Africa News blog
African business, politics and lifestyle
Is Africa a good bet?
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.
The International Monetary Fund’s most recent forecast of economic growth for Africa this year was 3.3 percent – much slower than the 5-6 percent of recent years but good by the standards of Western countries in recession. A senior IMF official noted recently, however, that African growth could be sharply lower than its forecasts.
“Remittances, tourism revenue and even aid, we feel could fall further,” said the IMF’s Africa Department Director Antoinette Sayeh.
The African markets that had attracted most foreign investment in recent years – not only developed South Africa but also countries such as Nigeria and Kenya – are among those that have so far been hardest hit, while smaller economies that may not have had so far to fall have been less touched.
A tale of two Africas
Good news and bad news for Africa from the latest take on global risks from the World Economic Forum. Not much danger for most of the continent, it says, from an asset bubble burst. That’s the good. The bad, of course, is that this is because there are not many financial assets to bubble. In fact, it deems the overall exposure even to economic risks is small because African economies are not particularly tied in to global markets.
Actually, the report shows that there are two Africas. Mapped by their susceptibility for economic and asset bubble trouble, most African countries are bunched together in a low risk range. But another, smaller cluster, including Nigeria and South Africa, finds itself in much more peril and shares space on the WEF risk map with Western and Eastern Europe.
Good news, in a contradictory sort of way.
I strongly disagree with the first writer, Somali- if that is his or her name for real- because western companies are not the cause of African’s problem. If you want to know who is/are the root of our problem in Africa, I would advise you to critically look at the rulers/leaders of Africa. Our presidents and their entourages are our continent’s problem. They consistently squander our wealth and natural resources. Embezzlement, corruption, and favoratism are the tools commonly used by these leaders to kill our nation.
On the other hand, these leaders go oeverseas and beg for money in the form of loans and development projects, which all end up in their pockets; leaving our children to starve and linger in poverty. Thus, who is going to save us and our wonderful continent, Africa? Please tell Mr. or Mrs. Somali to open his/her eye. Is it the whitemen’s firms or your government, our so-called leaders? We need to wake up and reform Africa. Stand up against corruption, embezzlement, and other vices within every corners of our sweet motherland.
Moreover,we Africans need to shoulder responsibility and come up with a viable system that could enable in planning our countries in Africa effectively and effeciently. Look at the U.S.A and other well-developed nations around the world! They work hard to get to where they are today. They did not just get rich over night; they embrace foreigners and foreign investors and companies, otherwise they wouldn’t have gotten to that level of economic and social improvements(development) they are now. Come on, Somali, reason and enrich your mind with the modern time we are in. We are no longer in the 19th century or 20th; this is the 21st century, baby! Stop blaming the whitemen and his companies- give them a break!
Also, competition builds the world and drives the world’s economy. Somali, I think it is hard time you majored in Economics at any affordable college or university in order to better understand how this world and its business works. Take a time off from your old African mentality that the whitemen are our problem. Please start focusing on people like Mogabe,Conte (late), Mabutu(though late as well), and Bongo together with many other corrupt leaders unmention so as to estimate how backward they have taken our nations and their negative impact on the continent as whole. These folks have tarnished our reputations as African, and I hope you are not one their supporters back home.
I hope your you understand all what I am trying to convey in the short article. Loosen your mind, Somali, and freely think for yourself. Bye, bye, and wish to hear from you again.
Last but not the least, Somali, I hope you create your own company in order to compete with the so-called “Western firms” in the global market, instead of ctriticising.
China brings its own (unqualified and qualified)workers to Africa despite being more expensive. Guess that pretty much sums up what manufacturing opportunities in Africa are compared to countries like Vietnam or China.