In the past 10 years, Africa’s investment scene has seen an increase in attention and interests in the continent's prospects as the next frontier in global trade, with countries like China, the United States and Britain, developing and executing elaborate strategies to maximize the opportunities made available in the African market.

The United States and the United States International Development Finance Corporation (IDFC), established by The Better Utilization of Investments Leading to Development (BUILD) Act, provides funding for businesses who intend to do business in emerging markets and also engage in development projects. Fundamentally, it seeks to deliver focused development to these emerging economies whilst enabling American businesses within these markets. It serves a better purpose, as against the age-old method of foreign aid for development projects.

The onset of negotiations on ‘BREXIT’ led the British government to move towards strengthening relations with key markets in Africa, particularly Nigeria and South Africa amongst others, as they are considered strategic gateways to the rest of Africa.

Also, the Chinese government has been actively engaged in executing its Belt and Road Initiative, which has seen an incremental commitment to funding for development across Africa, whilst ensuring stronger trade relations along the way.

However, the pandemic has caused all actions to take a back seat, in the interim, as countries around the world struggle to battle the spread and damage brought on by this virus and ensuring the safety of all people; albeit a lingering question, what would the return to an active drive towards increased investment in Africa look like after this crises? And what would have changed by then?


In Africa, one thing is clear; all affected states are actively managing the spread of the virus, despite challenges in getting as many people as required access to the necessary healthcare. This has also created an uncertain situation which has also led to a significant drop in business and investment activities in key African countries, including Nigeria and South Africa.

It is on record that Nigeria confirmed the first case of COVID-19 on February 28. Since that time, a combined slowdown in trade with supplier markets in Asia and Europe, a drop in government revenue from oil and lingering security challenges, have all led to a more conservative investor response, with even more investors preferring to hold on to liquid cash than sinking funds in an uncertain environment. While the short-term damages can be minimal, if allowed to fester to too long, the long term impact on the economy would be significant.

The situation in the rest of Africa is dire as well, as the African Union in its outlook stated that Pressures from the impact of the pandemic on tourism, depletion of remittances and FDI, drops in tax receipts and job losses, would all form a crude mix of challenges that would not be easily surmountable.

However, despite the gloomy outlook, it is expected that, upon the eradication of the epidemic, the business world would return to a lingering conversation; what to do with Africa and her even more bountiful opportunities.


  • The AU estimates that up to 20 million Africans, both in the formal and informal sectors, would be left unemployed by the end of this epidemic; meaning that there would be a larger number of available skilled and unskilled labour than there was before the pandemic started.
    This significant rise in the availability of labour, and the resulting economic hardships, would inadvertently drive down the cost of labour across Africa, making it easier to access skilled labour to drive industrialization and economic growth, to the benefit of state and businesses alike.

  • It is arguable that as governments across Africa are faced with the challenges of inability to fund budgets, infrastructural development and wage payments, they would turn to reductions in duty specific raw materials, and in some cases, finished goods, particularly fast-moving consumer goods. This, in addition to the introduction of tax waivers and other investment attraction measure, would go a long way in accelerating growth through increased reinvestment in key markets.

  • Before the onset of the coronavirus pandemic, the African Development Bank (AFDB), along with the World Bank and the International Monetary Fund (IMF) had been at the forefront of funding investment in strategic infrastructural provision to enable a more sustainable investment environment in Africa.
    Considering the short term gains to be had from growth in intra-Africa trade, particularly on the back of increased manufacturing and industrial activities and movement of goods and services from one end of the continent to another, these funders would inject even more funds with a focus on stimulating rapid growth and catalyzing foreign trade investment in Africa.

  • The Africa Continental Free Trade Agreement, which has been signed by 54 African countries and ratified by 28 countries remains the most influential catalyst for a resurgence of growth in Africa through trade and investment.
    This position is based on the consideration that the AfCFTA is projected to cover a market of more than 1.2 billion people with a combined GDP of more than US$3.4 trillion. The investment opportunities are enormous when considered in tandem with the above-discussed points; assuring investors an even more favourable environment, particularly for manufacturing and industrial production activities.
    It is believed that, despite an anticipated delay in the implementation, as the previously planned date for Trading to begin is 1st July 2020, a resumption of trading would immediately set in motion a focused drive towards a stronger African economy.


  • The Agricultural Sector would receive as increased attention due to the critical role adequate and nutritious foods play in rebuilding society after the pandemic has passed. There would be a sharp rise in demand for fresh food, particularly in countries where people have been in lockdown for extended periods. Proactive investment in this sector, particularly in the cultivation of grains, fruits, vegetables, and poultry, would yield short term ROI as these are the commodities that consumers would readily go for.

  • The onset of the pandemic and the resulting restrictions on movement, lockdowns and curfews, which further led to businesses having to resort to working remotely or working-from-home, has ignited the fires of conversations around work automation, remote work and freelance employment. We believe that opportunities in this area would be identified, allowing tech-solution providers to provide effective and efficient solutions to businesses who would find a challenge in paying the wages of full-time employees, as they struggle to get back to profitability.

  • It is an accepted opinion that the healthcare sector in Africa, in particular, is at a deficit; clearly shown by the inability of many affected African countries to effectively hold off the spread of the coronavirus. While this gap presents a challenge, it also presents an investment opportunity.
    It is expected that there would a sharp rise in investments in various strategic areas of healthcare, with a focus being on primary and secondary healthcare, as these levels are the most vulnerable and would also offer the most sustainable investment returns.

  • FMCG
  • The fast-moving consumer goods subsector has seen a comparative rise in demand, particularly the producers of edibles and healthcare-focused products, as more consumers have resorted to making more strategic decisions as the pandemic lingers on. It is expected that this sustained momentum in this subsector, would drive even more investment, particularly in the area of increased production, which would lead to more jobs, disposable income and higher spending power ratings in the short term, where same is executed effectively.

  • The recognition of cash as a singular means of transmitting the virus led to financial institutions encouraging more customers to utilize cashless means of payment and settlement to curb the spread of the virus. This singular act has sparked a resurgence on the key role cashless transactions would play in Africa going forward. While Fintech startups like Paga, FlutterWave and Mpesa have all shown us that this can be done at scale, we strongly believe that there would be a renewed drive towards more fintech solutions particularly aimed at financial inclusion and the rural dwellers, as a way to close the gap.

Ikechukwu Ibeawuchi
Public Policy and Regulations Advisor,

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