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How to Invest Intelligently in Africa - Data you can Trust
2 years ago by Christina Massaad

How to Invest Intelligently in Africa - Data you can Trust

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Investing or trading with companies in Africa can bring headaches for business people in terms of sourcing business intelligence and data they can trust. Traditionally, data on African companies has been difficult to access. However, Cedar Rose has been investigating companies in the Middle East and Africa for over 20 years. We not only have the largest, most comprehensive database on African companies (almost 5.8 million African companies as at March 2020), we have linked people to people, companies to companies, and companies to people to ensure full director and shareholder link analysis and UBO tracing - even across borders.

Africa offers a great deal of potential as a market to trade into. That`s why China is heavily investing in African infrastructure projects. According to a recent report from Quartz news site, Chinese investments and contracts in sub-Saharan Africa alone totalled $299 billion from 2005 to 2018 and the investment is continuing. China is not the only country investing in this vast continent though. The majority of investments come from France, the Netherlands, USA and UK with Egypt receiving the highest foreign direct investment totalling USD 6.8 Billion in 2018. Other major countries to benefit have been South Africa, Congo, Morocco and Ethiopia.

So what is the attraction to invest in Africa?

The African Continental Free Trade Area agreement was signed by 54 African countries in March 2018, requiring members to remove tariffs from 90% of goods, boosting inter-African trade. The agreement was expected to lead to the creation of a single continental market of more than 1.3 billion people, with a combined annual output of $2.2 trillion. It was hoped to boost intra-African trade by 33 per cent, leading to greater stability within.

The African continent is a huge land mass covering over 30 million square km that is bigger than the USA, Canada and China put together. It actually covers 20% of the world`s land area and the population is almost the same as China alone so there is plenty of room for growth.

With an increasingly educated and growing population and a generally very low cost of living, Africa offers some great potential for companies requiring manpower. For example, Cairo and Algiers are approximately 30% cheaper to live in than Beijing and 13% cheaper than Delhi, hence the large number of companies setting up manufacturing plants on the continent.

Here are some of the hottest sectors at the moment:

  • Egypt - offshore gas reserves and new oil exploration and production projects, food (grains) and textiles.
  • South Africa - mining, petroleum refinery, food processing, ICT (information and communications technologies) and renewable energy initiatives.
  • Republic of Congo - (not to be confused with its neighbouring country, the Democratic Republic of Congo which has rich mineral reserves) the Republic, also known as Congo (Brazzaville) recently received USD 448.6 million in aid from the International Monetary Fund and has huge oil and gas reserves as well as iron ore.
  • Morocco - renewable energy, finance, automotive manufacturing and education.
  • Ethiopia - petroleum refinery, minerals, real estate, manufacturing including automotive and renewable energy.

Whenever you consider venturing into new markets, having accurate data is imperative. Traditionally, Africa has been a difficult place to gather data from and this has deterred investors and businesses from going ahead. But Cedar Rose has made efforts to close the data and compliance gaps and can really help if you need to know anything about an African business, director or shareholder in order to grow your business safely into the region. There are always risks associated with doing business, and with our boots on the ground and experienced researchers, we help to mitigate those risks for our customers around the world.

Our data is source and intelligence graded, meaning that every data field within our database is date stamped and labelled with a reliability and trustworthiness score according to where it came from - because when conducting due diligence or investing large sums, only 100% trustworthy sources should be used to base decisions on - and there is a lot of less reliable and non-compliant data out there.

We are working through a fast track expansion plan to include more data for Africa within 2020 and to have as live a database as is possible for this region of the world very soon; in order to support the leap from traditional data requirements to eIDV, eKYC, eKYB, fintech, instant risk scoring and analysis.

Find out more by contacting us today and join our growth into Africa.

Original Article date: 20th March, 2020

*** The sole purpose of the article above is to generate public discussion, it has no intention to constitute legal advice. ***

  • Africa
  • MENA
  • Data
  • Trade
  • FDI
  • Investment
  • Opportunity
  • Risk Management
  • Compliance
  • Due Diligence
  • UBO