Natural resources were the foundation of investments in Africa, a panel at a KPMG Africa Conversation Series, held in Johannesburg, said on Wednesday.
Natural resources, such as minerals, oil and gas and agriculture, combined with increasing consumer demand on a continent that held over a billion people, and the opportunity to invest in infrastructure, were increasing the continent's attractiveness as a potential investment destination.
Agriculture seemed to be “taking the lead” as an increasingly attractive investment opportunity, owing to an abundance of land, water and labour, members of the panel commented.
Further, as only 20% of Africa was linked to electricity, renewable energy infrastructure investments were also attracting investors’ attention.
However, much like the mining sector, investments into Africa required long-term commitments and held a number of risks. These included the underdeveloped regulatory environment, political risk and lack of skilled human resources. A scarcity of information on some countries and the continent's poor infrastructure also created investment risk.
It was pointed out that could be mitigated through the establishment of a local presence in the host country and the engagement of the local government.