A report released by Renaissance Capital lists strong market and Gross Domestic Product (GDP) and huge natural resources as some of the ten reasons that make sub-Saharan African (SSA) a great investment destination.

The report, authored by head of research for Renaissance Capital Kato Mukuru, says SSA has witnessed strong growth in the equities market with Nigeria and Kenya leading the way with YTD rises of up to 30%. It also highlights the low sovereign debt levels as well as attractive valuations of banks on the back of limited liquidity.

The third factor is the relatively high real GDP growth performance in the SSA region over the last five years. Between 2004 and 2008, real GDP growth in SSA has averaged 6.5% (IMF figures.) Looking ahead, the region is expected to grow its real GDP by 4.7% and 5.8% in 2010 and 2011 respectively.

Africa is home to 12% of proven oil reserves and 6% of proven gas reserves, yet the region remains the least explored in the world as evidenced by recent discoveries in Uganda and Ghana. China has since identified the potential and its increasing investment and trade ties with SSA may top $100 billion in 2010. These inflows will further contribute to improvements in the region, making it even more attractive in the years to come. 

Africa, says the report, offers huge investment opportunities in energy and infrastructure. The growing intra-trade should help reposition the region.

There has also been progress in the fight against corruption and adoption of democracy, with 72% of sub-Saharan Africans living in free or semi-free democracies. 

Renaissance Capital analysts also note the incredible demographics of sub-Saharan Africa, predicting it will be home to 29% (348 million) of the world’s youth population by 2050 compared to only nine% in 1950.
 
Source: Vanguard