Investment in African Business; The New Economic Frontier

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Following the financial turn down in 2008-2009, the global economy saw an improvement when countries developed new policies to address economic diversification and growth.

The improvement in the global economy was seen in the accelerated growth of Gross Domestic Product (GDP) of some certain developed economies such as the ones in the East and South Asia.

With this newfound improvement, what is the place for Africa? Maybe it has rarely crossed your mind to invest in the continent, probably due to certain perception about the business environment.

Until recently, the African continent was tagged as the most impoverished in the world, but judging by the current economic growth rates, the World Bank hopes that most African countries will attain ‘middle income’ level by 2025.

In the last two decades, the countries in the Sub-Saharan African (SSA)region and their Northern counterparts have increased their GDP, this steady sustenance of economic growth over these years have recently attracted investors. 

SSA in the period of 2007-2013 grew its Foreign Direct Investments (FDI) at 19.5%. With these indications, it is pertinent to study how Africa will keep sustainable economic growth and provide healthy competition for Asian countries in years to come.

In the past few years in Africa, there is an improvement in inflation control, private enterprise owning states ventures, reduction in the budget deficit, international trade saw a rise has economies were opened for exchange.

The African labour market has a young population, with investment coming in, there is a provision of intensive production which can reduce the cost of production. Congo has the capacity to produce 58% of the world cobalt while South Africa produces 69.6% of the world’s platinum.

Foreign investment in these countries will decrease the cost of manufacturing the byproducts of these raw materials, making them available to the people, not forgetting it will also increase the size of its workforce.

With gradual changes in political and social reform, Africa has the potential to ruffle feathers with other developing economies to attract more foreign investment.  

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