Developing Africa Is Mature for All Types Investment

DEVELOPING AFRICA IS MATURE FOR ALL TYPES INVESTMENT.

Introduction

This article’s main objective is to draw attention on the African continent and the numerous investments’ opportunities it offers investors from the rest of the world. It intends to provide the latter with precise information on that often forgotten area. Although it has abundant natural resources,Africa remains the poorest and most underdeveloped continent, the result of a hasty economic liberalization marked by a lack of access to foreign capital in this critical period of globalization.

Only China has built increasingly stronger trade ties with African nations and is therefore Africa’s largest trading partner. In 2015, Chinese companies invested a total of USD10 billion in Africa and in 2016 China pledged to invest USD 50 billion the next six years in Africa.

Thus, Africa also needs more investments from Western companies and firms so as to diversify commercial partners. Yes indeed, Americans and Europeans are the first partners of the African nations in terms of development aid since the post-independence era. But African countries need more since they boast culturally close ties with the West, which could be a big advantage to boost trading.

Six profitable economic sectors to invest into will be developed in the following lines: Minerals, Agriculture, Tourism, Information Technology and technologically mediated information, Energy and Stock Market.

Minerals

Africa as continent is believed to hold 90% of the world’s cobalt, 90% of its platinum, 50% of its gold, 98% of its chromium, 70% of its tantalite, 64% of its manganese and one-third of its uranium. The Democratic Republic of the Congo (DRC) has 70% of the world’s coltan, a mineral used in the production of tantalum capacitors for electronic devices such as cell phones. The DRC also has more than 30% of the world’s diamond reserves. Guinea is the largest exporter of bauxite.

Of course, those minerals are exploited by investment companies from all over the world, but investments could be increased and improved if raw minerals were processed in Africa. Investors could benefit from the huge cheaper manpower from Africa and increase their profits on the international mineral market.

On the other hand, African countries could benefit from that new form of investment. In fact, as the growth in Africa has been driven mainly by services and not manufacturing, it has been growth without jobs and without reduction in poverty levels.

Tourism

Africa boasts perhaps the world’s largest combination of density and “range of freedom” of wild animals populations and diversity, with wild populations of large carnivores (such as lions, hyenas, and cheetahs) and herbivores (such as buffalo, elephants, cannels and giraffes) ranging freely on primarily open non-private plains. It is also home to a variety of “jungle” animals including snakes and primates and aquatic life such as crocodiles and amphibians. In addition, Africa has the largest number of megafauna species, as it was least affected by the extinction of the pleistocene megafauna.

All of this explains why Africa has over 3,000 protected areas, with 196 marine protected areas, 50 biosphere reserves, and 80 wetland reserves. That profusion of animal species and natural reserves may be for advised investors in tourism industry an opportunity to build hotels, amusement lots, playpens, etc. since the number of tourists who choose Africa as destination increases year by year. That tourist trade and its huge potential could result in infrastructures’ improvement and upgrading ,especially when it comes to transport sector, construction of roads, highways, railways and runways to relay the different reserves and the cities. Welcome to Africa.

Agriculture

Agriculture in Africa is traditional, on elementary stage in certain countries. Mechanized agriculture could be a profitable sector of investment. In addition it could trigger a land reform as well as an agrarian revolution especially in Sub-Saharan Africa. Yes indeed, million of hectares of land are suitable for cultivation but modern tools are needed since the millennial hoe used by peasants is obsolete in modern times in view of its weak output in terms of foodstuff. Anyway, to import food may not be a sustainable solution. In fact, the food security crisis in 2008 which took place on the heels of the global financial crisis has pushed back 100 million people into food insecurity. According to Professor Calestous Juma “African agriculture is at the crossroads; we have come to the end of a century of policies that favoured Africa’s raw materials export and importation of food. Africa is starting to focus on agricultural innovation as its new engine for regional trade and prosperity”. But for that to happen, the rest of the world has to invest USD billion in Africa, especially in Sub-Saharan Africa for that area to be a new granary for the world not only in industrial cultivation (coffee, tea, flowers) but also in fruit farming and foodstuff cultivation. Africa looks forward to seeing you, investors from all over the world!

Information Technology (IT) and Technologically mediated Information.

Information Technology (IT)

Information Technology sector is growing fast in Africa and is called to be a must for the development of the whole continent. Receiver radio in almost all households, mobile phone (almost 70% of the Africans) little by little are transforming the African continent making it closer to the rest of the world, boosting business, and gradually removing the negative image of Africa being only a war-torn zone, reducing uncertainty around numerous exaggerated preconceptions which discourage investors preventing them from investing in that area of the world.

The transformation of the African society is an important point in the study of Information and Technology (IT), as it relates to knowledge management. In this practice, tools and processes are to be used to assist a knowledge worker in performing research and making decisions, including steps such as:

. reviewing information in order to effectively derive value and meaning that abide with African culture and needs.

. deriving new knowledge from the information coming from abroad.

. making decisions or recommendations from the resulting knowledge adapted to African societies.

That discipline (IT) offers unlimited opportunities to investors who are keen to establish knowledge-based business companies in African countries.

Technologically mediated Information

It is estimated that the world’s technological capacity to store information grew from 2.6 exabytes in 1986 –which is the informational equivalent to less than 539 MB per person- to 295 exabytes in 2007. This is the informational equivalent to almost 61 CD-Rom per person in 2007, today far more.

The share of Africa as continent is still insignificant even though giant steps have been made since 2000. As today, more than 20 international Internet companies are doing profitable business in Africa. However, the slow development of technologically mediated information is still due to the weakness of the records. Essentially, records are information produced consciously as by-products of business activities or transactions and retained because of their value. Primarily their value is as evidence of the activities of the organization, but they may also be retained for their informational value. Sound records management ensures that the integrity of records is preserved for as long as they are required.

Africa has few business companies compared to the rest of the world, few business activities and few transactions, thus weak records. It’s crystal-clear that boosting the capacity to store information is an expensive program. African nations need as many investors as possible to make that crucial sector viable because it could be the real engine able to revolutionize their development model and their economic planning thanks to reliable data and statistics. Welcome investors.

Energy

Living organisms require available energy to stay alive, such as the energy humans get from food. Civilization gets the energy it needs from energy resources such as fossil fuels, nuclear fuel, or renewable energy. The processes of Earth’s climate and ecosystem are driven by the radiant energy Earth receives from the sun and the geothermal energy contained within the earth.

Africa is the continent that suffers the most from the lack of sufficient energy since the possibilities of developing hydro-power energy is limited by the small number of major falls and rivers. The major dams (Assouan in Egypt and Inga in RDC) are built on the two sole major rivers which areNile river and Congo river. The other countries have to use either fossil fuel or geothermal energy or both since there are no nuclear plants in Africa. Those forms of energy are expensive but paradoxically unable to produce a lot of energy. Thus, those countries have to complete their national grid by renewable energy, especially solar energy since the sun shines 350 days per year.

That sector (renewable energy) could be the most profitable in the near future. Advised investors may be ready by now and invest the maximum possible in Africa, especially in the safest countries.

Stock Market

A stock market, equity market or share market is the aggregation of buyers and sellers (a loose network of economic transactions, not a physical facility or discrete entity) of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange as well as those only traded privately. Example of the latter include shares of private companies which are sold to investors through equity crowdfunding platforms. Stock exchanges list shares of common equity as well as other security types, e.g. corporate bonds and convertible bonds.

Most of the countries in Africa have stock exchanges where major banks and companies (often international firms) make transactions and deals. Yet, the time has come for Africa to learn how to trade and invest internationally and not only domestically. Yes indeed, Africa has the required technology as banks operate internationally thanks to RTGS (Real Time Gross settlement) and SWIFT (Society for worldwide Interbank Financial Telecommunication). And the optic fibre has made access to broad band internet easy in all the towns of the continent.

It’s the right time for Africans to increase by their active participation the billion transactions dealt every day on the international financial markets. African nations have to be part of the international business community since we live in globalisation era. In addition, their stock exchanges have to be known and used by the rest of the world, allowing trading, speculation, short-term and long-term investments on the international level. Feel free in Africa.

Dr. Vincent Kageruka