3 Best African Commodities You Should Keep An Eye On

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Africa as a continent is popular for its commodity export, and this is because of the number of natural resources that are available in it. Africa is known to be one of the largest exporters of commodities such as rare earth metals, crude oil, and agricultural products.

An investor looking for what to put your money in may seem complicated because of the variety of commodities in the African market.

Crude Oil

Crude oil is one of the most valuable natural resources that exist in the world. However, you will notice how much the world has changed with the Russian/Ukraine war. Russia is known to be one of the biggest crude oil distributors to Nations across the globe. Still, Russia can no longer distribute this commodity because of the war and sanctions.

Countries now look to other sources of crude oil, of which Africa is part. Some countries in Africa that are rich in this product are now taking steps forward to make it available. Most OPEC members are African countries.

You should invest in crude oil now that the world has a shortage of oil producers (because of Russia’s sanctions). Africa is the next big producer of crude oil the world will be looking at. If Africa can utilize this opportunity, it can be a game changer in Africa’s economy.

Investing more in Africa’s crude oil production is your time as an investor. It is because when the time comes, crude oil will have one of the most significant global exports. Crude oil prices are responsible for many countries economies. Investing in crude oil is an opportunity to increase your assets.

Benefits of Crude Oil Investment

Portfolio Diversification

Investing in crude oil can be a great way to expand your portfolio. Your portfolio will not only extend, but you will have a different kind of asset that runs on another type of pricing level. This will help reduce the risk involved in investing.

Earn Dividends

By investing in crude oil, you will get a percentage payment given to you by the company. It is another way of increasing your wealth; as a shareholder, you should get a percentage in the form of cash or even stocks in the company.

Agricultural Produce

The following commodity to keep your eyes on is Agricultural produce. Africa is one of the giant continents that produces and supplies food products and cash crops to other continents. Agriculture is also known to be a source of employment for many who would have been unemployed.

Africa is known to produce agricultural products such as rice, maize, and wheat. The continent has a good amount of farm products available, but still, most countries in the continent import their food. Therefore, investing in Agriculture can be a game changer for you as an investor. It is because if Africa can have the means to produce her food without taking it outside to be manufactured, she will be able to stand on her own.

With the population growth in the world today, food is ever needed for survival. Investing in Agricultural produce means allowing yourself to have a long-term income source.

Benefits of Investing in African Agribusiness

Increase in Agricultural Produce Demand

Not just in Africa, but the world’s population is growing. By 2050 the world’s population will increase by 35%. Agriculture is a great commodity you want to keep your eyes on because the demand for food will keep growing.

High Yielding

Agriculture can bring in high returns, unlike any commodity. Even with little money put into it, it can yield highly. But, of course, this will only happen if done the right way.

Diversification

Investing in Agricultural produce is an excellent way to diversify your investment portfolio. Although it is always good not to stick to one kind of asset just in case one fails, you will at least have another source of investment.

Less Risky

Every investment has risks, but some can be considered less risky than others. For example, compared with the stock market, agriculture can be regarded as less risky.

African Gold Production

Gold availability in Africa and gold trade in Africa have a long history. From the Ghanian empire to the Malian empire, the gold trade has existed for as long as the 18th century in some African continents. Today the largest producers of Gold are Ghana and South Africa.

Gold is a valuable metal in any country around the world. In the world, most countries Central Banks have the value of gold at a high standard. Gold some years ago yielded investors a return of 25%.

 In previous years, gold has not failed to bring positive returns to those who invest in it. Whether in a good or bad economy, gold returns have been positive. Gold is used to make jewelry and other expensive products. This is a commodity that you shouldn’t miss out on.

Benefits of Investing in Gold

Tackles Inflation

Gold is one product that is not affected by inflation. This is because when you invest in it when inflation happens, the buying power of the product does not reduce. In the past years, gold still manages to give positive returns to those who invest in it.

Diversity

Of course, another benefit of investing in gold is the ability to diversify your portfolio. So again, this is a great way to reduce the risk level in your investments.

High Liquidity

Gold is a commodity in high demand, so by investing in physical or digital forms, you can easily find someone who will be interested in buying it. Whether you invest in physical or digital gold, gold remains in high demand, even today.

Price Stability

When you think about the price stability of gold to that of others, you will notice that gold has better price stability than most commodities in the market. So having this asset is a good idea.

It Does Not Deteriorate

Unlike some commodities, gold, over time, will not depreciate. It is because the price does not drop; it retains its purchasing value.

The Final Word on African Commodity Investing

These commodities stand out from all the other commodities that exist in Africa. Having a close eye on any of these is a plus for you. It would be best if you considered expanding your portfolio with these commodities.

 If you notice, keeping a close eye on these commodities is easy because they are news you hear almost daily and everywhere. Crude oil investment in Africa is a big opportunity for any investor, and so are agriculture and gold.

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