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. That’s when software analytics services, such as those provided by ArrowHead and other reputable providers, can help. They can provide investors with insights into market trends, consumer behavior, and industry-specific information to make informed decisions based on comprehensive research.
Investing in African commodities can offer several benefits to investors. They can provide diversification benefits to a global investment portfolio. Many African economies are considered emerging markets with the potential for robust economic growth. The demand for commodities, both domestically and internationally, can increase, potentially leading to price appreciation.
Below are the best African commodities to keep an eye on:
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 be 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 produces agricultural products such as rice, maize, and wheat. The continent has many farm products available, but still, most countries 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 Ghanaian 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. 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 gives 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 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.
Tips When Investing In African CommoditiesÂ
It’s crucial to conduct comprehensive research on the specific commodity of interest, considering the supply and demand dynamics, production methods, and key industry players. Assess the relevant African region or country’s political, economic, and social risks, including political stability, legal frameworks, infrastructure, and security. Â
Diversification within the commodity sector and careful risk assessment are essential for successful investment in African commodities. Timing is also critical, as understanding seasonal patterns and cyclical trends can help you enter the market when prices are favorable. Establishing local partnerships can provide valuable insights and access to opportunities, while thorough due diligence on companies or projects is crucial for verifying credibility and compliance. Â
Consider risk management strategies, stay informed on market news, and be mindful of environmental and social factors. Ensure legal and regulatory compliance, adopt a long-term perspective, and maintain a diversified portfolio to mitigate overall risk. Consulting with financial advisors, commodity experts, and legal professionals specializing in African markets can provide tailored guidance for your investment goals.
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.
