Africa News blog
African business, politics and lifestyle
For those looking to invest in Africa, the best prospects are in Nigeria and Ethiopia according to a new index of potential investment destinations published this week.
But should anybody want to put money into Africa at a time the global financial crisis and falling prices for export commodities, on which the continent is so reliant, have discouraged investors who had begun to see some African countries as promising frontier markets?
“Africa is going to overtake the Middle East to become the second fastest growing region in the world after emerging Asia. It will be affected by the global financial crisis but it is much less exposed than many places,” Katharine Pulvermacher, chief executive of business consultancy African Rainbow said this week on the launch of its Star of Africa index.
The index’s creators told my colleague Peter Apps that potential growth in energy, water and communications consumption could amply reward investors taking the risk in Africa. South Africa, Mauritius and Tanzania took third, fourth and fifth place respectively on the index. Somalia, Chad and Eritrea were the least appealing countries for investors.
Just stop someone on the street and ask if they have a cousin, a brother, or a sister living in Europe, the United States or elsewhere around Africa, and most likely they’ll say that they have two or three or more. Remittances from those loved ones total some $40 billion per year, according to the United Nations. In some countries, diaspora money makes up more than 20 percent of the gross domestic product, and analysts say, remittance cash may be as much as 50 percent higher than current estimates due to informal transfers.
But there is growing concern that this money could be a victim of a spiralling crisis in global financial markets.