Africa is a region with enormouspotential for private investors. It is a continent intransition, with rapid urbanization, increasingstability, ayoung and growing population, expanding internetconnectivity, rising incomes, and shifting consumptionpatterns. Taken together, these enduring trends have createdan abundance of commercial opportunities across thecontinent and turned the region into a place that investorscannot afford to ignore. Yet declining commodity prices,depreciating currencies and slowing global growth haveincreased uncertainty on the continent and sharply reducedliquidity that companies had used to expand activities inrecent years. Economies face a significant challenge todiversify and export a wider range of goods andservices.Even before recent global economic turmoil emerged,investor activity in Africa was constrained by structuralobstacles and a lack of financing options that ofteninhibited the effective distribution and mitigation of riskassociated with large-scale orlong-term projects.Fortunately, companies looking to seize still significantopportunities in Africa can benefit from additional sourcesof financing, as well as tools that crowd in more privatesector participants and mitigate risk, spreading it amongdifferent investor classes and over longer timeframes. Toolssuch as blended finance, co-financing, local debt and equityinstruments, private equity, and public-private partnershipsare being deployed in Africa in new ways that address risksassociated with low-income and fragile states. They provideinnovative paths to securing financing on a scale that canmatch the scope of business opportunities and help managerisk in high-growthAfrican markets.
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