Fear of Investing in Africa Is Losing You Money
Africa has its challenges, from corruption to political risk, yet the continent has changed and will continue to evolve. And once investors consider the impressive facts about the growth and transformation of Africa’s economies, their fear and pessimism about investing there should dissipate. Those were the key messages that emerged from a panel discussion entitled Emerging Markets — Spotlight on Africa, moderated by Bloomberg Television’s Manus Cranny, at the Sixth Annual CFA Institute European Investment Conference in London.
Speaking first, Charles Robertson, global chief economist at Renaissance Capital, highlighted the change theme. His view is that GDP growth knows no barriers, be they climate or ethnicity. Nobody expected the growth that China and India have experienced, and he argued that, in similar fashion, Africa’s GDP will cover a lot of distance in catching up with the rest of the world. Ten African countries have achieved at least 7% annual growth since 2000, he noted, enough to double GDP in about a decade. This growth is the result of public and private sector debt, increasing foreign direct investment, favorable demographics, rising education, and reforms that have made doing business easier.