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Investment Opportunities in Africa: How You Can Build Sustainable Wealth Investing in Africa (Ways to Build Wealth in Africa)
When we talk about
investing, we all think of those investment opportunities with the
most profitable returns and those whose returns will accrue in the
near future. Investing is
making your money grow faster than in savings. Many investors around
the globe remain unaware of the highly profitable foreign investments
in Africa.
Recently, many global
companies are turning to Africa for their investment alternatives and
they are indisputably making good returns. Those
companies ranging from technological, automobile, fashion and
financial among others have realized the African hidden potential.
Although the external investment in Africa has been enormous in
the recent past, it still lags behind the flows as compared to other
developing regions in the world. The economic
forecast in Africa has been positive with the World Bank
predicting a higher growth rate in the near future.
However,
as an investor, you should
have high tolerance to risk. Most if not all of the African countries
are faced with political instability, security threat and high
inflation rates. If your personality is one who can accept losing
money for the possibility of getting much more profit on your
investment, then you should consider aggressive
investments in some of less developed countries in Africa. If
you are those typical risk averse investors, then you should take due
cautions on the African country that you are considering investing
your money.
African
leaders and residents have realized the importance of attracting foreign
investors in to develop sustainable
wealth in African. Countries
have already taken initiatives to rebrand themselves and the continent
in general. Part of this branding is addressing the real things and
challenges that are facing the continent and deal with them in a
sophisticated manner. One of those methods is encouraging international
investments from governments and individual investors.
Another reason why Africa is the next big investment hub in the world is that there are
massive investments in infrastructure by the governments. African
countries have realized that insufficient supply of electricity, the
poor quality of highways and the outdated information and communication
technologies limits the productivity of firms and hinder
intra-regional trade. Investors are looking at the development of
infrastructure in a country before considering
investing in a manufacturing, technological or a transport company
in the specific countries. This means that investors from
emerging markets have much to gain from enhanced infrastructure in
Africa.
Africa has a growing
literate population which means that the investors
will not have a hard time mobilizing labor in Africa. The growing
youth population in Africa, most of which has access to modern and
rapid communications system will impact greatly in the African
promising future. African countries have realized the benefits of
preparing this young generation with the relevant skills through
education and training that will eventually help the country create
dynamism and inclusive, sustainable
economic growth. As an investor,
this is the best opportunity to invest and tap this growing cheap
labor for your firm or business.
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Key
notes when deciding on investing in Africa: Your
objectives for investing Most of the investors
are hopeful about growing their money fast. If you are such kind of an
investor, then you do not care about the risk of investing in
different areas. Some other investors are just into preserving their
capital in the safest way because they may need it sooner than later.
This means that if you have a financial goal that is near, you should
invest in less risky instruments. You should also consider investing
on countries that are less likely to experience any distortion that
may affect your business greatly.
The higher the returns you expect the riskier your investments
should be. Therefore, if your main objective is making huge returns
within a short period of time, you should consider risky investments.
Time
is critical Most African
countries have prolonged campaign periods and also have a significant
political influence in
investing. This is the main reason why most of the African
countries experience retardant growth during their political periods. For
example, investing on stock
market can be challenging during the campaign and voting periods
in most of the African countries.
A successful investor should know the best time of the year to
invest. Consider investing during those rest periods when every aspect
of the country is focused on development.
It is critical to continue investing through all market
conditions and particularly during markets lows when share prices are
undervalued and a lot cheaper. Although this is a point to note, you
should take due considerations when timing your investments.
Determine the type of investment that you want to set Different investments
will work differently to different countries in Africa. You have to
come up with the best
investment that you think will make you huge profits within a
short period of time. The African economy is also starting to
diversify beyond commodities.
Several African countries
are showing positive growth based on ambitious diversification
strategies. What this means for you is that you can consider investing
in technology, electronics supply, and automobile among many others.
Africa is the leading continent in the world with a fast technological
adoption and hence this offers a big cross-sector economic opportunity
for foreign investors. Mobile payment networks, pioneered in Kenya
opened the wired, global economy to poor, unbanked city and rural
dwellers. It is also
unsurprising that Nigeria, Gabon, Rwanda, South Africa, Tanzania and
Kenya are the most popular investment destinations in Africa,
accounting for the vast majority of funding.
Investments in the likes of e-learning, e-health, agritech and
logistics are on the rise and hence these are some of the investments
that one can consider in Africa.
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Where
to invest Which country has a
high likelihood of giving the best investment environment for your
business? Consider those countries where the type of investment is
legal and cannot be compromised. Find out any existing gap in the
African economy that needs mass attention and set an investment plan
here. Some of the African countries have the best investment
opportunities but are faced with several factors that can suppress
your investments in the region. Most of the time you will consider
investing in Congo, Somalia, Libya, Zimbabwe, Sudan and some more
African countries but face a security challenge. So you have to
analyze critically all the existing factors in different countries and
choose one from the alternatives.
Analyze
the risk Most of African
countries have security threats to both local and foreign investors.
Some countries such as Somalia are faced with significant terrorism
threats that can impair your business and investments. However, other
African countries are secure and hence provide a very conducive
environment for investments. Other risks relating to your investments
include political instability, intra-community wars and drought.
Diversify
your portfolio Every investor
understands the risk associated with holding a common portfolio. When
it comes to investing, you should cast your net widely and you will be
sure of a successful business in
Africa.
Do not focus on the return from an individual component of your
diversified investment portfolio. Rather look at the performance of
the portfolio as a whole. You can decide to invest
your money on different business opportunities available in
different countries. By doing so, the losses from one business will be
covered by profits from another business.
Ensure
that your investment strategies are customized for specific needs People need to
understand and be able to distinguish between the asset types that are
vital to ensuring financial security.
You should not worry; you can build a wealthy supply chain for
the African companies and the end users of a commodity. The
growth of Africa’s middle class is really changing the consumption
trend of goods and services in the continent. This group is educated
and live in urban areas; they are brand-aware and sophisticated in
terms of their consumption. This means there’s an open opportunity
for international standard supply chains for fashion, home and
lifestyle products. Both
quality and brand now matters in Africa more than before.
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Consider
African countries with friendly terms of business In this era, many
African leaders understand very well the benefits of keeping flexible
and friendly terms of business. They are relaxing on the existing
regulations and policies regarding foreign investments. In fact, some
countries such as Kenya, Ethiopia and Gabon are encouraging foreign
investments through incentives such as tax relieve and tax holidays,
free land and financial support to any foreign investment that will
set in their countries. The
African trade barriers are falling and hence the world should take the
chance and invest tremendously in the African continent. The duties
are being lowered and beneficial incentives introduced, this is
opening doors to manufacturers who can set up production and assembly
operations in multiple African countries. Read
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