The Africa conundrum: a huge opportunity, a tough investment case

With a rapidly maturing market—corners of which are already growing by double digits year on year—you’ll be hard pressed to find a consultant in Africa who doubts the continent’s long-term potential. But those actually living and working on the ground often find they have an uphill task in convincing their bosses back home to make the investments that will have them in pole position when that promised future finally arrives.

There are a number of reasons why this is so: competing priorities and the difficulty that always comes with convincing people to make long-horizon investments are obviously both factors. But in the case of Africa, its specific brand of volatility makes it especially hard to build a strong investment case. But here’s the kicker: that same volatility could be one of the biggest reasons that making an early investment is particularly worthwhile. Consider the following:

As an emerging region, instability remains a persistent characteristic of the African market. And the sheer variety of instability here can be intimidating to even the most adventurous of investors: There are areas that are plagued by conflict; epidemics can unmoor entire countries in a matter of weeks; sudden and mysterious recalculations can see official GDP and growth numbers double overnight; undiversified economies can go from boom to bust in the blink of an eye with the ebb and flow of global demand. In Africa, it can be hard to know what’s happening now, much less what’s happening next. With the odds so uncertain, it’s easy to understand why so many of the world’s biggest consulting firms remain less than eager to place their bets.

Think how much easier it would be to make to make the case if you had a good handle on this market—if you really understood how it worked. If you had the in-depth local market knowledge that allowed you to confidently identify emerging risks from a mile out, if you had the knowledge to put together your own reliable sizing and growth numbers for the economies and industries that are important to you. If you could do that, it would be much easier to make your case with your higher-ups.

And let’s not overlook the huge potential in becoming a reliable provider of information about the African market--you’d be absolutely invaluable to clients looking to find their own foothold here. You could even take a proactive role in cultivating demand for your services, steering the long-term development of African consulting. As a source of confidence and stability amid the volatility, you could run the game.

But there’s the rub—the Catch-22 of African investment. If only you understood Africa better, you could easily make your investment case—not to mention a killing from eager clients. But you’ll never really understand it if you don’t make the investment upfront.

Good luck with that proposal.