Coronavirus In Africa: An Opportunity For Innovative Investment

Coronavirus In Africa: An Opportunity For Innovative Investment

Coronavirus in Africa: The global covid-19 pandemic has created an opportunity for innovative investment on the continent. Women sell face masks and gloves, to prevent the spread of the new coronavirus, to passengers at a public minibus station in Lagos, Nigeria on March 27, 2020. The new coronavirus causes mild or moderate symptoms for most people, but for some, especially older adults and people with existing health problems, it can cause more severe illness or death. (AP Photo/Sunday Alamba)

The last couple of months can only be characterized as unprecedented, as many countries and markets went from indifference of the coronavirus pandemic to visible panic. In many emerging markets, the flight of capital coupled with slowed investments has further complicated fragile situations. Yet these unexpected and difficult times still present opportunity for investment.

The question is more so whether an opportunity is a product of the current time or will it be long-lasting.

To better answer this, let’s look at the following three sectors that can easily expect to survive and even thrive as African markets continue to navigate and prepare for a post-covid-19 world.

From The Africa Report.

Technology companies usually are not the biggest winners during tough economic times. The storyline, however, is quite different this time. Zoom Video Communications (ZM) has performed particularly well during covid-19. In fact, their stock is up more than 45 percent since end of February 2020.

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Microsoft Teams communication has been a boon to Microsoft. Work environments during and post coronavirus will continue with less in-person meetings as businesses shift towards more remote working, distance learning/training, and consequently more videoconferencing.

A similar technology bump can be expected in markets already utilizing technology to leapfrog its maturation process. Netflix, which saw more than 15 million new subscribers in the first quarter of 2020, is betting on Africa with certain series, such as Queen Sono by South African writer/director Kagiso Lediga.

Taking a page out of Netflix’s book, investing in Africa-focused technology solutions remains a big opportunity in the post-pandemic era for several simple reasons:

Global travel, including across Africa, will never be the same, for example, with keyless check-ins at hotels and airline check-ins with less contact.

Cash is dirty, given many germs and hands touch the paper money and coins. Therefore the growth of mobile money and contactless transactions will be even more essential to everyday life.

Education will (and should) include more digital teaching. The quantity and quality of the options has been improving but most parents suggest there is more to be done here.

The theory on investing in telecom can be oversimplified by the number of subscribers and Average Revenue per User (ARPU). Coronavirus in Africa has shown how the ARPU number can shift drastically with business trends and lifestyle changes.

Read more at The Africa Report.