06 September 2021
5 Best Ways to invest in Africa
The African continent offers various investment opportunities despite the effect of the world pandemic. The continent's fast-growing population, digital economy, and financial markets present rewarding opportunities to prospective investors. Are you searching for easy ways to speculate in Africa? Consider the choices below. Do note that the highlighted options are supported prevailing market realities, available statistics and experts' recommendation.
1. Invest in Agriculture
According to Oxford Business Group, agriculture accounts for under 14% of Sub-Saharan Africa's gross domestic product (GDP). That's despite the very fact that the continent is home to 60% of the world's arable lands. And this doesn't only make it potentially capable of being self-sufficient, but also capable of feeding the remainder of the globe. Note that the region's food import bill reached a record high in 2021. Available data from the planet Bank show that Africa imports $35 billion worth of food in a very year. Another report by Empower Africa noted that inadequate storage facilities, mechanization, and irrigation systems are reasons for low yields. In view of of these problems and opportunities, it's safe to mention that Africa's agriculture sector offers investors high rewards and an opportunity to effectuate growth that propels the region towards food sovereignty. Investors who are capable of providing solutions to those problems stand an opportunity to reap lots of advantages.
2. Invest in African tech startups
It is not news that the African tech ecosystem is one in every of the fastest growing within the world. In 2021, African tech startups raised nearly $5 billion worth of funding. Some of the African countries with the foremost vibrant tech ecosystems are Nigeria, South Africa, Egypt, Kenya and Rwanda. and therefore the sub-sectors that are performing the most effective include fintech, heathtech, edtech, agritech, etc. You can join other investors that have already positioned themselves for a windfall by investing in Africa's burgeoning tech ecosystem.
3. Invest in assets
According to Statista, Africa's population stood at 1.37 billion as of May 2021. And there are numerous projections that it'll continue to grow. for example, the United Nations estimates that the continent's population will hit 2.5 billion people by 2050 These numbers represent rewarding opportunities for realty investors in Africa. Investors can make easy money because the continent continues to experience a population boom and rapid urbanisation. In the meantime, data obtained from Worldometer shows that Nigeria, Ethiopia, Egypt, Democratic Republic of Congo and Republic of South Africa are the foremost populated countries in Africa. Nigeria tops the list with over 206 million population, followed by Ethiopia with over 114 million. The Egyptian population is over 102 million while DRC is home to over 89 million people. These figures represent folks that are currently in need of affordable and decent housing. And any land investor capable of providing that may be rest assured of their returns.
4. Invest in Africa’s Natural Resources
The African continent is home to 10% of the world’s natural oil and gas reserves. per Energy Capital and Power, Africa's fossil fuel reserves are over 800 trillion cubic feet. Nigeria tops the list of African countries with the foremost gas with 206.53 trillion cubic feet. Algeria ranks second in Africa and 11th among global countries with proven gas reserves. Africa's fossil fuel reserves predict 80% expansion by 2035, making the continent a hotspot for investors. The continent is rich in gold, diamond, platinum, uranium reserves, and more. per an assessment by the world organisation, investing within the region would amount to a sound business. The evaluation further described Africa because the most prosperous region within the world.
5. Invest in African Stocks
Have you ever wanted to take a position in market-leading stocks with high dividends? Well, that is what you will get with the African stock exchange. There are a complete of 29 stock markets available in Africa. Note that the most effective thanks to invest in African stocks is thru local brokerage firms. Potential investors should also equip themselves with in-depth knowledge and understanding of the securities market varieties for the right exchange selection. Consider shortlisting stock exchanges and stocks before researching. The research will aid the choice on exchange selection. you'll be able to invest in Africa through an exchange-traded fund (ETF) or investment trust with an acceptable exchange. Conclusion Now that you simply know the straightforward ways to speculate in Africa, other factors you ought to consider before investing are the assorted national governments, legal systems, policies, and therefore the people. watch out for weak governance, currency, corruption, and volatility as these factors could affect your investments. Consider engaging portfolio companies and adopt a hands-on approach for your assets. About the author Olayinka Sodiq may be a qualified writer with technical, analytical and copywriting experience gained from 5 years of both in-house and freelancing gigs. he's versed in finance, investments, technology, blockchain, mergers & acquisitions, bankruptcy, etc.
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