July 24, 2024

  • Bitcoin(BTC)$24,383.00-1.66%
  • Ethereum(ETH)$1,657.83-2.53%
  • Tether(USDT)$1.000.18%
  • BNB(BNB)$310.23-1.26%
  • USD Coin(USDC)$1.000.10%
  • XRP(XRP)$0.39-0.81%
  • Binance USD(BUSD)$1.000.05%
  • Cardano(ADA)$0.39-2.73%
  • Dogecoin(DOGE)$0.09-2.67%
  • Polygon(MATIC)$1.38-6.66%
parkisgold-zz

Why Africa is still World Best Investment Destination

0 27
Investing in Africa

CEM REPORT, ECONOMY | The continent of Africa has become resilient over the years with pragmatic successes in the path of growth and development despite economic challenges posed by climate change, geopolitical tensions, global inflation and rising debt, among others. The abundant resources with which the continent is endowed undoubtedly forms the stronghold for resilience and growth.

These resources are what has positioned the continent as still the world best investment destination now and the future. Once again, the vanguard of African investment potentials, Dr Akinwumi Adesina, the President of African Development Bank (AfDB) has again reeled out these resources and the prospects it bears for both local and foreign investors.

In his speech at the 50th anniversary celebration of the Arab Bank for Economic Development in Africa (BADEA) in Riyadh, Adesina outlined five reasons why Africa is the world’s investment frontier. The first and indeed the prominent is the size of African population. Of great emphasis is the abundance of working youth in the continent.

parkisgold-zz

According to Africa Union, Africa has the youngest population in the world with more than 400 million young people aged between the ages of 15 to 35 years. This army of workforce is the biggest asset the continent has making every investment in economy of Africa worthwhile. Not only is the population large, it is also enterprising and innovative driving tech, creative, service and production sectors.

The continent’s renewable energy potential is almost unlimited. “Africa has 39% of the world’s renewable energy potential, more than any other continent”; Joab Okanda, Christian Aid’s Pan African Advocacy Advisor, declared in 2022, a figure that is undisputed. Africa is endowed with solar capacity of 10 TW, hydro capacity of 350 GW, wind capacity of 110 GW, and geothermal energy sources up to 15 GW.

McKinsey wrote in 2023 that Africa’s energy needs could double by 2050 as its population grows over the next three decades. At present, around 600 million Africans lack access to electricity (about half the total population), and this is expected to rise to 1.2 billion by 2050. Similarly, while 920 million Africans lack access to clean cooking, this could double to around 1.8 billion people in 30 years. Industrialization will also drive Africa’s energy demand, with the continent’s manufacturing output projected to grow by more than 6 percent each year until at least 2025.”

[READ ALSO] Global Cotton Market Boom: Growth Opportunity for African Producers

It was further stated that in the article that “Renewables will become more important in electricity generation, but only progressively: ramping up in 2030 to reach 65 percent of installed capacity by 2035 and around 95 percent by 2050. As for renewables, solar and wind will grow much faster than hydropower, with around 70 percent of installed capacity coming from solar, 20 percent from wind, and 10 percent from hydro by 2050.”

Akinwumi mention the abundance of arable land in Africa. Africa has 65% of the world’s remaining uncultivated arable land, an abundance of fresh water and about 300 days of sunshine each year. This coupled with abundance of agile workforce makes investment in Africa’s agriculture a savvy business decision and a global strategic food security plan.

In the short run, investments in irrigation, mechanization, storage facilities, and modern inputs will allow farmers to grow enough food for the continent’s food sufficiency. In the long term, following the rate of world population increase, Africa will become the global breadbasket.

An added factor to the investment viability of Africa is the African Continental Free Trade Area (AfCFTA), which Dr Akimwumi noted is “the single largest free-trade zone in the world in terms of number of countries.” The African Continental Free Trade Area (AfCFTA) is the largest free trade area in the world measured by the number of countries participating. The pact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion.

The Bank Group president added, despite headwinds confronting Africa, “more than half of African countries—31—achieved higher real GDP growth rates in 2023 than in 2022. And most noteworthy is that 10 African countries are among the fastest-growing economies in the world.” This signify the undeterrable nature of Africa growth and development.

Share this

Leave a Comment

parkisgold-zz
glo advert
WP Twitter Auto Publish Powered By : XYZScripts.com