Emerging markets fast becoming key investments spots

Investors are increasingly turning their attention towards emerging markets, particularly Africa, as the continent presents significant potential for scalable impact in various sectors. In a recent interview with CNBC Africa, Pramit Banerjee, Lead at Sankalp Forum, highlighted the trends and opportunities that are driving investments in Africa. According to Banerjee, the continent has seen an inflow of around one trillion dollars of investments from impact investors and development finance institutions in the last financial year of 2023. This surge in investments indicates a growing momentum in Africa, with key areas such as manufacturing, automobiles, EV vehicles, and non-automotive manufacturing segments attracting interest. With Africa's demographic landscape showing promising signs, including a steadily growing population on track to reach 2 billion by 2040, the continent is poised to become a major player in the global economy. By 2020, Africa is projected to have a collective GDP of around 2.6 trillion dollars, with consumer spending reaching 1.4 trillion dollars, leading to the emergence of 500 million new middle-class consumers. Furthermore, Africa's average annual growth rate of 5% over the last few decades, coupled with its urbanization rates comparable to China and Europe, underlines the continent's potential for growth and investment opportunities. As Africa's workforce continues to expand, Banerjee emphasized the importance of sectors like manufacturing and the role they play in leveraging the continent's workforce for global supply chain networks. The pandemic and global economic uncertainties have prompted global manufacturers to diversify their manufacturing hubs, with Africa emerging as a competitive option. Banerjee stressed the need to incorporate more SMEs into the supply chain network through the utilization of technology such as artificial intelligence and blockchain. Additionally, Africa's abundance of rare earth materials presents opportunities for growth in sectors like automobiles, non-automotive components, and e-commerce. Banerjee highlighted the role of companies like Intellica in supporting small-scale enterprises across various sectors including agriculture, manufacturing, financial services, and healthcare. When it comes to policies and regulatory frameworks, Banerjee called for a focus on education, skill development, and infrastructure to enhance productivity among Africa's young workforce. He also praised the African Continental Free Trade Agreement (AFCTA) for promoting cross-border trade, investments, and economic growth by harmonizing regulations and attracting foreign direct investments. Banerjee underscored renewable energy and infrastructure as key sectors ripe for investments in Africa, emphasizing the importance of supporting enterprises and entrepreneurs across the region. Despite the opportunities for growth, climate change remains a critical factor that could impact investment tempo and economic development in Africa. Banerjee highlighted the upcoming Sankalp Africa Summit, which aims to bring together stakeholders to discuss climate-specific investments and actions across the continent. The summit will feature discussions on climate-smart agriculture, regenerative practices, circular economy models, and healthcare, showcasing innovative solutions that address climate change challenges. By aligning investments and policies with climate considerations, Africa can unlock its full potential for sustainable and inclusive growth.