September 1, 2022

Top 4 Investment Opportunities in Africa (and how to invest)

invest opportunities in africa

Table of Contents

The African economy is one of the fastest growing in the world, and many analysts expect it to continue this trend throughout the next few years. Many developed nations have exhausted their potential for new jobs and production of goods and services, while Africa has only begun to tap its potential. New investment opportunities in Africa are emerging every day such as agriculture or construction. Despite the recent market fluctuations and geopolitical uncertainties, experts see exciting investment opportunities. for investors interested in Africa. This means that investors looking to get involved with emerging markets stand to profit greatly if they partner with the right company or firm for long-term investment.

In this article, we’ll take a look at some of the most promising investment opportunities in Africa based on current research, existing market trends, and future potential.

4 of the Most Promising Investment Opportunities in Africa

Tech and Communication Start-Up

The tech sector is considered to be one of the fastest-growing industries and one of the most promising investment opportunities in Africa There are more than 500,000 startups in Africa today and an additional 1 million are being formed every year throughout the continent. They cover a variety of industries, including fintech, digital media, e-commerce, and health tech as they are set up to address many problems Africa is facing.

According to Statista, the funding value of the continent’s tech startups has increased from less than 190 million U.S. dollars to over two billion U.S. dollars between 2015 and 2021, as a result of the introduction of innovative digital services. Thanks to the number of startups, incubators, co-working spaces, and the overall economic ecosystem, South Africa, Kenya, and Nigeria were the most favorable countries for startups in 2021.

Among the startups we can list the following ones:

  • Jumia Group: an e-commerce company present in the African market. Founded in 2012 by two Frenchmen, Jumia sells electronic products, hygiene, food and services.
  • OPay: a mobile money platform launched in 2018. The company operated in Nigeria. empowers users and enables them to accomplish more with their money by providing smart financial services.
  • Chipper Cashthe largest mobile cross-border money transfer platform in Africa. This Ghanaian company was founded in 2017 and has raised since then $280 000 000.

 

How do I invest in Tech African Startups?

Africa is composed of 54 heterogeneous countries, each with a unique economic and geopolitical situation. There are many countries that promote entrepreneurship and foreign investment, including Nigeria, Ghana, and Rwanda. As with any investment, the most important step is to get reliable information on which to base your strategy. Many published articles will allow you to get an idea of the economic and geopolitical situation of the countries in which the operating startups.

There are several ways you can invest in Tech African startups:

  1. Venture Capital : Venture capital is a form of investment in which a group of private investors commits capital to a business in exchange for an ownership stake. Venture capital is typically used to finance businesses in the early stages of development, such as startups and small businesses, but can also be used to support larger companies with growth opportunities.

Despite global VC investment growing at twice the rate as last year, African tech still grew faster than any other region, with $6 billion invested (according to Partech).

Here you have a few Venture Capital funds operating in Africa you should consider for investing in Africa:

  1. Business Angel: A network of business angels is a group of individuals (known as business angels or angel investors) who inject money into a company in exchange for a stake. The network is made up of experienced professionals or entrepreneurs who have experience and contacts in the industry in which they invest. Business angels invest in companies with high growth potential.

We list a few BA networks that you can contact directly on their website if you want to invest through this:

 

Agriculture and Food Production

Agriculture is another promising investment opportunity in Africa. As stated by Empower Africa, the African continent offers the most extensive tracts of arable land left in the world but it represented only 17% of SSA’S GDP in 2021 (World Bank data). The continent is highly dependent on international trade and food insecurity remains one of its major issues.

For several years now, initiatives have been multiplying to develop agriculture in Africa and thus be less dependent on foreign imports. Beyond financial profit, these initiatives are part of a desire for human development. After all, a country cannot develop without a well-fed population. 

 

There are a number of ways to support agricultural development in Africa. One important step is to invest in sustainable farming practices that reduce food waste and increase yields. This will help ensure that more people have access to affordable food.

Several companies are dedicated to providing innovative solutions to farming methods:

  • ColdHubs allows outdoor markets and farm clusters to store and preserve fresh produce 24 hours a day, seven days a week, extending its shelf life from two days to over 21 days. The solar panels on each hub are linked to a battery storage system, allowing the coolers to operate off the grid all day.
  • MyAgro is A unique mobile layaway platform that allows farmers to purchase seeds and fertilizer using their mobile phones in small

In addition, it is important to develop markets for African farmers to sell their products overseas. By doing so, they can earn valuable foreign exchange that can be used for further investments in agriculture and other areas of development.

For instance, FreshAfrika is a startup founded by Noella Ligan and Katia Kuseke, which sells baskets of fruits, vegetables, and spices from sub-Saharan African farmers to French consumers.

 

How do I invest in agriculture in Africa?

Many international organizations are making global food security a priority. Thus these are the main sources of funding for the sector in Africa. For individuals, it remains possible to invest through new online platforms that have emerged in recent years. We can list:

  • Seekewa is a participatory platform that helps small farmers in Africa find all the resources they need to carry out their projects.

Real Estate and Construction

Investing in the real estate and construction sectors can be an excellent way to profit from the growing African economy. In fact, it is one of the biggest emerging markets for real estate investment. The continent has a large population and a growing middle class. These factors are driving strong demand for housing and commercial properties. Property investors can also find high returns in Africa because of low-interest rates, improved infrastructure, and stable governments.

There are a number of factors that make Africa an attractive investment market. First, the population is growing rapidly, which creates opportunities for new construction projects. Second, the economy is growing fast due to the rising demand for housing and commercial properties. Third, property prices are increasing as a result of these factors, which makes investing in Africa more attractive.

There are several things to consider when investing in African real estate. First, there are risks involved with any investment decision. It is important to do your research before making any decisions. Next, you need to understand the local real estate market and regulations before making any investments. Finally, you should always be prepared for unexpected events like natural disasters and political instability.

How do I invest in real estate in Africa?

To invest in real estate in Africa, you can either directly buy land and houses in a given country through developers. There are thousands of developers across the continent who offer land or real estate for sale.

There have also recently been companies offering innovative ways to invest in Africa:

  • Founded in January 2018 by Aïta Magassa, Nawali is the first real estate investment agency in West Africa. It offers the sale of controlled and secured land in Senegal and the Gambia as well as interest-free financing solutions in the form of rotating tontines.

 

  • Enen-Group is an online real estate crowdfunding platform, which makes it possible to invest with a low entrance ticket in real estate development projects and rental properties in Senegal

 

  • Shirikina is positioning itself as a new player in real estate crowdfunding by allowing individuals to invest in real estate and construction projects with high added value throughout Africa.

Tourism and Travel

Africa is an emerging tourism market, with tremendous potential for growth. More than one-fifth of the world’s population lives in Africa, and the continent’s vast natural resources, unique cultures and diverse landscapes offer travelers a wide variety of experiences. As Africa continues to urbanize and improve its infrastructure, more people are able to afford to travel there. Moreover, and social media have made Africa more accessible than ever before and have made it a popular destination for travelers from around the world.

The most common destinations for tourists in Africa are South Africa, Egypt, Morocco, and safari lodges in Kenya and Tanzania. The most popular activities for tourists in Africa include hiking, safaris, wildlife viewing, adventure tours, and beach holidays.

There are many investment opportunities in the tourism sector, and investors can choose to invest in both luxury hotels and budget-friendly hostels. They can also invest in travel agencies to help them book cheap flights and plan affordable trips throughout the continent.

 

How do I invest in tourism in Africa?

Some African governments adopt investment policies that encourage the establishment of foreign entrepreneurs, and booming tourism and hotel sectors.  For instance, Investors who build hotels in designated areas in The Gambia can receive free land from the government, and those who invest over $250,000 can receive a 10-year tax holiday.

Conclusion

Overall, the African economy is experiencing rapid growth, and this growth has attracted many investors who are eager to profit from the continent’s potential. This has created many investment opportunities, ranging from tech start-ups to real estate and construction Investing in Africa can be a highly rewarding experience. As with any investment, risks exist and have to be mitigated as much as possible by doing your research before committing any money.

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