The African Youth Survey, a regular poll, suggests that 71% of young Africans plan to start a business. If you don’t believe me, talk to your neighbor. Employees invest their money in side hustles, most of which are not disclosed to their often delusional or insecure employers. So does the employer continue to treat an employee as simply an employee or a fellow entrepreneur? That is a debate for another day.
Today, I look at the good, bad, and ugly of starting a business in Africa in 2026:
The good: Bakhresa in Tanzania started in the 1970s and has grown from a small restaurant into a large, diversified business empire. The Madhvani Group in Uganda has grown to contribute ten percent of Uganda’s GDP from a small sugar factory in the early 1900s. It is no coincidence that some of the biggest conglomerates in Africa today, including Dangote, a Nigerian company run by Aliko Dangote, Africa’s richest man, started out as trading firms. Having access to granular market intelligence when information is scarce allowed them to build businesses serving demand about which others did not know. That is the good side of starting businesses in Africa. You can grow big by being relentless and doing basic things as seen.
The bad : Informal work is common in all poor countries, especially in Africa. The same stuff has happened in India, but Africa is different: it has a relatively high share of informal self-employment, and the likelihood of a young person entering informal work does not seem to be diminishing. Young Africans are no more likely to hold a salaried job than older Africans. “The jobs of many young people in Africa do not differ from [those] of their parents’ generation. Business in Africa can be highly political, in ways that undermine the continent’s growth.
Many of the “self-employed” may just be the unemployed “in disguise.
The ugly: Although African entrepreneurs are founding innovative startups in everything from fintech to commercial agriculture, running a business is often the result of desperation, not a deliberate choice. Desperation from being employed starts to creep in after the fifth year. “This job is not my home,” one thinks. “Look at Sudesh, he started his business”, the would-be entrepreneur asserts. By June 2026, Martin will launch a business without a proper understanding of how a business works. He is most likely to lose his money. Once that happens, that should keep him in employment longer than anticipated.
Before starting a small business, know that Africa does not need more small businesses. It needs more large ones. Large firms are productivity powerhouses. They bring people, ideas, technology, and equipment together in ways that make workers more efficient, which makes people richer. If you’re building it from scratch, build a big-minded business, not a small one. Africa is the only inhabited continent without any of the world’s 500 biggest firms, as compiled by Fortune, a magazine.
