Why Africa’s small markets sometimes attract the biggest investments

By Mbwambo Erick

When investors evaluate opportunities around the world, market size is often one of the first metrics they consider. Conventional wisdom suggests that larger economies naturally attract larger investments. Yet across Africa, some of the continent’s smaller and lesser-known markets continue to secure significant attention from international investors.

According to Prateek Suri, Chairman of Maser Group and CEO of MDR Investments, the reason is simple: successful investors often look beyond today’s numbers and focus on future opportunity.

“Investors are not always searching for the largest market,” Suri says. “Many are looking for the right market at the right stage of development, where long-term growth potential remains significantly undervalued.”

Having spent years building businesses across Africa and the Middle East, Suri believes many international investors continue to underestimate the opportunities available in markets that receive relatively little global attention.

One factor is competition.

Large economies often attract numerous international companies, creating crowded sectors and higher costs of entry. Smaller markets, by contrast, can provide opportunities to establish leadership positions, build strategic partnerships, and capture market share more efficiently.

Countries such as Rwanda, Mauritius, Botswana, Benin, and Seychelles have demonstrated how policy reforms, regulatory stability, and business-friendly environments can attract investment despite modest domestic populations.

However, Suri notes that the story is not limited to smaller economies alone.

Tanzania, for example, has emerged as one of East Africa’s most attractive long-term investment destinations. While larger than many of its regional peers, Tanzania is increasingly drawing investor attention because of its strategic location, expanding infrastructure, growing population, and role as a gateway to regional trade.

“Tanzania possesses many of the characteristics investors seek in emerging markets,” Suri explains. “Its access to the Indian Ocean, improving transport corridors, natural resource base, tourism potential, and growing consumer economy make it one of the most strategically important markets in East Africa.”

The country continues to attract interest across sectors including logistics, manufacturing, hospitality, energy, mining, housing, and digital infrastructure. Major investments in ports, transportation networks, and connectivity are strengthening Tanzania’s position as a commercial hub serving multiple neighbouring countries.

For many investors, geography can be as important as population size.

A strategically positioned country with strong regional connections can often deliver opportunities that exceed what traditional economic indicators might suggest. The growth of regional blocs such as the East African Community has further strengthened this trend by making cross-border trade and investment increasingly efficient.

Technology is also changing how investors think about scale.

“Digital infrastructure has reduced many of the historical limitations associated with smaller markets,” Suri says. “Today, a company can establish itself in one country while serving customers across an entire region.”

The rise of fintech, e-commerce, artificial intelligence, cloud services, and digital payments has enabled businesses to scale more rapidly than ever before. Investors are increasingly prioritizing connectivity, talent, regulatory frameworks, and long-term growth prospects over simple population statistics.

According to Suri, some of the world’s most successful investments have historically emerged from markets that were initially overlooked.

“The biggest opportunities are often found where others are not looking,” he says. “Investors who focus exclusively on current size may miss markets that are positioned for substantial long-term growth.”

As global capital continues searching for new opportunities, Africa’s investment story is becoming increasingly diverse. Whether in smaller reform-driven economies or regional growth hubs such as Tanzania, investors are discovering that potential is not always measured by size alone.

Sometimes, the most significant opportunities emerge where vision extends beyond the headlines and toward the future.

Mbwambo Erick is a financial analyst and investment expert based in Dar es Salaam and Dodoma.