Global Investing

Africa investment: back on?

Carolyn Cohn

Nov 23, 2009 08:35 EST

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.

There has been a lack of both opportunity and willingness for international investors to get back into Africa, after many pulled out as a result of the global financial crisis.

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.

A loan to Angola was likely to be approved this week, delegates from the International Monetary Fund said, adding they were “cautiously optimistic” on Africa’s growth outlook.