Invest in Africa

Investing in Africa: The Business Case

With some of the fastest-growing economies in the world, African nations are playing an increasingly significant role in the global economy. The population is young and rapidly growing, and household incomes and consumption are projected to rise. Digital and mobile access is rapidly increasing, the infrastructure gap is closing, and Africa is primed for mass industrialization. Further, the U.S. Government has taken unprecedented steps to support investors. And with business environment reforms being made across the continent, the prospect of investing across Africa’s numerous and diverse countries is much different than it was in decades past.

Despite the wealth of opportunities, doing business in Africa continues to be associated with real and perceived risks. Institutional and infrastructure barriers, risk and reward imbalances, and high transaction costs can make it difficult for U.S. investors to find opportunities and close deals.

Prosper Africa, the U.S. Government initiative to increase trade and investment between African nations and the United States, helps mitigate those challenges. Leveraging the tools of 17 U.S. Government agencies, Prosper Africa provides investors with market insights, deal support, financing opportunities, and solutions for strengthening business climates.

Investment Opportunities in Africa

Increasingly favorable market conditions are spurring entrepreneurs and companies across Africa to innovate products and services, and investors are already working with Prosper Africa to close deals. Investment opportunities in Africa vary by country and region, and they span diverse business sectors and asset classes, including venture capital, private equity, institutional investment, and foreign direct investment.

Financial Services

Household income in Africa is rising, resulting in increased demand for financial services like banking, insurance, mobile payments, and loans and credit. These demographic trends—alongside the increase in digital and mobile access, the prospect of mass industrialization, and the narrowing of the infrastructure gap—promise to drive investment and unlock new trade opportunities for U.S. and African businesses across a range of high-potential sectors. This makes financial technology (fintech) ripe for U.S. investment. Already across Africa, there are more than 180 million active mobile money accounts—over 50% of the global total—with five times the growth relative to all other regions¹.

Health Care

Africa’s population is expected to make up one-fifth of the world’s population by 2030². This will increase demand for health care infrastructure, health care services, and personal health care products. While there is growing demand for traditional brick-and-mortar points of care, telemedicine and digital health also show promise, especially with increasing internet connectivity and mobile use across the continent.

Information Communications Technology (ICT)

Expanding internet access and increasing adoption of technology across Africa has resulted in a digital boom. In 2018, there were over 456 million unique mobile subscribers in Sub-Saharan Africa (about 44% of the region’s population, up from 20% in 2015)³. And as internet connectivity increases, so will the demand for services in sectors like e-commerce, education, financial technology, digital health, entertainment, cybersecurity, data analytics, and more.

Learn More About U.S. Government Support for Tech Deals Here

Infrastructure

As its population grows, Africa is also experiencing rapid urbanization. By 2025, there will be 100 cities with more than one million inhabitants, compared with Latin America, which is projected to have only half as many highly populated cities⁴. The resulting need for infrastructure creates investable opportunities in telecommunications, energy, water and sanitation, and transportation.

Other Sectors

Additional investment opportunities include growing sectors like accommodations, agriculture, aerospace and defense, consumer goods, design and construction, environmental technology, food and beverage, and textiles and apparel.

The above analysis is informed by the Prosper Africa Roadmap. From March-August 2020, the Roadmap team from McKinsey & Company and the CrossBoundary Group engaged in a collaborative research process, drawing from data-driven analysis, in-depth interviews, and interactive workshops with key U.S. Government and private sector stakeholders, think tanks, and other thought leaders to chart a course for strengthening the trade and investment partnership between the United States and Africa.

How to Invest in Africa

Investing in Africa requires becoming familiar with African markets and enterprises operating on the continent, conducting due diligence, understanding the risks and opportunities, and deciding what’s right for you and your business. It can be difficult to know how to start. Here are three ways:

Register Your Interest in the Virtual Deal Room

Prosper Africa’s Virtual Deal Room is a space where U.S. investors can explore investable opportunities that have been curated by on-the-ground experts.

Visit the Virtual Deal Room

Browse the Prosper Africa Toolkit

Browse the Prosper Africa toolkit below for resources that enable you to identify new investment opportunities, scale up existing investments, and lower costs. Prosper Africa also supports U.S. businesses seeking to expand by exporting to Africa.