5 best Countries to Invest in Africa 2022
Are you looking for the best countries to invest in Africa? Continue reading this post to find out.
African countries offer enormous economic potential and lucrative investment and partnership prospects. There are a variety of reasons why investors from all over the world are becoming interested in Africa. For those with long-term investment plans, Africa presents a great opportunity. This is because, from a global investment standpoint, Africa remains “undiscovered,” leading to what many believe are extremely low valuations in both debt and equity investments. These, in turn, provide appealing entry points, particularly in comparison to values in many more established markets.
Furthermore, Africa is experiencing a major population surge; now, Africa accounts for 17% of the world’s population. Africa is growing at a rate of double the population of France every two years. Projections state that it will double in size by 2050. Between 2050 and 2100, it is anticipated to double to 4.3 billion people. As such it will account for up to 40% of the world’s population. To meet the requirements of its rising population, African economies must diversify. They need to consider new sectors such as telecommunications, consumer, and infrastructure are fast-growing.
Best Countries to Invest in Africa
Africa is developing along the same lines as Asia. The following decades will see a significant increase in earnings and ongoing reductions in poverty. There will also be significant economic gains for early investors. So, if you’re seeking the best countries to invest in Africa this year, check the list below.
Nigeria
Nigeria had a great 2021. This is Aside from missing out on the Rand Merchant Bank’s list of nations to invest in for 2021. According to Statista, Nigeria’s gross domestic output reached $514 billion in 2021. This made it the African country with the highest GDP. According to the National Bureau of Statistics, Nigeria’s GDP increased by 4.03 percent in the third quarter of 2021.
The figures mark the fourth straight quarter of increase. However, they are lower than the 5.01 percent achieved in the second quarter of 2021. Communication, information, and services account for about 10% of total output, according to Trading Economics. Construction, industry, and principal exports account for 16 percent of GDP. On the other hand, agriculture, natural gas, and crude petroleum account for 11 percent. These make Nigeria one of the best countries to invest in Africa this year.
Egypt
Egypt has a population of over 105 million people, according to the World Population Review. According to Reuters, the country’s GDP grew by 9.8% in the first quarter of the fiscal year 2021-22.
According to the IMF, FDI in Egypt would increase year over year until 2025. With FDI capital investment increasing by 59 percent in the financial year 2021–22 to $8.6 billion. It also predicts that FDI will increase to $11.7 billion in the fiscal year 2022–23. After this, it will rise to $16.5 billion in the fiscal year 2024–25.
Egypt boasts of a large economy and so is one of the best countries to invest in Africa. The government received 140 greenfield FDI projects in 2019. This rise is up 52 percent from the previous year and the highest level between 2003 and 2020. Egypt has attracted more than 10% of FDI into Africa since 2016 and prior to Covid-19. With investments in major industries including automotive, financial services, agricultural, and ICT.
Second, only to Nigeria, Egypt has the second-highest GDP in Africa, at $394 billion dollars. Despite the consequences of the pandemic, Egypt thrived in 2021. It has a diverse economy that benefits from fossil fuels, agriculture, and tourism, making it a great investment destination. The Egyptian government announced the creation of seven new free zones in 2019. These aim to attract more investors and boost exports and productivity. Egypt was also one of the few countries to see GDP rise in 2020. The country saw a rise from $303 billion in 2019 to $363 billion in 2020. According to the IMF, real GDP growth would be 3.3 percent in 2021 and 5.2 percent in 2022.
Botswana
Botswana is one of the fastest-growing economies in Africa. Its economy is predicted to grow at a 9.7% annual rate in 2021. The country’s GDP has been predicted to expand at a rate of 4.3 percent this year. Following advances in money-laundering management, Botswana was removed from the Financial Action Task Force’s (FATF) ‘grey list’ in October 2021. Money laundering, terrorist financing, and other illegal money flows are the focus of the FATF, an intergovernmental organization. The removal from the list has inspired hope. It should help Botswana’s efforts to diversify its economy and attract foreign investors.
In addition, the country intends to make use of its energy resources. By 2027, it wants to be a net exporter of electricity. Botswana, Namibia, and the United States signed a memorandum of understanding in 2021. This document will see them jointly develop a giant solar project in the two southern African countries. This has the capacity to generate between 3,000 and 5,000 megawatts of electricity. Once realized, the country would become one of the world’s leading producers and exporters of solar energy.
Tanzania
Tanzania’s GDP has been rising steadily since 2016. It is expected to reach $62.4 billion in 2020, an increase of around 6% over the previous five years. Following the stabilization of food prices, inflation fell to 3.3 percent in 2020. Tanzania was listed among the world’s ten fastest-growing economies in the 2020 African Economic Outlook report.
In 2020, the country will be classified as a lower-middle-income country. Tanzania’s Development Vision 2025 intends to push the country closer to middle-income status by the year 2025. Tanzania’s GDP is expected to expand by 4.9 percent in 2022 and 6.3 percent in 2023. These figures are based on projections by the African Development Bank.
Tanzanians were also encouraged by the appointment of President Samia Suluhu Hassan in April 2021. Following years of feuding, Hassan traveled to Kenya for negotiations aimed at improving commercial relations between the two countries. She has also stated that she will reduce income taxes and analyze existing tax systems and charges. These African countries, all of which are growing, have a bright future ahead of them. Covid-19, especially the Omicron version, will result in additional obstacles. However, both appear to be in good shape to survive the pandemic. The country now offers profitable business chances to investors thanks to new legislation encouraging international investment.
Morocco
According to available data, Morocco has the fifth largest economy on the African continent in terms of GDP. Morocco’s GDP was $124 billion in 2021, according to Statista. The country’s economic growth is expected to reach 3.2 percent in 2022, according to forecasts. Morocco’s GDP had been rising year after year since 2016, peaking at $119.7 billion in 2019, just before Covid-19 struck. The country has a 4.5 percent yearly compound growth rate.
Morocco has also recently launched the Green Generation 2020–2030 agriculture strategy. Its main goals are to promote and encourage young people to invest in one million hectares of arable land. This will result in the creation of 350,000 employment and a $6.6 billion increase in agricultural exports by 2030. In 2019, FDI inflows peaked in the country, with a total of 111 FDI projects recorded. This is about 56% higher than the previous year. In 2020, the country ranked third in Africa in the World Bank’s Ease of Doing Business assessment. It achieved this with a 1.7 point rise in its score, providing an appealing environment for investors. The economy of the country is liberal, based on supply and demand.
Conclusion
Apart from the African countries mentioned above, several more have been found to have significant growth potential this year. Kenya, South Africa, Algeria, Ghana, Ivory Coast, and Ethiopia are among the other countries. Consider doing your study before investing now that you know the best nations to invest in 2022.
Before you invest your money, think about the business environment and political concerns. Instead of investing blindly, do your homework on the growth, liquidity, and risk variables to avoid losing money. Proceed with great caution but don’t be crippled by fear. Don’t forget to visit SME360 to find out how to establish a profitable business.
