Now that we have covered (in Part 1) why you need to take precautions when investing into the many nations of Africa, we can now assess the treasures that African countries may hold. Each region contains their own positives, for example, East Africa shows promising signs of growth. Kenya, Rwanda and Tanzania are all predicted for a 6% + growth rate according to Rand Merchant Bank. Furthermore, while East Africa shows the greatest economic growth rates, it is North Africa that dominates, and has been dominating, contributing an incredible 37% of the African GDP from only 5 countries. Each market that African countries supply contains a multitude of potentials. However, in order to utilize the markets and instigate business while mitigating risks, it is pivotal that you understand the region.
Room for Investments
Despite the technological difficulties that Egypt endures, it would be unwise to overlook the nation as a potential region for investment. Egypt has the largest consumer market throughout the Middle East and North Africa, with a market size of an estimated $1.4 trillion, which accounts for 20% of Africa’s $7 trillion market. The fact that North Africa provides a bulk of the African GDP amounting to a significant 37% from only 5 countries - Egypt, Morocco, Tunisia, Algeria and Libya - indicates that this is a booming region with great potential. Furthermore, the structural and technological deficits that parts of the African continent endure may be a blessing in disguise. The silver lining with every problem is that there is a solution; the difficulties provide a perfect platform for investment in development or financing of infrastructure projects.
Foreign direct investment (FDI) hot spots are prevalent across the African nations, from Egypt’s large consumer market and Ethiopia's fast growing (deemed the fastest) economy to Cote d'Ivoire's investments in infrastructure with a focus on transport and energy. There are many potential growth opportunities across Africa, you just need to know how to navigate within the region and be informed enough to mitigate risks. For example, eleven countries are forecasted to grow their economies above 6%, with Ethiopia leading the way with a strong 8% predicted growth rate. Furthermore, the magnitude of natural resources also presents a positive indicator for FDI. Nigeria's recovering oil prices and Ghana's concentrated around the oil and gas sector prove that, not only does Africa present investment opportunities, but long-term prosperity is within reach.
Look before you Leap
However, there are a few fundamental precautions that are needed to be considered before investing or involving yourself and your company within Africa. Thorough and reliable due diligence must be undertaken, whether you are investing abroad, within your own country or even your own city. It is fundamental to know what potential risks may arise with certain actions and weigh them against potential rewards. Thus, when you instigate business in a continent such as Africa, indulging in business intelligence is a must. Becoming informed of a topic or a region will give you the necessary knowledge and know-how to enact business.
Cedar Rose is a business intelligence company which specialises in the Middle East and Africa. Our database contains coverage of African countries that may be of great potential. Our data warehouse holds more than 90% of entities in Algeria and Morocco, with at least 50% of entities in Egypt. Furthermore, our coverage also spreads into entities located in Western Sahara. But we don`t just provide data access, we have teams of experienced and professional investigators who can conduct meticulous additional research, ensuring your due diligence is trustworthy, up-to-date and compliantly obtained.
Africa is one of the largest continents on this planet and it contains a huge amount of untapped potential. With our data, knowledge, language skills and research expertise, Cedar Rose can help you and your company successfully invest in this vast region. Our services are focused and dedicated to business intelligence, expertly conducted in order to mitigate risks. Check out our services online and let us know how we can help you.
*** The sole purpose of the article above is to generate public discussion. It has no intention to constitute legal advice. **