How to invest in Africa

I have wanted to discuss the merits of investing in Africa in the same way that companies invested in South East Asia many years ago for a while now, but I hesitated because people would more than likely say that it is unrealistic due to the poor infrastructure and uneducated population. I was waiting for some company or entrepreneur to successfully do it so that my words will have some backing.

I have found just what I was looking for. I recently read in the Toronto Star about an entrepreneur that decided to manufacture shoes in Africa and sell them globally. He is successful with his business and it is growing and even some celebs have begun to wear them. If you want to read the article, click here.

Now to debunk the usual arguments against using a similar approach in Africa that was used and is still being used in parts of Asia that has enabled China, Singapore, India and others to either already be modern economies or be emerging economies with a great deal of global economic influence and whose citizens have benefited greatly from. First, the poor infrastructure: It is true that most of Africa has very poor infrastructure, however, have you ever looked at India? India has terrible infrastructure as well but it is getting better because of these investments that have been made over the years. Moreover, it is incorrect to say and think that Africa has poor infrastructure so you cannot use it as a manufacturing base. If you make and sell a particular product then you just need to build one factory along one major road that connects to one major African city. This is not too hard to find if you actually look for it. It doesn’t matter if Africa as a whole has poor infrastructure because you are not trying to build a country or continent, you are simply trying to operate your business so it doesn’t matter if 20 miles away there are no roads or clean water because as long as your building and road is clean you’re good to go.

The second argument that the people are poorly educated is also largely irrelevant. I am not saying that they are more educated than you think because they really do have very little to no education in many cases. However, neither did large parts of Asia that received investments and began to manufacture just about all of our non-food consumer goods. I am not saying that Intel should open a facility there to produce computer chips. Obviously there is no enough education to handle that but, there is not reason that they cannot be trained to produce clothing, simple toys, buttons, etc… It doesn’t take a rocket scientist to make these products, anyone can learn the process.

I think there are many benefits to investing in Africa. First, from a business stand point, it is less expensive than most other parts of the world even if you give them good wages and benefits (which you must as it is your responsibility as a citizen from an advanced nation, plus it’s plain good business). Also, you can use it as part of your marketing like my example of the shoes entrepreneur. Secondly, investing in Africa is not only good for Africa, but it is good for your home country as it will create good relationships between the two countries and these days fostering friendships with countries is something that is becoming more important and more difficult to do because of competition from other countries.

If you are looking to manufacture your product overseas and you have yet to select a site you should look in to Africa as well.