Have you made any profits off of your investments, or are you one of those still undecided as to whether or not to invest? Well, if you are in the former category, then congratulations are in order. But if you haven’t invested in anything at all this year, then this article is for you.
Business Insider Africa recently spoke to Olumide Adesina, an investment analyst at Quantum Economics. Below are some of the investment options he highlighted.
1. Invest in African tech startups
Apparently, African tech startups are doing amazingly well right now. And there is no better time to position your investments to grow with them than now. So, if you are still thinking of where to invest, think African tech startups, particularly the fintech ones in Lagos, Cape Town and Nairobi. They are doing amazingly well. Foreign investors know this, which is why they pumped in nearly $5 billion in African tech last year.
“One area critical for investment is the technology space. We’ve seen so many value assets coming up in that space. You can’t ignore the fact that the likes of Chipper Cash, Flutterwave, Paystack and others have created further footprints in the global tech ecosystem. So, foreign investors are seriously keen on that sector to really invest. So, people that have exposure to secondary markets can take the opportunity,” said Olumide Adesina.
2. Invest in Bonds and Treasury Bills
These have always been the go-to investment options for most investors in Africa due to their low-risk nature. So, go ahead and invest in your series 1 savings bonds, treasury bills, corporate bonds, etc.
“As a result of the tapering and global dovish shift, Sub-Saharan Africa’s Eurobonds should benefit from weaker market sentiments and create excellent investment opportunities. The yields on Nigerian, Ghanaian and Angolan Eurobonds are expected to be double-digits in 2022. And any investment that yields double-digits returns in dollars is definitely a bargain,” Olumide said.
3. Invest in the stock markets
Earlier, we quoted Olumide Adesina recommending investments in African bank stocks. That’s definitely something you should consider doing. There are nearly 30 stock exchanges across the continent. And they all have some high-performing stocks listed on them. So, buy shares in African companies. Buy bank shares, telecom shares, and of course the shares of cement companies.
“You cannot also ignore the cement giants that are seriously keyed into the infrastructure sector. You see that many countries, including Africa’s biggest economy Nigeria, is focusing more on building/upgrading their infrastructure. That will definitely benefit the cement companies and their stocks,” Olumide added.
4. Invest in crypto assets and NFTs
Cryptocurrency has become a major investment option for most people around Africa and elsewhere. Note, however, that while these assets can make you a lot of money, they are also very high-risk in nature. So you should be very careful with them. Olumide advised that “crypto assets (including NFTs) have a reputation for exponential growth. But you should limit your exposure to them because of their inherent risk and pending regulations.”
Another easy investments you could make is in agriculture. Humans will always need food. So, any business that specialise in food production is guaranteed to make returns. So, consider investing in agriculture either directly, or through companies that specialise in doing that; preferably agritech startups.
Now, as you go about your investments this new year, it’s important to reiterate that you should avoid putting all your money in high risk assets such as crypto and Forex. It can be tempting to do this due to the potential for huge returns. Unfortunately, the risks are real.
Instead, spread out your portfolios such that you have a little bit of stocks, a little bit of bonds, a little bit of crypto/Forex, a little bit of a high -yield savings plan, etc. That way, if something negative should happen to one asset class, you have something to fall back on.
