04 February 2014

Take 15: Barriers to Investing in Africa (Video)

Posted In: Equity Investments, Portfolio Management

Tendai Musikavanhu, CFA, cofounder of One Stone Capital Group and Old Mutual Global Index Trackers Limited, shares his views on the obstacles to investing in Africa, such as insufficient information, illiquid markets, limited investor protection, and poor perception. He also explains why he think passive investing is better than active investing in Africa.

Here is an approximate breakdown of the questions discussed during the interview for your convenience:

0:00 – 0:50: Introduction

0:51 – 2:28: A survey of CFA Institute members in Europe from October 2013 shows that insufficient information and illiquid markets are the largest barrier to investing in Africa by the highest proportion of respondents (29%).

2:29 – 3:30: For an institutional investor, what is the cost of a round trip to investing in Africa?

3:31 – 5:00: Insufficient regulatory and legal protection was selected as the largest barrier to investing in Africa by 23% of the respondents. How would you comment on that?

5:01 – 5:50: Corruption was selected as the largest barrier to investing in Africa by 21% of the respondents. What is your take on corruption in Africa?

5:51 – 6:55: A poor perception due to political risk was selected as the largest barrier to investing in Africa by 15% of the respondents. How would you comment on that?

6:56 – 8:21: A poor perception due to past humanitarian crisis was selected as the largest barrier to investing in Africa by only 1% of the respondents. Has the perception of Africa changed?

8:22 – 9:40: How would you summarize your views on barriers to investing in Africa?

Readers may also be interested in a recap from European Investment Conference, “Fear of Investing in Africa Is Losing You Money.

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

Tags: Africa, Frontier Markets, Videos

Share On

About the Author(s)

Usman Hayat, CFA

Usman Hayat, CFA, writes about sustainable, responsible, and impact investing and Islamic finance. He is the lead author of "Environmental, Social, and Governance Issues in Investing: A Guide for Investment Professionals;" the literature review, "Islamic Finance: Ethics, Concepts, Practice;" and the research report "Sustainable, Responsible, and Impact Investing and Islamic Finance: Similarities and Differences." He is interested in online learning and has directed three e-courses for CFA Institute: "ESG-100," "Islamic Finance Quiz," and "Residual Income Equity Valuation." The other topics he writes about are macroeconomics and behavioral finance. He has experience working in securities regulation and as an independent consultant. His qualifications include the CFA charter, the FRM designation, an MBA, and an MA in development economics. He has served as a content director at CFA Institute. He is a former executive director at the Securities and Exchange Commission of Pakistan (SECP) and former CEO of the Audit Oversight Board (Pakistan). His personal interests include reading and hiking.