Business opportunities in African countries are taking the finance world by storm, but it may not be something that you have considered so far. Investing in Africa is growing in popularity and you could be missing out on some exciting opportunities.
While some investments are high risk and high profit, others cater to smaller investors that need to balance their risks more carefully. So there really is something for everyone. One area of investment growing at an astounding rate is the alternative energy market; more specifically – solar power.
You may have just let out an audible groan at the thought of investing in solar power. But, investing in solar power in Africa is very different to say, the UK. To start with there is greater access to the main component – the sun – in Africa. Cloud cover, persistent rain, and seasonal changes are much less of an issue on the Sub-Saharan continent. Then there is need, access, and enthusiasm — which are plentiful in Africa.
Still not sure why you should consider investing in solar energy in Africa? Not sure what is in it for you in both the short and the long term? Read on to discover seven excellent reasons why you should invest in Africa, and particularly in solar power.
1. SOLAR BUSINESS OPPORTUNITIES IN AFRICA ARE PLENTIFUL
There is a real buzz about solar energy in Africa and it is only set to grow. Interest in alternative energy has been present for a while but improvements in infrastructure, the exponential growth of small businesses, and intra-African trade development means that this buzz is starting to reach investors outside the country.
Companies of all sizes are becoming involved in the solar energy market, and that means that investment opportunities are bountiful and varied.
Whether you are interested in supporting a start-up that is developing new technology to improve solar capture or are more focused on sales and marketing, there is an opportunity that suits your budget and your level of acceptable risk.
2. THE SUN IS FREE
The sun itself is free to use. The costs come from the equipment needed to capture and store the energy the sun produces. The cost of this equipment or at least the parts needed to make it are falling. More small businesses can access the technology. Individuals are learning how to create safe, working, and effective solar panels.
With as many as 600 million people across Sub-Saharan Africa still relying on generators and kerosene lamps, it is unlikely that production will ever outstrip need.
Falling costs, greater community involvement, better education and training — these all result in cleaner, more efficient, and more reliable solar energy, which in turn supports falling costs, greater community involvement – you get the picture. So, what’s in it for you?
The more the costs fall and the take up of solar energy increases, the greater the profits made by these small businesses and those that form part of their supply chain. This, in turn, means better returns for you.
3. FALLING COSTS OF SOLAR ENERGY
The main reason you make an investment is to make a profit. It’s the same reason why you choose a bank account that pays interest or buy property. So, why consider business opportunities in African countries when it is no secret that outside of the larger cities there are pockets of extreme poverty. What is the point if there is no end consumer to purchase the product?
That is exactly the point. While access to mains electricity is patchy and expensive across the African subcontinent, solar energy is cheap and plentiful. And, further investment is increasing its reach and availability.
Once families have access to solar panel technology, they control their own energy supply. They are not reliant on power stations, cabling, or the stability of large corporations or governments. They do not pay more to use more, which means no more energy rationing and choosing between running the refrigerator, studying, and charging their smartphones.
4. SPREAD YOUR CAPITAL TO SPREAD YOUR RISK
One of the biggest mistakes that new investors make is not spreading their risk. If you put all your eggs in one basket and the handle breaks, you are going to end up with a big mess and need to replace both your eggs and your basket. It’s a good analogy for investing for many reasons, but primarily because of the time it can take to clear up and recover from the mess.
One of the many benefits of investing in solar energy in Africa is that you have the ideal opportunity to spread your investments and therefore to spread your risk. There are 54 countries in Africa, each with its own laws, business ethics, risks, and potential rewards.
In each country that is embracing solar energy, there are numerous businesses with their own models, technology, supply chains, and support systems. By spreading your investment across different countries and businesses you are increasing your potential returns, reducing your risk, and supporting more small businesses.
Investments in Africa may not be covered by the Financial Services Compensation Scheme or similar services depending on your home country, but it is possible to work through ethical investment platforms, crowdfunding services, and the DfID (Department for International Development) that do provide some level of support and reassurance.
5. INVESTMENT THAT SUITS YOUR POCKET
Long-term does not suit everyone and one of the benefits of investing in business opportunities in African countries is that you can find an investment term that best suits you. If you find that it is working in your favour, you can always choose to re-invest. If not, then you choose a new investment at the end of the term.
And, it’s not just the term of the investment that you can choose to suit your needs. You can also determine the amount that you invest. While this is not unusual, the starting amounts for investing in Africa are much smaller than for many other investments. In some cases, you can start with an investment of as little as £50.
6. THE SUN ISN’T LIKELY TO GO OUT ANYTIME SOON
The sun, like all resources, is finite and there will come a time when it will simply stop producing the energy needed to heat and light the planet. However, there is no immediate panic, as it isn’t due to stop working for at least another 4.5 billion years. That should be more than enough time for you to realise your investment’s potential.
No one owns the sun either. Unlike an oil field that can change ownership overnight or a natural gas deposit that can suddenly come under someone else’s borders, the sun is there for everyone.
This means that those working to produce solar panels will always have access to their key component. And, as there is an average of 325 days of bright sunshine in Africa each year, it is a truly renewable and accessible resource.
7. REAP THE BENEFITS WHILE GIVING SOMETHING BACK
Yes, of course, the main reason you make an investment is to make money. But, the ability to do so while giving something back to a community is an added benefit. Investing in solar energy in Africa provides opportunities to help families and small businesses build better lives for themselves rather than relying on aid or charity.
It helps schools to support the next generation of entrepreneurs who may go on to solve the wider global energy crisis and find new ways of tackling global warming, poverty, and many other challenges that face not just Africa but the wider world. Your investment makes you part of the solution, and that has to be a good thing.
The Question is Why Not Invest in Solar Business Opportunities in African Countries?
So, why not invest in solar business opportunities in African countries? Yes, there are risks, but there are risks in any investment market. There are risks involved even if you just leave your money in the bank (look at Northern Rock for example). But, if you approach the investment with your eyes open, your risks and capital spread. And if you only invest what you can afford to lose, then there is no reason not to look toward Africa for your next investment.
If you want to know more about business opportunities in African countries, get in touch with us for a free consultation today.