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

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology 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.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More