In recent years, investing in Africa has become an obvious choice for French entrepreneurs, as well as for expatriate African entrepreneurs. Indeed, this huge continent of 64 countries (55 of which are members of the African Union) offers a great many commercial opportunities, some of which can provide high levels of returns.
However, where should you start? Before you invest in Africa, this guide explains why this continent is a land rich in opportunities, which African countries to invest in and in which sectors, and how to make a successful investment. In addition, for African entrepreneurs living in France, it explains which businesses to create on the ground in order to prosper.
Why invest in Africa?
Africa has been the fastest growing continent in recent years, with many African countries experiencing enormous economic growth. As the most profitable region in the world, Africa is a land of great financial opportunity for foreign investors, promising very high returns and offering many advantages: natural resources, a young labor force etc.
For both French investors and Africans wishing to invest in their home region, establishing a business in Africa has many advantages:
- High potential returns on foreign direct investment,
- Many potential markets (64 countries),
- Increasing urbanization and technological take-up, creating new investment opportunities,
- Many growing sectors (health, technology, banking and infrastructure),
- Large reserves of natural resources (uncultivated arable land, mining deposits, oil, natural gas etc.),
- A young labor force accessible in abundance,
- The emergence of a middle class with real purchasing power,
- Political accountability: progress of political transitions to democracies (such as in Ghana).
For French entrepreneurs
For French entrepreneurs, there are several advantages to opening their business and investing in Africa:
- Accessibility to already proven African markets, with France being one of the main investors in Africa, alongside China and the United Kingdom,
- Creation of subsidiaries to develop their business in Africa,
- Presence of both public and private funds offering financing solutions,
- Excellent project feasibility.
For African entrepreneurs
For African entrepreneurs, in addition to the many economic opportunities that may not exist in France, investing in Africa may be a necessity for the economic, political and cultural development of the continent:
- Contributing to the creation of jobs that allow workers to stay in their local area and with their families, without having to move to different regions or countries,
- Reducing dependence on goods manufactured in foreign countries: machinery, medical devices, automobiles etc.,
- Increasing African wages, which are much lower than in Europe,
- Improving labor market efficiency,
- Supporting the development of high-level African training courses adapted to the African context,
- Contributing to the training of a local elite of African entrepreneurs who remain in country and invest in their own region,
- Contributing to the opening up of certain African regions by investing in transport infrastructure (roads, ports and airports) and telecommunications infrastructure (cellular and Internet),
- Encouraging cultural change, particularly in relation to the role of women in society, which is very often the impetus behind the creation of a business.
Why send money to Africa with Western Union?
With Western Union, you can send money to Africa in a few clicks at a very attractive rate and thus facilitate all your African investments.
What type of business should you start in Africa?
Through the diversity of its regions and potential markets, Africa offers a wide variety of business opportunities. Discover ten business sectors in Africa with high economic potential:
- Tech startups: due to the proliferation of technological hubs (cellular access, Wi-Fi deployment, digitalization, mobile applications and e-health),
- Fossil fuels: gas, oil, coal etc.,
- Renewable energies: solar, biomass, photovoltaics, hydroelectricity, wind farms etc.,
- Mineral resources: gold, zinc, diamonds, copper, nickel, cobalt etc.,
- Foodstuffs industry: rice, fruits and vegetables, cocoa, spices, vanilla, tobacco, cocoa etc.,
- Tourism: safari, trekking, travel agencies, hotels, seaside resorts, eco-tourism etc.,
- Infrastructure: transport and telecommunications,
- Health: maternity, hospitals, private clinics, miscellaneous care,
- Real estate: Africa is expected to experience the highest urban growth rate in the world by 2050, according to the OECD,
- Transport: appropriate transport services (buses, taxis or private hire vehicles) and logistics.
Where to invest in Africa?
Africa contains more than 60 countries (55 of which are members of the African Union), so investment opportunities are very numerous and varied. The most interesting African countries include:
- Tanzania: tourism, health and mining,
- Egypt: tourism,
- Morocco: tourism, health and real estate,
- South Africa: tourism, real estate, retail, technology and mining,
- Kenya: leader in ICT (Information and Communication Technologies), real estate, agriculture and tourism,
- Nigeria: oil, real estate, technology, information and communication,
- Rwanda: ICT, construction and energy,
- Congo: tourism and mineral deposits.
These countries stand out due to their high level of economic growth and current political stability, making them all the more attractive for foreign investors wishing to develop their business in Africa.
What are the obstacles to creating businesses in Africa?
While Africa does offer many investment opportunities for French or African entrepreneurs living in France, there are several obstacles in terms of access or the likelihood of their project being a success:
- Access to public or private financing, which may be difficult for foreign investors,
- The complexity of local regulations and administrative and customs constraints,
- Budgetary opacity: returns, accounting, expenses and debts,
- Infrastructure problems: power outages and energy supply,
- Corruption at local or governmental level,
- Political instability: war and armed conflicts,
- Volatility of local currencies,
- Difficulty in attracting and retaining a skilled workforce.
How to make a successful investment in Africa?
Before you launch your business in Africa, it is essential to prepare your investment well. In addition to the traditional steps in creating a business (market research, choice of market, financing etc.), to invest in Africa, it is necessary to:
- Know the local context (political, economic, industrial and cultural situation) to ensure that your project is suitable,
- Choose a region without foreign exchange controls, to ensure you are able to recover your money,
- Choose a region with a large skilled workforce,
- Use local experts who will help you navigate legal, financial and administrative complexities.
Africans, how can you invest in your community in France?
If you are an African entrepreneur living in France, investing in your community can be just as important and profitable as investing in Africa. Indeed, there are many economic opportunities that allow you to succeed financially while enhancing your community. African entrepreneurs in France can thus develop a business in the following areas:
- Gastronomy: street food and gastronomic catering,
- Agri-food: delicatessens and wholesale and retail trade in African products,
- Fashion and beauty: textiles, cosmetics and hair care,
- Culture: creation of cultural events relating to Africa, creation of associations, support of local initiatives etc.,
- Investment: it is also possible to invest in African startups in France, promoting African innovation.
To make this investment a success, it is important to verify that you have the right residence permit, to build a strong network of African and French entrepreneurs and to find strategic partners, while also adapting to French corporate culture.
FAQs
What is the exchange rate for the CEMAC CFA Franc?
The exchange rate for the CEMAC CFA franc is approximately:
- 1 euro = 656 francs,
- 1 franc = 0.0015 euro.
Easily convert EUR to XAF with Western Union, whatever the amount.
How do I send money to Africa?
With Western Union, easily send money to Africa from France:
- Online in a few clicks via our website,
- With our mobile app,
- In person, by going to an agent location.
Your receiver can get the money in cash, in their account or in their mobile wallet.
This article is for general information purposes and does not constitute legal or professional advice from Western Union. This article is not intended to substitute advice from a financial advisor or any other qualified professional.
