There’s something you should know about Africa- the resource-rich continent has grown exponentially over the last few years. With a youthful population being omnipresent, debt levels lowering and trade funds improved, Africa is a great place to visit and live in.
Furthermore, global consultancy, Ernst and Young believes Africa is the second-best attractive investment destination after the US. Many experts have also concluded that Africa is ranking number one according to economic growth, and should be acknowledged as a mainstream investment option. In this feature, we list some strong reasons why you need to invest in Africa:
One of the basic reasons any investor decides to invest in a certain country or state is when they are impressed by the economic performance. According to the International Monetary Fund, Africa is number 7 out of the ten best economies across the globe. Additionally, several sub-Saharan countries are expected to rise by 0.5% per year after coming out of the financial crunch. And because COVID 19 has had a strong impact on several economies globally, businesses are slowly gravitating towards making everything functional.
Low Correlation Amongst the Markets
Africa isn’t correlated with the strong markets out there. In fact, the correlation is around 0.27. Secondly, according to recent research, the stocks in this country are dependent on domestic factors. For example, if you are looking for the best 10 dollar stocks, you will have to go through domestic markets to check out the most lucrative options. However, if China has a slower landing, it will have an impact on the African exporters. So when investing your money in stocks, don’t forget to acknowledge the relationship between this place and the rest of the world.
Low Debt Levels
Contrary to what you must have read or heard, Africa has lower debt levels as compared to several other strong economies across the globe. You would be surprised to know the debt level in the UK is around 77%, whereas in Africa, it is only 16%. It has also been found that countries with strong debt levels tend to impose higher taxes on the public. In contrast, states with lower debt levels enable their citizens to enjoy a good quality of life. So when you decide to invest in Africa, you can be rest assured that the tax amount won’t be as high as in other countries.
The Exciting Resource Story
If you go through the different articles on the web, you will frequently come across details about minerals, natural gas, oil, arable land, and food. But don’t focus on any of that because African land is equivalent to that of India, China, the US, Europe, and Argentina combined. Secondly, the non-oil output has also increased in the last few years. This is why Africa’s energy sector has witnessed massive improvement in the last decade.
Today, Africa is surrounded by a vibrant youth population and middle-class workforce. Experts believe the African workforce is equivalent to that of India. Secondly, as consumers continue to spend money on different products and services, the continent will become a better place for investors. When an economy has an increasing number of people willing to work every day, this gives a massive boost to the GDP. For instance, tourism is a major sector in Africa, a lot of people are happily looking forward to investing there.
If you conduct some research on the companies operating in Africa, you will be thrilled to know that the big names from the business world are present there. Africa is one of the top 15 countries that have been acknowledged for the strong five-year economic growth. Seruma has estimated that Africa will grow by 4.7% in the next 5 years. This makes Africa a great investment hub for the newbies in the market.