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Friday, January 1, 2010

Advice On Making African Investments

By Jay Berg

Africa has always been viewed as a 'basket case' in the eyes of the investment world and never seen as a particularly likely investment opportunity. However, in recent times, markets in Africa have seen some significant growth and there are now some good options for making African investments.

But why invest in Africa when there are other options elsewhere that you could take advantage of and would be far easier. For one thing, investing in Africa is a positive and somewhat philanthropic thing to do, as it not only serves your won financial ends, but it helps to build up a continent in need of finance and aid. The continent has suffered and continues to suffer from serious internal issues ranging from civil war and famine to disease and political strife. For a long time this has put off different funds from offering investment into a country they thought as far too unstable to provide steady financial returns. Nonetheless, and more so now, there is great potential there.

Africa's best chance for building itself up and digging itself out of all its woes is not on continued foreign aid and charity, but on continued foreign enterprise and investment from private companies. A couple of years ago roughly 1% of foreign investment throughout the entire world is invested in sub-Saharan Africa, yet this is changing. As the World Bank has said, Africa offers the highest returns on foreign investment for any region of the world.

Surely then there are great opportunities to make investments. Yet due to the perceived risks, these levels remain smaller than they could and perhaps should be. With political strife all over and currency fluctuations affecting economic stability, you may just run the risk of your investment being lost. However, it is important that you simply know what you are doing and where to go with your money. On the whole there has been a great growth in democracy around the region and this has led on to greater development in different markets and industries.

The economic performance in sub-Saharan Africa is increasing, with the largest growth areas being seen in industries such as finance, infrastructure and tourism. Tourism particularly is an important industry for African nations and encourages people to see what these countries have to offer, in turn bringing in foreign investment.

Stocks markets have also seen large improvements, regularly outscoring averages around the world, and increasing in number from ten to eighteen in the past twenty or so years. South Africa also, fundamental to the growth of the continent has been seeing consistent growth and continues to account for about 25% of the continents GDP.

For any canny investor willing to take a slight risk in the hope of some high returns there is no doubt that Africa can offer some significant opportunity. The main problem for any independent, small time investor is finding funds that will offer then the opportunity.

For those therefore, keen on locating a fund that will offer then high potential investment returns, there are some available, in most cases, just be sure that you can take the hit of losing the money you have invested. - 23217

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