In The African Diaspora? Which Country Would You Bet On?

In The African Diaspora? Which Country Would You Bet On?

The optimism in Africa continues to grow. Independent commentators continue to highlight the promise of a continent of growth as indicated in an article from Raconteur.net by Peter Guest in the Sunday Times of the 16th November 2014.

 

Here are the highlights:

  1. Africa presents promising, high growth opportunities for investors but not without significant risks.
  2. Sub-Saharan Africa’s (SSA) GDP growth has outpaced the global average since 2001, often considerably but the headline figure masks considerable differences between one country and another.
  3. The common trends driving growth across the region are population growth, urbanisation, high commodity prices and a trend towards increasing political stability.
  4. There has been an upsurge in foreign direct investment into the area of mining, minerals, energy, agriculture and infrastructure development.
  5. Africa however remains a difficult area to invest in due to a lack of advanced financial infrastructure and capital markets making it a risky venture.
  6. SSA countries have been issuing Eurobonds which have been attractive to investors, notably $750m 10-year-bond by Zambia and a total of $16.6 billion from sovereign funds from countries which included Rwanda and Ghana.
  7. There is now an established trend for African governments to look to global and local capital markets for funding.
  8. The financial meltdown in Ghana is highlighted as a warning to investors of the risk associated with African markets.
  9. Few African markets, South Africa being the exception have the critical mass to raise funding on international markets.
  10. 270 stocks listed on the continent are considered to be of an investable grade according to independent analysts.

The countries really attracting Foreign Direct Investment at the moment are Mozambique, Nigeria, South Africa, Ethiopia,Algeria and Kenya, showing a change in ranking with Nigeria being pushed into second position and  South Africa into third. So who would you bet on?