Economists will tell you that the best way to help poor countries is to invest your money in their economy. Humanists will tell you that the best way to help a poor country is by improving its infrastructure so they can have the basic needs of living. Investors might tell you that the highest growth potential investments are those that occur in undeveloped countries.
But saying ‘investing in Africa’ sounds like a slogan more than a real type of investment. Africa is the second-largest continent in the world in terms of size and population. As of 2024, the population of Africa is 1,4 billion across 54 countries. So, how do you find the right investment? How do you choose the right country in Africa to invest in?
But we are here to do the research for readers. That is part of the benefits of the online world. Below, you will find some of the most unique ways in which you can invest in Africa.
Africa’s Economic Status
The current economic status of Africa is not the brightest. Although Africa accounts for around 17% of the world’s population, the second-largest continent produces only about 3% of the global GDP.
However, always look at the bright side – Africa’s economic future growth appears to be promising. According to the World Economic Forum, Africa will be worth $5.6 trillion within 5 years – but only if it accelerates its policy reforms. Furthermore, the fact the women are joining the workforce and closing the gender gap can be a game-changer for the African economy.
As a matter of fact, six of the world’s 12 fastest-growing countries are in Africa (Ethiopia, the Democratic Republic of the Congo, Côte d’Ivoire, Mozambique, Tanzania, and Rwanda).
According to Africa.com, here are Africa’s Top 10 countries to invest in:
- Egypt
- South Africa
- Morocco
- Ethiopia
- Kenya
- Rwanda
- Tanzania
- Nigeria
- Ghana
- Cote d’Ivoire
Still, there are notable issues when it comes to investing in Africa. Africa, for example, is not on track to meet the United Nations SDG7 goal – to provide universal electricity access. Also, political turmoils in Africa hold major investors from entering the markets, although, these were mildly reduced in the past two decades.
However, investing in Africa, though it comes with relatively high risk, can be rewarding in the short and long term. Here are some ways to find investment opportunities in Africa and get exposure to African ETFs.
3 Ways to Invest in Africa
Here are 3 ways to invest in Africa:
African Investment Portal
African Investments has a great portal that connects investors and businesses in Africa. You can get access to the ‘Investment Dashboard’ where you can find updates about new projects that vary based on the amount you wish to invest.
Apart from that, AFSIC is the largest annual African investment conference taking place outside Africa and attracts a wide variety of the most important investors in Africa. In 2020, the event took place in Park Plaza Westminster Bridge, London. AFSIC 2021 registration is required, and early bird registration is out at a price of £845.00 per delegate.
Buy Stock and ETFs – Africa
The easiest and most convenient way to invest in African or African-based companies is through the stock market. These options include investing in a company, index, or ETF. If you don’t have a stockbroker to trade with, we can recommend Zacks Trade. Regardless, here are some of the best African-Related ETFs in the market:
- VanEck Vectors Africa Index ETF
- iShares MSCI South Africa ETF
- Global X MSCI Nigeria ETF
- VanEck Vectors Egypt Index ETF
- Commonwealth Africa Fund
When it comes to buying stocks in Africa, the process is a bit complicated. The Johannesburg Stock Exchange is perhaps the most developed stock exchange in Africa and the only exchange that you might get direct access. If you wish to trade the Johannesburg Stock Exchange (JSE) index, AvaTrade is one of the few brokers out there offering to trade this index.
Find Investment Opportunities in Africa
Lastly, you can independently search for investment opportunities in Africa through dashboards and private equity firms. Here are some of the most well-known and reliable boards to find investment opportunities:
- G20 Compact with Africa
- Capital Africa
- Invest Africa
- Growth Africa
- Marsh & McLennan Companies – Investment in African Infrastructure
Final Word
In sum, investing in Africa can be quite a challenge since getting direct access to equities in Africa is fairly complicated. Ironically, those who are looking to make investments in Africa should look for third-party organizations or ETFs and stocks traded on US and European equity markets.
Hopefully, our list can assist you in finding a way to invest in African companies. Yet, it is important to consider the risks involved in investing in Africa, which can be a high-yield investment but with a high risk.
