Invest in Africa

In the first of a new series of columns on investing, Anver Versi explains why Africa is set to boom over the next few decades

Invest‘The Africa we want’ or ‘Agenda 2063’, is a new commitment by the African Union Commission, the UN Economic Commission for Africa (UNECA) and The New Partnership for African Development (NEPAD) to work together to create an Africa of our dreams – a prosperous, healthy, vigorous, creative and exciting continent – by the year 2063.

Governments will provide the environment, the support and the infrastructure needed for this great enterprise, but the private sector will deliver the dream. This means that, for the next five decades, investors of all shapes and sizes can expect to enjoy a boom as great as, if not greater than, the one we have seen in Asia: and according to expert analysts, longer-lasting.

“This represents a paradigm shift in African thinking,” says Dr Carlos Lopes, the Secretary-General of UNECA. “It is no longer just about fire-fighting but about planning and implementing the long-term view. Governments will come and go, but the steady roll of development will march on.”

These are honeyed words to investors, both local and foreign. Nothing scares off investment as rapidly as the threat of abrupt changes in national policies. Investors need to think in the long, or at least the medium, term for their shareholders to have confidence in their ventures.

“African markets, because most are still being developed, are the most exciting to invest in. The returns are great and the prospects for long-term growth are unmatched anywhere else in the world,” according to the African Centre for Economic Transformation (ACET), Africa’s leading think-tank.

“The faint of heart worry about the political climate – who will win elections and so on – but fantastic markets like Nigeria, Kenya, South Africa and so on will continue to be attractive whatever the political climate. A US$100,000 investment in these markets 15 years ago is now worth billions of dollars,” says Juma Khalifa, a Tanzanian businessman who has investments in construction, trade and light manufacturing in several African countries.

The expert view is that “food is rapidly becoming the new oil” and Africa, with the world’s largest tracts of arable but still uncultivated land, ”can and should become the breadbasket of the world over the next two decades,” according to Zimbabwean telecoms tycoon Strive Massiva.

Investments from Asian countries continue to increase by the month. The Chinese are now shifting their approach and migrating some of their light manufacturing to Africa. For example, Huajian, one of the world’s largest shoe-makers, produces some of its most prestigious brands from its factories in Ethiopia.

Helen Hai, who set up the factory and is the CEO of the ‘Made in Africa’ initiative, was appointed a UNIDO Goodwill Ambassador for her work in promoting African exports. She says: “Africa will be the next manufacturing floor of the world,” and she should know.

She is not alone in thinking along these lines. Investments from other Asian, Latin American and Middle Eastern countries are on the increase. Kenya Airways has now started three flights per week to Hanoi in Vietnam to soak up some of the demand for travel to and from Asia. For the canny investor, the time is now and the place is Africa. “It stands to reason,” says Hai.