Africa, described as a fast-growing continent for foreign direct investment, has an abundance of natural and human resources and untapped market potential. Rich in commodities, it has 40% of the world’s gold reserves and 30% of mineral reserves, many being critical to the technology, automotive and energy industries.
The wealth of resources also extends beyond commodities to its vast human capital and potential. According to a recent study by Cities Alliance, a global partnership fighting urban poverty and supporting cities to deliver sustainable development, over 60% of the population in Africa is below 25, which suggests it is a hotbed for fresh talent for businesses looking to grow and invest in their workforce.
Why is this important? According To Faniro-Dada, Managing Director of Endeavour Nigeria, “The data is clear - Africa is the next digital growth frontier. The combination of our young and digitally savvy population, an emerging technology ecosystem and the impact of the COVID-19 pandemic on behaviours is set to trigger an inflection point in our digitisation journey. We have been excited by the increased levels of funding that our entrepreneurs are attracting, but we want to make it even easier for more investors to bring out their cheque books to catalyse the growth that we believe is pending.”
The year 2021 saw private investment in Africa hit a record high of $7.4bn, according to an annual report by African Private Equity and Venture Capital Association (AVCA). The report states, “Africa’s economies are leading as a region of resilience with vast potential”.
While there may be a wealth of opportunity, there are a number of risks which growth focused investors and businesses should factor into any expansion plans.