Over the years, Africa has gotten the reputation of being a land of fertile soil and vast natural resources. Hence, it is a land of so many business opportunities. Investors, entrepreneurs, and expatriates worldwide are continuously seeking untapped resources on the continent.
Although investors could go anywhere in the African market and find growth, it is important to understand the unique situation in each market. You have to do your research and choose an environment where the process is relatively easier. This will ensure the success of the business.
Moving forward, if you’re nursing the thoughts of starting a business in Africa, then the question on your mind would most likely be “Where is the best country to do business in Africa?”
This post serves as a list of the best countries to do business in Africa if Africa’s developing economies attract you as an investor. Keep reading!
What are the Advantages of doing Business in Africa?
Before venturing into any investment, it’s important to know the associated risks and rewards. As a result, we’ll share some of the reasons why doing business in Africa may be the next best thing for you as an investor.
Africa is the fastest-growing continent in the world. The best part is this growth is being fueled by a young and rapidly urbanizing population. As a result, there is potential for growth in the service and consumer goods industries.
Vast Natural Resources
When it comes to natural resources, it is safe to say that Africa is the most blessed continent. The Northern region is rich in crude oil reserves. In the same manner, the southern part contains vital mining industries. Many of these natural resources remain untapped, hence, they offer an opportunity for growth.
According to the United Nations Conference on Trade and Development, investing in Africa offers the highest returns on foreign investments worldwide. However, it is important to keep in mind that the high returns compensate investors for the risks involved in doing business in the continent.
Drawbacks to Doing Business in Africa
As we mentioned earlier, every business idea comes with risks and benefits. Let’s take a look at some of the potential risks that come with doing business in Africa.
Civil wars can take their toll on people and the economy at large. Not only do these wars come with security risks but they also increase the likelihood of political instability. All these can serve as potential risks for investors.
Sadly, quite a lot of investors are apprehensive about investing in Africa because of its political instability. Most investors would rather not deal with the corruption, bureaucracy, and inconsistent policies that are peculiar to African countries.
Best Countries to do Business in Africa
If you’ve decided to expand the shores of your investments to Africa, here are the best countries that you can consider.
Thanks to its geographical proximity to the Middle East and Europe, Egypt has become a potential destination that investors should look at for business. Other factors that make Egypt a potential market include its incredible pool of talent, high population, affordable cost of living, and relatively cheap real estate.
Another country to consider for business is Morocco. This is because the country enjoys a relatively stable political system that directly translates to its sturdy economy.
So, beyond the vibrant culture, superb cuisine, and beautiful landscape, Morocco is a financial hub from which many European countries can access the African market.
As the least indebted country in Africa, Botswana has one of the strongest economies to develop in Africa. This is no thanks to the Pula Fund. Pula Fund is Botswana’s long-term investment portfolio from preserving part of the country’s revenue from diamond export.
Botswana is particularly desirable for high-net-worth investors seeking to invest in Africa because of the ease of doing business and low levels of corruption.
Over the years, South Africa has received the bulk of direct investment in foreign stock in the whole of Africa. Hence, it has gained the reputation of being one of the most popular places to invest in Africa.
In addition, the sound economic policies, mature capital markets, and availability of financing services make it a great investment opportunity for investors.
Despite its small size, Rwanda is one of the fastest-growing economies in Nigeria. Rwanda has grown to become one of Africa’s emerging markets with particular emphasis on private equity firms, institutional investors, multinational companies, and venture capitalists.
Mauritius is known for two major things globally— its tax-friendly environment and its sugar products. Although its agricultural sector is the main market, investors would be glad to know that the country is diversifying its economy. Other sectors of the economy like textiles, exports, and tourism are being developed to lessen the country’s dependence on sugar.
Kenya is a good place to invest if you want to test the waters of the African market. The East African country is Africa’s economic, commercial, financial, and logistics hub. The economy is largely driven by young entrepreneurs in technology, particularly those in the fintech industry. So, if you’re a foreign investor with a social impact in mind, this is the country to consider.
There you have it! The best countries to do business in Africa. Now that we’ve helped you narrow down your options, it is your turn to do due diligence.
As we’ve said, Africa is a land filled with so many opportunities. However, it is important to remember that these opportunities come with their associated risk. As a result, it is necessary to understand the uniqueness of each market before deciding which country to invest in.
Moving forward, after choosing a country to do business in, you’d want to ensure that all your business operations go smoothly. That’s where Changera comes in.
Changera helps you manage your business by providing tools and services that keep your business running. From receiving payments from customers all over the world to funding import and export, Changera has got you covered.