Not investing in Africa is like…
(Photos : Maps/Ethnite/EconoInsight)
WORLD ECONOMIC FORUM
Last weekend, Cheryl and I were honoured guests at the wedding of good friends, Alec and Jeanette Hogg, he of MoneyWeb and journalistic fame. (Click here to read more…) Their honeymoon takes them to interesting places, and on their return they translocate to their new home, adjacent to Summerhill. We have much to look forward to.
Meanwhile though, as this continent’s foremost financial journalist, Alec is a regular invitee to the goings on at Davos (and to Warren Buffet’s annual Berkshire Hathaway bash). His current business revolves around the meeting of the world’s most powerful economies, and there was an interesting take on Africa’s profile at this meeting in the Business Report.
“The International Monetary Fund (IMF) believes growth in sub-Saharan Africa will be 1 percentage point above the global average, and puts eight African countries in its top 20 fastest-expanding economies in 2010. Oil rich Angola and the Republic of Congo will lead the charge with growth rates of more than 9 percent and 12 percent respectively, both beating China, according to the IMF’s most recent projections.
“Africa is the continent of the long game”, said Tara O’Connor of Africa Risk Consulting. “It is not perfect, but the overarching trend is one towards entrenching political stability, which allows businesses to operate much more consistently”.
For some African countries, particularly those helped by Chinese investment and its thirst of energy and minerals, another boom may be approaching.
Investors with cheap cash needing to spice up returns in more obscure parts of the globe are asking whether Africa can shift from final investment frontier into the emerging market mainstream. Reflecting this interest, Africa got top billing at the annual meeting at the World Economic Forum (WEF) in Davos last week.
“Not investing in Africa is like missing out on Japan and Germany in the 1950’s, southeast Asia in the 1980’s and emerging markets in the 1990’s:”, said Francis Beddlington, the head of research at emerging market investment house Insparo Capital.
For all the previous false dawns, there is a growing belief that the continent – home to 53 countries, a rapidly urbanising young population of a billion people and as much as a third of the world’s natural resources – is changing.