Africa: A continent of opportunity

LAGOS (Capital Markets in Africa) – Invesco believes that Africa will be the economic and investment story of this century. However, it is a continent of 54 countries, each with its own potential, pitfalls and capacity to absorb different forms of investment. The aim of this document is to examine each country in turn and to reach conclusions about the possibility and desirability of investments.

Why Africa
Before turning to the country detail, it may be worth outlining why we think Africa represents such an opportunity. First, Africa is big, accounting for 22.3% of the world’s surface area and 23.5% of its agricultural land (see Figure A1, which puts Africa’s resources in a global context). It has the capacity to be an important source of food.

It is also home to some of the world’s biggest mineral reserves. In particular, it is well endowed in important industrial metals such as platinum group metals (92.6% of global reserves), cobalt, uranium and graphite, while also being an important source of gold and diamonds. The “Largest African countries” information in Figure A1 shows the countries that are the best endowed in each category.

Africa would appear to have limited hydrocarbon energy assets but it is well endowed with important renewable resources. Our own calculations (based on the intensity/duration of sunlight and land surface area) suggest that Africa has 30% of the world’s solar resources. However, that is an indication of potential and in 2020. Africa accounted for only 1.4% of global solar energy
generation. With appropriate investment, Africa could become a world leader in the generation of such energy.

To read the article, please click the Africa 2021: A Continent of Opportunity