According to the World’s leading forecasters, the African economy is expected to grow by approximately 6% during 2013/14, while its total GDP is expected to reach USD 2.6 trillion by 2020. The Nigerian stock market alone returned 47.2 % in 2013.
This is great news, but where should one invest?
Let me quickly state the obvious; Rapid urbanisation on the continent means that priority needs to be given to infrastructure (mostly power and transportation). Africa has a growing population of young, globally minded people who increasingly use mobile phones and the internet. The banking industry is expanding with growing income levels, as is consumer demand, and a population explosion requires more schools and hospitals. The African continent is also said to be on its way to become the world’s low-cost manufacturing hub.
A CNBC news reporter recently stated that sub-Saharan Africa, which was once seen as a pure commodity play (or as a part of the world to avoid entirely) is now the place to get big returns on relatively small investments.
The key issue is of course the risk/reward balance. Investment-grade countries like South Africa, Botswana and Namibia might offer lower returns than countries with higher risk like Nigeria, Ghana, Tanzania and Kenya. The bottom-line is that Africa offers numerous opportunities and that they are as varied as the 54 countries of the African Union.
The overall buzz resounding around the globe however, is that the time is now!