Africa's untapped potential is hungry for investors, today Here's how you can profit…
When you think of Africa, the first thing that may come to your mind is disease, war and riddled with poverty.
However, there's a more attractive side to Africa that you need to know about…
• Africa's economic growth is set to grow close to 5%.
• African consumers will have over $1 trillion spending power by 2020.
• African countries will spend over $90 billion a year upgrading IT, transport, and infrastructure.
So with these positive trends in mind, are there any promising investment opportunities in Africa that you should be paying attention to?
Well recently, I sat down with renowned local economist Dawie Roodt for the South African Investor and posed this exact question to him.
Dawie's answer was clear: "Without a doubt! There are a number of screaming opportunities in the African market."
The only problem is, you need to know where to look…
But don't worry, you can sit back and relax.
Today, I'll show you what African sectors are poised for massive growth and how you can profit from them…
The African urbanisation opportunity
One of the best opportunities in Africa right now is the mega-urbanisation trend.
Nearly 850 million people have been added to Africa’s population in the past century.
What's even more significant is that these people are moving to big African cities. Six of the ten countries with the highest rates of urbanisation in the world are African.
Combined, the top ten cities will accommodate 30 million new urban consumers in the next 15 years.
Our resident penny share expert, Francois Joubert, explains urbanisation, "When people move to the city from rural areas, they need homes. This spurs on the construction industry. It helps the property industry. It gives rise to estate agencies, buy-to-let businesses and massive wealth and job creation - It kick-starts large-scale economic growth."
This means that the more people moving into Africa's cities, the bigger the opportunities that arise for service providers, agriculture, consumer, construction and infrastructure companies. All these growing cities need water, food and power.
And this offers you a great opportunity to profit.
Specifically, I've found you two great African urbanisation opportunities that are ripe for the picking, right now!
Opportunity #1: Infrastructure
Urbanisation is the fuel behind the 30 year-long infrastructure boom going on in Africa right now. Billions of dollars are pouring in to the sector, and the cash inflows are not slowing down any time soon.
The need for infrastructure is evident. According to the World Bank, sub-Saharan Africa needs infrastructure investment of $100 billion (R1.2 trillion) a year.
It currently spends R461 billion on infrastructure each year. This is less than half of what it needs to spend to keep up with economic growth.
Not to mention, spending on electricity development and other infrastructure in Africa needs to grow between R900 billion to R1.2 trillion a year, to keep up with business.
One JSE listed company, Consolidated Infrastructure (JSE: CIL), is perfectly positioned to capitalise on the huge growing market.
CIL operates throughout Africa in the lucrative renewable energy space and has built up a significant competitive advantage in the space in recent years.
Opportunity #2: Transportation.
A growing infrastructure spurs on the need for efficient transportation and logistics companies transporting materials, equipment and even vehicles to support the construction boom.
If you're looking for an investment opportunity, the JSE listed OneLogix (JSE: OLG) is a local company servicing the logistics industry in Africa
Onelogix built a logistics network that reaches from Durban to Johannesburg, Beitbridge, Harare, Lusaka, Kenya, and Tanzania.
It transports 35% of all cars in South Africa and nearly 95% of all cars transported into Sub Saharan Africa.
So it has a strong foothold in the African markets.
Buy these two great companies today!
OneLogix and CIL are just a couple of great companies that are tapping into Africa’s growing markets.
With South Africa's economic looking as bleak as ever, now’s a great time to explore what the African continent has to offer.
In the coming weeks, I'll be going more into depth about the opportunities that are arising in Africa’s fast-growing industries. And more importantly, how you can find and profit from them!
But for now, OneLogix and CIL are great companies to buy.