For years, Africa has been heralded as the last frontier of economic opportunity—a continent bursting with potential, rich in natural resources, and home to the world’s youngest population. Yet, despite the grand projections and optimism, Africa remains one of the poorest continents, struggling with infrastructural deficits, governance issues, and economic instability.
So, when Nigerian billionaire and investment mogul Tony Elumelu took to X to declare that “there is nowhere else in the world that can match the return on investment that our continent offers,” it was bound to spark debate.
Elumelu, a leading proponent of “Africapitalism”—a philosophy that promotes private-sector-driven development—argues that Africa presents an unparalleled investment opportunity. He highlights the continent’s young and rapidly growing population, a $3.4 trillion market under the African Continental Free Trade Area (AfCFTA), and the booming digital economy as key drivers of economic transformation.
“Africa has the youngest population in the world,” he wrote. “By embracing Africapitalism, we emphasize the critical role of the private sector, particularly entrepreneurs, in driving economic and social development.”
A Case for Africa’s Investment Potential
There’s some data to support his optimism. The African Development Bank projects that the continent’s GDP will expand at an average rate of 4% annually over the next decade, driven by entrepreneurship, technological innovation, and intra-continental trade. Internet penetration has surged, reaching 45% in 2023, fueling the rise of fintech, e-commerce, and other digital industries. In 2022, African startups raised a record $5 billion in venture capital funding, proving that global investors are taking notice.
Moreover, the AfCFTA agreement is designed to create a single market of 1.3 billion people, promising to boost intra-African trade by 52% by 2025. If fully implemented, the International Monetary Fund (IMF) estimates it could add $450 billion to the continent’s GDP by 2035, further enhancing Africa’s appeal as an investment destination.
Elumelu believes the time has come for Africa to take control of its economic narrative. “Traditional trade models have too often excluded or marginalized Africa,” he noted. “Now is the time for the world to partner with Africa for mutual and lasting benefit.”
If Africa Offers the Best ROI, Why Is It Still Poor?
However, despite Elumelu’s assertion, Africa remains economically fragile. The question many analysts have asked is: If Africa truly offers unmatched returns on investment, why has it remained poor?
With vast natural resources—including oil, gold, and agricultural wealth—Africa should, in theory, be a global economic powerhouse. But in reality, the continent has struggled with systemic corruption, weak institutions, poor infrastructure, and economic mismanagement. Many of its governments are plagued by policy inconsistencies that scare away investors. Insecurity—ranging from political instability to insurgencies and ethnic conflicts—further complicates the business environment.
Even within Elumelu’s home country, Nigeria, one of Africa’s largest economies, economic challenges persist. The country has faced multiple recessions in recent years, high inflation, and currency devaluation. Also, many multinational companies have exited the country citing unfavorable business climate.
Furthermore, Africa remains largely dependent on foreign aid and loans, further calling into question the claim of unmatched ROI. If investments in Africa yielded such high returns, some analysts argue, wouldn’t the continent be experiencing unprecedented economic prosperity by now? Wouldn’t investors be scrambling to pour money into its markets?
Major global investors still favor markets like the U.S., China, and parts of Europe, where regulatory frameworks are stronger and risks are lower. This is backed by the World Bank’s Ease of Doing Business Index, where many African nations rank poorly due to bureaucratic bottlenecks, weak legal frameworks, and infrastructural deficiencies.
Despite being home to some of the world’s fastest-growing economies, the continent still struggles to attract and retain foreign direct investment (FDI) at the scale seen in Asia or the Middle East.
Moreover, while Africa’s digital economy is growing, its development remains uneven. A significant digital divide persists, with many rural areas lacking basic internet access, and power outages remain a major challenge across the continent. High youth unemployment—despite Africa’s demographic advantage—also suggests that the private sector has not expanded rapidly enough to absorb the growing workforce.
What Africa Needs to Truly Unlock Its Investment Potential
Elumelu himself acknowledges that Africa’s full potential cannot be realized without addressing critical barriers. He points out that investment in infrastructure, digital connectivity, and energy access must be prioritized.
“To fully leverage technology, we must address the digital divide,” he said. “Investments in broadband infrastructure, digital literacy, and cybersecurity are critical to ensuring technology drives equitable growth.”
The billionaire entrepreneur has backed up his words with action. Through his Tony Elumelu Foundation, he has supported an estimated 21,000 African entrepreneurs, who have collectively created more than 1.5 million jobs across all 54 African countries. His efforts highlight the importance of private-sector-driven growth, but systemic challenges remain.
For Africa to truly deliver on its promise, policymakers must do more to create a favorable business environment. Stronger institutions, policy consistency, anti-corruption measures, and investment-friendly regulations will be crucial in converting Africa’s potential into tangible economic prosperity.
However, Elumelu’s optimism is not misplaced—Africa does offer tremendous opportunities. But his assertion that “nowhere else in the world can match the return on investment that our continent offers” remains highly contested. While the continent boasts massive potential, structural deficiencies, governance failures, and investment risks continue to deter many global investors.
If Africa is to live up to the promise of high returns, economists believe that it must first create an ecosystem where investments can thrive—not just in theory, but in reality. Until then, Africa’s paradox will remain: a land of immense opportunity, yet still struggling to fully capitalize on it.
