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

    Video Democrats Clinton, Kaine Offer 'Very Different Vision' Than Trump

    In a jab at Trump, Clinton says her team wants to 'build bridges, not walls'; Obama Hails Kaine's record; Trump calls Kaine a 'job-killer'

    Turkey Wants Pakistan to Close Down institutions, Businesses Linked to Gulen

    Thousands of Pakistani students are enrolled in Gulen's commercial network of around two dozen institutions operating in Pakistan for over two decades

    AU Passport A Work in Progress

    Who will get the passport and what the benefits are still need to be worked out

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

    By the Numbers

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movementi
    X
    July 22, 2016 11:49 AM
    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Poor Residents in Cleveland Not Feeling High Hopes of Republican Convention

    With the Republican Party's National Convention underway in Cleveland, Ohio, delegates and visitors are gathered in the host city's downtown - waiting to hear from the party's presidential candidate, Donald Trump. But a few kilometers from the convention's venue, Cleveland's poorest residents are not convinced Trump or his policies will make a difference in their lives. VOA's Ramon Taylor spoke with some of these residents as well as some of the Republican delegates and filed this report.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video With Yosemite as Backdrop, Obama Praises National Parks

    Last month, President Barack Obama and his family visited some of the most beautiful national parks in the U.S. Using the majestic backdrop of a towering waterfall in California's Yosemite National Park, Obama praised the national park system which celebrates its 100th anniversary this year. He talked about the importance of America’s “national treasures” and the need to protect them from climate change and other threats. VOA’s Julie Taboh reports.
    Video

    Video Counter-Islamic State Coalition Plots Next Steps

    As momentum shifts against Islamic State in Iraq, discussions are taking place about the next steps for driving the terrorist group from its final strongholds. Secretary of State John Kerry is hosting a counter-IS meeting at the State Department, a day after defense ministers from more than 30 countries reviewed and agreed upon a course of action. VOA Pentagon correspondent Carla Babb reports.
    Video

    Video Russia's Participation at Brazil Olympic Games Still In Question

    The International Olympic Committee has delayed a decision on whether to ban all Russian teams from competing in next month's Olympic Games in Brazil over allegations of an elaborate doping scheme. The World Anti-Doping Agency recently released an independent report alleging widespread doping by Russian athletes at the 2014 Winter Olympics in Sochi. So far, only Russian track and field athletes have been barred from the Summer Games in Brazil. VOA's Zlatica Hoke has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.
    Video

    Video Millennials Could Determine Who Wins Race to White House

    With only four months to go until Americans elect a new president, one group of voters is getting a lot more attention these days: those ages 18 to 35, a generation known as millennials. It’s a demographic that some analysts say could have the power to decide the 2016 election. But a lot depends on whether they actually turn out to vote. VOA’s Alexa Lamanna reports.

    Special Report

    Adrift The Invisible African Diaspora