5 Reasons to invest in Africa

Africa has an exciting resource story

Africa has an exciting resource story Africa has rich resources in oil, natural gas, minerals, power, energy, food and
arable land. It has a land mass equivalent to Europe, the U.S, India, China and Argentina combined. Non-oil output is also expanding thanks to reforms in the energy sector.

Expanding economy

The International Monetary Fund predicts that seven out of ten of the world’s fastest-growing economies between 2011 and 2015 will be in Africa. Many sub- Saharan countries’ growth is predicted to rise from 5 to 5.5 percent per year as they emerge from the financial crisis.

Low debt levels

Africa has better debt to GDP levels than some developed countries. Alquity said that while the U.K.’s debt level is 77 percent, Nigeria’s is just 16 percent.

Growing workforce

Africa is enjoying a growing middle class and a youthful workforce, already equivalent to that of India. A growing consumer base will also be a positive for the economy.

Low correlation to other markets

Africa is relatively uncorrelated to developed and emerging equity markets, with a correlation of 0.27. According to Alquity, stocks are more driven by domestic factors. However, if China has a slower landing than expected, there will be weaker demand from African exporters and a knock-on effect on commodity prices.

Africa today

  • $1.6 trillion
    Africa’s collective DGP in 2008,
    roughly equal to Brazil’s or Russia’s
  • $860 billion
    Africa’s combined consumer spending in 2008
  • 316 million
    the number of new mobile phone
    subscribers signed up in Africa since 2000
  • 60%
    Africa’s share of the world’s total amount of uncultivated, arable land
  • 52
    the number of African cities with
    more than 1 million people each
  • 20
    the number of African companies
    with revenues of at least $3 billion

Africa tomorrow

  • 2.6 trillion
    Africa’s collective GDP in 2020
  • $1.4 trillion
    Africa’s consumer spending in 2020
  • 1.1 billion
    the number of Africans of working age in 2040
  • 128 million
    the number of African households with disdretionary income in 2020
  • 50%
    the portion of Africans living in cities by 2030

Africa - the Lion of the Future

Africa is the continent of future. It´s business realities have left old perceptions far behind. Growth is more sustained and diversified than ever before. Income per capita will grow by 50% over the next twelve years, turning it into one of the world's most dynamic regions. Reforms and entrepreneurial drive have transformed Africa into a continent of opportunities that can no longer be ignored.

The question is no longer whether African countries will be the next development success stories, but when. African economies have emerged from the global financial storm much faster than their Western peers. Average growth has been nearly 6% in 2012, up from 3.1% in 2009. Between 2012 and 2016, Sub-Saharan Africa growth will be 4.9% compared with 2.9% globally. Half of the world's ten fastest-growing countries are in Sub-Saharan Africa. Economic output in the region is set to double and per capita income to grow by 50% within the next twelve years.  Due to the considerable progress that many countries have made in terms of political stability, macroeconomic health and business conditions, sustainable growth in Africa is the new reality.

Africa's demographic trends are further fueling this growth. Africa's middle class of 313 million people, or 34% of its entire population, is larger than the entire population of the United States and on a par with the middle class of India. Africa is gaining 5 million of these new consumers each year. The number of mobile phone users has grown 40% every year during the last decade, from 12 million in 2000 to 343 million in 2010.

Cities are ballooning at the rate of 3.5% a year and the continent will soon have the world's largest labor force. In many countries across Africa, the median age is under 20, compared with just fewer than 30 in Asia and just fewer than 40 in Europe. Africa's working age population will continue to expand after 2050.

The continent's natural resources are also full of untapped potential. Africa is home to 10% of the world's oil reserves, 40% of gold reserves and about 85% of chromium and platinum group metals, wide swaths of which are still to be mined. And much of the continent's territory remains to be fully surveyed by geologists.

In addition, 60% of the world's remaining uncultivated land is in Africa. Rising commodity prices are providing an ever greater incentive to cultivate these areas. Revenue from agriculture is set to grow about 4% a year to USD 320 billion by 2020, which is positive news for the two-thirds of Africans who live in rural areas and the 70% who make their living from agriculture.