In 2023, the world's population has been hit by wars, supply chain problems, and high inflation. We also experienced the hottest year since records began. This is a stark reminder of the urgency and global cooperation needed to meet climate goals.
More than 2 billion voters in more than 50 countries will head to the polls in 2024, leading to a political initiative that will give a wide range of voices their opinions on how their leaders will confront these challenges. It becomes an event. On January 1st, Saudi Arabia, the United Arab Emirates, Iran, Egypt, and Ethiopia were added to the group, and five new countries joined the BRICS group, increasing its global influence, further changing the power relationship on the world stage. It is being done. South in this historic election year.
This year's World Economic Forum (WEF) Annual Meeting in Davos highlighted Africa as the world's fastest growing region and a key destination for investors looking to diversify their portfolios and strengthen their resilience. has once again attracted attention. These opportunities will not always be smooth sailing, but given global trends and global instability, Africa is a region that cannot be ignored.
The wonders of minerals: Accelerating the energy transition
According to WEF research, the global economy could save $2 trillion if businesses reduce their energy demands. These measures will reduce energy intensity in buildings, transportation and industry, reducing costs and reducing greenhouse gas emissions at the same time. This comes after the central message of last year's COP28 was to triple renewable energy capacity by 2030. The global renewable energy and energy efficiency pledges declared at COP28 will bode well for Africa, as demand for the continent's abundant critical minerals will increase. Secure resources and create job opportunities for millions of people.
From an investment perspective, Africa's significant mineral reserves will emerge as a key element in this greening of the grid. Africa contains approximately 85% of the world's manganese, 80% of its platinum and chromium, and 47% of its cobalt, as well as large reserves of lithium, phosphates, and nickel. These minerals are essential for powering solar panels, electric vehicles, and wind turbines.
China is currently leading the way in investing in Africa's vital mineral resources. There has also been significant investment in the region from US, Australian, UK and Japanese companies over the past 18 months, actively promoting the development of symbiotic investment relationships between investors and African countries. For example, Japan and the UK are forging partnerships with mineral-rich African countries to build local processing capacity, supply diversification, and local refining facilities.
Africa’s role in unlocking investment diversity
Despite the opportunity to invest in critical resources, most important to support this is financial support for much-needed infrastructure. Africa has significant infrastructure needs, particularly in areas such as electricity, providing opportunities for foreign investors to reap long-term benefits from these projects.
Investing in infrastructure can help build more efficient transport networks, which in turn creates more resilient supply chains, boosts exports and attracts more foreign investors. For example, the UK has renewed its focus on Africa post-Brexit in a bid to foster new trading partnerships and strengthen sustainable economic growth overseas, and will host the UK-Africa Investment Summit in April. It is planned. A new £48 million ($60.6 million) program to improve infrastructure in Zambia and Tanzania was recently announced by the UK government to reduce the cost of transporting goods, support raw material processing infrastructure and improve waste management. It is said that
Significant progress is being made to reduce trade barriers and deepen economic ties across the continent as foreign investors seek to advance infrastructure projects across the continent. Efforts are underway to form the African Continental Free Trade Area (AfCFTA), encompassing all 55 African Union member countries and creating what will be the world's largest free trade area. The AfCFTA is expected to increase intra-African trade by more than 52% and attract significant foreign investment by lowering tariffs and creating a single market for goods and services.
Davos 2024 saw significant progress for Africa, putting a decisive spotlight on the continent's economic growth. The WEF and AfCFTA have announced a new initiative made up of 40 global companies to accelerate private sector investment across key sectors of Africa's industrialization, including transport and logistics, agriculture, pharmaceuticals and automotive. Harnessing the power of free trade areas will increase global investment in Africa and help foster innovation in 2024 and beyond.
Geopolitical aspirations drive growth
Africa was firmly on the agenda at the Davos conference, and the region began to attract attention as an investment destination for foreign investors. This year has been a whirlwind of geopolitical and economic turmoil, creating growth opportunities for Africa and elevating the continent on the cusp of a new era of opportunity. Africa also offers significant opportunities for those seeking dispersion. This is an increasingly important consideration as the global geopolitical environment prompts investors to seek stability through risk diversification.
2024 will be a landmark year in global politics, with conversations at Davos highlighting that driving rapid transformation, investing in infrastructure and driving the global energy transition will be key focuses in the coming months. It was done. The changing economic and political environment will create a perfect storm that will foster investment in the continent and strengthen its ability to perform on the world stage.
