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Once considered a poor bet for investment, the African continent is now attracting the attention of the world’s major players. Surprisingly, it’s China leading the way, not traditional economic powerhouses such as the US or the EU. As Western investors wake up to the reality of this new economic order, they face challenges in their efforts to make up lost ground.

It may not be easy to pinpoint why the West has fallen behind, but it has a lot to do with complacency. Countries such as the US have kept to traditional markets. They’ve made only limited efforts at expansion into emerging markets. As these emerging markets look to expand their economies, they’re welcoming investment from willing partners such as China.

This allows China to find new sources for the natural resources they so desperately need. It also gives them greater influence around the globe.

Chinese Investment Reaches $1 Trillion

It wasn’t that long ago that the thought of China spearheading a push to modernize and expand the economies of places such as Africa and Latin America would have been unthinkable. That’s no longer the case. Chinese investment in Sub-Saharan Africa has now reached more than $1 Trillion. They’re easily outpacing US and other foreign direct investment in Africa.

Chinese influence is everywhere on the African continent. This includes mining interests, as well as infrastructure projects. These are helping Africa to modernize.

It helps that China doesn’t have to worry about the baggage of a colonial past, but Western indifference has been the bigger culprit.  There are many logistical problems when it comes to doing business in Africa and this has caused Western investors to look elsewhere.

Accessing Untapped Resources

African countries may offer logistical challenges to investors, but there’s a huge upside – these countries have a wealth of untapped resources. This includes both natural resources and consumer markets. These consumer markets are clearly maturing and expanding.

As investment pours into Africa, the continent is experiencing rapid growth in real GDP. In fact, growth will exceed 5% per year in many areas of the continent in the coming years. These are some of the highest growth figures in the world.

It’s Important to be on the Ground Early

With such rapid growth, it’s important for foreign investors to hit the ground running. Unfortunately, Western investors are lagging behind their Chinese counterparts. This is largely due to traditionally negative views on African economic potential.