There are unmatched investment returns to be had in Africa, despite the challenges.
This is the word from Africa Investment Forum’s (AIF) senior director Chinelo Anohu, in a webinar discussing opportunities for Africa in the wake of the Covid-19 pandemic and how the continent could leverage them to attract investment for development.
Participants discussed domestic manufacturing as a path to expand intra-continental trade while also reasserting Africa’s position in global markets. The role of the private sector and the African Continental Free Trade Area was also explored.
The other panelists were Farid Fezoua, president and CEO of GE Africa; Daniel Mminele, CEO of Absa Group; and Sir Graham Wrigley, chairman of CDC Group.
Anohu stresses that investors should not view Africa as a single market. “Africa is vast. It’s 54 countries, and in those countries, you have 54 different outlooks, 54 kinds of resources, and 54 different ways of managing those resources. Bearing that in mind, Africa remains the key investment destination.”
He stresses that investing in African countries carries risks, but these were too often exaggerated. “It’s about a mindset,” Anohu adds.
Offering a private-sector perspective, Mminele says: “There is a particular role for financial institutions like Absa to play, in combination with DFIs, which traditionally have played a significant role in promoting economic growth on the continent – whether through co-financing arrangements with the private sector, or facilitating access to finance, or even becoming involved in policy discussions.”
Fezoua points to the size and non-integration of African markets as a stumbling block to attracting investment in individual countries’ manufacturing sectors. “You need to have a critical mass and volume to justify that investment and to be able to not have idle plants.”
There was consensus among the panelists that current economic conditions in Africa, while challenging, present significant opportunities. “Despite the underlying challenges, there is no better destination for a decent return on investment than Africa,” Anohu observes.