Africa investment: back on?
Could it be that rock bottom interest rates in the developed world are finally driving money into Africa?
Corruption, bureaucracy and uncertainties over debt restructuring all remain as barriers to investment in Africa, but overall the climate is improving, at least according to emerging market specialists who gathered recently at Thomson Reuters’ London headquarters for panel discussions on African investment.
But that is starting to change as minimal interest rates in developed countries once more propel investors to higher-yielding, growing economies. Michael Hugman, emerging markets strategist at Standard Bank, told the conference:
The crisis for Africa should be a relatively short-term deviation. People are finally waking up to the fact that OECD countries are offering little over 1 percent.
Postponed international bonds may once more be on the road, with Kenyan Central Bank Governor Njuguna Ndung’u promising the conference Kenya will launch a planned debut Eurobond next year.
However, Africa is unlikely to return to the heady days of 2007, when, according to David Cowan, Africa strategist at Citi, “you could just make up a country in Africa”, assign it a mythical commodity export, and investors would come flocking.