Africa emerges as ‘sustainable’ investment market

Sub-Saharan Africa is beginning to substantiate itself as an attractive investment destination, with international equity now a major source of investment, says Equus.

Capital markets communications agency Equus said international equity has become the fastest-growing source of investment in Sub-Saharan Africa.

Equus argued that growth in the region “looks to be sustainable”, with favourable demographics and a growing middle-class fuelling domestic demand for local products.

“The young, growing population also serves as a source of competitive labour and boosts the consumer market as a whole,” the update said.

Moreover, referring to data by the United Nations Department of Economic and Social Affairs, by 2040 Africa will have a larger working age population than China or India.

“Consumer-facing industries such as [fast moving consumer goods (FMCG)], financial services, healthcare and telecoms, will naturally account for the majority of growth, providing a strong platform for success,” Equus said.

While international private equity has increased within the region, and opportunities are evident, Equus said the market still needs to mature.

“Better risk management tools are needed, as is a continuing maturation of the market, in order to ensure the benefits of this capital are realised.”

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