Africa is the richest and most profitable continent in the world with major sectors representing higher opportunities for companies looking to invest in it and it is expected to transform through SDGs,
Extensively, Africa is the ideal place for unlocking investment potential considering so many factors
Africa at large has seen a rapid acceleration in investment over the years. For instance, Africa saw a roaring growth in investment in agriculture from the first half of last year of about 400 million dollars which was more than 80% of what was invested in 2021 according to the Africa Agri food tech investment report 2022.
Despite the glowing review on the investment opportunities in Africa, some countries are more favorable for business than others with South Africa, Morocco, and Egypt being on the top list.
This is so because these countries have a bright economic growth Prospect and abundant natural resources.
Because as of 2022, Egypt’s GDP grew by 3.6% despite the COVID-19 turmoil. The Egyptian government enjoys external investment in real estate, oil, and gas to just mention a few.
South Africa and Morocco have also witnessed extensive investment in renewable energy, infrastructure, and cyber security with overall economic growth of 2.0% and 1.3% respectively.
In all these top listed and other countries, they are both private and public investors heavily investing in them. With China, the United Kingdom, and America competing for investments.
As of current, china ranks as the biggest investor in Africa investing about 70 billion dollars. With Europe remaining the largest holder of Assets in the continent.
Hence For Global Investors, it is guaranteed that investing in the following major sectors will ultimately return a fruitful outcome.
- Automotive sector
Africa’s automotive market generates billions of dollars per year with South Africa and Morocco taking the lead in massive production of automobiles. Nevertheless, despite these two countries overtaking this market, other African countries’ markets remain untapped hence the need to invest in them.
- Agriculture and Agri processing
For the past 10 years, most African countries economy has had their backbone in agriculture. For instance, Nigeria and Kenya have seen a rise in agriculture investments but even this is so, vast amounts of fertile lands remain uncultivated.
- Pharmaceuticals
According to the African development bank, Africa imports 70% of its medicines, an investment in this sector will definitely fill the gap and achieve maximum returns.
- Transport and Logistics
Transport plays a significant role in Africa, with most sub-Saharan regions relying on road transport only. An introduction of an alternative, affordable, and conducive mode of transport will truly be a game changer.
This goes with saying that while what is listed above remains the major sectors in Africa’s investment, there are also some sectors where potential investors can invest (unzipping the myths around investments; where and how to invest)
Furthermore, African Governments are expected to improve the continent’s potential through the agreement with the UN Development Programme. Through this program, African countries will be able to transform their economic growth and unlock its investments prospects,
With that opportunity, global investors and all other stakeholders interested in tapping into Africa, here is how they can unlock Africans’ investment potential:
- Fostering a supportive business environment, Governments need to create an environment that supports business growth including a stable political climate, an effective legal system, and predictable macroeconomic policies.
- Developing infrastructure; Investing in infrastructure such as transportation, energy, and telecommunications.
- Promoting regional integration; African countries can achieve greater economies of scale by cooperating and integrating regional markets. Harmonizing legal and regulatory frameworks and promoting cross-border investment would facilitate regional integration.
- Supporting entrepreneurship; Governments and private sector actors need to provide support to entrepreneurs with innovative ideas, including funding, mentorship, and access to markets
- Enhancing access to finance; access to finance is a key challenge for entrepreneurs and small businesses in Africa. Governments and private sector actors need to work together to create financial products and services tailored to the needs of African entrepreneurs.
