Why investing in Africa will guarantee you good returns

Evelyn Kasiri

In a presentation to the American Association for Advancement of Science (AAAS) in Seattle, at the beginning of 2020, billionaire Bill Gates told leaders how he predicts  Africa to be worst hit by the Covid-19.

However at the end of December 2020, Africa had been least affected by the corona virus, despite the fact that some economic sectors like tourism and oil declined significantly.

The 2021 Africa Outlook report, published by Atlantic council on 22nd December 2020, said that, "African nations have mostly escaped the heavy death toll and hospital bed shortages faced by western countries.."

"Its a miracle that in spite of the slower economic growth in Africa, we have received commitments of over 2.4 billion mobilised by Global Economic Network for banking, energy and agriculture in Nigeria, Tanzania, Ghana and Uganda.

Numerous western studies including from Mckinsey.com and  brooking.edu reveal that investing in Africa's business potential has already proved to offer higher returns.

So, if the demand and the opportunities for profitably investing in Africa exist, why is it that global investors used to be hesitant about investing in Africa? What has been holding global investors back from Africa for a long time? What has started to change in favour of investing in Africa?

In order to understand why global investors have been hesitant about Africa, one study, by A Leke titled 'Africa's Untapped Business Potential' on brooking.edu said global investors, when analysing opportunities in Africa in underestimate its fast-growing population and markets.

Paul Boynton at Old Mutual explained his reasons as to why global investors used to be hesitant  about investing in Africa, saying that "I believe that it is primarily because of the perceived risks of investing in Africa being much higher than the actual risks" ( in the  Financial Times August 28 2019).

Collins Tugumisirize, CEO of Leverage Africa Limited and Senior adviser to Global Economic Network on Africa said that, "Development agencies used to promote a comparatively negative narrative about how the world should perceive economic situations in Africa, which made risk analysts magnify obstacles to investing in Africa, until Covid-19 pandemic came, where media reports in 2020 have revealed how western populations have suffered more infections and deaths.