Why Invest in Africa? The Foreign Direct Investment Case for 2026

Why invest in Africa in 2026? Because the investment story is moving beyond a narrow commodities narrative toward infrastructure, industrialisation, digital markets, energy, critical minerals, agriculture and increasingly connected regional economies.

The capital flows are significant. UN Trade and Development reported that foreign direct investment into Africa reached a record $97 billion in 2024, representing approximately 6% of global FDI. That headline requires context: one large urban development project in Egypt materially affected the total. Excluding that effect, UNCTAD calculated African FDI at approximately $62 billion, still 12% higher.

That distinction captures the African investment thesis well.

There is genuine momentum, but sophisticated investors need to look beneath headline numbers.

Africa is not one market and should not be treated as one allocation. The opportunity lies in identifying specific countries, sectors and assets where structural demand, policy direction and investor capability intersect.

Why invest in Africa now?

Investors should consider Africa now because several long term trends are converging: demographic expansion, urbanisation, demand for infrastructure, digital adoption, natural resource supply chains and regional economic integration.

These trends do not guarantee investment returns.

They create areas in which investable businesses and infrastructure can emerge.

UNCTAD reported that African FDI rose sharply in 2024, while investment facilitation accounted for 36% of policy measures favourable to investors on the continent.

The significance is not simply that more money entered Africa.

It is that governments and investors are increasingly treating investment facilitation, infrastructure and strategic industries as connected parts of the growth agenda.

Is Africa really attracting more foreign direct investment?

Yes, although the numbers need careful interpretation.

According to UNCTAD:

Africa FDI indicator	2024
Reported FDI inflows	$97 billion
Increase from prior year	75%
Share of global FDI	6%
FDI excluding major Egypt project effect	About $62 billion
Underlying increase after adjustment	12%

The adjusted figure is arguably more useful for an investment committee because it prevents one exceptional transaction from being mistaken for continent wide growth of the same magnitude.

The lesson is important: Africa’s FDI story is strengthening, but investment decisions should be based on country and sector fundamentals rather than continental headline statistics.

What are the structural reasons to invest in Africa?

Several long duration themes support the investment case.

Demographics

Switzerland’s own Africa Strategy 2025–2028 notes that Africa currently has more than 1.3 billion people and is expected to account for more than a quarter of the world’s population by 2050.

Population growth alone does not create attractive investments.

But population growth combined with urbanisation, infrastructure demand, employment, consumption and financial inclusion can create large addressable markets.

Urbanisation

The growth of African cities creates demand for housing, transport, logistics, power, water, healthcare, financial services and digital infrastructure.

This makes urbanisation not one investment sector but a driver of several.

Natural resources

Africa’s resources remain strategically important.

Switzerland’s Africa Strategy specifically highlights resources including cobalt, gold, platinum, manganese and rare earths and connects them to global energy requirements and supply chain diversification.

For investors, the more sophisticated thesis is increasingly about the value chain around those resources, not extraction alone.

Regional integration

Regional frameworks can gradually make it easier to think beyond individual national markets.

The East African Community Common Market, for example, is built around movement of goods, persons, labour, services and capital and rights of establishment and residence, although implementation remains progressive.

For investors, regional integration can create opportunities to build companies designed for several markets rather than one.

Which sectors offer significant African investment opportunities?

The answer varies by market, but several themes deserve investment committee attention.

1. Critical minerals and mining value chains

The global energy transition and supply chain diversification have increased strategic interest in mineral producing jurisdictions.

The opportunity extends beyond acquiring mines.

Investors can consider:

• Processing
• Logistics
• Mining services
• Energy
• Equipment
• Technology
• Environmental services
• Local supply chains

Our forthcoming analysis of private equity in Africa’s critical minerals will examine this thesis in depth.

Investors considering Tanzanian mining opportunities can also review Shikana Group’s mining law and local content guide for Tanzania.

2. Infrastructure

Infrastructure remains fundamental to almost every other investment thesis.

Manufacturing requires reliable electricity and logistics. Agriculture requires storage and transport. Digital businesses need connectivity and data infrastructure.

Infrastructure investment therefore provides exposure not simply to one sector but to the enabling systems behind wider economic activity.

3. Energy

Power demand, grid development, renewable energy and industrialisation create opportunities across African energy markets.

However, investors need to distinguish between technological potential and bankable projects.

Offtake structures, regulation, currency exposure and political risk can materially change returns.

4. Agriculture and food processing

Agriculture’s opportunity extends beyond farmland.

The larger value chain includes:

production → aggregation → storage → processing → logistics → distribution → export

Investment opportunities can therefore emerge in cold chain, processing, logistics, agricultural technology and financing.

5. Digital services and fintech

African digital markets have produced companies addressing payments, financial access, commerce and business infrastructure.

Switzerland’s Africa Strategy specifically identifies technology and digital start ups as contributors to growth and new markets in countries including Kenya, Nigeria and South Africa.

Investors should nevertheless evaluate regulatory environments carefully, particularly for financial services and payments.

6. Tourism and hospitality

African tourism combines established global destinations with markets that still require hospitality infrastructure and supporting services.

Private capital can consider hotels, destination assets, business hospitality and tourism infrastructure where demand fundamentals support the investment.

Why is East Africa strategically important?

East Africa combines several investment themes within one region.

It includes:

• Major consumer markets
• Tourism destinations
• Mineral resources
• Agricultural production
• Digital ecosystems
• Ports and logistics corridors
• Infrastructure requirements
• Regional integration initiatives

For international investors, markets such as Tanzania, Kenya, Uganda and Rwanda can therefore be considered both individually and as components of a regional strategy.

However, the regulatory execution remains country specific.

An investor considering Tanzania should review Shikana Group’s foreign direct investment in Tanzania guide for the legal and regulatory layer beneath the investment thesis.

Investors moving from thesis to transaction should also review Shikana Group’s East Africa investment due diligence checklist.

What risks should investors consider before investing in Africa?

Africa’s investment opportunity should not be presented without its risks.

Relevant risks can include:

• Currency volatility
• Political and regulatory changes
• Tax uncertainty
• Infrastructure constraints
• Sovereign risk
• Access to financing
• Liquidity
• Governance
• Corruption
• Local content requirements
• Exit constraints
• Security risks in some markets

But these risks vary significantly across countries and sectors.

The question should therefore not be:

“Is Africa risky?”

The better questions are:

Which risks exist in this specific investment? How material are they? Can they be priced, mitigated or structured?

That is an investment committee question rather than a marketing question.

How should investors choose an African market?

Start with the investment strategy rather than a country ranking.

An investor should assess:

Question	Investment relevance
What sector do we understand?	Determines where the investor has an informational advantage
What return profile do we require?	Narrows suitable assets
What investment horizon do we have?	Influences sector and structure
What currency exposure can we accept?	Affects country selection
Do we need liquidity?	Influences public vs private strategies
What regulatory capability do we have?	Determines execution complexity
Can the business expand regionally?	Affects addressable market
What is our exit route?	Tests the thesis before entry

Africa is too diverse for a generic “best country” answer to be useful.

Why does execution matter so much in African investment?

Because identifying a growth market and successfully investing in it are different skills.

A compelling macro thesis still needs to survive:

due diligence → structure → licensing → financing → stakeholder engagement → operations → exit

This is where international capital frequently needs strong local execution capability.

The investor may understand portfolio construction and capital allocation exceptionally well while lacking detailed knowledge of a particular regulator, land regime or local transaction process.

The best advisory model therefore combines international investment discipline with on the ground execution.

What role can Switzerland play in African investment?

Switzerland has explicitly identified Africa’s growing political and economic importance in its Africa Strategy 2025–2028.

One of the strategy’s four priorities is prosperity and competitiveness, alongside peace and security, environment, and democracy and governance.

This institutional direction complements Switzerland’s existing strengths in finance, international business, commodities, professional services and cross border investment.

Our companion article, Why Switzerland Is a Prime Gateway to African Markets, examines that bridge in detail.

What is the African investment case for 2026?

The case is not that every African market will outperform.

It is that Africa contains a growing number of markets and sectors where structural demand and capital requirements are creating investable opportunities.

The 2024 FDI data reinforces that investors are paying attention. But the headline $97 billion number also demonstrates why investors need analytical discipline: one large project can significantly alter continental statistics.

The stronger thesis is therefore based on fundamentals:

Demographics + urbanisation + infrastructure + strategic resources + regional integration + sector specific opportunity.

The investors positioned to benefit will be those capable of moving beyond the continental narrative and identifying individual assets where those forces translate into sustainable cash flows and realistic exits.

Frequently Asked Questions About Investing in Africa

Why are investors looking at Africa?

Investors are examining opportunities created by demographics, urbanisation, infrastructure demand, digitalisation, strategic minerals, agriculture, energy and regional economic integration.

How much FDI does Africa receive?

UNCTAD reported $97 billion of FDI inflows in 2024. Because one major Egyptian project significantly affected the total, UNCTAD also reported an adjusted figure of about $62 billion, representing a 12% increase.

What are some important investment sectors in Africa?

Depending on the market, relevant sectors include infrastructure, energy, critical minerals, agriculture and food processing, digital services, fintech, tourism and hospitality.

Is East Africa attractive to foreign investors?

East Africa contains several growing markets and regional integration initiatives, but investment attractiveness must be assessed country by country and sector by sector.

What should investors do before entering an African market?

Investors should establish their thesis, conduct market and regulatory analysis, complete legal and financial due diligence, select the appropriate structure and plan the exit before committing substantial capital.