Top six factors not to ignore when investing in Africa

farmer on his tractor plowing the field, rural wyoming

Foreign investors are increasingly becoming aware of the tremendous potential and financial reward the African continent offers. Foreign direct investments (FDIs) deliver a number of important contributions to economic development in terms of employment and foreign exchange.
In 2016, Africa benefitted from US$51bn of FDI. There are various investment opportunities that will generate investor returns whilst contributing towards economic and social development such as agribusiness, infrastructure and healthcare, amongst many other areas. Global investment firm Quantum Global has recently developed an innovative tool designed to guide investors on the most attractive African markets for investment in the short to medium term.
Each component of the newly developed Africa Investment Index (AII) (growth, liquidity, risk, business environment, demographics and social capital factors) enables for calculation of the risk premium for each African country – therefore presenting a more substantial case when considering African investment opportunities. Countries are then ranked in the AII according to their score.

Growth factors

Sub-Saharan Africa’s growth is predicted to continue to rise throughout 2018, including in low-income countries such as Ethiopia, Tanzania and Rwanda who are currently at the forefront of African growth. The AII’s growth factors look specifically at domestic investment (as a percentage of GDP), the size of an economy as well as economic growth.
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