Africa is the world’s fastest-growing economy. Investing in Africa is getting more and more popular. Still, there are not many ETFs, which provide exposure to the African markets. Exchange-Traded Funds may invest in a specific country or a group of African countries. Investable opportunities in Africa are mainly focused around resources and financial companies. A significant part of the African economy is also basing on commodities and raw materials (especially precious metals). Investment regions in Africa differ from each other. The northern and middle-east parts have similar crude oil reserves, whereas South Africa is seen as the most established with the strong raw materials market and mining sector as well as huge diamond reserves. South Africa is the most popular region on the continent. Generally, Africa is seen as politically unstable continent with government problems, persistent poverty and health issues. Moreover, due to the lack of infrastructure and political issues Africa has rather poor business conditions. That is why investment risk is very high. Nevertheless, due to the large population and large amount of natural resources, Africa might be considered as a land of opportunities. Even if the long term investing is uncertain and very risky it may be very rewarding.
Nigeria ETF is in the medium-term down -8% in 2 months and down -13% below S&P in 4 months. In the long-term down -38% below S&P in 2 years and down -79% below S&P in 8 years.
South Africa ETF is in the medium-term down -15% below S&P in 5 months. In the long-term down -20% in 2 years and down -34% below S&P in 4 years.