Africa boasts burgeoning investment potential across various industries and in various countries. Five countries are of particular interest to any investor looking to expand their investment portfolio. From the pyramids of Giza in Egypt to the Okavango Delta in Botswana, Africa has dynamic markets and strategic advantages that any savvy investor can capitalize on and take a front row seat to Africa’s promising future.
The top 5 countries identified for their investment potential in Africa will be discussed in this blog by taking a look at their GDP, unemployment rate, and population.
egypt
A solid bounce-back prior to the war in Ukraine supported an increase in economic growth to 6.6% in FY2021/22 – double the pace of the previous year. Leading indicators in recent months have indicated that economic activity has been adversely impacted by multiple global shocks notably with the rising cost of domestic and imported inputs.
| Year | Population Increase (%) | GDP (Billion USD) | Inflation rate (%) | Unemployment (%) |
| 112,71 Million | ||||
| 2023 | 1,5 | 393,91 | 33,9 | 7,3 |
| 2022 | 1,6 | 475,23 | 13,9 | 7,3 |
| 2021 | 1,7 | 423,3 | 5,2 | 7,4 |
| 2020 | 1,7 | 382,53 | 5 | 8 |
| 2019 | 1,8 | 317,89 | 9,2 | 7,9 |
| 2018 | 1,9 | 263,16 | 14,4 | 9,9 |
Forecasted GDP growth for 2024 – 2.8%
morocco
As is true in many former African colonies, Morocco’s economy remains heavily dependent on the export of raw materials. Modern sectors are increasingly becoming more important particularly the tourism and telecommunications sectors. Altogether, the modern portion accounts for more than 66% of gross domestic product (GDP) even though it employs only about 33% of the country’s workforce.
| Year | Population Increase (%) | GDP (Billion USD) | Inflation rate (%) | Unemployment (%) |
| 37,83 Million | ||||
| 2023 | 1 | 143,96 | 6,1 | 9,1 |
| 2022 | 1 | 130,91 | 6,7 | 9,5 |
| 2021 | 1,1 | 141,82 | 1,4 | 10,5 |
| 2020 | 1,1 | 121,35 | 0,7 | 11,2 |
| 2019 | 1 | 128,92 | 0,3 | 9,2 |
| 2018 | 1,1 | 127,34 | 1,8 | 9,3 |
Forecasted GDP growth for 2024/25 – 2,4%
SOUTH AFRICA
The South African economy continues to recover from the effect of the COVID-19 pandemic, albeit more slowly than expected with a growth of 1.9% in 2022. Although employment picked up in 2022, the labour market situation remains challenging due to poverty reaching levels that have not been seen for over a decade and record high inflation increases. The outlook is clouded with risks, and sustained reforms and investments are required to support better growth outcomes and poverty reduction.
| Year | Population Increase (%) | GDP (Billion USD) | Inflation rate (%) | Unemployment (%) |
| 60,41 Million | ||||
| 2023 | 0,9 | 377,68 | 6,1 | 28 |
| 2022 | 0,8 | 405,11 | 7 | 28,8 |
| 2021 | 1 | 420,01 | 4,6 | 28,8 |
| 2020 | 1,2 | 338,19 | 3,2 | 24,3 |
| 2019 | 1,3 | 389,25 | 4,1 | 25,5 |
| 2018 | 1,2 | 405,09 | 4,5 | 24,2 |
Forecasted GDP growth for 2024/25 – 1.3%
rwanda
Rwanda’s economy is almost exclusively built on agriculture of which contributes more than 40% to the nation’s GDP. Subsequently, more than 90% of the population makes its livelihood by producing food crops or through industrial works involving the processing of crops. The most fertile agricultural areas in the country are the mountain regions that forming the Congo-Nile watershed and the central plateau where two crops can normally be harvested each year. Principal food crops include bananas, sweet potatoes, cassava, sorghum, and beans. Principal export crops include coffee, tea, pyrethrum, cotton, and cinchona.
| Year | Population Increase (%) | GDP (Billion USD) | Inflation rate (%) | Unemployment (%) |
| 14,09 Million | ||||
| 2023 | 2,3 | 14,02 | 19,8 | 14,9 |
| 2022 | 2,3 | 13,31 | 17,7 | 15,1 |
| 2021 | 2,4 | 11,05 | -0,4 | 15,8 |
| 2020 | 2,4 | 10,17 | 9,9 | 11,8 |
| 2019 | 2,4 | 10,35 | 3,3 | 11,2 |
| 2018 | 2,4 | 9,64 | -0,3 | 10,8 |
Forecasted GDP growth for 2024/25 – 7,6%
botswana
Botswana has one of the strongest economies in Africa and, even though the country was adversely affected, showed significant recovery in 2021 after the global COVD-19 pandemic. According to the IMF, GDP grew by an estimated 9,2% which was mainly driven by a rebound in diamond exports and an increase in domestic demand. In the coming years, the country’s economy should continue to grow albeit at a slower pace than previously seen. Investment in the mining sector and the rebound of the prices of hard commodities (diamond, copper, and nickel) should contribute to the positive forecasts.
| Year | Population Increase (%) | GDP (Billion USD) | Inflation rate (%) | Unemployment (%) |
| 2,67 Million | ||||
| 2023 | 1,7 | 20,45 | 5,1 | 23,4 |
| 2022 | 0,9 | 20,35 | 11,7 | 23,6 |
| 2021 | 1,6 | 18,74 | 7,2 | 23,1 |
| 2020 | 1,9 | 14,93 | 1,9 | 21 |
| 2019 | 2 | 16,7 | 2,8 | 20,1 |
| 2018 | 2 | 17,03 | 3,2 | 19,7 |
Forecasted GDP growth for 2024/25 – 3.5%
why invest in africa?
Natural Resources
Africa has an abundant of energy and natural resources holding approximately 40% of the world’s gold and 30% of its mineral reserves including ample supplies of uranium, diamonds, and iron according to the United Nations Environment Programme (UNEP). Moreover, amid the energy crisis brought on by the Russia-Ukraine conflict, Africa’s vast oil and gas resources are more valuable than ever. Many of these natural resources remain underdeveloped and provides a prime opportunity for growth.
Africa holds approximately 60% of the world’s uncultivated, arable land. Global food demand is projected to increase with 70% by 2025 with the demand in African growing even faster.
Africa could be a green energy-hub beyond its oil and gas resources. Within the continent there is great potential for wind and solar energy generation which places the continent in a prime position to playing a vital role in addressing the climate change crisis.
Social Responsibility
Investing contributes to positively addressing and impacting women’s rights in Africa. Closing the gender income gap and opening new markets through the African Continental free Trade Area (AfCFTA) will benefit women and investors alike. According to the Economic mission for Africa, women account for around 70% of informal cross-border traders in Africa. Historically, women have been vulnerable to harassment, theft, violence, and imprisonment.
Skilled investors know the importance if diversifying their investment portfolios and investing in Africa can prove to be the key to this diversification through new markets and increased trade in these economies.
Technological Development
More African societies are going digital with more business being conducted online and the increasing of skills in data analytics, programming, and search engine marketing. This technological advancement is mostly fueled by expanding markets, increased internet penetration, and digital commerce. While connectivity lags in some regions, mobile device use continues to increase with a staggering proportion of African web traffic coming from smartphones with some regions reaching a total of 89%.
High Risk, High Reward
Africa offers the highest return on direct foreign investment worldwide which compensates investors for the risks involved in investing in Africa.
Population Growth
Africa is the fastest-growing continent fueled by a young, rapidly urbanizing population. There is considerable growth potential in the service and consumer goods industries.
references
Africa, S.S. (n.d.). South African GDP grows by 1,6% | Statistics South Africa. [online] Available at: https://www.statssa.gov.za/?p=15991
Botswana’s Population Grows. (n.d.). Available at: https://www.statsbots.org.bw/sites/default/files/documents/2022%20Population%20and%20Housing%20Census%20Preliminary%20Resutls_0.pdf [Accessed 26 Feb. 2023].
Knoema. (n.d.). Morocco Inflation rate, 2021-2023 – knoema.com. [online] Available at: https://knoema.com/atlas/Morocco/topics/Economy/Short-term-indicators/Inflation-rate#:~:text=Morocco%20%2D%20Consumer%20price%20inflation&text=In%20November%202022%2C%20inflation%20rate [Accessed 26 Feb. 2023].
Morocco population 1950-2023 (no date) MacroTrends. Available at: https://www.macrotrends.net/countries/MAR/morocco/population (Accessed: February 26, 2023).
P.M.G. (2022). Eight Reasons Why Africa Is Primed for Impact Investing. [online] CFA Institute Enterprising Investor. Available at: https://blogs.cfainstitute.org/investor/2022/10/14/eight-reasons-why-africa-is-primed-for-impact-investing/#:~:text=The%20second%20largest%20continent%20by [Accessed 27 Feb. 2023].
Statssa.gov.za. (2023). Available at: https://www.statssa.gov.za/wp-content/uploads/2023/01/cpidec1.jpg [Accessed 26 Feb. 2023].
Tradingeconomics.com. (2019). Botswana Unemployment Rate. [online] Available at: https://tradingeconomics.com/botswana/unemployment-rate
Tradingeconomics.com. (2019). Botswana Unemployment Rate. [online] Available at: https://tradingeconomics.com/botswana/unemployment-rate Upenn.edu. (2019). East Africa Living Encyclopedia. [online] Available at: https://www.africa.upenn.edu/NEH/rweconomy.htm.
Tradingeconomics.com. (2019). Available at: https://tradingeconomics.com/morocco/inflation-cpi.
The World Bank (2015). Overview. [online] World Bank. Available at: https://www.worldbank.org/en/country/egypt/overview.
The World Bank (2022). Overview. [online] World Bank. Available at: https://www.worldbank.org/en/country/southafrica/overview.
