Why Big Companies Rushed to Africa

Africa

An up rise in population, speedy urbanization,  the adoption and absorption of new technological features as well as the continuous unlocking of abundance of resources and the deepening of the financial sector are some of the prominent trends that are expected to propel Africa’s on-going economic reinvigoration in the years to come.

Democracy and a vibrant free enterprise are in a phase of a steadily up rise making Africa a market to be watched as it steadily grows. The governments are repelling the negative perceptions of international investors by improving the business structures. The African continent gained popularity fir its vast natural resources , which includes 90% of the world’s platinum, 50% of the world’s gold, 70% of the world’s coltan [majority of cell phones around the world uses this] and 30% of the world’s diamond reserves. It is also the second largest and second most populated continent in the world at large.

As Africa begins to gain attention globally and other rapidly expanding market as the center of the expansion of the future, experts have the belief that businesses and trades will be important  for the continent’s realization of 75s economic growth potential.

The sub Sahara African population alone is expected to break the bounds by hitting an unprecedented number of 2 billion people by 2050, which in turn will result in more than a fifth if the world’s population being Africans. This means that Africa’s population will be made up more of young and affluent people. This major demographic adjustment will bring in a number of opportunities and challenges to the continent’s economy. With the combination of this and a robust economic growth, support for the emergent consumer ratio will be achieved by indirectly enabling local businesses to flow, creating economic opportunities and also attracting foreign investments.

More than half of Africa’s population would have migrated to the urban areas by 2030 as the continent’s economy continues to thrive and by 2050 its estimated that about 60% of the population will either migrate or be born in modernized areas in the years to come.

The availability and affordability of mobile phones and internet services also helped in the development of the continent as it has provided a means for Africans to pitch their ideas to investors around the globe.

With food rapidly becoming the new oil of the 21^st century, agricultural output in Africa is set for an unprecedented amount of up rise in the years to come. Africa’s agricultural fortunes are poised for a big change as there could be a doubling in the agricultural output within the next decade.

At recent times, a significant amount of up rise in investment from international companies in Africa has been noticed and the reasons for this advancements are stated below.

• High investment rates

According to the UN Africa is a region that is prosperous and the best time for investment in the continent is of recent due to the fact that African market is recognized to be a giant global market with a lot of consumers. Products brought to African markets that are needed by Africans get sold out almost immediately as Africans are known to spare no cost when it comes to meeting their needs or the needs of their families. Available data shows that the African region recorded an 11.4% growth in foreign investment returns between the year 2006 to 2011 but dropped significant in 2020 due to the pandemic restriction procedures.  Things are looking good again for the economy as it recorded a 3.5% growth as of 2021 with the ease of lock down and commodity rebound being the main factors for its sudden growth.

• Availability of raw materials.

Africa is rich in natural resources and raw materials, it is home to 40% of the world’s gold abs 30% of the world’s mineral reserve. Africa holds a strategic position with oil and natural  resources on the global map.

• Flexible government policies.

Due to the steady inflow of foreign direct investments in the continent, African governments are beginning to make flexible policies to encourage more direct investments from foreign investors. One good example is the Egyptian government which recently adopted a new investment law to facilitate private investment growth in the country.

• Flourishing entertainment industry.

Available data on billboard indicates that African entertainment industry is not on a global scale as  Africa plays a significant role in the entertainment industry globally. Investors can benefit from the entertainment industry’s power players traveling to Africa for shows. Africa also has renowned artists with credibility from cinema to music making the continent ideal for strategic investors.

• Consumer increased demand.

World lab data describes Africa as a growing middle class economy. The data also disclosed that business models targeting consumers at the bottom of the income pyramid should consider African economies.

• Potential workforce.

Africa has a large population of youths making a potential workforce benefit for investors as 60% of Africa’s population are below 25 years of age.  For example Nigeria tanks as the most populated African country with over 206 million people. Investors can benefit through this by building h a large workforce for rewarding opportunities

• Digital acceptance.

Africa has the highest adoption rates that any other region globally. Higher digital adoption rates unlock enormous economic potential for investors in the continent. Africa offers rewarding opportunities for digital software and hardware businesses.