Why Invest in Africa?


Why Invest in Africa?

Africa is a continent of diverse and innovative peoples, whose potential to spawn economic progress is intense and real. Change in Africa is happening now and it’s happening fast, and our site is dedicated to creating awareness of these economic realities.

Many investors still view Africa as an impoverished, politically unstable, and diseased-ridden country. Africa, then, must be decades away from showing signs of economic life.

We think the opposite is true.

Investment in Africa has been booming for more than ten years, and Market Frontiers is confident that the trend will only continue.

Factors driving Africa’s success

Government reforms and initiatives have reduced inflation, budget deficits and debt levels in Africa. Africa’s regulatory, legal and business environment has also improved.

According to the World Bank’s 2013 Doing Business Report, among the 50 economies globally that have most improved their regulatory environment for business since 2005, the largest share — a third — are in Sub-Saharan Africa.

It is estimated that Africa’s population will double in the next 40 years to reach two billion — which will be 20% of the world’s population in 2050. The median age in the continent is just 20 — making it the world’s youngest continent.

As a result, by 2040, Africa’s potential labor force is expected to be more than 1.1 billion people, which exceeds projections for the Chinese and Indian workforces.

There has been a substantial increase in the economic presence of other emerging markets in Africa. The BRIC’s share in African trade has increased from just 1% a generation ago to 20% today.

By 2030, this share is expected to be 50%. China and India in particular are looking to Africa to help meet their energy security needs, as a market for manufactured goods and potentially for long-term food security too.

African leaders are eager to move away from dependence on aid and the accompanying conditions imposed by donors. This development has spurred a rising technocratic class in SSA that is well aware of the challenges to raising income and competing globally, including infrastructure investments, regulations and maintenance.

The growing influence of the private sector in Africa is evident in the increasing number of leaders and cabinet members from the corporate world.

Africa has great reserves of natural resources. Nigeria and Angola are among the top 20 oil producers in the world. African countries make up 11 of the top 50 countries in terms of proven oil reserves.

South Africa, Ghana and Tanzania are among the top 20 gold producers; Zambia and the Democratic Republic of Congo the top 20 copper producers.