News / Africa

Experts Promote Investment Potential in Africa

Foreign investment in Africa has been on the rise in recent years, and some experts say the continent has the potential for highly profitable returns. But many businesses remain unaware of the current opportunities and African countries lag behind the flows of capital into other developing regions. At the Africa Investor summit on the New York Stock Exchange this week, a panel of global institutional investors and pension fund managers met with African Capital Market leaders to discuss the opportunities and challenges facing economic growth and international investment in African markets.

Financial experts say the African continent remains among the world's most risky places to invest, but the prolonged economic slowdown in western markets has prompted investors to seek new opportunities.

Several African countries have worked their way into the global dialogue as emerging markets generally defined as nations with social or business activity in the process of rapid growth and industrialization. According to the financial publication McKinsey Quarterly, over the past two years, an upturn in national growth rates was mirrored in the increased profitability of companies operating in Africa.

The most optimistic about Africa's financial future compare its current investment climate to that of countries like Brazil, Russia and China over the past two decades.

Former U.S. Treasury Secretary Robert Rubin says he sees limitless potential.

"I think the tradition impression of Africa is that major opportunities are in the extractive industries, natural resources," he said. "Clearly natural resources are an important part of the African economy and will remain so for a long time to come. But I think people focus on less, are less aware of is that Africa now has developed tremendous opportunities in media, telecommunications, infrastructure, retail activity, transport. In all of the dimensions of a modern economy."

From an investor's perspective, several countries in particular are considered new frontiers of growth. Nigeria, the world's eighth largest crude oil producer, has a projected growth rate of 4.8 percent for 2010 and the Nigerian Stock Exchange is now the second-largest in sub-Saharan Africa - but it is still less than 10 percent the size of the region's top exchange, South Africa. Obstacles remain, among them the country's decrepit power grid and jitters over Nigeria's upcoming presidential elections which analyst say could divide the country along religious lines.

According to Johan de Bruijn, a portfolio manager at Emerging Markets Management, Kenya is another dynamic player.

"We think that the Kenyan economy is extremely innovative and there's lots of countries there that are on the forefront of technology," said de Bruijn. "They have had a number of sub-sea cables landing so we think telecom international broadband costs will come down, internet penetration will rise up as well."

The United States is currently Africa's largest trading partner, followed by China, which has invested heavily throughout the continent.

Eddy Njoroge , the Managing Director of Kengen, Kenya's largest utility generator, says it is looking for joint venture partners, and has inked a deal with a South Korean company to create a coal plant.

"We have a huge expansion program. We are currently at about 1500 megawatts. We hope to be 3000 megawatts by within the next three years or so. By 2030 we hope to be over 10000 megawatts," said Njoroge. "So we'll be looking for a lot of partnerships. We know that. I n all sorts of forms. Joint venture partners. We're looking at in terms of the shareholding we want the government to sell, we're hoping to get a strategic investor into the company."

Ghana is set to become the continent's newest oil exporter. The country's stock exchange currently has a bout 35 listed companies. Ekow Afedzie, the Deputy Managing Director of the Ghana Stock Exchange, says the country's stable government, expanding Growth Domestic Product and falling inflation makes it an attractive place for investors.

"When it comes to the market itself, the stock exchange in Ghana has been doing quite well over the years," said Afedzie. "This year the market has gone up about 30 percent in dollar terms. Last year it was down, but the year it was up about 58 percent. When most markets were down all around world our market was up like 58 percent."

Experts say a lack of liquidity and a lack of diversification are the greatest challenges facing African economies. Other challenges include political instability, a lack of infrastructure and the reliance by many African nations on commodities for economic growth.

You May Like

China May Be Biggest Winner From Ukraine Crisis

Missile sales, oil and gas shipments are among many areas that may drive Beijing and Moscow closer together in coming years More

Obama Faces Chaotic World, Limits of Power

Current foreign policy issues bring into focus challenges for US policymakers who are mindful of Americans' waning appetite for overseas military engagements More

SADC Meeting Lesotho Officials to Resolve Stalemate

Official says regional bloc has been engaged with leaders in Lesotho to resolve political disagreement that led to coup attempt More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
West Africa Ebola Vaccine Trials Possible by Early 2015i
X
Carol Pearson
August 30, 2014 7:14 PM
A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.

AppleAndroid