7 Reliable Avenues: How To Invest Your Money in Africa

7 Reliable Avenues: How To Invest Your Money in Africa

You are ready to invest on the continent – but you may be one of the many who simply wonder exactly how to invest your money in Africa….

We follow media outlets featuring amazing opportunities in Africa and highlighting amazing returns on investment (ROI) reaching well above global average. At around 15-25% ROI – sometimes even more than 30% – as compared to a global average of around 5-10%, Africa seems to be the place to put your money in. In fact, Forbes states that according to the 2014 release of Dalbar’s Quantitative Analysis of Investor Behavior (QAIB) in the US, “the average investor in a blend of equities and fixed-income mutual funds has garnered only a 2.6% net annualized rate of return for the 10-year time period ending Dec. 31, 2013.” Hmm, not a very exciting outlook one has to confess, especially when you are just getting started.

So Africa is a little like a full pot of honey, and a lot of bees are flying around it, but they are not quite sure where to land. You don’t want to get stuck in sweet promises, right?

The media at large is highlighting opportunities, but you hear little about how to go about your investment plans, whom to contact, and how you can ensure your contacts are reliable.

You guessed it, this is where I come in, and I thought a quick list including some of the best avenues and contacts may be of help to your endeavours.

Local investment agencies

This one needs to be on your list. Local investment agencies are relevant if you are planning to invest medium to larger amounts, so in the region of $50,000 all the way up to several millions US Dollars. These are usually government-owned or partially government-owned agencies, such as KenInvest in Kenya for example or the so-called Investment Promotion Centers (names vary slightly from country to country). The benefits are huge: The service you get is often absolutely free, opportunities are up-to-date, and projects listed with the local investment agencies are managed by overall reliable and professional companies on the ground.

Tech hubs

If you are interested in investing into tech or online businesses Africa’s local tech hubs are your gold mine. They are packed with ambitious, talented, young African tech entrepreneurs and start-ups, many of which are regular members at those hubs. Just think JoziHub in South Africa, iHub in Kenya, kLab in Rwanda, of Co-Creation Hub in Nigeria. And there are many more! This avenue is usual of benefit for you if you want to make a small to medium-sized investment into a promising tech start-up.

Crowd funding & renowned online platforms

There are several professional and renowned Africa investment platforms online that allow you to make an investment from afar into projects that have been carefully selected by those leading and managing theses platforms. Among those for example fall the crowd funding site Venture Capital for Africa (VC4A) and Homestrings.

Start-Up accelerators

There are several entrepreneur-start-up accelerators professionally run by local companies and institutions. The benefit for you to access promising start-ups via these accelerators for investment is that those entrepreneurs who made it into the accelerator program usually went through an intensive selection process. So you know these are start-ups with great potential. Start-up accelerators are often looking for investors, so that those who went through the program are able to leap-start and grow their business.  This avenue is best for small to medium sized investments.

Embassies

Another way to get linked to investment opportunities is to visit your respective embassy or your country’s local chamber of commerce in the African country you would like to invest in. You may feel at home and this may be a good avenue for someone who steps into the country for the first time and needs a bit of added support in this regard. On the downside however, you are not approaching the investment opportunity through local native stakeholders, and you usually need to pay for those services.

African stock exchanges

Several countries in Africa have a national stock exchange, 29 in total, but that option is still widely overlooked by Africans in the Diaspora or foreign investors. Stock exchanges list often just a very limited amount of companies, having said that the dynamics are visibly increasing in fast growing markets with more companies making public offers. Stock exchange in Africa can be lucrative and some are so popular that it is difficult to get your hands on shares.

Industry associations

Oh yes, one of my favourites, yet largely overlooked. You have the local chamber of commerce, the export promotion councils, and industry-specific associations such as manufacturer association, agricultural association or a chamber of mines, which are usually happy to help. They have trusted members who are at large well known to these associations. Give these associations a visit, possibly attend one of their networking events, and you will get many concrete tips, contacts, and leads for investment opportunities in a particular industry of interest.

You see, I am giving it all away….now go out there and make it happen! I wish you all the best for your Africa Business endeavours and feel free to contact me for a private 1-hour consultation if you want to discuss your specific endeavours further to get the much needed clarity before making your next move.

Dr. Harnet
Dr. Harnet Bokrezion is the Founder of africajumpstart.com and co-author of the book '101 Ways to Make Money in Africa'. She coaches individuals and consults existing companies assisting them to make smart and strategic business decisions in Africa’s new emerging markets faster and more confidently. Dr. Harnet also regularly writes for the renowned DHL powered publication howwemadeitinafrica.com. Get in touch to inquire how she can be of assistance to your own Africa business endeavors: harnet@africajumpstart.com

User Comments ( 6 )

  • Catherine

    Hello Doctor,
    This is Catherine from Uganda. Thank you for the information. My point of interest is the stock exchange. I recently invested in a mutual fund here being offered by UAP Financial Services. However, I would like your advice on how one can invest wisely in the African stock market.
    Also, please write an article for people like me, who are still employed and can not directly involve themselves in businesses like agriculture due to limited time. The above article I think is a good one but I don’t understand most of the ideas you propose.
    Thank you.
    Regards

    • Dr. Harnet

      Dear Catherine
      Thank you for your feedback and questions. My article was presenting avenues to you how to access investment opportunities. So the entities I have listed are a source of information for you: You can visit their offices and get access to investment projects with reliable partners through these listed agencies who will be able to direct you or facilitate.
      I like your questions regarding business opportunities for those (still) in employment and maybe a post about Africa’s stock exchange. I will deliver on both and publish them on AFrica Business Jumpstart, please give me a few weeks. Thanks again and a warm welcome to our online community!

  • Abiodun Adewuni

    Dear Dr,
    I wish to seek for an investor who will be interested in Agriculture or large entertainment park in Nigeria.
    I have purchased over 200 plots of land in Ogbomosho, South west of Nigeria in Africa. This land has the proper government documentation with large stream by the side.
    Kindly link me up with authentic investor to partner with me.
    Thanks

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  • Herbert Williams

    I know that something is happening investment wise. I’m glad to have this information to start. I look forward to new horizons.

    • Dr. Harnet

      Hi Herbert
      Glad you are finding the information provided in my blog useful. A warm welcome to Africa Business Jumpstart!