52 Reasons to Invest in Africa (That Everyday People Can Understand)
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Bull market… Bear market… or maybe “Lion market”? Why should realizing a return on investment be a game of Chicken? Bull market and bear market are both shorthand ways to describe market trends. “Bull” refers to investor confidence and increased investing in anticipation of future price increases in the stock market. “Bear” refers to a lack of investor confidence and decline in the stock market over a given period of time. But where does a “lion” fit in all of this talk nowadays about market trends? To everyday people, the word “lion” might bring to mind images of the do-or-die nature of the African jungle. To that end, I came up with the phrase “lion market” as a shorthand way to capture how some experts have described the high risk-high reward nature of investing in Africa.
First things first, can investing in Africa be risky? Yes. It’s true that markets can be risky and market trends can impact the buying and selling of stocks in a way that produces winners (ahead of the trend, potentially making a profit) and losers (late to the trend, potentially taking a loss). However, not all investment opportunities are “do or die” or “win-lose”, particularly in Africa – arguably, the least economically developed continent. An investor’s interest in turning a profit can align with an African child’s interest in getting an education. “Win-win” investments in Africa are directly proportional to wealth creation in the world. The more wealth can be created in the world, the stronger economic security can be maintained across the globe.
Realizing a return on investment can be good for people and at the same time good for business. By definition, there is no fixed amount of wealth in the world. You create wealth by getting people something that they want, whether that’s in a developed market, emerging market, or frontier market. In the case of Africa, wealth can be created not only by getting people something that they want, but by getting people something that they need.
No one has a monopoly on wealth creation, especially in a promising market like Africa. Everyday people, retail investors, and small and medium enterprises (SME’s) can come up with something that people in Africa want or need. Perhaps, a better way to look at investment opportunities in Africa is not through the lens of a stock market but rather a “food market”. Successful trips to the food market are the ones in which you return with something people (i.e. you and your family members) want. As some investors scrimp on the few investment opportunities in developed markets like the United States and Japan, and other investors pounce on the already identified opportunities in emerging markets like Brazil and China, the investors that will return with a “lion’s share” of what people want are the investors that walk down the “shopping aisle” of new investments in Africa… perhaps with a few coupons in hand as they walk the walk.
This article is like a “coupon list” for reasons to “shop” in Africa. I have compiled 52 reasons as a celebration of Africa’s 50+ countries. In essence, the list includes both continent-specific and country-specific reasons to invest in Africa.
1. Many people don’t know about the investment opportunities in Africa.
Investing is more like grocery shopping and less like rocket science, so it’s amazing that a lot of the information on investing reads like a series of calculus equations. Investment lingo sometimes seems too technical, maybe that’s one reason why so few people know about the opportunities in Africa. It is worth noting here that there are generally two types of people that invest: institutional investors and retail investors. Institutional investors are people that invest on behalf of large institutions like banks and operating companies and deal with large pools of money. Retail investors are individuals that invest for their own personal benefit or small business. It’s safe to say that the lack of knowledge on investment opportunities in Africa is more widespread among retail investors.
2. Many people don’t know what to invest in when it comes to Africa.
While Africa still features a lot of starving children with flies circling about their heads; nowadays, Africa also features about 10 stock exchanges according to bizcommunity.com. The market capital has risen from $5.5 billion in 1988 to $569 billion in 2005 (excluding South Africa). In addition, small investors are able to access Africa’s growth potential through the T. Rowe Price Africa and Middle East Fund (nasdaq: TRAMX), launched September 2007. The SPDR S&P Emerging Middle East & Africa (nyse: GAF) exchange-traded fund is another option according to John H. Christy’s commentary on Forbes.com.
3. Africa can supply the demand for commodities. Think of Africa’s natural resources. According to Nile Capital Management, 10 percent of the world’s oil reserves and 40 percent of the world’s proven gold reserves are in Africa. In addition, Africa contains 90% of the world’s platinum reserves, about 80% of its cocoa and diamonds, 60% of its phosphate, 50% of its bauxite and chromium reserves, 20% of its titanium, and close to 15% of its oil and natural gas. (Source: US Geological Survey, Credit Suisse).
4. Big multinational companies are spending big money to build up Africa’s infrastructure. For example, diamond industry leaders De Beers recently signed a deal to mine diamonds in Botswana, including a commitment to build a diamond sorting facility. And the Infrastructure Consortium for Africa (ICA) reported on Jan. 18, 2011 that IBM will be joining Bharti Airtel (which services 16 African countries) to improve its telecommunications infrastructure.
5. There are African companies operating at a profit in Africa. Africa’s total stock market capitalization now exceeds $1 trillion. Companies like telecom enterprise MTN and beer maker South African Breweries (a subsidiary of SABMiller) are relatively profitable. From 2002 to 2007, African companies were more profitable than their counterparts in Asia; the average annual return on capital of African companies was 65 percent to 70 percent higher than that of comparable companies in China, India, Indonesia, and Vietnam according to economists Paul Collier and Jean-Louis Warnholz in their article Now’s the Time to Invest in Africa featured on the Harvard Business Review.
6. There are a lot of young people and young families in Africa. The workforce in Africa is young and energetic. More so, African governments don’t have to dedicate a lot of resources to elderly care and pension plans.
7. Domestic demand is set to rise as more people in Africa move up the economic ladder. Consumer spending for goods and services in sectors like telecommunications, transportation, wholesale and retail is increasing. Africa’s consumption has grown by $250 billion since 2000 according to the Global Insight United Nations Conference on Trade and Development, McKinsey Global Institute. Estimates show that 85 million African households earned $5,000 (USD) or more in 2008. The numbers of households with discretionary income is projected to rise by 50% over the next ten years, reaching 128 million. By 2030, the continent’s top cities could have a spending power of $ 1.3 trillion (USD). African households spent $860 billion (USD) in 2008. And African consumers as a class will spend about $1.4 trillion (USD) in 2020.
8. Politically-motivated violence is not good for business and Africans are starting to see this. Functioning democracies in Ghana and South Africa are two cases in point. In 2007, FreedomHouse.org reported that out of the 48 countries of sub-Saharan Africa, 11 were rated “Free” for their performance in 2006, 22 were rated “Partly Free” and only 15 were rated “Not Free”. In essence, about 63 percent of Africa’s population now lives in countries designated “Free or Partly Free”.
9. Economic growth is in the air in Africa. The World Bank projects that nine out of the 15 countries with the highest rate of 5-year economic growth are in Africa. According to the World Bank’s Global Economic Prospects 2011, released on January 13, the GDP growth rate for Sub-Saharan Africa was projected at 4.7% for 2010, from a 1.7% low in 2009, and set to increase to 5.3% in 2011 and 5.5% in 2012. This compares to negative growth for the United States in 2009 (-2.6%) and weak recovery in 2010-2012 (2.8%, 2.8%, and 2.9%). Notably, the best growth rates were for countries other than South Africa, Africa’s largest economic power. Rates for South Africa, with a negative rate of -1.8% in 2009, are projected at 2.7% for 2010, 3.5% in 2011, and 4.1% in 2012. Other countries in the Sub-Saharan region, by contrast, grew an average of 5.8% in 2010, with 6.4% and 6.2% rates projected for 2011 and 2012 respectively.
10. Low Debt-to-GDP ratio in several African countries. For example, in 2010, Nigeria had a debt-to-GDP ratio of only 18 percent, compared with Greece whose debt-to-GDP ratio was more than 100 percent. The point here is that a low debt-to-GDP ratio represents an economy that produces a large number of goods/services and in turn profits that are high enough to pay back debts. Governments aim for low debt-to-GDP ratios in order to position themselves to pay back public debts– a good sign for a small investor or SME that decides to participate in a program that is wholly or partially paid for by public funds.
11. Stocks in African exchanges are comparatively cheaper. The average price-to-earnings ratio for African companies is about 8 to 9 percent compared with the S&P 500, which has an average P/E ratio of about 15 or 16 percent according to Larry Seruma, chief investment officer of Nile Capital Management. Investopedia defines the P/E ratio (price-to-earnings ratio) of a stock (also called its “P/E”) as a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. P/E is a financial ratio used for valuation: a higher P/E ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower P/E ratio.
12. It is kind of easy to invest in African stocks. For example, investors in the US can trade in real-time on the Johannesburg Stock Exchange, and other exchanges simply require an emailed request to a broker. African exchanges have improved their trading systems and governance, and brokers are following suit to improve their quality of service and deepen their knowledge.
13. Gain an appreciation for the difference between risk and volatility. Volatility generally indicates the level at which an investor may experience huge price swings, but this doesn’t always translate into risk. Risk means an exposure to the chance of injury or loss. The S&P 500 is certainly less volatile than stock markets in Africa; nevertheless, a big reason investors invest in the first place is for the return… the “food”. According to AfricaBusinessSource.com, the risk-adjusted return of the S&P 500 was not as attractive as the return in most African stock markets over the past five years (in effect, the risk-adjusted return of the S&P 500 was a less desirable slice of “bread”).
14. African politicians and professionals are beginning to question the continent’s dependence on foreign aid and now see other forms of foreign investment as healthier than foreign aid. For example, economist Dambisa Moyo argues in her book (a New York Times bestseller), Dead Aid: Why Aid Is Not Working and How There is Another Way for Africa, that foreign aid has not worked for Africa because it creates a culture of dependency and corruption and African governments should phase it out. President of Rwanda, Paul Kagame, agrees with Moyo and has taken steps to demonstrate his increased focus on other forms of foreign investment: a) buying a copy of Moyo’s book for every member of his cabinet; b) penning an op-ed in the Washington Post titled Why the U.S. Needs Africa on Sept. 21, 2009 in which he states that “Africa and the United States may be on the verge of a new partnership, not one of dependency and aid but one of shared ideas, vision and investments that increase our mutual prosperities.”
15. Africa is untapped… Ozii Obiyo, international business consultant, used the term “untapped” to describe Africa’s potential for positive growth across many sectors in a recent interview. “Untapped” is especially useful when describing Africa as that term is used to describe the process of collecting palm wine from a palm wine tree. Palm wine is a ceremonial drink rich in tradition and often used to celebrate success and show respect.
16. Africa features the world’s last frontier market. Frontier markets are like small gardens compared to the big farms of emerging markets a la Brazil, India, and China. The equity markets and capital markets in Africa tend to be too small or too illiquid. For example, as of July 2008, the Uganda Securities Exchange in Kampala listed just nine companies and trading took place only about 11 days a month; and the exchange’s average daily volume was $200,000. Nevertheless, equity flows to Africa doubled in the years between 2004 and 2008 to $7 billion (USD) per year according to economist and financial strategist Olivier Lumenganeso.
17. Africa’s agriculture is ripe for harvest. McKinsey Global Institute estimates that Africa has 60% of the world’s uncultivated arable land. The continent’s agricultural output could increase from $280 billion (USD) -the estimate as of July 2010- to $ 500 billion (USD) by 2020 and as much as $880 billion (USD) by 2030.
18. Helping Africa meet its electricity needs can be the “light at the end of the tunnel” for small investment opportunities that have long-term benefits. Infrastructure development projects are usually the type of investment opportunities reserved for big, institutional investors and project finance endeavors; however, Africa’s need for electricity is so deep that even smaller investors can offer solutions, albeit, on a much smaller scale. There are a lot of rural communities in Africa that are far removed from electrical grids. Individual systems, small geothermal plants, or diesel generators can be supplied to these communities under carefully crafted arrangements that can turn a profit for the investor/provider.
19. The modularity of renewable energy offers investment opportunities in Africa for small investors and small to medium businesses. Renewable sources of energy can be modular in their production and delivery; and Africa is blessed with an array of renewable sources of energy like wind and solar. As an illustration, the solar panels used to produce solar power do so by converting sunlight into electricity and these panels consist of a group of solar cells that perform the energy conversion on a cellular level (e.g. each cell can produce 1-2 watts of power). To produce viable amounts of solar power that can power up a home and then a group of homes, the cells are joined to form a panel and additional panels can be joined for additional power. The modularity of solar power allows small investors to invest in particular steps in the production process or supply chain.
20. Africa is, of course, a whole continent and investors can use certain mechanisms to categorize each country in Africa based on the country’s risk/reward potential. For example, a report by McKinsey & Co articulated a 4-part framework for strategizing investment opportunities in Africa. The framework places each African country in one of four categories based on level of economic advancement (from most advanced to least advanced): Diversified Economies (e.g. South Africa, Egypt, Morocco, Tunisia), Oil Exporters (e.g. Nigeria, Angola, Algeria), Transition Economies (e.g. Ghana, Kenya, Senegal), and Pre-Transition Economies (Ethiopia, Congo, Mali).
21. Nigeria, Africa’s most populated country as of Jan. 2011, has a fast growing financial sector. Relatively speaking, investors tend to have an easier time obtaining capital and other credit facilities in Nigeria. Banking regulations and financial reforms were put in place throughout the mid 2000’s, spearheaded by Prof. Charles Soludo (Rhodes Scholar, economist, and author of NEEDS program) as Central Bank of Nigeria governor. These reforms: raised minimum Shareholders’ Fund for banks in the country to N25 billion [about US$200 million] from the former level of N2bn [US$15MN]; provided incentives for banks in the country to consolidate through mergers and acquisitions; sought to encourage banks to play active development roles in the Nigerian economy, while being competent and competitive players in African regional and global financial systems. For more information, check out: 2005 US – Africa Summit of the Corporate Council on Africa, Baltimore, USA
22. Nigeria’s government is pursuing a policy of trade liberalization and openness to privatization… slowly but surely. Since 2000, the business environment in Nigeria has been more amenable to foreign investors esp. with regard to the capital intensive sectors of the Nigerian economy like telecom and oil & gas; also privatization — allowing private ownership of previously government-owned operations and property seems to be on upswing in light of a rise in government “consented” real estate transactions since the start of the 21st century. Notably, the rationale behind government consent for real estate transactions in some parts of Nigeria is that by default the government owns the land.
23. South Africa, Africa’s largest economy as of 2010, offers attractive investments in real estate and land properties. The country is a top-notch vacation spot, and it has a lot of young professionals looking for good housing. In addition, real estate developers are given tax breaks of up to 20% while another 20% tax break on rental is available for renovation projects according to SA Home Traders.
24. South Africa’s workforce is highly trained. The South African government has made a commitment to spend big on education and training as part of the Joint Initiative on Priority Skills Acquisition (JIPSA) which brings together the efforts of government, business, and labor unions to ensure that core professional skills are picked up through targeted training. As a result of this initiative, South Africa now has 1000 engineering graduates per year. This number is on track to increase to over 2000 per year by the end of 2011.
25. Ethiopia, Africa’s oldest independent country according to BBC, offers significant tax incentives for import of investment capital goods. According to the Ethiopian Embassy, there is a 100% exemption on importing investment capital goods like plant machinery and construction material into the country. Also, products developed in Ethiopia are exempt from export tax.
26. Ethiopia is quite liberalized with its permission of remittance out of the country. For example, remittance is permitted for: principal and interest payment on external loans, payments associated with technology transfer, proceeds from sales or liquidation of an enterprise, salaries and other payments. Also, a 100% foreign ownership of an investment or enterprise is permitted.
27. Egypt, strategically positioned at the intersection of Africa, the Middle East, and the Mediterranean region, gives investors access to key global markets from one location. For example, the EU-Egypt Association Agreement set up a bilateral trade agreement based on reciprocal liberalization for both industry and agriculture. In essence, Egyptian products from garments and furniture to food products enjoy special access to European Union markets.
28. Algeria, one of Africa’s leading oil producers, is benefitting from increased government spending and openness to free trade. For example, the National Investment Council (CNI), chaired by the Head of State, was created to strengthen the legal and regulatory framework for investment. CNI underwent an institutional restructuring in October 2006 to boost investment opportunities that are of interest to the national economy. The CNI is in charge of defining investment strategy and priorities, approving special investment incentives by sector, and giving final authorization for special investment schemes. According to ANIMA Investment Network, the government passed a law in 2005 that requires all companies working in foreign trade to increase their capital stock equity to a minimum of DZ20 million (about US $275,000).
29. Mauritius ranks 20th among 183 countries (and first in Africa) as the “Easiest Place to Do Business”. The “Easiest Place to Do Business” report is prepared and released by the World Bank, and the ranking for Mauritius is benchmarked to June 2010. A high ranking means that the country’s regulatory environment is relatively conducive to the starting and operation of a business.
30. Ghana was the site of President Barack Obama’s first presidential visit to Africa in 2009. Also, Ghana was the site of stock broker and The Pursuit of Happyness author Chris Gardner’s “I am here to learn” engagement with African entrepreneurs, young professionals, and corporate executives in 2010. Coincidence… Maybe… or maybe not.
31. Kenya’s pharmaceutical market shows promising signs (from the investor’s as well as from the patient’s standpoint). Responding to the demand for better health services (i.e. patient care, pharmaceutical products, and medical equipment) is becoming commercially viable as more segments of the population are able to pay for care which in turn makes such services more affordable and accessible. According to TradeInvestKenya.com, Kenya is the largest producer of pharmaceutical products in the Common Market for Eastern and Southern Africa (COMESA) region as of 2010 and Kenya supplies about 50% of the region’s market. Kenya’s own pharmaceutical and consumer health market is estimated to be worth an estimated $160 million (USD) per year.
32. Democratic Republic of the Congo (DRC) has a one-stop shop that helps investors who want to invest in the country. The National Agency for Investment Promotion (ANAPI) treats investors as though they’re on a VIP guest list. It assists the investor during and after the approval of his/her investment opportunity with: airport or harbor welcome; transportation from airport to downtown and to various towns; reservation in hotels; search for land concessions and/or premises; search for foreign and domestic partners; set up of companies; and various other information on the Congolese. Approval of a given investment opportunity is based on its advantages to the Investment Code – which is intended to favor competitiveness and business development.
33. Botswana was the 2nd Fastest Growing Economy in 2010. According to EconomyWatch.com, Botswana experienced a 14.4% GDP growth rate. In fact, Botswana has been one of the fastest growing economies in the world since it gained its independence in 1966 according to figures from the World Bank.
34. Angolan Stock Market and Derivatives (BVDA) will open in 2011. According to finance minister Carlos Alberto Lopes, everything is being done to get BVDA up and running smoothly. Antonio Cruz Lima, Capital Market Installing Commission chairman, said the stock market is reasonably prepared to open. Some experts believe that the new constitutional reality of the country gives investors some assurance of Angola’s commitment to political stability. Notably, the new Constitution of the Republic of Angola was approved in January 2011.
35. Cameroon, “Africa in miniature” for its climate and cultural diversity, privatized its national mobile telecommunications provider, CAMTEL Mobile in February 2000. This has been a major development especially given the fact that Africa is reaching a period where mobile data may overtake voice in revenue generation. Allafrica.com reported in November 2010 that the president of Ericsson in Africa, Lars Linden, views the innovation in Africa’s information and communication technology as substantial enough to enable mobile telecommunications operators to increase data services they offer through mobile phones and in turn generate more revenue for telecom operators in Africa.
36. Tanzania has the confidence of investors and world class bankers. In a survey reported by the Tanzania Embassy-China in 2010 and conducted jointly by the Tanzania Investment Centre (TIC), the Bank of Tanzania (BOT), and the National Bureau of Statistics (NBS), 71% of existing foreign investors in Tanzania expressed desire and readiness to expand their businesses and only 10% were considering contraction. In addition, investors have access to credit with the presence of major banks such as Standard Chartered, ABSA, Barclays, Citibank, Stanbic, and Exim.
37. Liberia’s debt relief. The World Bank and International Monetary Fund announced on June 29, 2010 that they were supporting Liberia with a debt forgiveness package worth $4.6 billion (USD).
38. Tunisia has a high level of skilled human resources and business incorporations. During the first eleven months of 2010: 188 new firms with foreign participation started their production phase; 212 expansion operations were carried out by foreign companies operating in Tunisia as part of the development of their activities; and 14,776 new employment positions, including 11,966 positions in the manufacturing industry were created. (Source: FIPA-Tunisia)
39. Rwanda is open for business. In addition to President Kagame’s focus on private investment for economic development, Rwanda represents the hub for the increasingly integrated East African Community (EAC), an intergovernmental organization that includes Uganda, Tanzania, Kenya, and Burundi. EAC has a market of 125 million people with a combined GDP of over $70 billion (USD). According to Reuters Africa, the EAC is a probable precursor to the establishment of the East African Federation, a proposed federation of its five members into a single state. In 2010, the EAC launched its own common market for goods, labour and capital within the region, with the goal of a common currency by 2012 and full political federation in 2015.
40. Namibia’s close ties with India can lead to long-term economic development that’s beneficial to both countries. The India-Namibia relations date back to India’s early support of the Namibian liberation movement that began in 1966. In 2009, India and Namibia signed agreements to strengthen cooperation in trade and increase investments in sectors such as mining, agriculture, and textiles. As India moves from an emerging market to a developed market, Namibia can become less of a “lion market”.
41. Morocco has the strategic ability for olive oil production to help meet the worldwide demand. Worldwide consumption of olive oil is on the rise. The US market for olive oil grew by more than 50% from 2000-2010. Morocco is the world’s 6th largest producer of olive oil and its production is projected to increase by 267% in 2020.
42. Swaziland enjoys preferential trading status with the United States and the European Union. The country has received trade preferences for apparel exports under the African Growth and Opportunity Act (AGOA) to the US; and for sugar to the EU under the Generalized System of Preferences (GSP).
43. Mozambique is growing its trade & exports portfolio while alleviating poverty. Mozal, Mozambique’s largest and Africa’s second largest aluminum producer began production in mid-2000 and has greatly expanded the nation’s trade volume and jobs. Also, China announced in August 2010 its plans to invest $13 billion (USD) in industrial, tourism, mining, and energy projects in Mozambique over the next five years according to report by The Economic Times.
44. Malawi is becoming economically independent and ending famine simultaneously. In 2006, as a response to disastrously low agricultural harvests, Malawi began a program of fertilizer subsidies that were aimed at reinvigorating crop production. As of 2010, the program has measurably improved Malawi’s agriculture, making Malawi a net exporter of food to nearby countries. (See: article in NY Times)
45. Madagascar is the ultimate blend of African, Arab, Asian, and European industriousness; its unique location allows it to protect investors of diverse backgrounds with similar interests. Madagascar has signed foreign Investment Promotion and Protection Agreements with several countries such as Canada, Mauritius, France, and Germany. These agreements provide a framework of legally binding rights and obligations.
46. Sierra Leone is committed to settling commercial disputes… fast. In December 2010, the Sierra Leone Judiciary, under the leadership of Chief Justice Umu Hawa Tejan Jalloh, commissioned the Fast Track Commercial Court.
47. Gambia is investing in itself. As part of Gambia’s Vision 2020, the goal is to become a middle income country and ensure that at least $10 billion (USD) will be invested in economic development by 2020.
48. Mali is educating itself. Gross enrollment in primary education was an estimated 84% in 2009 according to Africaneconomicoutlook.org
49. Senegal, like a group of other African nations, encourages arbitration over costly litigation. According to the US Dept. of State, Senegal and the US share a Bilateral Investment Treaty for international arbitration. (U.S. companies entering the Senegalese market should ensure that their contracts with third parties make a provision for binding international arbitration in case of a dispute). The treaty also provides for Most Favored Nation treatment for investors, internationally recognized standards of compensation in the event of expropriation, free transfer of capital and profits, and procedures for dispute settlement, including international arbitration. Senegal has signed similar agreements for protection of investment with France, Switzerland, Denmark, Finland, Spain, Italy, the Netherlands, South Korea, Romania, Japan, Australia, China, Iran, Morocco, and Sudan. Senegal has concluded tax treaties with France, Mali, and WAEMU member states.
50. Investments in Zimbabwe can be socially innovative. Instead of waiting to see whether the nation gets back on its feet, investors can take advantage of readily available investment opportunities that are socially responsible. Investments can do the heavy lifting when political will tires. Let your investment do your talking for you. As an illustration, Enterprise Zimbabwe (EZ) is a non-profit group that promotes entrepreneurship by connecting small and medium enterprises to philanthropic donations. EZ was set up by Billionaire Richard Branson, Virgin Unite, Humanity United, and the Nduna Foundation; and it was launched at the Clinton Global Initiative 2010 Annual Meeting. Behold socially responsible investment funds!
51. Sudan, Africa’s largest country, has sent an open invite to brave investors. Following the successful independence referendum for Southern Sudan in early 2011, the Undersecretary in the Ministry of Wildlife Conservation and Tourism in Southern Sudan, Dr. Daniel Wani, is seeking investors in the aviation, hospitality, and safari sectors, and also encouraging private-public partnerships in the wildlife sector.
52. Invest in lives – help Africa grow; help the economically deprived in Africa. Economic deprivation in the continent of Africa negatively impacts global economic security. According to Ryan Shen-Hoover of Africanbusinesssource.com, here’s how some of the dots connect: Each dollar invested in an African stock helps to build the liquidity of the exchange on which it trades. Rising liquidity lowers risk. Lower risk attracts additional investment to the exchange. Greater investment on the exchange lowers the cost of capital for listed companies. A lower cost of capital leads to increased growth, food production, and job creation.
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