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.
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.
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.
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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.
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.