The pandemic hit many economies with a bang; many businesses shut down, and people lost their jobs. Amid all of this, the investment opportunities have also taken a hit and adopted some shift. However, this change in investment opportunities has not affected Africa as much as Europe and America.
A drop in investments since the pandemic
Africa has faced around a 16% drop in investment in 2020 when the pandemic began. Although many countries in Africa have seen a drastic change, most of the continent’s investment opportunities have not faced a drastic downfall.
Most of the drop in investment has been observed in newer projects, whereas the older ones seem to be surviving well as they are less risky. Some countries like Egypt, Nigeria, South Africa, and Ethiopia have done well for themselves and are golden places for investment.
The expert analysis of changes in investments
Alexandre Dabou, a specialist in the investment and enterprise division of UNCTAD, said, “Many [African] countries have structural weaknesses that are holding back investors, and they have little fiscal space to revive their economies.” It is predicted that the investment will drop around 5% in 2021, but it is still a better figure than what other continents are facing, and developed countries specifically.
George Asante, Managing Director at Absa Group, says in an interview that investors show interest in countries that have rewards for them, i.e., returns, which during the pandemic Africa was able to provide. When many countries, including the US, were not doing too well, Africa gave investors a reason to risk and invest their money in different parts of the continent.
Several countries, such as Kenya and Ghana, went into a crisis stronger than others but were able to reform and protect themselves from drowning. Now, they possess great potential in terms of investment.
Remote work introducing new opportunities
One thing that has been observed regarding work opportunities in Africa is the switch to remote jobs. This is, of course, benefitted many Africans as they can work for companies worldwide without having to leave their homes or country. Due to this, more opportunities have opened up, creating room for new investment.
Private companies have been able to do well for themselves, considering that it is a pandemic. Many investors are looking into a private African company because they believe it may be a rewarding experience in terms of returns on their investment.
The road to recovery opening more doors for investment
It has been established that most of Africa has coped well during the Covid-19 crisis, making it a much safer and promising place to invest. There is still a need for improvement as the continent is working towards getting out of the difficult times, and unlike many other struggling economies, it may be able to do well for itself in the near future.
Furthermore, the adaption of technology is another contributing factor to Africa’s economy that will lead to beneficial changes. Therefore, investors would be more willing to invest in African countries and companies.