After a few years of sluggish regional growth, Africa’s economies are rebounding, offering a significant opportunity for investors, according to a new study by IFC, a member of the World Bank Group, in partnership with the Africa CEO Forum.

It finds that the region’s new potential is about more than recovering commodity prices, but other forces such as favorable demographic trends, economic reforms, infrastructure investment, buoyant services sectors, and strong agricultural production. 

Hans Peter Lankes, Vice President, Economics and Private Sector Development, IFC, said, “There is considerable opportunity for investors to seize on favorable trends. Africa’s growing middle class is consuming a wide range of goods and services, while technology is changing the services delivered to consumers. The result is enormous potential across a range of sectors in Africa.” 

The report, entitled Shaping the Future of Africa: Markets and Opportunities for Private Investors, notes that growth recovered from a two-decade low of 1.3 percent in 2016 to an estimated 2.4 percent in 2017, and is projected to improve further to 3.6 percent in 2020.

The report finds that certain sectors show potential for high growth due to productivity gains or consumer demands. Food production and agriculture stand out in a region that continues to import food while a rapidly urbanizing population requires more choice. Africa’s needs in infrastructure remain vast, and range  from power to transport to sanitation, among other areas.

Beyond conventual policies to improve productivity, adopting innovative practices and technology can help Africa’s productivity growth through “leapfrogging.” Access to finance, for example, is low, yet Africa has led the world in innovative financial services based on mobile telephony, that is opening new opportunities to increase financial and other services through reliable payment systems.

Amir Ben Yahmed, Founder and President, Africa CEO Forum, said, “This report demonstrates the abundance business opportunities today in Africa. The Africa CEO Forum was founded to provide a dialogue that engages business leaders and helps investors turn these opportunities into successful projects that create jobs and drive Africa’s economic development.”

The report also highlights obstacles that continue to constrain Africa’s development and competitiveness, which include lack of financing and the infrastructure gap. The report finds that joint efforts by governments and private sector, supported by development partners, can best address such challenges and create opportunities. It presents case studies of investments supported by IFC that are delivering strong development impact across Africa.

Sergio Pimenta, IFC Vice President for the Middle East and Africa, said, “Africa is the top priority for IFC. IFC aims to mobilize more private capital to address development and inclusive growth challenges in Africa, notably in infrastructure and agribusiness. In collaboration with other institutions of the World Bank Group, we work to bridge the infrastructure gap, build a productive real sector, and lead inclusive business approaches that will shape a better future for Africa.”

The report was launched during the 2018 Africa CEO Forum, an annual gathering of influential African and international CEOs, investors, and policymakers.