Africa investment opportunities are not for everyone. But for those who are risk-takers, investors with established businesses, and entrepreneurs looking for a place to park their money or invest, Africa is worth considering.
Here’s a snippet of some pros and cons to consider if Africa’s developing economies are apt for your investment risk appetite.
Advantages of doing business in Africa
One of the advantages of doing business in Africa is high returns.
According to the Overseas Private Investment Corporation (OPIC) and United Nations Conference on Trade and Development (UNCTAD), investing in Africa offers the highest return on foreign direct investment worldwide. But, of course, the high returns compensate investors for the risks involved in investing in Africa.
Africa’s extensive natural resources are another reason for investing in Africa.
The northern region of Africa is rich in crude oil reserves. In contrast, the southern part has vital mining industries. Many of these natural resources remain underdeveloped and provide the opportunity for growth.
Another one of the many advantages of doing business in Africa is its large population.
Africa is the fastest-growing continent. Fueling the growth is a young, rapidly urbanizing population. The African people account for an estimated 17 percent of the global population. That’s about 1.4 billion living on the African continent. Thus, there is a considerable potential for growth in the service and consumer goods industries.
Drawbacks of investing in African business
The number one risk why entrepreneurs are apprehensive to invest in Africa is because of its political instability.
Corruption, bureaucracy, and inadequate policies are causes of headaches for potential investors like you.
International investors should also be wary of civil unrest.
Regional conflicts have taken their toll on its people and the African economy. Moreover, civil war can overthrow a regime. And regime changes are an added risk for investors. Not just because of security risks but also from political uncertainties.
Business opportunities in Africa
Despite the added burden of the pandemic, Africa is brimming with investment opportunities. Some business sectors and industries where we see potential and business opportunities are:
- African stock markets (ETF and mutual fund)
- Africa real estate properties
- Africa’s natural resources
- African companies
- African agriculture
Our team believes that expanding your company operations or investing on the ground are the best options to invest in Africa.
Africa business opportunities are in startups, fintech firms, and local SMEs. Existing businesses on the ground with socioeconomic impact are a hit among aggressive investors. You can park your money on boutique funds or make a direct investment.
10 African countries with investment opportunities
If you are warming up to the idea of investing in Africa, then the next question on your mind would probably be, ‘where is the best place to do business in Africa?’
Here are the ten best African countries to start a business.
 Credit: GITFiC.com