Friday, August 27, 2010

Harvard Business Review: Now's the Time to Invest in Africa

Over the years many misguided pronouncements have touted the improved economic prospects of Africa, home to a large proportion of the world’s billion poorest people. The late 1990s even saw a slight economic resurgence, dubbed an “African renaissance,” but it fizzled, and a gloomy view of the continent as too unstable for investment other than in mining and oil seemed to settle over corporate boardrooms. read more...

U.S News & World Report: 12 Reasons to Invest in Africa

'Ground-floor opportunity.' Seruma says many investors have already missed what he calls a "ground-floor opportunity" in Africa. For the decade ending Dec. 31, 2009, an African composite index made up of eight countries, including South Africa, Nigeria, and Egypt, returned about 14 percent annualized. South Africa alone returned an average of 13 percent per year over that period. Compare that with the MSCI Emerging Markets Index, which returned about 7 percent annualized, or the S&P 500, which lost about 3 percent over the same time period. He compares the risk versus return ratio in Africa today with emerging markets like China, India, and Brazil in the late 1900s—meaning that investors who enter a new high-growth market first reap the highest returns over time because they're willing to take on more risk. read more...

FT: How Africa can become the next Bric

If you were to think about Africa collectively, and consider it in the same framework that informs our 2050 scenarios for the Bric, next 11 and other major economies, you would see an economy as big as some of the Brics. If you then look at the potential of the 11 largest African economies for the next 40 years (by studying their likely demographics, the resulting changes in their working population and their productivity) their combined GDP by 2050 would reach more than $13,000bn, making them bigger than either Brazil or Russia, although not China or India. Read more...

Tuesday, August 24, 2010

China Railway in $30 Billion South Africa Train Talks

Aug. 24 (Bloomberg) -- China Railway Group Ltd., the world’s second-largest publicly traded heavy construction company, said it is in talks with South Africa’s government for a $30 billion high-speed rail project between Johannesburg and Durban.

Discussions are at an early stage and no funding is in place, China Railway Chairman Li Changjin said in an interview in Beijing today. China Railway has signed an agreement with Standard Bank Group, Ltd., Africa’s biggest lender, Li said, without elaborating. Read more...

Monday, August 23, 2010

HSBC Takes Important Step Into Africa With Nedbank Deal

It may not quite be a new scramble for Africa. But Nedbank, in which HSBC confirmed Monday it’s in talks to acquire a controlling stake, was certainly one of the last opportunities for international banks to buy a ready-made beach-head into the mostly untapped continent.
Beyond the broader fact of growing GDP and untapped consumers, international banks are attracted to Africa because the continent is itself attractive to Asia. As a hub for resources needed by commodity-hungry Chinese industry, the links between the continents continue to strengthen. South Africa, as the major economic power in the region which commands around 20% of Africa’s GDP, is the ideal springboard. Read more...

Saturday, August 21, 2010

India, Japan battle for Africa telemedicine market

The battle for the dominance of Africa's mobile market by Asian countries has moved to tele-education, e-commerce and telemedicine programs, with Japan and India now competing for supremacy in the supply of equipment to support related programs.

While the Indian project, dubbed e-Network, is equipped to support tele-education, e-governance, e-commerce, infotainment and resource mapping, the Japanese project is focused on tele-education and e-governance. Read more...

Wednesday, August 18, 2010

Liberia signs $1.6 bln palm oil investment: government

MONROVIA (Reuters) - Liberia's government has signed a $1.6 billion deal with Golden Veroleum for a 500-acre palm oil plantation in the southeast of the West African nation, a spokesman said on Wednesday.

"When ratified by the legislature, it will create over 35,000 jobs for Liberians," presidential spokesman Cyrus Badio told Reuters by telephone.

Singapore's second-largest listed palm oil plantation firm Golden Agri-Resources said on Tuesday it was considering investing in Verdant to gain access to the project. read more...

Africa Unlikely to Follow China’s Goose

Can Chinese investment inject some Asian-tiger-like vigor into African economies? That’s certainly the hope of many – including World Bank President Robert Zoellick, who has urged Chinese companies to expand beyond infrastructure and resource-extraction projects and also invest in manufacturing in Africa.
Something like this seems to still be happening in Asia, where countries that are poorer than China — such as Vietnam, Bangladesh and Cambodia — have in fact been picking up some of the textile and garment business in recent years as Chinese costs go up.

But a new short paper published by the Vale Columbia Center on Sustainable International Investment, at Columbia University, casts doubt on whether China’s low-end industries will actually shift to Africa in “flying geese” style. read more...

Sunday, August 15, 2010

Gabon Signs $4.5 Billion Accords on Infrastructure, Agriculture

Gabon signed accords with three Asian companies to build infrastructure and develop palm-oil and lumber projects that are expected to generate at least $4.5 billion of investment in the country, officials said.

The programs, which may create 50,000 jobs, are part of President Ali Bongo Ondimba’s plans to diversify the nation’s economy, the presidency said in an e-mailed statement today from the capital, Libreville.

“Our objective is to diversify the economy to prepare for the post-oil era using sustainable projects,” Christian Nkero Capito, an adviser to Economy Minister Magloire Ngambia, said in a phone interview today. read more

Wednesday, August 11, 2010

Brazil's state bank, partners push into Africa

Brazil's biggest state-run bank and two other partners announced an expansion in Africa on Monday in the latest sign of growing financial links between emerging markets.

Banco do Brasil, Latin America's largest bank by assets, said in a regulatory filing it will team with local private-sector giant Banco Bradesco and Portugal's Banco Espirito Santo (BES) to tap Africa's growing appetite for consumer loans, credit cards and other products.
"The African continent is the future," Finance Minister Guido Mantega said. read more...

New literary series views Africa through African eyes

Tired of reading accounts of Africa through the eyes of outsiders, 14 African writers have set out to document the diversity of their content in a series of books and blogs partly inspired by the soccer World Cup.

The first World Cup to be held in Africa triggered a wave of pan-African solidarity as fans from Dakar to Dar Es Salaam threw their support behind African teams, hoping the home advantage would boost the continent's chances of success.
"For 400 years, Africa's history was hijacked by Europe. The great travel books were all written by Europeans. Africans didn't talk about Africa," said Alain Mabanckou, from Congo Republic, one of the writers taking part in the project.

Some of the authors have already blogged about their travels on the project's Website,
read more

US goes high-end to boost export trade with Africa

The US is moving higher up the products advancement ladder to keep its share of trade with Africa where competition for the low-end market has intensified with availability of cheap goods from emerging economies such as China and India.
“America will not compete at the low-end of Africa’s consumer goods market with Brazil, Russia, India or China (BRIC),” he said on the sidelines of the 2010 Africa Growth and Opportunity Act (Agoa) in Kansas City last week. read more

Thursday, August 5, 2010

Financial Times: BRICs in Africa

It’s become a hoary cliché that the Bric economies are leading a modern day “scramble for Africa” - and it’s a scramble that’s often frustratingly difficult to quantify.

But Standard Bank has waded through the mish-mash of data and emerged with a prediction: that over the next decade emerging economies will contribute 30 per cent of the new foreign investment coming into Africa. While the bulk of African FDI is still from the old economies, the momentum is all with the Brics. So is the drama and the buzz. read more...

West Africa: An Investment Opportunity to Take Advantage Of

The investment opportunity Africa offers has not fundamentally changed because of the World Cup, but rather the sporting tournament has opened people’s eyes to the potential the continent offers in terms of investment and business opportunities. Never is this more so the case than with the African nation of Burkina Faso, where an active program from the government, encouraging mining and exploration, has led to an influx of junior resource companies, while the country itself stands ready for a mining surge.
With this, it has recently begun to inaugurate its first industrial scale gold mining operations, and under pressure from local operators, plans to continue to change its policies towards the industry in coming years. Between 2008 and 2009 for example, the number of exploration licenses awarded by the government rose by 11%, climbing from 537 to more...

World Bank unit leads big funds into Africa

The private-sector lending arm of the World Bank is leading large government-owned wealth and state pension groups into frontier markets in Africa and elsewhere where few big investors have sought to venture.
The funds have amassed nearly $3 trillion in assets, and a 1 percent investment of their assets could add up to $30 billion a year in private investment for Africa. read more...

Tuesday, August 3, 2010

U.S. Policy Should Spur Private Investment in Africa

"I think really we've got to realize what China, India, the Europeans, the Arabs already realize: that we've got to have private investment into Africa if we're going to continue a strong U.S.-Africa relationship," he said.
The U.S. government's Export-Import Bank, which aims to decrease risk for U.S. firms selling abroad, provides little assistance for small companies in African markets. The bank provided just $437 million in loan guarantees to Africa-invested U.S. firms in 2008, and most of the recipients were large, stable companies like Exxon-Mobil Corp., Mr. Hayes said.

The China Exim Bank, on the other hand, provided $13.1 billion in guaranteed loans for Chinese companies investing in Africa during 2008, the most recent year for which numbers are available. As a result, U.S. firms are falling behind, even though American investment would be preferred to Chinese in many countries, he added. read more...

Ecobank Signs Pact With Bank Of China

With the desk, Ecobank’s Chinese customers would have access to the resources of both banks, including seconded staff of the Bank of China, which would remove language and cultural barriers that Chinese banking clients tend to face in Africa. read more...

Monday, August 2, 2010

Joining Up Africa: Fullfilling Potential

Korea has important lessons to teach Africa

What will be the benefits for Korea in investing in Africa?

There is plentiful low-cost labor and huge access to raw material imports like agriculture and minerals. Several countries also have open commercial environments where it will be easy to gain benefits in agreements with the governments. I want to stress that there is huge growth in consumer demand and the desire to buy high-quality consumer goods, such as cars, mobile telephones and personal computers. So why not assemble Korean mobile phones in Africa with low-cost labor? read more...