It’s no secret that Africa is the hot new infrastructure investment prospect in the world, with a young population and several markets in high single-digit GDP growth. But speaking of Africa in such general terms is dangerous, as it is a vast continent with markets more varied even than Europe or Asia. So where are the best investment prospects to be found? In this article we look at where to invest in Africa for the best returns.
With over 6% growth, Ethiopia is set to be Africa’s fastest-growing economy, and while much of this growth comes directly from mineral and hydrocarbon exploitation, the real opportunities lie in the subsequent need for the development of civil engineering caused by rapid urbanisation in the country – with opportunities in just about every field including road building, hydrological engineering and utilities. Other infrastructure, such as port facilities and transport infrastructure, will also be necessary.
Construction is a popular target for private investment in African countries, with many large engineering firms – particularly from China – seizing the opportunities caused by population growth and increased wealth. But though this is the low-hanging fruit, significant attention is paid by African governments to more complex civil infrastructure such as water and energy supplies, with 83% of such projects attracting Government investment, while just 12% comes from private sources. Attempting to redress that balance is a sound strategy for targeting a relatively untapped market.
The rapid growth of many African countries has led to the urgent need for improved water supply projects both in individual countries and across the whole continent, connecting cities and whole regions to aquifers that enable further population growth. Countries with large water resources, such as Rwanda, stand to make large amounts of money in the supply of their own people and projects in other countries, but often struggle to attract large enough Government investment. Here joint Private-Public investment has a great opportunity to succeed where one or the other has failed, in both the creation of water carrying infrastructure and other necessary elements such as water purification and sewage treatment. While risk is sometimes a factor in holding back private investors, the mitigating factor of government involvement should be enough to reassure potential backers and convince them to invest.
Where to invest in Africa – where to find out more
Jabiut manages a wide range of diversified portfolios across several African countries. We work with investment partners to manage major capital projects to help African nations build and implement the basic infrastructure they need to allow their economies to thrive and their people live better lives. Read more about what we do or get in touch to discuss how we can work together and generate real returns for investment partners.
Read more about what we do.
Or get in touch to discuss how we can work together and generate real returns for investment partners.
About The Author
Tunde is the founder of UK-based Jabiut Development Partners; a strategic development, infrastructure finance and project consulting organisation. He is actively involved in major programme delivery and strategic advisory; providing numerous organisations and arms of government with advice on capital projects, project financing and infrastructure concession placement.
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