Should You Choose Africa as Your Next Investment Destination?
July 17, 2019 (Investorideas.com Newswire) For those who aren't in the know, Africa seems to be an eternal basket case, where risks far outweigh the possible benefits. But that general perception seems to be changing, thanks in part to China's willingness to invest in Africa as part of their Belt and Road initiative. But are the Chinese making the right choice by investing heavily in the continent?
Lessons learned from other developing nations that have become economic powers themselves have led to decades of steady improvement. Today, five of the world's ten fastest-growing economies are in Africa and the United Nations has tagged the continent as the second most attractive investment destination, after Asia.
Risk and opportunity
Of course, things aren't perfect by any means. Africa is a continent that is still under the effects of neo-colonialism. It extracts and exports most of the raw materials needed to make our most advanced technologies, yet it sees very little of that wealth and very little of those raw materials are processed into finished commodities indigenously. Infrastructure, sanitation, and education are still a far cry from what is typically present in other developed countries.
This also spells opportunity. Should African countries start to create desirable value-added items within their own borders, that could very well upset the current balance in favor of Africans. This has led to many African countries attempt to attract foreign investment.
And while the West has been skittish, Chinese businesses certainly seems up to the challenge. Thanks to investments and the easy availability of Chinese hardware, software development is on the rise in Nigeria, South Africa, and Kenya. Consumer tech items such as mobile phones are now being manufactured in Africa, with assistance from Chinese companies, and other tech items may soon follow.
Indeed, even negative articles about Chinese investment in Africa by Western writers often betray an acknowledgment that Western countries have been missing out, despite almost exclusive access to the continent and near-endless military interventions for decades.
All signs point to African countries as a whole being where South American economies were during the 1980s, except with the benefit of the lessons of those countries as well as with access to important technologies that allow small players to level the playing field such as the internet. In the past few decades, buying power has continuously increased almost across the board, and countries like Kenya and Nigeria are now home to a real middle-class. Even today, there is a massive, untapped market for all kinds of goods and services for investors willing to recognize the continent's potential.
While there is certainly still plenty of room for improvement, people often forget that Africa is the world's largest continent, with 54 countries and a combined population smaller that is still smaller than India's or China's. Each of those countries provides countless opportunities for the investors brave or savvy enough to find them.
Regardless of your next investment destination, be sure to get international insurance coverage from a specialized insurer like Now Health International. This will allow you access to quality comprehensive healthcare virtually anywhere in the world, and with lower premiums compared to most insurers.
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