Investing in Africa – funds at a glance

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Africa is increasingly moving into the public eye as an attractive investment location. However, the continent comprises 55 states. In addition, the search for the perfect investment product for investing in Africa is being made more difficult by a growing number of providers. In this article we give an overview of providers of African investments.

Why does Africa's industrialization matter? Challenges and opportunities? |  African Development Bank - Building today, a better Africa tomorrow

Frontier markets as investment locations are increasingly moving into the focus of investors. Because the classic investment locations, such as Europe, the USA and certain Asian countries, are already very saturated and it is becoming increasingly difficult to achieve good returns. In addition, as the development status increases, so does the susceptibility to crises, as was shown again in the Corona year 2020. Frontier markets, on the other hand, still offer a lot of space to achieve high efficiency increases and corresponding returns through investments.

The African continent is particularly interesting because industrialization is only just beginning in many countries. The Foreign Office says about Africa: “No continent is growing economically and demographically as quickly as Africa. In the past ten years, investments by German companies have doubled. The African gross domestic product has grown by 30 percent in that time Afrika fonds investieren. The bad image that clings to the continent in terms of economy has long since not matched the dynamic development figures. “Chancellor Angela Merkel put it more succinctly:” Investments in Africa are investments in the future. “

THE BAD IMAGE THAT CLINGS TO THE CONTINENT IN TERMS OF ECONOMY HAS LONG SINCE NOT BEEN IN LINE WITH THE DYNAMIC DEVELOPMENT FIGURES

African states and regions
The economy needs a good political framework in order to flourish. However, not all 55 African countries meet this requirement. It is therefore important to separate the wheat from the chaff.

According to the IMF (International Monetary Fund), Africa as a whole grew by 3.2% in 2019 (Europe 1.6%). For the Corona year 2020, the IMF expects growth of at least -1.7% (Europe: -6.7%).

THE ECONOMY IN EAST AFRICA IS BOOMING
East Africa is particularly interesting for foreign investors. Because it is the fastest growing region in Africa. The entire region grew by 6.3% in 2019. The economy is also stable in the Corona year 2020. The IMF expects positive growth of 1.7%.

East Africa is increasingly positioning itself as one of the most popular destinations for investors in Africa, according to the BVMW (Federal Association of Medium-Sized Enterprises). According to the GIZ (Society for International Cooperation), practically all market segments in East Africa are unsaturated and offer good development opportunities.

INVESTING IN ETHIOPIA? – CAUTION IS ADVISED
Ethiopia’s growth has been impressive since 2004. Therefore, many investors wonder whether they should invest in Ethiopia. However, MLC Properties currently advises caution. First of all, as the headquarters of the African Union, the country has attracted a lot of attention in the past and thus also attracted foreign investments. Therefore, there is an increased risk of market oversaturation. However, restrictions on the free movement of capital are more important . There is no guarantee that foreign investors can easily get their capital Back.

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