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11 Nov 2014

Why Invest?

The question should be, can foreign businesses NOT afford to invest in Africa?

Based on projections made by international organisations such and the African Development Bank (AFDB) And International Monetary Fund (IMF), the future for Africa is bright.

The IMF forecasts "Growth in sub-Saharan Africa is expected to remain strong, at about 5 percent in 2014 and 5¾ percent in 2015.", despite the slowdown in the Global economy in recent years. According to the AFDB seven of the world's top 10 fastest-growing economies will be African over the coming years. The latest IMF report states that the combined economy of the region is expected to grow by 5.8 percent next year, with Nigeria, Tanzania and Zambia, to expand by 7 percent or more. There is no shortage of positive investment news.

More businesses should seriously consider early expansion and carving a market share while Africa is still underestimated by most. Many SMEs and large businesses have ventured into the market and are reaping the unprecedented rewards. Despite the issues with corruption, political, economic and health concerns, Africa is still attractive to many foreign businesses.The BIG secret is that the trend of economic growth in sub-Saharan Africa has withstood at least two decades despite the troughs in the global business cycle.

Due to the dynamic and unique nature of individual African countries, foreign businesses seeking expansion or business in Africa should conduct a risk-based due diligence as part of their investment decision making process. It is crucial that businesses, regardless of size, should give early consideration to a better appreciation of the complexities target markets.

See the full IMF report here


The opinions expressed do not necessarily reflect the views of John Leonard and Partners Pty Limited or its affiliates, or any of its or their respective other professionals or clients. This publication is not designed to provide legal or other advice and you should not take, or refrain from taking, action based on its content. Please contact us for Legal Notices.

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