Even with COVID-19 impacting Africa, the future economic outlook is extremely positive.
Over the past two decades, the continent of Africa has seen a tremendous amount of economic activity. Unfortunately, the COVID-19 pandemic has brought economic activity to the region to almost a standstill. As reported by the International Monetary Fund, the private sector will have to play more of a role in economic development if African countries want to enjoy a strong recovery and avoid economic stagnation. Heads of state from Africa made this one of their resounding messages during the recent summit on “Financing African Economies” held in Paris in May of 2021. Infrastructure — both physical (roads, electricity) and social (health, education) — is one area where the private sector could be more involved.
Even though the economic outlook does not look positive today because of the COVID-19 pandemic, many international companies are still poised to invest in Africa and play the long game when it means investing in Africa. The region is ripe for investment, and in particular, two sectors are drawing immense attention from international companies. The first is the development and construction of data centers throughout the continent — also, the ability for the country to be a future global leader in solar energy.
Why Africa Needs Data Centers
Africa only accounts for less than 1% of the world’s data centers, as indicated by the How We Made It Africa blog. As the continent continues to recover from the COVID-19 pandemic, it will again continue to be a leader in emerging markets for global investments. Large global technology companies will make investments in key African countries. The blog stated customers in Africa are increasingly using data centers to access public cloud-based services from hosts like Amazon Web Services (AWS), Microsoft, and others. This will cause a wave of data center investments to materialize across the continent, led by regional economic powerhouses including South Africa, Kenya, and Nigeria. Other markets, including Ghana, attracting investment from big US tech giants like Twitter and Google, are increasingly seeing interest from data center investors. The development and construction data centers will bring global technology firms and large international construction companies, producing a lot of work for locals and bringing expats, which will spark the local economies.
Africa Must Create More Energy
The continent of Africa is still developing and lags behind other regions when it comes to electricity. As reported by mondaq.com, the African Development Bank Group found that some 640 million people do not have access to energy in Africa, with more than 30 out of the 54 countries on the continent going through an energy crisis. Additionally, the continent is heavily dependent on fossil fuels, with over 80 percent of the power generated from coal, oil, or natural gas. The current producers of energy in the continent are not sustainable, and for the continent to grow, as many predict, it must focus on investing in sustainable power. Certain countries like Morocco, Egypt, South Africa, and Kenya have already made significant investments in sustainable energy, opening the door for foreign investments. Once the pandemic is brought to a manageable state, we will see a major influx of international companies wanting to invest in sustainable energy to fuel Africa’s energy needs and technology growth.
What do International Companies Need Before Investing in the Continent of Africa
Unfortunately, Africa is still a hotbed for global terrorism, which poses a risk to international companies. International companies looking to invest in Africa, need to partner with the right insurance firm to protect their assets and, most importantly, their staff.
Tuman Global Solutions
Tuman Global Solutions is an insurance provider with over 30 years of experience working in unstable geopolitical environments with international organizations worldwide, ranging from relief and development organizations, government contractors, defense contractors, oil and gas companies, international schools, construction companies, and manufacturing companies, and logistic firms.
Contact Us today to obtain a tenured and trusted overview of your organization’s insurance needs before investing time, resources, funds, and staff in Africa.