Investing In Africa

The importance of Africa. The origin of humanity, home to the Pyramids

of Giza and the untamed wilderness of the Serengeti–Africa is a continent

unlike any other on the planet. Ravaged by desertification, deforestation,

pollution, water scarcity, and colonization, Africa has historically been one

of the least wealthy continents on the earth. Poised to be the most

vulnerable to climate change and boasting an abundance of natural

resources (particularly those used in the production of technology), it

comes as no surprise the vast continent has become a foreign investment

hot ground.

“Africa has grown 300 percent in the last decade, outperforming global averages (196 percent). It has become home to many of the world’s fastest-growing economies, offering unique opportunities for U.S. trade and investment.” (Signé) A significant reason for this is the signing of the African Continental Free Trade Area in 2018. Business after that increased tremendously. “Per a World Bank study, the AfCFTA has the potential to lift 30 million people out of extreme poverty, increase the income of 68 million Africans, increase Africa’s exports by USD 560 billion, and generate USD 450 billion of potential gains for African economies by 2035.” (Signé)

It is essential to bring Africa into the global economy; if not, poverty, violence, illegal immigration, and unhealthy conditions may increase. Africa can't be ignored. “In Sub-Saharan Africa, over 50 percent of people live without access to electricity, more than 70 percent of people live without access to safe drinking water, 69 percent of people live without basic sanitation, and 53 percent of the roads are unpaved.” These conditions complicate and endanger the lives of millions. (Signé)

China is a principal investor as it became Africa’s prime trading partner between 2006 and 2016, "China’s trade with Africa surged, with imports increasing by 233 percent and exports increasing 53 percent, as they did for several other global players as well.” (Signé) Africa needs help with its infrastructure. China has been a key player with this as its largest financier. China partnered with 44 African governments. For example, Beijing pledged $60 billion in economic assistance in 2018. “The value of Chinese business there since 2005 amounts to more than $2 trillion, with $300 billion in current investments.” (Foreign Affairs Committee)

With Africa’s growth, the U.S. could benefit by investing in retail, consumer products, food, housing, education, and more. In the book Unlocking Africa's Business Potential, Signé estimates that by 2050, Africa will have an estimated USD 16.12 trillion of consumer and business spending. This creates enormous opportunities for US businesses. It could also help the US from feeling reliant on other countries for manufacturing. More importantly, investing in Africa would help the world thrive as a whole. Its benefits would not just be monetary but for the greater good. It could create more jobs for men, women, and even the youth, helping Africa thrive.

Signé wrote it best, “Advancing trade, investment, and technology in Africa offers enormous economic growth and increased prosperity for both regions and is best realized through value-based foreign policy and a market-based model of development, education, and accountability....Trade and investment are not just about money and prosperity. They also bring and support peace,

stability, and security.”

Investing in Africa: References

(2022, November 14). China Regional Snapshot: Sub-Saharan Africa. Foreign Affairs

Committee.

https://foreignaffairs.house.gov/china-regional-snapshot-sub-saharan-africa/

(2022, September 08). WMO: Climate change in Africa can destabilize ‘countries and

entire regions.’ The United Nations.

https://news.un.org/en/story/2022/09/1126221

(2023, July 05). Investment flows to Africa dropped to $45 billion in 2022. The United

Nations Conference on Trade and Development.

https://unctad.org/news/investment-flows-africa-dropped-45-billion-2022

Mitchell, Jason. (2023, January 26). Africa’s reliance on China is only likely to get worse.

Investment Monitor.

https://www.investmentmonitor.ai/features/africas-reliance-on-china-is-only-likel

y-to-get-worse/

Signé, Landry. (2021, July 28). US Trade and investment in Africa. Brookings.

https://www.brookings.edu/articles/us-trade-and-investment-in-africa/