Investing in emerging markets especially African markets requires a firm understanding of the continents economic and political landscape. The first thing to acknowledge is the diversity of the cultures (values and ideals) on this vast, natural resource rich continent with a population of 1.111 billion people according to 2013 figures.
According to the Overseas Private Investment Corporation (OPIC) and UNCTAD, Africa, with its burgeoning economies, offers the highest return on foreign direct investment (FDI) globally for investors seeking to diversify their income and realize higher growth rates than those available in home markets.
A general lack of infrastructure and financing means that a large amount of Africa’s Gold, Uranium, Oil, Diamonds and rare earth elements remain untapped presenting serious investors with huge potential profits if they are willing to take on above average risks and make significant capital investments.
With approximately 14.27% of the global human population residing on the continent, the consumer goods markets for products and services from the telecommunications and banking sectors presents an exciting opportunity for realizing huge revenues and profits.
In sub-Saharan Africa (SSA), capital markets are generally small and characterized with low levels of liquidity even though they deliver higher yields than in developed markets. In the region, the flow of capital is also vulnerable to many external shocks as was the case during the global financial crisis of 2008/2009 and the 2012 Euro crisis. The most active and liquid stock markets in the region are South Africa, Nigeria, Kenya, Mauritius and Zimbabwe with the Johannesburg Stock Exchange (JSE) representing 38% of all listed companies and 83% of total market capitalization in SSA in 2012.