African sectors & countries investors should consider in 2020

Investors looking to invest in Africa will find that there is a lot of choice in 2020. Something different is happening in Africa. A sizable number of African governments have realised that the in-country weak investment situation will not change if there are no drastic changes to policy. In 2019, 99% of African states signed up to the African Continental Free Trade Agreement (AfCFTA) with the purpose of improving trade within the African continent.

Mozambique is getting closer to completing some of its gas projects (by 2021) and the government played a hand in accelerating the pace of investor deployment of infrastructure. Nigeria is gearing up for the completion of the Dangote oil refinery that is expected to be completed by the end of 2020, with the capability to refine 650,000 barrels per day. Ghana has begun reforms in the management of its cocoa sector which exports 30% of the global market. Ethiopia is expected to implement its announced decision to partly privatise a large number of its state owned entities and a number of these companies will be partly privatised in 2020.

A snapshot of these developments provides investor insights to opportunities in the African continent. The best investor opportunity will be in picking up on the secondary goods and services that will be required with the large in-country projects already taking shape. Private equity investors as well as alternative infrastructure investors can find opportunities by following the sectors where investment has already been deployed. Instead of listening to the African government budgets/forecasts on where spending will be allocated, in 2020, it will be more feasible to generate strong returns from projects that follow deployed investor capital.

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