How to Invest Money in an African Business
Many investors shy away from spending money in Africa due to concerns about political turmoil and economic stability. The African continent is not a monolith and investors should look at success stories before writing off potential investments. Nations like South Africa, Mauritius and the Seychelles offer examples of the continent's economic potential in the 21st century. Investors should blend their social consciences with savvy business decisions when sending money to African businesses.
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Instructions
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Bypass faceless corporations and international agencies by working through innovative online lenders like MyC4 (see Resources). MyC4 gives investors the chance to review files on individual business owners who request small loans. MyC4 sets an upward limit on interest accrued on the loan but active investors can earn steady money while encouraging small business growth in Africa.
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Trade stocks on the right exchange if you are interested in regional and pan-African businesses. For example, you will want to work through the JSE Securities Exchange in Johannesburg, South Africa if you are looking at investments in Ghana, Zimbabwe and Namibia.
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Expand your holdings on the African continents to take advantage of natural resources unique to each region. You can invest in oil in Egypt, coffee in Tanzania and gold in Namibia to earn dividends off each region's main exports.
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Help families from Algeria to Madagascar live in better homes by investing in home builders and building supply companies in Africa. Look at companies that produce prefabricated housing like ZenKaya, an African company that produces small but eco-friendly homes in Mozambique and South Africa (see Resources).
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Ride the telecommunications wave throughout the African continent as you look for good investments. The spotty nature of wired communication throughout Africa makes mobile phone providers a wise investment. Review information from the African Telecommunications Union to find regional carriers that have increased their monthly subscribers and sell mobile phones in high numbers.
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Play your role in helping solve Africa's transportation woes by investing in transportation consultancies working throughout the continent. Firms like Dornier Consulting (see Resources) work from South Africa to Egypt in an effort to create unified transportation systems that transcend national borders. Your investments in engineering and consulting firms may yield high returns as the United States, China and Russia invest money into Africa's natural resources.
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Tips & Warnings
Follow elections, scandals and other problems arising in African nations to determine when to halt your investments. You should look for warning signs like disputed elections, tribal conflicts and reprimands from international bodies to ensure the safety of your investment.
Take time to investigate the labor, environmental and ethical practices of international companies working in Africa before investing. Search online for news reports, government documents and blogs highlighting questionable practices to avoid making money off the backs of African workers.
Resources
- Photo Credit Photo by Miguel G.S.
