Investment Opportunities in Africa for 2012

By Tucker Cummings , last updated January 5, 2012

Everyone in America has received a spam email at some point from a “Nigerian prince” asking for money. But despite all of the negative associations with African email scams, there are plenty of legitimate investment opportunities worth investigating in Africa in 2012. In a recent article, Forbes noted that Africa has solid potential for growth.

During the recession in 2009, Africa and Asia were the only two regions that showed positive growth, with steady upward growth in 2010 and 2011 as well. In addition, the IMF reports that the combined economic growth of all African nations will average to around 6% in 2012. Bearing all that in mind, it may be the perfect time to make a move on some of 2012’s most promising investment opportunities. While it may be the world’s poorest continent, Africa still has the potential to generate wealth for you.
Energy
In the first quarter of 2012, Johannesburg will host the Africa Energy Indaba, drawing energy innovators from around the globe to discuss the future of Africa’s electricity needs as well as options for alternative energy sources. And this conference is perfectly timed, as energy output will control just how fast Africa can industrialize in the coming decade. The continent is urbanizing at a rate that is faster than all other continents and investing in African energy companies and energy infrastructure now can pay off big in the coming years, particularly investments in clean energy.
Mining
Africa is a rich source of various mineral deposits, but the mining industry itself has been underdeveloped and underfunded. In 2012, that could change, as countries like Nigeria shift their focus from tapping their oil reserves to exploiting their deposits of coal, gold, iron, bauxite (used to make aluminum), and tin. Other countries such as the Democratic Republic of Congo, Tanzania, Namibia, and Zambia have minerals just waiting to be mined, including copper and diamonds.
In addition to use in fine jewelry, these minerals are used to make home goods, construction materials, and even computer parts. Investing in mining companies and technology will certainly pay dividends, as all Africans need in order to tap their own resources is adequate venture capital and sufficient mining technology and equipment.
Tourism
A visit to Africa doesn’t have to be all about the Pyramids or seeing a ton of animals on safari. American and European tourists are becoming increasingly aware of the true diversity of Africa’s beauty, from national parks to luxury getaways. Forbes pointed out in a recent article that consumers interested in the finer things have plenty of reason to start flocking to Africa.
Richard Branson will be opening a luxury safari lodge in Masai Mara, Kenya in 2012, while Italian tycoon Flavio Briatore already operates a similar establishment in the coastal resort area of Malindi, in Kenya. With plenty of land around Lake Victoria available for development and an increasing large African middle class who wants to use their disposable income for exploring their own continent, tourism investment could be one of the smartest ways to grow your money in Africa.
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