Macro investing vs micro investing: What’s the difference and why does it matter to Africa?

27 Sep 2022

ABiQ explores the differences between macro investing and micro investing.

What is macro investing?

Macro investing is a type of investment strategy that considers a large quantity of data to better understand and analyse the current state of an economy. This type of analysis helps investors make intelligent investment decisions. An expert macro analyst will consider global events and trends when analysing an investment opportunity.

What is micro investing?

Micro investing means investing on an extremely small scale. Micro investing refers to the practice of investing in extremely small amounts by purchasing fractions of shares. This strategy allows investors to potentially reduce risk through Dollar-Cost Averaging (DCA). Micro investing also enables people who previously did not have the required funds to start investing on a much smaller scale.

What is Foreign Direct Investment (FDI)? 

Foreign direct investment (FDI) is an investment made by an individual, company or government into a business, corporation, or public sector department, located within another country. The term FDI is usually used to describe an investment in a foreign country where substantial stake in a company is purchased. Approximately $83 billion worth of FDI flowed into African countries in 2021.

How is macro investing used in Africa?

Traditionally, Africa is regarded as a more volatile and risky investment. When investors look towards investing in Africa, investors often make use of a macro investing strategy by analysing global trends to determine if their investment in Africa is worth the risk.

How is micro investing used in Africa?

Investing on a much smaller scale can be helpful for new investors or investors who are looking to reduce their risk. This has opened up an incredible opportunity for small-scale African investors who often don’t have access to large capital.

Why invest in Africa?

Africa is a land of opportunities. ​Africa’s population is set to increase by 25 percent over the next 10 years. Africa’s population is expected to grow from 1.340 billion in 2020 to 1.617 billion by 2030 resulting in a demand for more infrastructure. This population growth across Africa will further expand a huge market with many opportunities. 

At ABiQ, we focus on supporting the development of the African and Middle Eastern markets, highlighting investment opportunities, to help businesses make the right choice when it comes to their role in investment, economic development and socioeconomic improvement. ABiQ provides validated data and trusted business intelligence. Our unique forecasting and project tracking tool provides data and analysis to support your business growth strategy across the African continent and more.
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