2025 will be a pivotal year for investment. A quarter way into the 21st century and global markets are being rocked by shifting economic policies, geopolitical realignments, growing protectionist trade, and new national industrial strategies. As investors ponder what’s next, Africa should be top-of-mind.
The African Development Bank projects the continent’s economy will expand by 4.3% in 2025, up from 3.7% in 2024. It will offer compelling opportunities across equities, venture capital, and infrastructure. The IMF predicts nine of the world’s fastest growing economies will be in Africa: South Sudan, Libya, Senegal, Sudan, Uganda, Niger, Zambia, Benin, and Rwanda.
In Rwanda, Ethiopia, Ivory Coast, and Tanzania, growth is projected to exceed six percent due to agriculture, manufacturing, services, and technology sector expansion. Public markets are confirming it. The Bourse Regionale des Valeurs Mobilieres, Nairobi Securities Exchange, and Johannesburg Stock Exchange are seeing heightened activity, with increased foreign investor inflows and a resurgence of local participation.
With these trends, the Mennonite Economic Development Associates (MEDA) co-created the impact investment fund-of-funds, the Mastercard Foundation Africa Growth Fund, to invest in youth and empower women entrepreneurs to lead innovation, growth, and job creation. Women are Africa’s economic backbone. Sub-Saharan women have among the highest rates of entrepreneurship at 26 percent. Globally, one in six women intend to start a business; in Africa, it’s one in three. Women reinvest up to 90 percent of their incomes in education, health, and nutrition, compared to 40 percent by men, transforming their societies.
As leading Global North economies descend into trade spats driven by the Trump Administration’s protectionist, and arguably imperialist, overtures, Canada launched its first-ever Africa Strategy for mutual prosperity and security. Africa can offer new markets, investment, and trade opportunities for the North to pivot to, as the established norms fall.
Africa is the world’s youngest continent—more than 60 percent of its people are under 25. A promising future is evident. Today’s population is 1.4 billion and projected to reach 2.5 billion by 2050. Africa’s youth population, already the largest in the world, is projected to double to over 830 million by then. That’s where business needs to be.
And women are essential to Africa’s economic rise. The Mastercard Index of Women Entrepreneurs 2023 ranked Uganda, Botswana, and Ghana among the top countries with high rates of female entrepreneurship. Many young women in West, East, and Central Africa are in informal employment, often in agriculture. This sector provides low wages and job insecurity, limiting economic advancement. Access to finance remains a barrier, with African women receiving only 7% of total private equity and venture capital funding. Microfinance institutions and fintech innovations, such as M-Pesa in Kenya, have improved financial inclusion for women, but many opportunities for real returns and growth are still being missed.
The demographics mean a growing labor force and increased consumer base. Investors that fuel this growth can help the region skip youth unemployment and promote training and education to prepare workers for the future. Sub-Saharan Africa’s working-age population will surpass that of developed countries. This shift compels substantial investments—estimated at $400 billion annually by the African Development Bank—to harness growth potential.
Priority sectors include agriculture and agri-tech, renewable energy, digital and fintech, and infrastructure development. Agriculture employs over 60% of the workforce. Investment in agribusiness and climate-smart techniques will deliver food security. Africa also has massive untapped potential in solar, wind, and hydropower, making clean energy investment a necessity. Its mobile phone penetration and financial inclusion efforts are driving innovation, particularly in markets like Kenya and Nigeria. And rapid urbanization calls for funding in transport, housing, water, and sanitation systems.
Economist Rita Babihuga-Nsanze estimates there is $2–$4 trillion in excess African savings in pension funds, insurance funds, sovereign wealth funds, and central bank reserves. Much of this capital is invested outside Africa, often in low-yielding assets.
This is why we are promoting greater domiciliation of investment vehicles (IVs) in Africa. Eighty percent of African IVs are domiciled outside the continent. A change is vital to improve Africa’s competitiveness and ensure inclusive growth—especially support for micro, small, and medium enterprises (MSMEs).
We conducted a study of factors and opportunities in Cabo Verde, Côte d’Ivoire, Ethiopia, Ghana, Kenya, Mauritius, Morocco, Nigeria, Rwanda, Senegal, South Africa, Togo, and Uganda. A stronger investment ecosystem will deliver more global and domestic capital. IVs can pool capital across financial instruments, business models, and capital allocators, directing private capital, venture capital, and pension funds to MSMEs. But the countries studied must engage policymakers, regulatory bodies, and advocacy groups to strengthen their markets. Clear and supportive policy will unlock pension fund investments. And simplifying domiciliation while ensuring regulatory clarity will boost investor confidence.
The conditions are right. Seizing high growth, scaling enterprises with innovative finance by domestic IVs, encouraging capital inflows, and creating investment-friendly capital ecosystems will allow domestic and global investment to thrive. It’s time for Africa to become the pivot point for investors everywhere.
