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How to Invest in Africa the Smart Way

When you think about the continent of Africa, “investment” is not the first word that comes to mind.

Many people don’t know how to approach investment in the region. It is, however, the fastest-growing continent in the world.

With a collaborative approach, the future of trade and investment in Africa could mean a mutually beneficial outcome.

From the risks to the rewards, learn how to invest in Africa the smart way.

Why It’s Worth Investing 

There are several reasons why it’s worth investing in this region. Its natural resources and state of underdevelopment are major factors to take into consideration.

Natural Resources

With 54 countries, miles of coastline, mountain ranges, and the Saharan desert, this continent is rich in natural resources.

Agriculture and climate vary in all regions creating a plethora of resources in all areas of the continent. From cacao and coffee beans to metals and minerals there are many untapped resources across the nation.

We know that diamonds have been the dominant export of Africa. However, oil and natural gas deposits also come from this region. We use these resources for energy and fuel.

Underdevelopment

The income per capita in Africa is the lowest of the six continents. Investing in infrastructure gives the population the opportunity to become wealthier.

Most of Africa is relatively underdeveloped. This means that there is massive potential for growth and expansion in all areas. This is especially important when considering real estate and off-plan property investment.

Smart Ways to Invest in Africa

Africa lacks funding in many areas that are crucial for economic growth. These include accessible education and healthcare services.

Health Services

There are several ways to invest in health services in Africa. There is a need for financial investors in many areas of healthcare in this region.

Facilities like hospitals and pharmacies are needed for proper health services. Additionally, there is a need for skilled staff to operate out of these facilities. Medical schools are essential to produce doctors, and nurses to fill those roles.

There is a need to broaden healthcare services and bring those services closer to patients, especially those in rural areas.

Access to Education 

In some African countries, as many as 50% of the population is illiterate.  Those living in rural areas outnumber rates of illiteracy than those in urban regions.

Investing in education means investing in the future. This means creating access to education, which is vital for economic growth.

Additionally, governments must take into consideration the growing digital economy. During the lockdown, many children in sub-Saharan Africa were unable to access their remote learning facilities. As a result, they were unable to continue their studies living in regions without internet access to online schooling.

Investing in the digital economy means students can access educational materials online.

Considering the Risks  

Like all investments, there are risks to consider. Let’s take a look at possible risks and challenges when investing in Africa.

Unstable Government

Political unrest is one difficult setback. Government practices and administration are not as diligent as we are used to in the US.

Negligence of business practices and accounting standards can get in the way of trade and investment planning. This is due to the quality, or lack thereof, in governance.

Lack of Infrastructure 

Lack of infrastructure can mean big opportunities for growth and development, it can be a double-edged sword. In some rural areas, there is no access to electricity, roadways, and other necessary resources.

This can cause difficult setbacks.

As an investor, it is important to weigh the risks and rewards before investing. It may be beneficial to invest less in areas of higher risk, maximizing investment returns.

Bless the Gains Down in Africa

There are many factors to consider when deciding to invest in Africa. With economic growth and advances in banking systems, there is great hope and potential in this intriguing market.

For more information on smart ways to invest, be sure to visit our blog again!

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