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

    UN Observes International Day of Peacekeepers

    The U.N. honors 3,400 peacekeepers killed since first mission in 1948

    Video Rolling Thunder Tribute to US Military Turns into a Trump Rally

    Half-million motorcycles are expected to rumble Sunday afternoon from Pentagon to Vietnam War Memorial for rally in event group calls Ride for Freedom

    The Struggle With Painkillers: Treating Pain Without Feeding Addiction

    'Wonder drug' pain medications have turned out to be major problem: not only do they run high risk of addicting the user, but they can actually make patients' chronic pain worse, US CDC says

    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.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora