News / Africa

Is Investing in Africa a Good Bet?

South African President Jacob Zuma at World Economic Forum 2013 Annual Meeting in Davos (Credit: WEC)
South African President Jacob Zuma at World Economic Forum 2013 Annual Meeting in Davos (Credit: WEC)

Multimedia

Audio
Joe DeCapua
Many sub-Saharan countries have had sustained economic growth despite the global recession. But conflict, political instability and weather extremes in some areas may keep investors away. At the World Economic Forum in Davos, Switzerland, African leaders and others talked about what’s being done to make the continent more attractive to investors.


From the start, those on the panel questioned the title, De-risking Africa. South African president Jacob Zuma said, “I’ve been questioning myself about the topic. De-risking Africa. Is Africa risky more than any other region of the world? Somebody will have to explain to me because it looks like there’s a perception about Africa which needs to be dealt with.”

Zuma said that he takes issue with that perception, adding that many African leaders have taken measures to ensure stability in their countries.

“African leaders have collectively come together to do things that [are] going to make Africa to move forward. We have collectively dealt with the issue of democracy in the continent of Africa. We are entrenching democratic rule. We have taken a decision to grow our infrastructure; to grow our intra-trade. We are moving to integrate the five economic regions in the continent,” he said.

Nigerian president Goodluck Jonathan agreed that overall, the continent has become much more stable politically and economically.
Nigerian President Goodluck Jonathan at 2013 World Economic Forum Annual Meeting. (Credit: WEC)Nigerian President Goodluck Jonathan at 2013 World Economic Forum Annual Meeting. (Credit: WEC)
x
Nigerian President Goodluck Jonathan at 2013 World Economic Forum Annual Meeting. (Credit: WEC)
Nigerian President Goodluck Jonathan at 2013 World Economic Forum Annual Meeting. (Credit: WEC)

“Before this time, the growth rate has been stagnant, just as Zuma said. But over the period the growth rate of a number of African countries is significantly above the world average. Countries like, of course, Ethiopia, Ghana, Niger, Liberia, though they are small economies. But in terms of growth it’s quite significant. That shows a focus and a promise,” he said.

Jonathan was asked whether Nigeria is vulnerable to global economic shocks because it relies so heavily on one commodity – oil.

“Any country that depends on one major commodity – it’s a big risk because anything that affects the oil production or the global oil price – it affects us. Of course that is one aspect. And that is why we are looking to different areas,” he said.

These include agriculture and minerals.

“We have the potential,” he said.

He added that the opportunity for Nigeria to diversify its economy is due to political stability after years of political turmoil, including military rule.

Sunil Bharti Mittal, president and CEO of the Indian firm Bharti Enterprises and co-chair of the India-Africa Business Council, took part in the discussion. His company provides mobile telecommunication services.

“I think the African continent and most of the nations welcome foreign investment. When I moved in three years back, I was amazed at the welcome we received in every country, including Nigeria. In Nigeria of late we see a lot of stress in the upper north, where Boko Haram had been targeting cell sites, switching centers. And the support that we have received from the government has been tremendous. Security has been beefed up. People have been reassured, especially foreigners who are working there. And that’s what counts in the end,” he said.

Mittal said that it only took about 80 days to get a mobile operation up and running in Rwanda.

“Will Africa have issues from time to time which will scare investors, which will worry investors? That’s a fact of life. There are some pockets – a new one developing in Mali now, upper Nigeria, some of the parts of Congo and the northwestern border. Issues will be there. But investors go with their eyes open. The opportunity is big. The prize to be won in the end is very big and the growth is there. At the end of the day, all emerging markets offer growth. But today really the last bastion of big growth is the African continent,” he said.

Among those concerned about security in Africa is Louise Arbour, head of the International Crisis Group and former chief prosecutor of the International Criminal Tribunals for the Former Yugoslavia and Rwanda. She said that despite Africa’s economic growth, many leaders and regional economic groups are devoting more of their time and attention to resolving conflict. Those driving factors include competition for resources, organized crime, radical Islamist militias and piracy off the Somali coast and in the Gulf of Guinea.

“Behind these ostensible, sort of, conflict drivers I think there’s a commonality of issues that the continent still is struggling to address. I think the first one is issues of governance. Most importantly, political and economic exclusion. And finally, still very weak institutions. So to varying degrees, in varying countries, these underlying issues, I think, continue to pose a very, very serious challenge,” she said.

The company SABMiller has been operating breweries in South Africa for more than a hundred years. And since the end of apartheid in 1994, it has branched out to other African countries.

Chairman Graham Mackay said, “In my perspective, it’s not so much a question of de-risking. It’s taking the brakes off what is already remarkable economic progress by removing some of the bottlenecks. I don’t know of any part of Africa where we could have invested because we thought there was demand and didn’t for risk factors. We were the first investor into South Sudan, I think, of any kind. Great big brewery there next to Juba just after independence.”

He said that the South Sudan brewery has more than doubled in size since it opened. Mackay also said there are hundreds of millions of people coming into Africa’s cash economy, who are looking for quality goods.

“We don’t hold back on investment because of risk factors. We invest as we think the markets can grow,” he said.

But there are ongoing issues threatening stability in some regions, such as the conflict in Mali. Nigerian president Jonathan says the terrorists and extremists must be contained and he thanks France for its intervention. International Crisis Group’s Louise Arbour says the situation in Mali has already destabilized the region and fears militarization could take on a life of its own.

In South Africa, President Zuma acknowledged that violent labor disputes and strikes have been a problem, both socially and economically. But he said those issues are being addressed through better bargaining agreements.

Rwandan president Paul Kagame, who was in the audience, said there is often a misperception about Africa because its history is written by non-Africans. He said that it’s time for Africans to write their own story.

You May Like

Video Analysts: Beijing Parade a 'Bazaar' of Stolen Technology

Show commemorating victory over Japan in World War II involved long, medium and short range missiles, a range of tanks and 200 fighter aircraft More

Bernie Sanders Surge Reflects US Shift on Socialism

Although most analysts say it is unlikely he will get the Democratic nomination, Sanders' campaign opens up questions and issues that are otherwise marginalized More

Video On IS Frontline, Kurdish Fighters Ready for Offensive

Peshmerga soldiers say although they need more heavy artillery, they are poised to take the fight to the Islamic State extremists on their turf 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.
Drowned Migrant Toddler Photo Triggers European Outragei
X
Henry Ridgwell
September 04, 2015 11:36 AM
The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Drowned Migrant Toddler Photo Triggers European Outrage

The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Russians Observe 11th Anniversary of Beslan School Attack

This week, Russians have been observing the 11th anniversary of the attack by Islamic militants on a school in Russia's North Caucasus region that killed more than 330 hostages, including 186 children. The three-day siege and massacre that started on September 1, 2004 took place in Beslan, a town in the republic of North Ossetia, and is one of the bloodiest terrorist acts ever in Russia. VOA's Mike Richman reports.
Video

Video Native Americans Debate: Father Serra, Saint or Sinner?

Pope Francis will canonize an 18th century missionary to Spanish California during a papal visit to the United States this month.  But some Native Americans have criticized the elevation to sainthood of the missionary priest, Junipero Serra. VOA's Mike O’Sullivan has more from Los Angeles.
Video

Video Calais School Offers Another Face of Europe’s Migrant Crisis

Europe is facing mounting criticism over how it’s handling its biggest migration crisis since World War II. But not all Europeans believe building walls or passing repressive policies are the answer. A school for migrants in the French port city of Calais, is opening doors and building bonds across nationalities. VOA's Lisa Bryant reports.
Video

Video Kurdish Fighters on IS Frontline Ready for Offensive

Finger on the trigger, the Kurdish Peshmerga soldier stared across the dust at a village taken over by Islamic State extremists. The Kurdistan’s Khazir frontline, just 45 minutes from the Islamic State stronghold of Mosul. And at this point, the militants were less than two kilometers away. VOA's Sharon Behn reports.
Video

Video China Announces Troop Cuts at WWII Parade

Chinese President Xi Jinping Thursday announced plans to cut the world’s largest military force by 300,000 troops. The announcement was made during a massive military parade to commemorate victory over Japan in World War II. The event was shunned by most Western leaders and for some is raising fresh concerns about China’s military ambitions. VOA’s Bill Ide has more from Beijing.
Video

Video Russia-Japan Relations Cool as Putin Visits China for WWII Anniversary

Russian President Vladimir Putin is in Beijing for commemorations of the 70th anniversary of China's WWII victory over Japan. Putin is expected to visit Japan later this year, but tensions between Tokyo and Moscow over islands disputed since the war, and sanctions over Ukraine, could pour cold water on the plan. VOA's Daniel Schearf reports.
Video

Video Yemen ‘on Brink of Disaster’ as Medical Shortages Soar

Aid agencies warn Yemen is on the brink of humanitarian disaster – with up to half a million children facing severe malnutrition, and hospitals running out of basic medicines. There are fears Yemen's civil war could escalate as the coalition led by Saudi Arabia tries to drive back Houthi rebels, who seized control of much of the country earlier this year. Henry Ridgwell reports.
Video

Video Apps Helping Kenyan Businesses Stay Ahead of Counterfeiters

Counterfeit goods in Kenya cost the government as much as $1 billion each year in lost tax revenues. The fake goods also hurt entrepreneurs who find it hard to carve out a niche in the market and retain customers. But as Lenny Ruvaga reports from Nairobi, information technology is being used to try to beat the problem.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.

VOA Blogs