Foreign direct investment (FDI) in Africa reached a record $83 billion in 2021, more than doubling from $40 billion in 2020, but fell to $45 billion in 2022, representing 3.5% of global FDI flows that year.

Despite the decline in 2022, projections indicate a gradual recovery in FDI inflows as global economic conditions stabilize and new projects emerge, particularly in energy and infrastructure sectors.

South Africa has consistently attracted the highest levels of foreign investment in Africa, with inflows reaching $40.9 billion in 2021, driven by significant deals in mining and energy sectors.

Egypt ranked second in foreign investment inflows in 2021, attracting $5.1 billion, with notable investments in green projects and real estate, supported by Gulf countries' financial commitments and government incentives like the 'golden license' for strategic sectors.

Mauritius and Rwanda have emerged as attractive destinations for foreign investment due to their stable business environments and regulatory frameworks, with Mauritius leading in per capita wealth and Rwanda showing strong growth in private wealth.

West Africa is experiencing significant growth in foreign investment, driven by initiatives such as the West Africa Trade & Investment Hub, which facilitates private sector productivity and competitiveness in industries like green energy, hospitality, and agriculture.

Kenya, Nigeria, and Ghana are among the fastest-growing regions for foreign investment in Africa, with Kenya and Nigeria attracting investments in technology and digital transformation, while Ghana is recognized as a tech hub with growth in financial services and agriculture exports.

Namibia is emerging as a promising investment destination, with initiatives like the Namibian Investment Residency Program attracting foreign investors through incentives such as tax benefits and residency opportunities.

Renewable energy, agriculture, and logistics have emerged as primary industries attracting foreign investment in Africa, with countries like Mauritania and Namibia focusing on green hydrogen and agricultural technology to enhance crop production and sustainability efforts.

The mining sector, particularly the extraction of minerals like lithium, cobalt, and copper, has seen significant foreign investment due to its critical role in renewable energy technologies, with countries such as Zimbabwe, Zambia, and the Democratic Republic of Congo being key destinations for these investments.

Technology-driven sectors, including fintech and pharmaceuticals, are increasingly attracting foreign investment, with African fintech revenues projected to reach $30 billion by 2025.

Energy and gas supply projects have emerged as major recipients of foreign investment in Africa, with new field projects announced in 2022 valued at $120 billion, alongside substantial investments in construction and extractive industries totaling $24 billion and $21 billion respectively.

The African Continental Free Trade Area (AfCFTA), which creates a $3.4 trillion borderless market, is expected to significantly boost foreign investment by reducing trade barriers and fostering inclusive continental growth.

AfCFTA is projected to attract global investors seeking to capitalize on Africa's growing consumer and business spending, which is expected to reach $16.12 trillion by 2050.

Major foreign companies investing in Africa include Japanese firms such as Toyota and Nissan, South Korean companies like Hyundai and Samsung, and Indian enterprises focusing on industries such as automotive manufacturing, electronics, and agriculture.

French companies, including Total Energies and SPIE, are heavily involved in Nigeria, focusing on energy, solar mini-grid projects, and other industrial sectors, while over 60 French firms operate in Angola, contributing to agriculture and food production.

India has emerged as one of Africa's top five investors, with $74 billion invested in sectors such as agriculture, renewable energy, and automotive manufacturing, leveraging Africa's raw materials and growing middle class.

Equinix Inc., a NASDAQ-listed data center operator, plans to invest $390 million over the next five years to build and expand data centers in Africa, initially focusing on South Africa and the west coast.

Norrsken22, an Africa-focused venture capital firm, has raised $205 million to invest in tech startups across beacon economies like South Africa, Nigeria, Ghana, Kenya, and Egypt, targeting sectors such as fintech, edtech, and meditech.

In July 2023, several agreements were signed between Nigerian and French companies in sectors such as agriculture, energy, and technological innovation, reflecting France's strategic investment focus in Nigeria as its key partner in sub-Saharan Africa.

Special Economic Zones (SEZs) in Africa have attracted foreign investment by creating investor-friendly environments, such as Morocco’s Tanger-Med SEZ, which specializes in the automotive sector and has created hundreds of thousands of jobs through partnerships with world-class investors.

The African Export-Import Bank has facilitated investment by urging governments to reduce tariffs, eliminate non-tariff duties, and adopt legislation that supports e-commerce and advanced payment methods, enhancing the investment climate across the continent.

African governments play a crucial role in attracting foreign investment by implementing legal, regulatory, and tax frameworks that promote local content development and compliance, as seen in countries like Ghana and South Africa.

Governments also focus on creating favorable environments for foreign capital by addressing infrastructure gaps, improving administrative efficiency, and offering incentives such as tax breaks and investment guarantees.

To further attract private capital, African governments are encouraged to adopt innovative mechanisms such as financial guarantees, anti-corruption measures, and public-private partnerships, which are essential for mitigating risks and unlocking investment potential.

Foreign investors in African markets face challenges such as fragmented smallholder systems, where small-scale farmers produce limited quantities that do not meet the large-scale demands of processors, and the lack of infrastructure to aggregate these outputs into consistent supplies for buyers.

Corruption, political instability, and inconsistent regulatory frameworks across African countries are significant barriers to foreign investment, as they create uncertainty and increase operational risks for international firms.

To address these challenges, initiatives such as AfCFTA aim to streamline cross-border trade processes, reduce logistical barriers, and harmonize regulations, while some countries like Mauritius have developed robust legal and tax frameworks to attract foreign investors.

Multinational organizations like the World Bank and IMF play a pivotal role in facilitating foreign investment in Africa by providing concessional credit and mobilizing private capital to address infrastructure gaps and support sustainable development projects.

The International Finance Corporation (IFC), a member of the World Bank Group, focuses on fostering private sector growth in Africa by offering loans, equity investments, and advisory services to local businesses.

African-based companies are leveraging foreign investment to expand operations and enter new markets by forming strategic partnerships and utilizing financing opportunities, as seen in collaborations like Formosa Plastics Group and SARL SMTP in Algeria.

The African private wealth market is projected to grow by 38% over the next 10 years, highlighting the continent's potential for sustained foreign investment in sectors like real estate and eco-friendly developments.

Graduates should focus on acquiring knowledge in sustainable finance and environmental standards, as initiatives like Egypt's Sustainable Finance Academy emphasize the importance of integrating sustainability practices into business operations.

Special Economic Zones (SEZs) in Africa, such as those in Mauritius, Senegal, and Rwanda, offer a promising environment for skilled labor and entrepreneurship, providing graduates with opportunities to work in investor-friendly hubs.

Foreign direct investment (FDI) in Africa reached a record $83 billion in 2021, more than doubling from $40 billion in 2020, but fell to $45 billion in 2022, representing 3.5% of global FDI flows that year.

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Content: FDI flows to North Africa down 5% in 2021
Foreign direct investment to North Africa fell 5 percent to $9.3 billion for the whole of 2021, according to a report on “Investing in the World ” released by the United Nations Conference on Trade and Development (UNCTAD) on June 9, 2022.
These investments, towards Tunisia, improved slightly from $652 million in 2020 to $660 million in 2021.
The same investment to Morocco increased by 52 percent to 2.2 billion dollars in 2021, compared with a 12 percent drop to 1.5 billion dollars in Egypt.
Despite the decline in these investments in Egypt, it remains the second country to benefit from the inflow of foreign direct investment in Africa.
According to the same report, the flow of foreign direct investment in Africa reached a record level of $83 billion for the whole of 2021, more than double the investment achieved for the whole of 2020.
Despite this significant growth, the flow of investment to Africa in 2021 represented only 5.2 percent of the global total, compared to 4.1 percent in 2020.
Most African countries saw a slight increase in foreign direct investment (FDI) in 2021.
These investments developed in South, East and West Africa, while they maintained their previous levels in Central Africa, while declining in North Africa.
Europeans remain the most important investors in Africa, led by investors from the United Kingdom ($65 billion) and France ($60 billion).
Increased investments in renewable energy
Despite the overall positive trend of foreign direct investment towards Africa, the announcement of new projects remained weak at $39 billion and shows only a weak recovery compared to $32 billion recorded in 2020 and less than $77 billion recorded in 2019.
In parallel, the number of international projects in the field of renewable energies in Africa increased to an estimated 71 projects, almost double the 36 projects completed in 2011.
Among these projects is a $20 billion project that aims to export wind energy to the UK from Morocco.
By laying 3,800 km of submarine cables.

What was the total FDI inflow to Africa in 2022 and how did it compare to 2021?

$45 billion, which was down from $80 billion in 2021

Despite the decline in 2022, projections indicate a gradual recovery in FDI inflows as global economic conditions stabilize and new projects emerge, particularly in energy and infrastructure sectors.

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Content: Chairman of the Board of Directors and Editors
I'm sorry.
Mohamad Elbaz
Chairman of the Board of Directors and Editors
I'm sorry.
Mohamad Elbaz
It has reached $11 billion.
UN highlights doubling of foreign direct investment in Egypt
The United Nations Trade and Development Board (UNCTAD) said in its annual report on foreign direct investment flows for the year 2022, on Wednesday in Geneva, that Egypt witnessed an increase in foreign direct investment more than doubled to $11 billion as a result of increased cross-border M & A sales.
Investment flows to Africa fell to $45 billion in 2022 from a record $80 billion in 2021 and accounted for 3.5 percent of global foreign direct investment, the report said, adding that international project financing deals targeting Africa showed a 47 percent drop in value.
The report pointed out that the number of announcements of new projects increased by 39% to 766, and that six of the 15 largest new investment mega projects (those worth more than $10 billion) announced in 2022 were in Africa, stressing that Egypt witnessed an increase in foreign direct investment more than doubled to $11 billion as a result of increased cross-border M & A sales.
The number of new projects has more than doubled to 161, and the value of international project financing transactions has increased by two-thirds to $24 billion.
FDI inflows have risen over the past five years in four of the continent ’ s regional economic groupings, with FDI in the Common Market for Eastern and Southern Africa (COMESA) growing by 14% to $22 billion, and inflows also rising in the Southern African Development Community (SADC) (quadrupled to $10 billion) and the West African Economic and Monetary Union (WEMU) (doubled to $5.2 billion). East African Community (up 9% to $3.8 billion).
According to the report, the largest increase in 2022 was in new field projects announced in energy and gas supply (to $120 billion from $24 billion in 2021), and the value of projects in construction and extractive industries rose to $24 billion and $21 billion, respectively, while the information and communication sector recorded the largest number of projects.
European investors remain by far the largest owners of FDI in Africa, led by the United Kingdom ($60 billion), France ($54 billion) and the Netherlands ($54 billion).

South Africa has consistently attracted the highest levels of foreign investment in Africa, with inflows reaching $40.9 billion in 2021, driven by significant deals in mining and energy sectors.

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Content: AFED: EGYPT RECEIVED $5.1 BILLION INVESTMENTS IN 2021
GDP growth is expected to rise to 4.4% this year
Abdulrahman Abu Al-Enein
6: 52 AM, Wednesday, 31 May 23
Recent data issued by the African Development Bank (AfDB) revealed that Egypt ranked second in terms of foreign direct investment flows in the continent in 2021 and attracted nearly $5.1 billion.
According to the Africa Economies Outlook 2023, South Africa was the largest recipient of foreign direct investment in 2021 with investments of more than $40.9 billion, nearly half of the total inflows to the continent in that year, followed by Egypt and Mozambique, which each attracted nearly $5.1 billion, representing about 6.2% of the total volume.
In the same context, the report expected Egypt ’ s GDP growth rate to decline to 4.4% this year from 6.6% estimated last year, and to rise to 5.1% next year.
The report pointed out that the inflation rate rose from 4.5% in the fiscal year 2020 / 2021 to 8.5% in the fiscal year 2021 / 2022 due to the rise in food and energy prices globally and the devaluation of the pound against the dollar.
He said that the current account deficit shrank to 3.5% of GDP in the fiscal year 2021 / 2022 compared to 4.4% in the previous fiscal year 2020 / 2021 due to the rise of tourism revenues to 10.7 billion dollars against 4.9 billion dollars, respectively.
The African Development Bank pointed out that the banking sector remains profitable and well capitalized, noting that the rate of non-performing loans reached 3.2% in June 2022, explaining that subsidies and social protection programs have reduced the impact of high food and energy prices on vulnerable families.
The Minister of Planning Hala Al-Said said in previous statements that despite the current effects of the Russian-Ukrainian crisis, which is likely to spread over the next year, the Egyptian economy is expected to grow by 4.2% by the end of the current fiscal year 2023-2022.
Al-Saeed said that with the development of inflationary trends in the Egyptian economy and despite the success of the state in curbing it and reducing it from very high levels (25% in 2017-2016) to less than 5% in 2021-2020, the rate increased to about 15% in 2022, and continued to rise, especially after the Russian-Ukrainian crisis.
Foreign direct investment in Mozambique increased by 68% in 2021, the report said, noting that these investments were largely directed to green projects in the energy sector.
Nigeria accounted for 5.8% of FDI inflows to Africa and Ethiopia 5.1% despite economic challenges.
The bulk of foreign direct investment in these countries is increasingly going to clean energy resource projects.
Mauritius and South Africa recorded the largest outflows in 2021, but a few countries recorded net inflows, including Egypt ($18 billion) and Nigeria ($5.9 billion).
The Bank estimates that capital flight through net investment outflows continued in 2022 at around $28 billion, which is close to the 2021 level due to higher interest rates linked to deflationary monetary policies in developed countries.
Official development assistance (ODA) to Africa stabilized at $65 billion in 2021 after the previous 28 percent jump in 2020.
The significant increase in such assistance since 2020 reflected the support provided by the international community to help African governments address the humanitarian, social and economic impacts of the coronavirus epidemic and the difficult global economic conditions.
The African countries that saw the largest increase in ODA in 2021 included Egypt (428%), Equatorial Guinea (115%), Angola (109%), Gabon (82%) and Sudan (60%).
The report pointed out that official development assistance to Egypt during 2021 amounted to about 8.2 billion dollars, Ethiopia 4 billion dollars, Sudan 3.8 billion dollars, the Democratic Republic of the Congo 3.5 billion dollars, Nigeria 3.4 billion dollars, and Kenya 3.1 billion dollars.
African countries need to leverage this external support to address existing vulnerabilities and build more resilient economies, given the risks that advanced economies are reallocating resources for reconstruction and humanitarian assistance in Ukraine at the expense of meeting the continent ’ s official development assistance commitments.
Ukraine received $16.1 billion in net official development assistance (ODA), equivalent to 7.8 percent of the total aid resources provided last year.
It is noteworthy that the report was launched in light of the annual meetings of the African Development Bank Group held under the auspices of President Abdel Fattah El Sisi in Sharm El Sheikh from 22 to 26 May.

Egypt ranked second in foreign investment inflows in 2021, attracting $5.1 billion, with notable investments in green projects and real estate, supported by Gulf countries' financial commitments and government incentives like the 'golden license' for strategic sectors.

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Content: « Money » monitors the forecasts of economic analysts for foreign investment flows in the current year
A number of them predicted it would reach $10 billion.
Samar Al-Sayed
Praying for Mahmood
6: 59 AM, Wednesday, 27 Jul 22
Wael Ziadeh: The Russian-Ukrainian war is an opportunity for the Egyptian stock exchange to attract more capital
Esraa Ahmed: Clean energy, infrastructure and digital financial services are the most attractive sectors
Hani Geneina: Companies should be encouraged to reinvest their profits instead of transferring them to parent entities abroad
Naaman Khaled: Most of the money will come from Gulf markets
The Egyptian government aims to increase foreign direct investment flows, especially the Gulf, in the local market in the coming period, in light of the repercussions of the Russian-Ukrainian war on the global and local economies, and a number of analysts and macroeconomic experts estimated the value of these investments to reach $10 billion, driven by various factors, including the decline in the stock prices of companies on the stock exchange, and the exchange rate of the pound against the dollar.
The latest report issued by UNCTAD in June on the volume of foreign investment flows in 15 African countries last year showed that Egypt ranked second in the list, recording the volume of flows about 5.122 billion dollars compared to 5.852 billion in 2020 compared to 9.010 billion in 2019.
South Africa came first last year with a 1,235% jump in investment inflows of $40.889 billion compared to $3.062 billion in 2020 and $5.125 billion in 2019.
Wael Ziadeh, founder and CEO of Zela Capital, said that the Russian-Ukrainian war had negatively affected foreign direct investment flows in the world, while inter-state assistance had increased to counter the negative consequences of the war.
He explained to Al-Mal that these negative effects included the exit of investment flows from some emerging countries, which led to the impact of their trade balance, especially as their imports of food and oil more than their exports, for example Turkey and many European countries, as well as Sri Lanka.
On the other hand, the war represents a positive area for these countries, especially in activating the stock market sector, he said, adding that in this context, the Egyptian Exchange has opportunities to attract more foreign investments in the coming period.
He predicted that Egypt will take no more than six months to recover its trade balance once the war is over, as the prices of petroleum products and food will fall rapidly, as they rose rapidly after the outbreak of the war.
The objectives of the Egyptian government published in July 2021 in the second and final review report of the Credit Standby Arrangement Program signed with the International Monetary Fund, amounting to about $5.4 billion, indicated that the percentage of net foreign direct investments of GDP will rise to 2.5% in the current fiscal year compared to 2% in the last fiscal year, adding that it recorded 1.4% in the fiscal year 2021 / 2020, 2% in 2019 and 2.6% in 2019. / 2018.
These targets pointed out that the proportion of net foreign direct investment will jump to 3% of GDP in the fiscal year 2025 / 2024 compared to 2.9% in 2023 / 2024.
The government also expected in the report to increase the volume of foreign direct investment flows in the local market to about 11.7 billion in the current fiscal year against 8.6 billion dollars in the last fiscal year 2022 / 2021 to rise to 14.9 billion in the next fiscal year (2023 / 2024) and 16.5 billion in 2025 / 2024.
According to the Central Bank of Egypt ’ s forecasts issued in its statistical bulletin for May, the proportion of net foreign direct investment in GDP declined to about 1.3% in the fiscal year 2020 / 2021 compared to 2% in the fiscal year 2019 / 2020, adding that it was 2.7% in the fiscal year 2018 / 2019 and 3.1% in the year 2017 / 2018.
Economist Hani Geneina predicted that the value of net foreign direct investments in the local market will exceed 10 billion dollars in the coming period, due to several different factors, including the decline in the prices of shares of companies in the stock exchange and the exchange rate of the pound against the dollar.
However, Egypt was the second largest recipient of foreign direct investment in the African continent, he said, adding that recent pledges from Gulf countries to invest about $22 billion in various sectors will boost foreign direct investment in the future.
The number of new green projects in Egypt has more than tripled to $5.6 billion, according to the UNCTAD report, pointing out that for example, the UAE real estate company Reportage announced a real estate project worth $1.5 billion.
According to the report, the volume of foreign direct investment flows to North Africa declined by 5% to $9.3 billion last year.
Geneina told Al-Mal that the flows of foreign direct investments to the markets are divided into three types, the first is the acquisition of one company on another by more than 10%, pointing out that this investment happened last fiscal year, such as the acquisition of the UAE Holding “ADQ ” on several Egyptian companies, pointing out the importance of this type of investment, but it is not very useful in the list of foreign investments.
This type of rapid investment is encouraged by the decline in both stock prices on the stock exchange and the exchange rate of the pound against the dollar, as well as the recent government stimulus measures that included the implementation of the state ownership document.
The document of state ownership announced by the government in mid-June revealed the most prominent sectors that will witness the stabilization or reduction of government investments (while allowing the participation of the private sector), a number of activities in the transport, education, mining, real estate, electricity, telecommunications and sports sectors.
Geneina said that the second type of flows is the reinvestment of a foreign company present in the market for its profits again, pointing out that this type is classified in the balance of payments as foreign direct investments.
He added that the most prominent local sectors that will go to this type of investment is oil and gas, due to the high value of its profits achieved last fiscal year, and will therefore reinvest its large financial surpluses during the current fiscal year.
He pointed out that the third type of investment is the most difficult, which is the establishment of a new company or project from the beginning, and the employment of new workers, pointing out that for example, Dana Gas announced that it will expand its operations implemented in the local market.
This area is likely to witness an increase during the current fiscal year, especially in the oil and gas sectors and related sectors, namely petrochemicals and fertilizers, especially by Gulf investments in light of the features announced recently by the government, namely the state ownership document, the gold license, as well as the large financial surpluses they have, which motivates them to invest in the local market.
In mid-May, Prime Minister Mostafa Madbouly announced a number of concessions on the industrial sector, most notably the issuance of the golden license for some projects, pointing out that it will be granted once and include three areas as a start, namely green hydrogen, electric car manufacturing and infrastructure, seawater desalination projects and renewable energy.
Geneina stressed the importance of the government encouraging foreign companies to reinvest their profits in the local market instead of transferring them to parent companies abroad by providing incentives to urge them to take this step.
According to the latest UNCTAD report, Mozambique ranked third in the list of foreign investment flows to 15 African countries last year, and its inflows rose by 68% to $5.102 billion compared to $3.035 billion in 2020, while it recorded 2.212 billion in 2019.
Nigeria ranked fourth on the list, attracting inflows of 4.844 billion over the past year, an increase of 103 percent from the previous year, the data added, adding that it recorded 2.385 billion in 2020 and 2.305 billion in 2019.
Ethiopia followed in fifth place, and foreign direct investment inflows increased last year by 79% to $4.259 billion compared to $2.381 billion in 2020.
In the sixth place came « Congo » with the volume of flows of $3.691 billion, a decline of 8% from its value in 2020, and recorded 4.016 billion dollars, followed by Ghana in the seventh place in the list and increased flows by 39% to reach 2.614 billion dollars during 2021 compared to 1.876 billion in 2020.
According to data from the UNCTAD list, foreign direct investment flows in Senegal jumped by 21% to 2.232 billion against 1.846 billion dollars in the previous comparison period.
According to the report, the value of flows to Morocco increased by 52% last year to $2.153 billion, and a major international financing deal was announced there, a $20 billion construction project for a 3,800km transmission line to the UK with a capacity of 3.6 gigawatts, sponsored by English company Xlinks.
The Democratic Republic of the Congo ranked 10th on the list, with investments up 14% to $1.870 billion compared to $1.647 billion in 2020.
Gabon came in eleventh place, with direct investment flows falling by 5% last year to record 1.635 billion dollars compared to 1.717 billion in 2020, followed by Uganda, with flows rising by 31% to 1.142 billion dollars compared to 874 million in 2020.
Tanzania ranked 13th, with foreign investment up 35 percent in 2021 to $922 million compared to $685 million in 2020.
According to the bulletin, investment flows in Algeria decreased by 24% last year to $870 million compared to $1.143 million in 2020, pointing to the decline of investments in Tunisia to $660 million compared to $652 million in 2020 to be ranked 15th.
Esraa Ahmed, a macro-economic analyst at the investment bank “Ahly Pharos ”, agrees with Geneina ’ s opinion as she expects the volume of net foreign direct investment in Egypt to rise to about $10 billion during the current fiscal year (2022 / 2023), up from levels that will not exceed $7 billion in the fiscal year ending 2021 / 2022.
She added that this rise is driven by the Gulf investment flows that have been announced recently, and the acquisition deals that we see are witnessing activity during the current period.
There are other factors that may prevent net foreign direct investment from rising to larger numbers in the near future due to the continuation of the war in Ukraine and its repercussions on the global economy.
According to Ahmed, these factors are the economic situation of the European Union, which is an important partner for Egypt in terms of trade and investment, in addition to the general reluctance globally to risk starting new projects, and the prevailing outlook for emerging markets and the risks of their currencies.
On the sectors that may witness foreign inflows during the coming period, she said that the most prominent of them are clean energy, new infrastructure driven by the expansion of the state in this field, in addition to digital financial services, and some branches of manufacturing industries.
For his part, Numan Khalid, a macro-economic analyst at Arqaam Capital, said that the current circumstances in the world prevent the possibility of predicting the volume of foreign direct investment flows in the local market during the coming period.
He added that most of the investments come from the Gulf market, especially from Saudi Arabia and the UAE, pointing out that these two countries have benefited greatly from the recent increases in oil prices, and thus have a great financial solvency through which to invest in surrounding countries, especially in Egypt, which is one of their target markets.
He pointed out that health, hotels, real estate and the financial sector will witness an increase in the volume of investment flows to them during the coming period.
During his participation in the Qatar Economic Forum last June, the Minister of Finance, Mohamed Maait, looked forward to increasing the volume of Gulf investments with the transformation of their deposits in Egypt into real investments that benefit from the promising development opportunities available in various fields.

Which African countries are driving the venture capital ecosystem?

Mauritius and Rwanda have emerged as attractive destinations for foreign investment due to their stable business environments and regulatory frameworks, with Mauritius leading in per capita wealth and Rwanda showing strong growth in private wealth.

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Content: Archive / Global News
World Today – Two small countries driving strong growth in Africa ’ s private wealth
You are now following the news of two small countries driving strong growth in Africa's private wealth from the World News section and now we leave you with the full details
MOHAMMED, Abu Dhabi, March 4, 2023 09: 22 PM – Rwanda and Mauritius combined account for less than 5 percent of Nigeria ’ s GDP, but the two small countries are driving strong growth in private wealth in Africa which is expected to rise to $3 trillion by 2031 from the current 2.1 trillion.
According to Henley Global Consulting ’ s Africa Private Wealth Report, Africa ’ s smaller and better-regulated economies are fast becoming centres of wealth and home to more millionaires on the continent.
Private wealth in Mauritius is expected to grow by 80 percent over the next 10 years, compared with 60 percent for Rwanda.
Great for Mauritius.
The number of high net worth individuals in Mauritius will reach more than 8,000 by 2031, making it one of the fastest attracting markets for high net worth individuals in the world, along with Australia, New Zealand, Switzerland and Malta.
In 2022, Mauritius became the first African country in terms of per capita wealth, due to the significant growth in the number of wealthy people who have flocked to it in recent years, taking advantage of the easy environment to do business, with Mauritius ranked 13th globally in the latest World Bank report on the indicators of the business environment; and ranked by the New World Index as the safest country in Africa.
Adult Retreat
As small countries attract more wealth, countries that have historically been the epicenter of private wealth in Africa are experiencing a steady exodus of millionaires.
Over the past 10 years, about 4,500 people with more than $1 million have left South Africa.
Although South Africa remains a major bastion of wealth in Africa, with a strong market for luxury real estate and wealth management services, it has faced significant economic and security challenges in recent years.
Of the 2,668 billionaires in the world, 15 are born in South Africa, but only 5 still live there.
Nigeria, Africa ’ s largest economy, has seen a sharp decline in total wealth, having suffered in recent years from high unemployment, corruption and over-reliance on oil exports.
Positive outlook
The outlook for private wealth on the continent is largely positive, as African countries have become less reliant on extractive industries, and business conditions continue to improve in many countries.
On the other hand, rapid population growth is a magnet for financiers looking for larger consumer markets.
Khaya Munzima, editor-in-chief specializing in economic affairs at the South African Broadcasting Corporation, believes that the continent has a lot of potential that helps to grow private wealth, especially in the central sectors that include agriculture, mining, information and communications technology, real estate and others.
“Africa is the second largest continent in the world with a population of 1.2 billion people, which is important for consumer activities that attract private wealth. ”
“The global economy is so interconnected that it is undeniable that the impact of the Russian conflict in Ukraine has been enormous on Africa, and there is an urgent need to pay more attention to the development of the financial sector, which is a key pillar of private capital. ”
Challenging the business environment
For experts, the African countries best able to improve the business environment will be the most profitable for the most part.
The World Bank estimates that of the 35 least business-friendly countries in the world, 27 are in Africa.
In this context, experts point to several challenges that hinder financial flows to many African countries, including corruption, bribery and extortion, as well as security and political instability.
Investment consultant Khea Sithol says some African countries are treating foreign firms as tools to absorb the crises they face.
“They stalk and blackmail foreign companies when they feel they need more money, hard currency, or more taxes to run parts of the country. ”
The economic system in many African countries poses a real challenge to the wealthy, as the legal framework governing investment relations is linked to the survival or demise of power in a highly volatile political environment.
Important indicators
136,000 people in Africa have assets of more than $1 million, of whom about 7,000 have assets of more than $10 million and 305 have assets of more than $100 million.
21 individuals in Africa have net assets of more than $1 billion, most of whose investments are in real estate, mining, telecommunications, luxury goods trading and agriculture.
39,000 South Africans own $651 billion in South Africa, of which $370 billion is concentrated in Johannesburg and Cape Town, the two richest cities in Africa.
• 27% decline in private wealth in Nigeria over the past 10 years, and 10,000 private Nigerians currently own about $228 billion.
We hope to be able to convey the full details of two small countries that are driving strong growth in Africa ’ s private wealth.
In God ’ s care and protection.
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West Africa is experiencing significant growth in foreign investment, driven by initiatives such as the West Africa Trade & Investment Hub, which facilitates private sector productivity and competitiveness in industries like green energy, hospitality, and agriculture.

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Content: There were 1,560 press releases posted in the last 24 hours and 222,474 in the last 365 days.

Financially facilitating extra-ordinary businesses to participate in the Economic Boom of West Africa

Barika and Kraft, Dubai based financier talks about unprecedented opportunities that businesses face during the economic prosperity of the West African Region.

“Across our corporate base globally the interest in Africa is high and growing, and I would say it is about the level that it was in Asia 30 years ago.”
— Dominic Barton, global managing director of McKinsey & Company
DUBAI, UNITED ARAB EMIRATES, August 18, 2022 /EINPresswire.com/ -- As West Africa’s population booms, its economy continues to expand, the opportunities for businesses to trade across the region are vast. The rising need economy has presented various opportunities across all industries in West Africa. Previously an agriculturally driven economy is now facing a transition. Majority of the newly established businesses are catering the growing needs of the people of west Africa, which include industries such as Hospitality, Healthcare and Banking.

One of the catalysts and driving forces for this economic can be seen from active participation of the West Africa Trade & Investment Hub (Trade Hub, which is a 5-year, $140 million trade and investment facilitation activity designed to improve private sector productivity, profitability, and competitiveness in West Africa through market-based approaches. The West Africa Trade and Investment Hub is a one-stop shop that partners with banks/financial institutions to provide financial support and business development services, capacity building, and best practices with the aim of making businesses viable and export ready, through the African Growth Opportunity Act (AGOA).

One of the largest economies in West Africa, Nigeria has seen significant surge in Energy usage. The government has been looking at alternate sources of energy such as Solar & Waste-to-Energy plants which has led to the inception of green power projects across the region. Barika and Kraft has been actively participating in this sector with a multitude of projects securing Seed-funding under the patronage of Barika and Kraft.

Apart from Nigeria, another nation observing a significant spike in economic prosperity is Ghana. Consumer expenditure has seen a large growth which is an early sign of nation-wide development. This west African nation is seeing a remarkable growth in exports as their dominant industry being Agriculture has undergone immense technological advancements which has benefited local farms to increase their yields. A lot of entrepreneurs are capturing the opportunity of being the first mover to establish/grow their presence in Ghana and Barika and Kraft has been actively reviewing opportunities of participation.

A representative from Barika and Kraft has informed us that there are a magnitude of projects currently being presented on a daily basis. Barika and Kraft focus on sourcing financial resources to the best of the projects that present their competence. Current projects that Barika and Kraft participate in include Green Energy, Hospitality, Fin-Tech, and Agriculture.

Barika and Kraft is a Dubai-based company providing financing services to global clients. More information is available by visiting its website at www.barika-kraft.com or email: info@barika-kraft.com

VALERY GARCIA
BARIKA AND KRAFT
vg@barika-kraft.com
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What are the outcomes of increased agricultural investments in Africa?

What trends are emerging for African startups in 2022?

Kenya, Nigeria, and Ghana are among the fastest-growing regions for foreign investment in Africa, with Kenya and Nigeria attracting investments in technology and digital transformation, while Ghana is recognized as a tech hub with growth in financial services and agriculture exports.

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Content: Optimists talk about Africa as the next economic frontier

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BY DELIA DE VILLIERS

For years Africa has been shrouded in controversy when it comes to its future potential. The optimists talk about Africa as the next economic frontier, while the sceptics point to a low growth rate, poverty and conflict as key challenges standing in the way of notable development.

Yet, the continent has grown its economy by around 5 percent a year over the past decade, is as urbanised as China and has as many cities as Europe with a population of more than one million, according to Future Agenda.

The World Bank reports that sub-Saharan Africa is “home to more than 1 billion people, half of whom will be under 25 years old by 2050”, suggesting that the workforce of the future is based here. They go on to say that Africa is a “diverse continent offering human and natural resources that have the potential to yield inclusive growth and eradicate poverty”.

While potential is not a measure of performance, what is productive is to consider the motivations of businesses opting either to enter the African market or expand operations on the continent. And that’s notwithstanding the challenges, or as Shaw Mabuto, partner at private equity firm Spear Capital, puts it: “While there are undoubtedly risks in Africa, they are well known and understood. Investors can mitigate for them.”

Spear Capital is particularly excited about the opportunities in the ESG (environmental, social, governance) space in Africa. “There are many businesses that have been able to thrive in spite of the prevailing environment and lack of government support. With the right backing, companies across the continent can grow successfully while at the same time making the world a better place and providing returns to their investors,” Mabuto says.

Google’s recent announcement of plans to invest $1 billion (R15.6bn) to support digital transformation in Africa is another very positive indicator of the potential of the continent. The investment, which was announced in October 2021, will be used to enable affordable internet access and building helpful products, for investments in entrepreneurship and technology, as well as to empower businesses as they continue or embark on their digital transformation.

This positive sentiment about Africa’s potential is echoed by a number of businesses who have chosen to expand their operations on the continent.

Picking your next market is key

When SweepSouth decided to scale their business across the African continent in 2020, they chose Kenya as the first territory to launch their on-demand home services model outside of South Africa’s borders. Three months ago they started operations in Nigeria, and plans are now afoot to expand further into Africa.

“There are so many factors that go into choosing a new market, so we decided to look at countries where people experience the same sort of home-care needs South Africans required when SweepSouth was started,” says Aisha Pandor, SweepSouth chief executive.

Kenya and Nigeria were obvious choices, representing big-market regions with a high growth opportunity, ever-increasing internet penetration and digital literacy, and the potential for positive impact on employment, education and economic growth via smart, scalable technology solutions.

“Kenya appealed to us because it felt like an in-between in terms of culture, market segment and dynamics, and also smartphone and internet penetration when compared with West Africa. And Nigeria is a really exciting new venture that we hope will serve as a base for further expansion into the West African region,” says Pandor.

West Africa, too, is increasingly recognised as an area of economic and growth interest for businesses looking to get a foothold on the continent.

Integrated PR and marketing agency Irvine Partners recently opened an office in Ghana in response to an increasing number of their global clients needing support there. The agency already has wholly owned offices in South Africa, Kenya and Nigeria, and has realised the potential of this West African country.

“Most of our clients’ interest in the region stems from Ghana’s position as a tech hub within sub-Saharan Africa and its growing financial services industry, but we’re also seeing many other industries looking to invest in and expand into the country. Strategically, it makes a lot of sense for us to have a presence in the country and we’re optimistic about its potential,” says managing director Hayley van der Woude.

Beyond the obvious

Importantly, the interest in Africa extends beyond the traditionally popular economic areas such as Lagos, Nairobi and Accra, with Mauritius serving as a prime example of potential beyond the obvious. It is currently the top-ranked economy in sub-Saharan Africa, according to the World Bank’s Ease of Doing Index and is recognised for offering a sound political and economic environment that strongly encourages investment thanks to a sophisticated banking system, a favourable tax regime and low inflation.

These are among the main reasons.

The Business Exchange (TBE), a South African-launched serviced office offering, not only expanded operations to Mauritius but also designed an investment opportunity for others with their sectional title shared office investment that offers a safe and affordable way to get into this bustling market.

“Mauritius, in our view, is fast becoming one of the hottest investment hubs on the continent. Major international brands, including Samsung, Broll, Expedia and NBA (North America’s National Basketball Association), are based at our serviced office space there, which speaks to the interest in the location and offers an indication of its dynamism as a business destination,” says David Seinker, the founder and chief executive of TBE.

Embracing innovation

Lastly, but certainly very significantly, when it comes to businesses where customer-centricity is key, such as banking and telecoms, African players compete more effectively than their international counterparts, according to a finding in the Boston Consulting Group’s digital maturity index.

“It’s also hardly surprising that these are two sectors where Africa has led the world when it comes to technology-led innovation,” says Ngadi Job Goshi, the general manager at Liferay Africa. “Ultimately, while Africa may be less digitally mature than other markets, there can be no doubt that businesses on the continent are unafraid to embrace technology and innovation. And, in the customer-centric ways in which they’ve done so, despite facing adversity and strong headwinds, there are lessons for the rest of the world in the tenacity and ingenuity birthed and nurtured in the African soil.”

Delia de Villiers is the senior account manager, Irvine Partners.

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What trends are emerging for African startups in 2022?

Namibia is emerging as a promising investment destination, with initiatives like the Namibian Investment Residency Program attracting foreign investors through incentives such as tax benefits and residency opportunities.

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Content: Henley & Partners: Invest in Namibian real estate, get residency
St Julians, MALTA
LONDON, March 02, 2023 (GLOBE NEWSWIRE) -- The Namibian Investment Residency Program is the latest program for global investment migration and the second choice for investment migration to Africa.
The program was launched by Henley & Partners, a global leader in residency and citizenship planning.
The Namibian government is actively seeking foreign investment to promote economic growth and diversification in the country.
The program offers numerous opportunities for international investors interested in establishing and growing on the continent, including tax incentives, financing and a one-stop shop for international companies.
An approved investor who invests at least $316,000 in a new luxury eco-friendly property in Walvis Bay, President ’ s Links Estate (with golf course), will receive a renewable work permit for five years, with the right to live, do business and study in Namibia.
Dominic Volek, Group Head of Private Client at Henley & Partners, said: “We are delighted to launch this innovative new residential project, offering our clients new investment options in Africa.
With its attractive scenery, attractive tax system and friendly business environment, Namibia has become an ideal investment choice for international entrepreneurs, high net worth individuals or retirees.
Namibia is home to one of the world ’ s largest natural and wildlife resources, and this unique coastal property project offers fewer than 600 properties.
So if investors want to take advantage of this opportunity and grab a limited number of seats, they need to act quickly to get residency in this country, "he said.
One of Africa's fastest-growing private wealth markets
According to the Africa Wealth Report, published by Henley & Partners in partnership with New World Wealth, the continent currently absorbs $2.1 trillion in private wealth, which is expected to grow by 38% over the next 10 years.
Namibia is poised to become one of Africa ’ s fastest-growing markets in the future.
It is predicted that in the next decade (to 2032), the number of local high net worth individuals (people with assets of $1 million or more) will grow by more than 60%.
According to statistics compiled by New World Wealth in December 2022, Namibia ’ s total investable wealth is as high as $26 billion.
The average wealth (per capita wealth) of Namibians is US $10,050, ranking third in Africa after Mauritius and South Africa.
The country is home to about 2,100 high net worth individuals and three billionaires (with assets of $100 million or more).
In order to attract foreign investment, the government has made significant improvements in its tax system in recent years.
Namibia has a revenue source-based tax system whereby the Government usually taxes only the income earned by foreign residents in the country.
What ’ s more, Namibia ’ s tax rates are relatively competitive compared to many other emerging markets, particularly neighbouring countries such as South Africa.
Namibia ’ s income tax rate is as high as 37 per cent, and even more striking is that there is no capital gains tax, property tax, gift tax, inheritance tax or net wealth tax / net worth tax.
The trend of diversification of residence is unprecedented.
At present, the President's Links Estate Namibia Investment Residency Program is the only investment avenue opened.
Thomas Scott, Group Head of Real Estate at Henley & Partners, said that international real estate has long-term investment value and is therefore always a reliable investment option for investors around the world.
“Real estate related investment immigration programs, such as our Namibian investment products, have more advantages, both to facilitate investors to travel freely around the world, but also to expand the investor ’ s personal rights as a resident or citizen of other countries, to provide investors and their families with more convenience, so that investors can choose where to live, work, study, retire and invest. ”
The potential benefits of this investment over the life of the product include the core value of the asset, the rental yield, as well as being an effective hedge against regional and global volatility and an international ‘ safe haven ’. ”
Volek pointed out that in the past few years, the demand for citizenship through investment has continued to grow significantly.
“Investment migration is generally attractive to affluent families because of the many benefits, including diversity of residence, greater global mobility, access to world-class education and health care, and back-up planning in times of turmoil. ”
No matter where you are born and where you currently live, wealthy investors can prepare themselves and their families for the future through investment immigration programs such as the New Investment Residency Program in Namibia. ”
Contact information
Sarah Nicklin
Head of Group Public Relations
sarah.nicklin @ henleyglobal.com
Mobile: + 27 72 464 8965

What trends are emerging for African startups in 2022?

Renewable energy, agriculture, and logistics have emerged as primary industries attracting foreign investment in Africa, with countries like Mauritania and Namibia focusing on green hydrogen and agricultural technology to enhance crop production and sustainability efforts.

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Content: 00: 00
Expo 2020 Dubai Today
UAE seeks to boost investment flow with African countries at Expo 2020
His Excellency Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, held a series of meetings with ministers, officials and businessmen from African countries to discuss ways to stimulate trade and investment flows between the UAE and the continent.
During the meetings, Dr. Al Zeyoudi reviewed the economic opportunities and potential of the UAE-Africa partnership in sectors such as renewable energy, agriculture, minerals and logistics.
During the meetings, Dr. Al Zeyoudi briefed the ministers on the developments in the UAE ’ s economic environment during the past phase, including the 50 projects, new economic legislations and qualitative initiatives launched by the UAE to shift to a new economic model based on knowledge and characterized by flexibility, competitiveness and sustainability.
In his meeting with Dr. Chilichi Kabuibwe, Secretary General of the Common Market for Eastern and Southern Africa (COMESA), Al-Zeyoudi pointed to opportunities to increase the current volume of trade exchange between the UAE and the 21 African member countries of COMESA through greater cooperation in areas such as logistics and advanced technology.
In his meeting with H.E. Ntabazi Harriet, Minister of State for Trade of the Republic of Uganda, Thani Al Zeyoudi focused on investment opportunities in agriculture, minerals and retail sectors, and discussed the possibility of investing in irrigation systems and agricultural technology that can enhance the production of key crops such as coffee, cocoa, tea, cotton and flowers.
In a related context, the renewable energy sector, specifically green hydrogen, was the main focus of the discussions that took place during her meeting with Her Excellency Naha Bint Hamdi Ould Meknes, Minister of Trade, Industry, Handicrafts and Tourism of Mauritania, and Her Excellency Lucia Ibombo, Minister of Manufacturing and Trade of Namibia. for production.
H.E. Al Zeyoudi also held constructive talks with H.E. Sikai Nzinza, Minister of Industry and Trade of Zimbabwe; H.E. Carlos Alberto Fortis Mesquita, Minister of Industry and Trade of Mozambique; H.E. Maween Diggs, Minister of Trade and Industry of Liberia; H.E. Thabiso Paul, Minister of Trade and Industry of Lesotho; H.E. Edward Henga Sande, Minister of Trade and Industry of Sierra Leone; H.E. Ndir Nigel Hahel Mead Hassan, Minister of Finance, Economic Planning and Trade of Seychelles, David Osiani, Secretary General of the Ministry of Industrialization, Trade and Enterprise Development of Kenya, and Admaso Tadesse, President of the Trade and Development Bank of Kenya.
H.E. Dr. Thani Al Zeyoudi stressed that Africa is one of the most attractive markets in the world for foreign direct investment, as it enjoys huge investment opportunities in vital and strategic sectors for the UAE such as renewable energy, agriculture and logistics.
He added: “The UAE seeks to strengthen economic, trade and investment cooperation with the African continent, especially as there are common visions between the two sides to achieve sustainable development through future-oriented projects such as green hydrogen, renewable energy and the deployment of agricultural technology solutions, which was highlighted during joint meetings with ministers and senior officials. ”
Al Zeyoudi said: “The UAE continues to implement its ambitious plans to establish itself as a key global gateway for regional and global trade and investment flows. The UAE also provides opportunities for African exporters to access new markets, thanks to its advanced infrastructure linking the country through ports and airports to more than 400 cities around the world, as well as the legislative and regulatory environment that stimulates business and investments. ”
Al-Zeyoudi expressed his aspiration to continue meetings and discussions with ministers and senior officials from African countries to bring trade and investment relations between the UAE and African countries to new heights of growth and prosperity.
His Excellency Thani Al Zeyoudi ’ s series of meetings with ministers and senior officials from Africa are part of the UAE ’ s efforts to expand trade relations with the world, as part of the UAE ’ s ambitious strategy for the next 50 years to build a more dynamic and competitive knowledge-based economy.
Talks have been announced in recent weeks to reach a comprehensive economic partnership agreement between the UAE and Indonesia and India, and a joint statement of intent between the UAE and South Korea on a comprehensive economic partnership agreement between the two countries was announced on Sunday.
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What are the outcomes of increased agricultural investments in Africa?

The mining sector, particularly the extraction of minerals like lithium, cobalt, and copper, has seen significant foreign investment due to its critical role in renewable energy technologies, with countries such as Zimbabwe, Zambia, and the Democratic Republic of Congo being key destinations for these investments.

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Content: The “green ” energy transition announced by the European Union in the name of combating global climate change requires a huge amount of cheap resources to deploy a network of renewable energy sources (RES).
Therefore, environmentally concerned politicians not only of the EU, but also of the United States, once again turned their eyes to Africa, where China is already in full control.
Bidding for Africa
Ivan Shilov © IA REGNUM
These countries are placing a big bet on Africa, hoping to meet the growing demand for renewable energy and at the same time promising the continent fantastic economic growth.
It is possible to buy green electricity from African countries: according to current estimates, solar power generation is 10 TW, hydropower - 350 GW; wind power - 110 GW.
Mozambique is considered one of the greenest countries in the world - it receives 81% of its electricity from hydropower.
However, much of Africa's energy resources remain largely untapped.
This is where foreign investors put their feet.
With the help of international consulting and investment agencies, they estimate that Ethiopia has solar and hydropower capacity of more than 60,000 MW, while in South Africa, the potential for wind power is estimated at 67,000 GW.
Having adopted the rules of the game of potential investors and decided that renewable energy is the source of their enrichment, some African countries have set themselves goals in the field of green energy development.
By 2030, Ghana aims to increase the share of its national “green ” energy balance from 42.5 MW to 1,363 MW, Angola is ready to use RES by 70% by 2025, and Senegal is doing everything possible to increase the share of RES in the country ’ s energy balance to 30% by 2030.
Windmills
Myriams-Fotos
The Paris climate agreement has forced many African governments to take the climate agenda more seriously, leading to the inclusion of RES provisions in national legislatures, including reforms aimed at encouraging foreign direct investment and private business participation in the process.
Paradoxically, for all the attractiveness of the African continent for “green ” investors, African countries are experiencing an energy crisis: currently more than 600 million people do not have access to electricity, and more than 900 million people do not have access to clean fuels for cooking.
Energy demand is growing every year across the continent due to population growth, with developing countries expected to account for more than 90% of the world ’ s population growth by 2050.
Electrifying their own territories has become a priority for many African governments, which requires significant investment, and here the whole calculation is on foreign investors.
It should not be forgotten that Africa is the second largest mining industry in the world, with many countries of the continent dependent on exploration and mining.
Already, the “green ” energy transition is orienting this industry towards the extraction of elements necessary for the production of electric vehicles, batteries and other clean energy technologies.
Although nearly 50% of South Africa ’ s export value comes from the development and trade of fossil fuels, the main focus is shifted to nickel, copper and cobalt mining – these minerals serve as important components in renewable energy technologies, and demand for them is expected to grow exponentially in the coming decades.
Countries rich in copper and nickel, such as the Democratic Republic of the Congo, Zimbabwe and Zambia, are likely to be especially loved by foreign investors.
To understand what promises these investors entry to the continent, it is enough to study the latest data on the size of mineral deposits, so necessary for the production of renewable energy.
Zimbabwe boasts the world ’ s second largest platinum deposit (2.8 billion tons) and rich chrome ore deposits (10 billion tons), as well as Africa ’ s largest lithium deposit.
The mining sector of the country is estimated at $12 billion a year.
With the growing demand for batteries, Zimbabwe is poised to become one of the world ’ s largest exporters of lithium, and is currently developing four major industrial projects.
Lithium
Dnn87
Another contender for an investment boom is Zambia, which has about 6% of the world ’ s proven copper reserves, as well as some of the richest deposits in the world, making the country the seventh largest copper producer in the world.
In addition, Zambia has prospects for uranium, gold, coal and diamonds.
The resources of the Democratic Republic of the Congo are estimated at tens of trillions of dollars - these are unused reserves of gold, cobalt, diamonds and high-quality copper.
In 2019, this South African country produced a total of 100,000 metric tons of cobalt, accounting for 70% of global production.
The country boasts some of the highest quality copper deposits in the world.
According to an E & Y report titled “Africa ’ s Attraction Program, ” Africa ’ s young, vibrant population and significant economic potential make it a tidbit for foreign investors.
However, the extraction of minerals and the construction of power plants does not mean that the lives of the African
Rather, it means more exploitation of cheap labor and enrichment of decision makers on how to dispose of the natural resources of their States.
Read earlier in this story: Africa is waiting for the irreversible consequences of the European green course
Read the development of the plot: Copper mining companies in Zambia plan to attract to gold mining

Technology-driven sectors, including fintech and pharmaceuticals, are increasingly attracting foreign investment, with African fintech revenues projected to reach $30 billion by 2025.

Title:

Content: When asked for his views on diversification as a strategy for portfolio management, Warren Buffett responded, “diversification is protection against ignorance”. Instead of a diversified portfolio, the Oracle of Omaha famously prefers a concentrated one, composed of a few sectors he has rigorously studied.

The UK’s investment strategy for the African continent is seemingly straight out of the Buffett playbook. As of 2020, the UK holds $65bn in total foreign direct investment (FDI) stock in Africa, second only to China. The vast majority of the portfolio is in oil, gas, mining and financial services.

In 2022 five new oil and gas deals worth £2.1bn were struck at the UK-Africa summit. In stark contrast, just £161m (8% of the total summit commitments) were invested in clean energy. One may agree with the UK’s strategy, suggesting that there aren’t many other high-yield investments to be made other than in oil majors, legacy miners and grey-haired banks. And besides, who would disagree with Buffett’s dictum? He is the sixth-wealthiest person in the world after all.

The truth of the matter is that Buffett would not be as wealthy as he is without adapting to changes in market trends, technologies and geopolitics. In May he sold his remaining stake in chip manufacturer TSMC due to geopolitical considerations (TSMC is based in Taiwan). A concentrated portfolio does not mean a stagnant one. It is this insight that the UK is overlooking, setting itself up to miss opportunities in those new industries rapidly taking shape across the world’s youngest and most promising continent.

Two trends are shaping markets across the continent. One of these is the adoption of financial technologies and the other is increased demand for healthcare, a consequence of Africa’s population boom and rising standards of living.

Fintech sector

McKinsey, a consultancy, estimated that revenues in the African fintech sector could surge eight times their current value to $30bn by 2025. Between 2020 and 2021 alone, the number of tech start-ups tripled to 5,200 companies. In 2021, seven of the 10 newly minted African unicorns (private companies valued over $1bn) are fintechs. As more Africans get connected and as digital identification verification models mature, fintechs will scale and profits will follow.

The second sector is pharmaceuticals. As Africa’s population grows and incomes rise, more money will be spent on healthcare. Within this sector, the Covid-19 pandemic laid bare the worrisome state of Africa’s vaccine and therapeutic manufacturing capabilities. Estimates vary, but some assessments forecast vaccine demand to double in volume from about 1-billion doses now to more than 2.7-billion doses by 2040. Industries adjacent to pharmaceuticals such as logistics, packaging and protective equipment are likely to cash in on increased private and public healthcare expenditure.

There are some positive signs that the newly revamped British International Investment (BII), formally the Commonwealth Development Corporation, is adjusting its investments because of these market trends. In 2020, the BII made a $150m investment in Kelix bio, a pan-African pharmaceutical platform focusing on manufacturing and marketing. It also executed a $20m, four-year structured credit deal with Moove, a fintech company that provides customers with cheaper access to vehicles.

Risk premium

These steps are positive but they are small. Inward FDI for Africa remains pitiful. Last year set a record for the continent, bringing in $83bn. To put this in context, the City of London in 2020 hit $831bn in FDI (10 times that of a continent of 54 countries), according to the Office of National Statistics.

What to make of this all? At least two insights. First, the UK should look to new sectors, taking bold bets in companies leading the fintech and pharmaceutical sectors. The second insight is that Africa’s risk premium is overpriced. There is opportunity beyond the industries of the 20th century; one just needs to look for them.

• Nott works for a venture facility for public benefit and is based in London. He writes in his personal capacity. You can follow his writing on Twitter @TheAfricaBrief.

Picture: 123RF

What trends are emerging for African startups in 2022?

Which sectors are Chinese investments in Africa focusing on?

Energy and gas supply projects have emerged as major recipients of foreign investment in Africa, with new field projects announced in 2022 valued at $120 billion, alongside substantial investments in construction and extractive industries totaling $24 billion and $21 billion respectively.

The African Continental Free Trade Area (AfCFTA), which creates a $3.4 trillion borderless market, is expected to significantly boost foreign investment by reducing trade barriers and fostering inclusive continental growth.

Title:

Content:
BusinessDay

Opportunities in volatile trade environment, the AfCFTA perspective

Trade Finance is the fundamental driver of economies around the globe. Regardless of economic cycles and the implications of macro events such as the financial crises in 2007 and 2008, Brexit, the economies of all countries around the world continue to be driven by parties trading commercially in exchange of goods.

Therefore, smooth settlement of commercial contracts and a smooth exchange of goods to satisfy the demands of the end consumers is paramount.

The outbreak of the COVID-19 pandemic caused a huge disruption to all sectors of global economy most especially international trade in goods and services, which dipped by about 10 percent in 2020 because of the lockdown in many parts of the world and the disruption in production, supply chain and consumption.

Further effects of the COVID-19 were the limitations in the movement of goods and services as well as people, huge demurrage payments due to delays in receipt of negotiated sets of documents for clearing at the ports.

According to the United Nations Conference on Trade and Development (UNCTAD) Secretariat calculations on national statistics, it was noted that international trade began to recover slowly for a lot of the major economies during Q3’ 2020, while a noticeable general recovery happened in Q4’ 2020.

In Nigeria, a significant 57.60 percent increase was noted in foreign trade goods when comparing 2021 with 2020. This was according to the National Bureau of Statistics (NBS).

Africa’s growth in trade

The fast growth of population and markets in Africa offers businesses several opportunities despite the slow growth globally.

Investments and innovations from businesses within Africa are necessary to meet the ever-growing demand for goods and services, infrastructure gap closure, job creation and poverty alleviation.

African Continental Free Trade Area (AfCFTA) has created a borderless market worth $3.4 trillion. This would reduce contraction in growth caused by COVID-19, reduce inequality and poverty trends, and encourage an inclusive continental growth.

Africa’s current population of around 1.2 billion people is projected to reach 1.7 billion by 2030. It has been noted that 34 percent of households in Africa live below the international poverty line of $1.9 per day.

Also, approximately 40 percent of the total wealth belongs to 0.0001 percent of Africa’s population, according to a report issued by the UNCTAD. The pandemic has worsened the case of vulnerabilities and inequalities of marginalised people, leading to an additional 37 million people in sub-Saharan Africa (SSA) living in extreme poverty.

Data from the African Development Bank (AfDB) show that the continent’s current untapped export potential amounts to $21.9 billion. It is expected that an export potential of $9.2 billion would be realised through a partial tariff liberalisation plan of AfCFTA over the next five years.

Also critical is enhanced pan-African collaboration in service export, which will play a key role to deliver on the 2030 Agenda for Sustainable Development.

According to the World Bank, by 2030, the largest consumer markets will include Nigeria, Egypt, and South Africa.

Lucrative opportunities in countries like Algeria, Angola, Ghana, Kenya, Morocco, Sudan, Ethiopia, Tunisia, and Tanzania, among others in Africa. Ethiopia, as an example, is reportedly one of the fastest-growing economies in the world over the past decade, with an average annual growth of 10.5 percent GDP from 2005-06 to 2015-16

Opportunities in ICT and mobile access

The rapid diffusion of ICTs in Africa over the past decade has facilitated access to consumers in new and varied ways.

Africa is currently the fastest-growing mobile telecom market in the world, averaging roughly 30 percent increase in mobile phone connections per year since 2000, and recently overtaking Latin America to become the world’s second-largest mobile market behind Asia

SSA experienced the world’s fastest rate of new broadband connections between the years 2008 and 2015.

Also, with the introduction of many players in the telecom space, mobile data traffic is expected to increase in multiple folds between 2017 and 2022. Mobile money accounts that are active are close to 120 million users, which is over 50 percent of the global total.

This has reduced usage of traditional banking products. It is expected that this would allow companies to improve their productivity, increase transaction speed, and access other markets. It could additionally increase the continent’s GDP by 2025 by over $300bn.

Agricultural resource growth

Africa has always been known for her riches in agriculture and mineral resources. Though this has not been translated into economic growth, shared wealth, innovations and further investments can change the picture.

The sector can create exciting growth opportunities for businesses. Africa can produce what it eats and move to the top of the food value chain globally. Agro-industrialisation would add value to what is being produced.

Industrialisation in Africa

The timely intervention on the industrial development of Africa is a welcome development. Africa is probably the least diversified in the world, with minimal progress recorded over the last two decades on industrialisation.

It is suggested that African industries have the opportunity to double production to nearly $1 trillion within a decade. Three-quarters of that growth is likely to come from manufacturing to substitute imports and meet rapidly growing local demand.

Urbanisation

Africa’s urban growth is the fastest in the world. The continent’s population is projected to double between now and 2050.

It is expected that Two-thirds of this growth will happen in the urban areas. 30 years from now, the cities will house an additional 950 million people globally.

There are lots of opportunities that come with this, as well as challenges for businesses, citizens and the government of Africa.

Read also: Beyond ECOWAS, 18 months of AfCFTA yet to show in Nigeria’s exports

There is a need to revamp political development agendas and improve policy decision-making. The implications of this have lasting consequences over generations.

These trends are promoting a spike in sector developments such as in pharmaceuticals, financial services, education, healthcare and so on.

Payment solution – PAPSS

By simplifying cross-border transactions and reducing the dependency on hard currencies, intra-African trade is boosted significantly and promotes the implementation of the AfCFTA, which is a force for African governments to address their infrastructure needs as well as to overhaul regulation relating to tariffs, bilateral trade, cross-border initiatives and capital flows.

The Pan African Payment and Settlement Systems (PAPSS) is a central Financial Market Infrastructure (FMI) that supports payment arrangements for the purpose of expanding the international trade of African States, and to facilitate central bank’s economic and financial integration.

PAPSS is currently live in the West African states Monetary Zone (WAMZ) in the following countries: Nigeria, the Gambia, Sierra Leone, Liberia, Ghana, and Guinea. Engagements are ongoing with all African Central Banks and all regional payment institutions.

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What trends are emerging for African startups in 2022?

AfCFTA is projected to attract global investors seeking to capitalize on Africa's growing consumer and business spending, which is expected to reach $16.12 trillion by 2050.

Title:

Content: Global investors waiting to pour in money in Africa to firewall China

By IANS | Published: August 2, 2021 02:09 PM2021-08-02T14:09:05+5:302021-08-02T14:25:34+5:30

New Delhi, Aug 2: After a tepid inflow of foreign direct investments (FDI) into Africa in 2020 amid the ...

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New Delhi, Aug 2: After a tepid inflow of foreign direct investments (FDI) into Africa in 2020 amid the Covid-19, investors are once again warming up to the continent. According to the United Nations Conference on Trade and Development (UNCTAD), FDI flows into Africa declined by 16 per cent in 2020 to $40 billion, from $47 billion in 2019.

China, the primary investor in the continent, has also slowed down its investments into the continent leaving an opportunity for other investors.

While the UNCTAD projected FDI inflow into Africa to grow this year, it said that the slow vaccine roll-out programme is a cause for concern. According to UNCTAD, FDI to the continent is projected to grow by only 5 per cent in 2021. But analysts said Africa as an investment destination has led to "an unprecedented curiosity" among other countries, which are now aggressively looking to mute China's dominance in the continent.

"Africa is critical in the new geopolitical and geo-economic contours. The continent, with its vast natural resources, offers a ready growth platform," an analyst told India Narrative.

According to a study published by Brookings Institution last week, Africa is home to 17 per cent of the world population. However, by 2050, it will have 26 per cent of the global population 2.53 billion people. "If Africa is not successfully integrated into the global economy, there could be a major threat to global prosperity and stability," the study said, adding that by 2050, the continent will be home to an estimated $16.12 trillion of combined consumer and business spending.

The African Continental Free Trade Area (AfCFTA) – the mega trade could give a push to intra-continental investment.

Touted as one of the biggest trade deals in the world, the AfCTA aims to create a single market comprising 1.3 billion people with a combined GDP of about $3.4 trillion.

Meanwhile, the US may have woken up late in recognising the potential of Africa but is making all attempts to make up for the lost time.

The Group of Seven or G7 has already decided to support US President Joe Biden's proposal of carving out a mega infrastructure plan under the "Build Back Better World" (B3W) initiative, expected to bring in transparency and sustainability. Besides, the initiative will be carried out only in consultation with local communities.

The G7 in its meeting in June also announced that it will increase its support to the Indo Pacific and Africa. "We resolve to collaborate with partners around the world, including in the Indo-Pacific and Africa, to actively promote these shared values for the good of all," said the statement.

India too has pressed the pedal on investments in the region. Sources said that the still-born Asia Africa Growth Corridor—the mega infrastructure project that was launched in 2017 to connect Asia and Africa must be revived.

Carnegie Endowment for International Peace noted that Chinese financiers committed $153 billion to African public sector borrowers between 2000 and 2019. "After rapid growth in the 2000s, annual lending commitments to Africa peaked in 2013, the year the BRI was launched. By 2019, though, new Chinese loan commitments amounted to only $7 billion to the continent, down 30 percent from $9.9 billion in 2018," it said.

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What trends are emerging for African startups in 2022?

Major foreign companies investing in Africa include Japanese firms such as Toyota and Nissan, South Korean companies like Hyundai and Samsung, and Indian enterprises focusing on industries such as automotive manufacturing, electronics, and agriculture.

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Content: Japan, Korea and India experience to expand Africa, Taiwan and Africa entrepreneurs association
The “Taiwan-Africa Entrepreneurs Association ”, commissioned by the International Trade Bureau of the Ministry of Economic Affairs, attracted more than 130 enterprises interested in exploring the African market. The exhibition and consultation desk at the representative office showed that our company's desire to expand the African market is very hot.
The theme of the event was “The Key to Success for Foreign Investors (Japan, Korea and India) in Expanding Africa ”. The event was addressed by Wang Ximeng, Secretary General of the Foreign Trade Association, Liu William, Deputy Director of the Bureau of International Trade of the Ministry of Economic Affairs, Msibi, Ambassador of the Kingdom of Swaziland, and Chen Shu-fang, President of the Association of Taiwan Commerce. In addition, Hung Sheng Packaging General Manager Tang Jung-hung, Yi Ho Industrial General Manager Fu Yang-li, and Nam Wei Industrial Strategy Director Yang Wei-han analyze the development opportunities in Africa from their practical experience in the packaging, building materials, and textile industries.
Wang Ximeng, secretary general of the Foreign Trade Association, pointed out that in addition to the competition between Europe, America and China over the layout of the African continent, Japan, South Korea, India and other countries in Asia are committed to increasing investment and economic cooperation in Africa.
There are more than 1.3 million people of Indian descent in Africa, such as in East Africa, where more than 60% of the economic lifeline is controlled by Indians.
In addition, 18 of India's 25 newly established embassies and consulates are located in Africa, and India has become the fifth largest investor in Africa, while Japanese automobile manufacturers Toyota, Nissan, and electrical appliance giant Toshiba have already planted flags in Africa; South Korea's Hyundai, Samsung, LG and other large enterprises have also been stationed in Africa.
Through this event, we hope to help our business people to learn from foreign companies such as Japan, Korea and India, as well as African market leaders, and shorten the path to enter the African market.
Liu, deputy director of the International Trade Bureau, said that in recent years, the global economy has continued to be volatile due to changes in the international situation such as Sino-US trade frictions, global inflation, and the Russian-Ukrainian war, but Africa has shown great resilience during this period.
In addition, foreign direct investment in Africa reached US $45 billion in 2022, which has returned to the pre-epidemic level, indicating that confidence in investment in Africa has gradually recovered. In 2022, the total import and export value of Africa reached a new high in recent years, with imports reaching US $694.5 billion, up 14%, and exports reaching US $661.4 billion, up 19%. It is hoped that through the activities of the association, upstream and downstream companies in various industries can learn from each other and share their experiences, and work together to promote Taiwan-Africa economic and trade relations.
The event will be held in conjunction with AGOA, a major textile manufacturer in South China, and the representative offices of African embassies in Taiwan, Africa-related associations, and import and export banks providing trade and financial services. For more information, please visit africa.taiwantrade.com for more information.

Which countries are actively investing in Africa besides China?

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Which sectors received the most foreign investment?

French companies, including Total Energies and SPIE, are heavily involved in Nigeria, focusing on energy, solar mini-grid projects, and other industrial sectors, while over 60 French firms operate in Angola, contributing to agriculture and food production.

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Content: New Telegraph

December 3, 2023

French Companies In Nigeria Pledge Job Offers For Undergraduates

French blue-chip companies in Nigeria, including Kool- boks, Total Energies and SPIE, in conjunction with other key Nigerian companies, have pledged jobs security and other social welfare for prospective French undergraduates in Nigerian tertiary institutions in a bid to explore their creativity and innovation to seek job opportunities and in touch with French companies interests in Nigeria.

The recent French-Nigerian Chamber of Commerce and Industry (FNCCI) November “French Week” to celebrate and strengthen Franco-Nigerian business ties held at the Alliance Française in Ikoyi, Lagos had many companies with their structures and job opportunities, including Access Bank, Leadway Assurance, CFAO, YOA insurance Brokers, Lancet, Wurvicat, Allem Sarumi Nigeria Limited, Total Energies, Air France, Kool- boks and SPIE, participating in the job fair meant for various French Language students and undergraduates in Nigerian tertiary institutions.

Those who spoke at the Choose France Campaign event, included the Minister Delegate for Foreign Trade, Economic Attractiveness and French Nationals Abroad, attached to the Minister for Europe and Foreign Affairs, Olivier Becht, Procurement Lead, SPIE, Dominic Okutue, Talent Acquisition Recruitment Manager, SPIE, Fatou Drame (Ghanaian), the Co-Founder and Chief Operating Officer, Koolboks, Deborah Gael, and the President, Maryam Abacha American University of Niger, Maradi, Maryam Abacha American University of Nigeria, Kano, Franco-British International University, Kaduna, and Canadian University of Nigeria, Abuja, Professor Adamu Abubakar Gwarzo. In his welcome speech, Becht explained that promoting the French outlook through the #MakeItIconic campaign was launched by the French government in November 2023, as an international communications campaign called “Choose France”.

He said that the campaign highlighted France’s strengths in terms of industrial and economic dynamism, innovation potential, and cultural and artistic vitality, with the aim of boosting the country’s appeal. Becht said that in a bid to promote the image of a modern and open country, the French government called upon Kylian Mbappé, Philippe Starck, Thomas Pesquet and other major entrepreneurs and personalities to get the message across to the globe. He said: “The motto of the campaign is “Make it iconic” with the idea that “choosing France is banking on boldness, innovation, the passion for expression and skill”.

There’s no doubt that this message resonates in a country like Nigeria, which is known for its dynamism, its entrepreneurial spirit and the boldness of its young people.” The French Minister Delegate for Foreign Trade, pointed out that Nigeria was France’s first trading partner in sub-Saharan Africa, accounting for over 20 percent of France’s trade with the region. He stated that France was among the very top investors in Nigeria, with over $10 billion in investment stocks.

“Together, the hundred or so French companies that have permanent presence in Nigeria, in a wide range of sectors, employ over 10,000 people in the country, mostly Nigerians. “French companies are not just selling French products: they are actually investing in Nigeria’s economy and creating jobs, factories, farms and vocational training centres,” he said, add- ing that “French energy majors such as Engie or Total Energies are very active in Nigeria in the solar mini-grid industry, and contribute to the electrification of rural areas and private indus- trials clusters.”

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Which European countries lead investment in Africa?

India has emerged as one of Africa's top five investors, with $74 billion invested in sectors such as agriculture, renewable energy, and automotive manufacturing, leveraging Africa's raw materials and growing middle class.

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Content: Monday, 06 November 2023 11: 38 GMT
India Leads Change in Collaboration with Africa
(MENAFN- Al-Borsa News) Indian Prime Minister Narendra Modi has raised his country ’ s flag in Africa recently, seeking to strengthen trade and investment relations with the continent ’ s countries.
Modi began his speech at the G20 summit in New Delhi last September, announcing that the African Union would become a permanent member of the group, which would strengthen the voice of the global South.
The move followed a decision by India and the four other current BRICS members the month before the summit to admit Egypt and Ethiopia, along with four other countries, into their ranks.
These examples illustrate how India is playing an increasingly active role in international diplomacy on behalf of Africa and the Global South.
At the same time, New Delhi ’ s growing trade and investment ties with Africa illustrate how channelling funds towards the global South can not only reap financial benefits, but also drive real systemic change in environmental, governance and social issues.
Trade relations between India and Africa go back centuries, when Indian traders traveled to the eastern coast of the continent in search of precious metals and gems.
These days, India is a key driver behind the growing global recognition of Africa ’ s strategic importance.
Modi, in particular, is using the platform offered by his position to promote a better understanding of the investment opportunities Africa offers to foreign investors.
Africa has a large working-age population, a growing middle class, and a wealth of raw materials including gold, diamonds, petroleum and minerals.
As the race to secure minerals for a green energy transition gains momentum, Africa ’ s strategic importance to the global economy is rapidly being redefined, with increasing initiatives coming from the United States, Europe and China, as well as India.
For its part, India is exporting food, beverages, petroleum products, medicines, machinery and vehicles to Africa.
In fact, India has become the largest supplier of passenger cars to South Africa, with automakers in South Korea and Japan assembling vehicles in India for export afterwards.
This model is likely to be scaled up to other African countries where the middle classes seek affordable transportation for their families.
India has also become one of Africa ’ s top five investors over the past decade, with about $74 billion flowing into the continent, attracted by rich supplies of crude oil, grains and nuts.
There are still many potential areas for further collaboration and innovation in Africa and India, especially in agriculture, where a major transformation is taking place.
Agriculture accounts for about 57% of Africa ’ s jobs, and new start-ups and established companies alike are radically changing the market by offering innovative solutions that address challenges across the agricultural value chain, from creating dashboards to connecting farmers in need to financing with potential investors to digitizing trade documents to reduce the burden of paperwork on farmers.
There is ample scope for India to contribute to modernizing Africa ’ s agricultural infrastructure, increasing the efficiency of the agricultural supply chain and improving productivity.
India and Africa can work together to strengthen their agribusiness ties by channelling money into agricultural technology, which will enhance global food security, and India can have the opportunity to drive sustainable agricultural practices in Africa through its investments.
The shift to clean energy in Africa is now the focus of attention, with renewable energy becoming an emerging hub for trade between India and Africa.
India is already investing heavily in renewables and is the world ’ s third largest producer of renewable energy.
At the same time, Indian investors can support the transition towards renewable energy in Africa by financing solar, wind and hydropower projects across the continent.
By leveraging its long-standing trade relationships, India can help drive real systemic change and contribute to the achievement of global net zero emissions targets.
India and other Asian countries have already shown interest in using their technologies, skills and capabilities to actively participate in Africa ’ s green energy transition by bidding for engineering, construction and management contracts for renewable energy projects.
As the global order continues to shift, investors and businesses must head to the global South if they want to stay ahead of the curve and support international growth.
India and Africa have built the foundation for a strong and long-term business relationship, and it is time to channel investments in a strategic way to foster collaboration, innovation and shared growth between India and Africa.
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Which Asian countries are investing in Africa?

Which countries are actively investing in Africa besides China?

Europe, U.S. Japan, South Korea, India
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Equinix Inc., a NASDAQ-listed data center operator, plans to invest $390 million over the next five years to build and expand data centers in Africa, initially focusing on South Africa and the west coast.

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As reported, in the next five years, Equinix Inc. will already build all the necessary facilities.
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NASDAQ listed Equinix Inc. plans to invest $390 million to build and expand data centers in Africa over the next five years.
Initially, the company will focus on South Africa and the west coast of the continent.
However, the data center operator from California is also considering East Africa and is willing to spend more money on building or acquiring equipment in the region, Sandile Dube, managing director for South Africa, said in an interview.
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"We will continue to invest in a region where it makes sense on the continent, and we are conducting a number of studies to explore these opportunities.
The planned amount of investment includes the construction of new data centers at existing enterprises, but excludes the creation of additional markets, "Dube said.
Several tech giants, such as Amazon.com Inc., Microsoft Corp. and China ’ s Huawei Technologies Co., have also invested in data centers in Africa in recent years, given the growing demand for connectivity and data storage.
At the moment, only 1% of global data center capacity is located on the continent, which provides great opportunities for investors wishing to take advantage of the potential for regional growth, while taking on certain operational risks, such as power supply problems.
Africa is considered the birthplace of a young and tech-savvy population with rapidly growing access to the Internet, which favorably affects the industry, despite the low initial base.
Two years ago, Equinix came to the continent, acquiring MainOne Cable Co. for $320 million, and from 2023 plans to begin construction of its first data center in Johannesburg, South Africa.
“We need to have key centers on the continent, as we have in Europe.
So we started with Lagos, Johannesburg and, over time, we plan to add Nairobi, ” Dube said.
Equinix usually prefers acquisitions when entering new markets, however, in some cases, such as South Africa, the company has decided to build its own data centers, Dube said.
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Which countries are actively investing in Africa besides China?

Norrsken22, an Africa-focused venture capital firm, has raised $205 million to invest in tech startups across beacon economies like South Africa, Nigeria, Ghana, Kenya, and Egypt, targeting sectors such as fintech, edtech, and meditech.

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Content: (Bloomberg) -- Norrsken22, an Africa-focused venture capital firm, received the backing of more than 30 unicorn founders and institutions to raise $205 million for new tech investments on the continent.

The fund — which counts the likes of Skype’s Niklas Zennström, Delivery Hero’s Niklas Östberg, and Flutterwave’s Olugbenga Agboola among its investors — is seeking the next generation of “tech giants” on the continent in sectors such as fintech, edtech and meditech, said Norrsken22 managing partner Natalie Kolbe in an interview.

Investments will largely be focused on startups in South Africa, Nigeria, Ghana, Kenya and Egypt, she said.

“We have made five investments to date, including in Tyme Bank in South Africa,” said Kolbe. “We would like to build out a portfolio of about twenty investments in the beacon economies of Africa.”

Africa is home to the fastest growing and most youthful population in the world, with tech-savvy youngsters increasingly tapping their smart-phones for services from entertainment to banking.

Norrsken22 said it’s seeking to invest in the growth in tech businesses expected in Africa, that is fueled by investment in digital infrastructure and smartphone adoption on the continent, said Kolbe. In addition, urbanization and the growing need for financial and health services bring an opportunity for tech startups to scale, she said.

Other investors in the fund include Standard Bank Group Ltd., Norfund, British International Investment, he International Finance Corporation, and the US International Development Finance Corporation.

In line with the rest of the world, funding for startups in Africa has dwindled this year, in line with a slowdown globally. The continent attracted about $2.5 billion during the first half of the year, according to Briter Bridges. Another centure capitla fund, Partech, raised more than $260 million to deploy on the continent.

©2023 Bloomberg L.P.

What trends are emerging for African startups in 2022?

In July 2023, several agreements were signed between Nigerian and French companies in sectors such as agriculture, energy, and technological innovation, reflecting France's strategic investment focus in Nigeria as its key partner in sub-Saharan Africa.

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Several agreements signed between Nigerian and French companies

French Foreign Trade Minister Olivier Becht gives an interview in Dubai on 13 July 2023   -
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Several agreements in principle were signed Thursday in Lagos between Nigerian and French companies, in the sectors of agriculture, energy and technological innovation, marking France's desire to strengthen its investments in Nigeria while its military presence is compromised on the continent.

Visiting for two days in the economic capital of the most populous country in Africa, the Minister Delegate in charge of French foreign trade, Olivier Becht, accompanied by around ten French companies, participated in an economic summit between France and Nigeria and notably supervised the signing of these agreements.

“Nigeria is a key partner for France”, its “first commercial partner in sub-Saharan Africa” and “around a hundred French companies” are present there which employ “more than 10,000 people in the country”, he said. he hammered before announcing Nigeria's presence for the first time at the Paris International Agricultural Show next February.

Five partnership agreements with the companies Compagnie Fruitière/Raedial Holdings, Danone/Koolbok s, Echosys/Rensource and Watt Renewables, and Bpifrance/Access Bank , were signed Thursday in the sectors of agriculture, energy and 'technological innovation.

“Nigeria is a country that has potential, especially since the promise of openness from the current government,” explained to AFP Didier Mas, technical director for Africa at Compagnie Fruitière, mainly present in French-speaking Africa, which hopes to expand. partner with Readial Holdings to grow bananas in Cross River State, in the south of the country.

Bpifrance, for its part, signed a “letter of intent” with Access Bank to develop their respective activities in France and Nigeria.

“Bpifrance caught our attention because it has a great influence in the financial sector,” Michael Wenegieme, head of the France department at Access Bank, told AFP.

Olivier Becht is the third French representative to visit Nigeria since President Ahmed Bola Tinubu came to power in May. This visit closely follows that of Catherine Colonna, French Minister of Foreign Affairs, in Abuja, the political capital, on November 3.

The day before his departure, Olivier Becht told AFP that "contrary to what some media, and particularly social networks, convey, France is absolutely not driven out of Africa and we are not at all in decline."

While the French army was forced to withdraw from Niger, Mali and Burkina Faso, Paris wants to consolidate its presence in Africa thanks to its economic weight and counter the influence of China and Russia on the continent.

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Which African countries are driving the venture capital ecosystem?

Which European countries lead investment in Africa?

Which countries are actively investing in Africa besides China?

Which countries are preferred FDI destinations in Africa?

Special Economic Zones (SEZs) in Africa have attracted foreign investment by creating investor-friendly environments, such as Morocco’s Tanger-Med SEZ, which specializes in the automotive sector and has created hundreds of thousands of jobs through partnerships with world-class investors.

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Content: RFI Interview / African Economy
Special Economic Zones in Africa have achieved average results.
Africa – The continent of Africa has 237 Special Economic Zones (ZES-Zones Economiques Spéciales) spread across 37 countries, inheriting the Free Trade Zone.
Africa ’ s special economic zones were once thought to be the key to development, as China did three decades ago.
However, some economists in Africa and Europe have analyzed that the effect of these special economic zones is average.
This is one of the latest topics on this week ’ s RFI French-language “Chronique Afrique Economie ” column.
The head of the Senegal Economic Outlook Office feels that success stories are rare.
And Morocco has an admirable example of success.
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On Monday, May 1, 2023, the French website RFI published a new interview by economic journalist Olivier ROGEZ in the column "African Economy", introducing the special economic zones of the African continent.
The original title of this article on the RFI column in French is: [Les Zones économiques spéciales en Afrique, un bilan mitigé].
In Chinese, it can be translated as [Special Economic Zones in Africa, with mixed results].
Below is a brief summary for sharing.
-- Morocco has a special economic zone with a global reputation -
This article in the Chronique Afrique Economie column of the French channel RFI first pointed out that in the past 20 years, the African economic zones have been plucked from the ground like grass in winter.
Kenya has 61, Nigeria has 38 and Ethiopia has 18.
In Africa, Special Economic Zones are the new name for free trade zones, but larger and more modern.
In this way, Africa hopes to replicate the model of export-oriented special economic zones in Asian countries.
But not all of them had the desired effect.
This is an analysis by the head of the Senegal Economic Outlook Office.
Morocco ’ s special economic zone in the Mediterranean port of Tanger-Med is a model around the world, the expert said.
And Mauritius, although already in a bit of a recession.
And in Ethiopia, boosted by Chinese and European investment.
In Gabon, the Nkok Special Economic Zone made a breakthrough in the timber industry.
-- Africa's Special Economic Zones have not had much success --
Most of Africa ’ s special economic zones are not specialized enough.
Morocco ’ s success story is based on professionalism.
In the automotive sector, world-class investors bring their equipment vendors and suppliers, creating hundreds of thousands of jobs.
Ethiopia, on the other hand, is heavy on textiles and leather.
-- The state needs to give full support to the Special Economic Zones -
This article in the Chronique Afrique Economie column of RFI concludes that successful SEZs are managed at the highest level with the support of the heads of state and government.
Today, 15% or even 50% of SEZs can be sold in the local market, subject to tax.
Therefore, it is necessary to adjust and encourage African products.
Therefore, the most important thing today is not exports, but the basis for developing industrial production in Africa.
The free trade zone is a first-class opportunity, and the special economic zone has future prospects.
(Translated and edited by RFI Radio Nikolai)
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Fin. ~

Which sectors received the most foreign investment?

The African Export-Import Bank has facilitated investment by urging governments to reduce tariffs, eliminate non-tariff duties, and adopt legislation that supports e-commerce and advanced payment methods, enhancing the investment climate across the continent.

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Content: General Supervision
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AFREXIM: 46 African Countries Committed to Continental Free Trade Agreement
Emily Mabro, Director of Services, Investment, Equity and Digital Technologies at Africsim Bank, said that several cooperation protocols to support and finance e-commerce have been signed, which were approved by the government on the sidelines of the Continental Free Trade Agreement (CFTA) in 46 African countries, in order to boost investment and attract investor confidence to ensure sustainable development.
This came during the activities of the South South South Investment Forum, on the sidelines of the second day of the IATF2023P Africa Trade Summit and Exhibition organized by the African Import and Export Bank (Afreximbank) in Cairo; support mechanisms.
The session was attended by Shanhong Yao, Regional Director, UNIDO; Abah Uffin, Export and Development Director, Afriximbank; Wu Kujin, Senior Director, Export-Import Bank of China; and Emily Mabro, Director, Services, Investment, Property Rights and Digital Technologies, Afriximbank.
She pointed out that the Bank is focusing on facilitating the investment climate in African countries through the adoption of legislation and trade deals binding on the countries party to the Continental Free Trade Agreement in order to help investors to invest within the African continent, including flexibility in the movement of goods and services and e-commerce within South Africa, including Kenya, and the use of advanced payment methods in African and Asian markets to promote comprehensive development.
She added that the African Export-Import Bank has contributed to building various capacities to ensure the realization of various policies to attract more investors to the African market by urging governments to provide incentives and create a favorable business climate to facilitate business within the African country, reduce tariffs and eliminate other non-tariff duties, and strengthen ties between different organizations outside the African region, such as the United Nations Industrial Development Organization (UNIDO) and the China Export-Import Bank. Africa.
Increased opportunities for joint investments with South Africa and Asia
She pointed to the need to increase joint investment opportunities with the regions of South South Africa and Asia, strengthen the partnership between the government and private sectors in the two regions, and increase opportunities for digital transformation, especially with regard to payments and factoring.

African governments play a crucial role in attracting foreign investment by implementing legal, regulatory, and tax frameworks that promote local content development and compliance, as seen in countries like Ghana and South Africa.

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Content: Centurion Law Group Navigates Legal, Regulatory And Tax Frameworks At African Energy Week (AEW) 2023

(MENAFN- African Press Organization)

A Technical Track hosted by pan-African legal and business advisory group, Centurion Law Group, held during the 2023 edition of African Energy Week (AEW) ( ) – taking place in Cape Town from 16-20 October – explored the legal, regulatory, and tax frameworks throughout Africa.

The technical track kicked off with opening remarks by Centurion Law Group Managing Director and Partner, Zion Adeoye, who moderated the session and spoke on Africa's position as one of the world's most attractive destinations for investment and how legal and regulatory frameworks are being put in place to advance local content development in the continent's energy sector.

“Africa remains one of the most attractive destinations for investment,” Adeoye stated, adding,“It is very clear that for the next two to three decades, oil and gas development will be very active. In Africa, local content manifests in several ways – shareholding in the company and utilizing local manpower. In the extractives industry, investors always have the problem of balancing the best hands to work on their projects and adhering to local content laws in terms of getting the right content barriers across the industry.”

Following the presentation, a panel featuring the participation of international legal representatives from Mauritius, South Africa, Equatorial Guinea, Guinea, Russia, South Sudan, Ghana, and Nigeria explored the regulatory and legal frameworks throughout the continent and abroad.

“In Mauritius, we allow investors to engage in transactions more easily in Africa,” stated Keseena Chengadu, Head of Investment at Centurion Law Group, adding,“It's good to use us as a hub when internationals want to invest in Africa. We offer assistance to internationals with engaging in transactions, which can be very challenging.”

“South Africa is comparatively significantly industrialized, and it results in a few advantages for potential investors,” stated Gari Matarirano, Energy and Infrastructure Attorney at Centurion Law Group, when speaking on the southern African country, adding,“First off, the reliability of professional service firms, the tax system, is quite sophisticated with a strong source of funding through the financial system.”

“In Ghana, we have a robust regulatory framework,” stated Yorm Ama Abledu, Senior International Attorney at Centurion Law Group, adding,“As lawyers, we are able to guide clients and allow them to speak with the right authorities to deal with so that they are compliant with the law.”

The speakers spoke on local content development laws in Africa, highlighting the benefits and challenges related to investing in the continent while adhering to specific laws that could require as much as between 25% and 40% local participation.

“The markets are not very saturated, but the population is constantly growing, so it's a nice place to invest. But the fear of an investor is that they have to give up an average localization percentage of 25%,” stated Alexey Khromov, Law Intern at Centurion Law Group, adding however that,“The Government should think in the best interest of the communities, but also think about how to make your country more attractive as an investment destination.”

“In South Sudan, the country has given opportunities for foreign investors in terms of employment, but our investment promotion and requirement laws required 80% national workers in any company engaging in the country,” stated Rachel Tanda, Attorney at Centurion Law Group.

Additionally, Tamara Jombai, Attorney at Centurion Law Group touched on the individual requirements for companies seeking to participate in African markets, stating that,“When you are coming into a country, you need to decide on the size of the company and the kind of project you will be doing, which will determine what you will do.”

Furthermore, it was noted during the panel discussion that African countries feature diverse and robust taxation agreements, with Mauritius boasting 46 double taxation agreements across the world, which serves to help entities do business throughout the continent while using Mauritius as a hub. Meanwhile, the determination of doing business in South Africa is made in accordance with common law principles, wherein a foreign company engaging in the southern African country is subject to codified rules for certain types of income such as dividends, royalties, and interest.

Speaking on South Sudan's tax regulations, Grace Yella, Director for the Economic and Monetary Community of Central Africa at Centurion Law Group stated that,“There is a wide range of options for investors to settle business in the East African region. Each country has particularities when it comes to tax. The similarity is they opt for each investor to have the possibility to have their own declaration – they choose what to pay as tax. The authorities then have to carry out investigations to confirm that what has been submitted correlates to your commitments.”

The panel closed off by noting that Africa is diverse in its legislation and regulatory requirements, highlighting that international investors seeking to do business in the continent are subject to a variety of frameworks. With a burgeoning energy sector and fast-growing population, the panelists noted that Africa's growing industries and economies will continue to serve as a promising investment destination for international firms.

Under a mandate to make energy poverty history by 2030, AEW 2023 kicks off its strategic program on 17 October, and will unite African energy policymakers and stakeholders with global investors to discuss and maximize opportunities within the continent's entire energy sector.

Distributed by APO Group on behalf of African Energy Week (AEW).
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Which countries are preferred FDI destinations in Africa?

Governments also focus on creating favorable environments for foreign capital by addressing infrastructure gaps, improving administrative efficiency, and offering incentives such as tax breaks and investment guarantees.

Title:

Content: Part I: Attracting Foreign Investment into Africa may not come from the Sweet Stories we tell Foreigners

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By Edward Chisanga

I attended an Investment Forum in Utopia last week where Utopian countries had a rare opportunity to speak their minds out to foreigners who had attended in large numbers together with their Heads of State. The Master of ceremony began by introducing the private sector from rich countries present from France, UK, USA, Germany, Netherlands, and others from the EU membership before turning to the Utopian Heads of State and their groups.

What Foreign Investors Heard

Then he called upon one Utopian Head of State to speak on behalf of all the fifty-five African countries in attendance to list compelling factors that would captivate foreign investors from rich countries to go and invest in Africa.

The President began, “Africa is a huge piece of land, most of which is underutilized. All the countries that I represent here boast of huge land available for you investors. Come and invest in Africa, the continent of the future.” Then the President turned to one of the Presidents in his group and allowed him to speak about his country’s promotion of investment.

“Zambia has one of the most open trade environments in Africa and is a member of the Southern Africa Development Community (SADC) and the Common Markets for Eastern and Southern Africa (COMESA). Businesses in Zambia benefit from one of the lowest profit taxes in the region. Increasing regional cooperation through multilateral organisations, including SADC and the African Union should continue to reduce the likelihood of interstate conflict.” Then he highlighted ‘Some of the government incentives to FDI as:

  1. Dividends paid out on farming profits are exempt for the first five years of activity.
  2. Initial allowance of 10% on capital expenditure incurred on the construction or improvement of an industrial building is deductible.
  3. Foreign exchange losses of a capital nature incurred on borrowings used for the building and construction of an industrial or commercial building are tax deductible.
  4. Income earned by companies in the first year of listing on the Lusaka stock exchange qualifies for a 2% discount on the applicable company tax rate in the particular sector. However, companies with more than 1/3 of their shareholding in the hands of Zambians qualify for a 7% discount.
  5. Implements, machinery and plant used for farming, manufacturing or tourism qualify for wear and tear allowance of 50% of the cost per year in the first two years of activity.

He continued, “Investors who invest at least USD250,000 in any sector or product not provided for as a priority sector or product, is entitled to non-fiscal incentives such as investment guarantees and protection against state nationalization and protection against non-commercial risks (Zambia is a signatory of Multilateral Investment Guarantee Agency).”

Then the moderating African President turned to South Africa’s President and gave him the floor. President Cyril Ramaphosa was quick and went straight to the point by referring his audience to his weekly newsletter output, ‘From the Desk of the President,’ and repeated the points he recently made in the United Kingdom, “Government has a bold vision to be a destination of choice for foreign direct investment and this requires far-reaching reforms. These include reducing the cost of doing business for both large and small businesses, improving the quality of South Africa’s institutions, enhancing administrative efficiency and governance systems.”

When the turn of the Ethiopian Prime Minister came, he repeated what he had said at the 2019 Davos Meeting in Switzerland, “Investment in infrastructure has contributed a lot to the growth and attracted FDI, making Ethiopia one of the leading FDI destinations in Africa.”

Based on what the three African countries presented as their selling points to attract FDI, the President speaking on behalf of Africa retorted, “The three African countries that have just spoken present a strong representative basis for me to conclude that Africa is ripe and ready for FDI. “You have heard yourselves from the horses’ mouths,” He proudly said. “There’re similar incentives in Rwanda, Benin, Lesotho, Burkina Faso and all other countries. It’s time for you to come and invest in Africa.”

What Foreign Investors do not hear.

Despite the repeated sweet stories coming from African leaders, there’re equally important things that Foreign Investor don’t hear but that they are aware of.
About Zambia, an UNCTAD Investment Report reports, “Zambia’s infrastructure, whose poor quality is a barrier to investment, should be strengthened by investments in the road network, railways and the construction of power plants. In 2021, a USD 11 billion standard gauge railway project was announced in Zambia, involving US capital, which would expand essential transport links with the outside world. The regulatory environment does not favour entrepreneurial activity, the requirements for commercial licenses being long and costly, and the application of regulations not being uniform. In addition, the protection of property rights and the enforcement of contracts are still weak by international standards.”

As the author of this article is a Zambian living in Zambia, he is aware of the challenges coming the country’s energy sector. We have loadshedding in Zambia which Foreign Investors are aware of. They’re aware that the Mining sector, the country’s brain earner depends on use of energy, yet it is not exempted from malady of shortages. Equally, they know how much Zambia’s private sector suffers from energy shortage and its effect on business.

In South Africa, despite sweet stories, except only in 2021inward FDI flows have been declining significantly since 2010 as Figure 1 below shows. Even if this dwindling trend were to be attributed to other factors, the deteriorating energy situation in South Africa is playing a multiplier effect on FDI and the overall economy. Yet, South Africa like other African countries’ Heads of State turn a blind eye on the matter. As for many other things going unwell, they simply don’t tell the truth about the energy crisis.

In Ethiopia, Laments Omer Redi, “The crisis in the power supply has reached such a critical point that blackouts now occur every other day.” Fortune adds, “It is obvious that Ethiopia is now in such a serious power crisis that it has been forced to introduce load shedding.” There are other voices no longer silent. Said Kevin Daly of London based investment company, “Ethiopia is uninventable now. The political situation is very tenuous, and there is a lack of information and clarity on the economy, and on how things are going to be resolved.”

Concluding

Policy coherence is defined by the OECD as, “The systematic promotion of mutually reinforcing policy actions across government departments and agencies creating synergies towards achieving the agreed objectives.” The wonderful incentive packages must be complemented with other key inputs to build a whole.

For example, just as a motor vehicle cannot move smoothly if one key part falls off, you cannot attract adequate FDI with a list of incentives only when the energy sector, upon which industry depends is in crisis. Fix energy, infrastructure, human skills, corruption, rule of law, security, etc to arrive at a complete package of what attracts FDI. FDI goes to Asia because there’s no infrastructure, human capital, or energy crisis.

All these are well built. Asia also has bigger land than Africa. We cannot keep on using obsolete factors that are abandoned by others to attract FDI. It’s like always saying, “Come to Zambia and see the Victoria Falls.” Foreign Tourists now go to beautiful cities without dust, simply to visit, feel safe and talk to honest and humble citizens with Asians largely qualifying in almost all these. Our cities, including Livingstone, are not ripe for serious tourism that builds wealth.

Foreign Investors or tourists are not our uncles on whose shoulders we will simply cry and await their positive response. They will not come simply because we are democratic and shout that Zambia is ready for business. They are not cajoled by sympathy or simply because Zambia’s leadership change occurs smoothly. They have not come since change from Kaunda to Chiluba or Chiluba to Banda or Banda to Sata which were all peaceful and democratic. We must understand what their needs are. If we don’t provide, they’ll go to Asia.

To further attract private capital, African governments are encouraged to adopt innovative mechanisms such as financial guarantees, anti-corruption measures, and public-private partnerships, which are essential for mitigating risks and unlocking investment potential.

Title:

Content: Menu principal
Menu principal
Development in Africa: adopting innovative mechanisms to attract private capital
Listed on: Tuesday, 28 May 2024 19: 30 Category: Economy
NAIROBI (Reuters) - The African Development Bank (AfDB) ’ s Minister of Finance and Governor of Algeria, Aziz Fayed, called on Tuesday in Nairobi, Kenya, for the adoption of “innovative ” mechanisms to bring in more private capital in order to unlock the enormous potential of the African continent.
Speaking at the African Development Bank (AfDB) Governors Dialogue, which is taking place within the framework of the African Financial Commission ’ s 2024 Annual Meetings, Fayed said: “We must develop innovative mechanisms for harnessing private capital, which requires the establishment of financial mechanisms and guarantees to encourage private investment, especially in high-risk sectors. ”
He also stressed the importance of Africa ’ s financial needs amid the complex challenges faced by its countries in the context of climate change, poverty and lack of economic diversification, noting that “despite the efforts made, private investment remains weak with investors hesitant because of the potential risks. ”
"Even though Africa is full of potential, it is often seen through the prism of risk rather than opportunity," he said.
Mr. Fayed also stressed that in order to reverse the picture, African countries must adopt several measures by improving the business climate by facilitating administrative procedures, fighting corruption, strengthening legal security, protecting investors, and developing incentive tax systems.
“We must also invest more in enterprises in order to stimulate economic growth and create an atmosphere conducive to the promotion of public-private partnerships by activating cooperation between the two sectors in order to create and embody development projects, ” he said.
The minister also pointed out that "the countries of the continent are also required to enhance their investment opportunities, exchange successful experiences and encourage access to technology and innovation."
Addressing the role of the African Development Bank (AfDB) in this direction, the minister noted that the "unprecedented" challenges facing the world today necessitate "strategic adaptation".
“The African Development Bank is called upon to be a pivotal actor in Africa ’ s economic transformation through the promotion of inclusive and sustainable growth, particularly through the development of a stronger private sector, ” he said.
The annual meetings of the African Development Bank Group (AfDB), which began on Monday, record the participation of more than 3,000 delegates who came to discuss the reform of the global financial architecture as necessary to accelerate Africa ’ s economic transformation.
The Algerian delegation to this event, which marks the 60th anniversary of the establishment of this African financial institution, is led by the Minister of Finance, the Governor of Algeria at the African Development Bank, Mr. Laaziz Fayed, in his capacity as the representative of the President of the Republic, Mr. Abdelmadjid Tebboune.
Development in Africa: adopting innovative mechanisms to attract private capital
Listed on: Tuesday, 28 May 2024 19: 30 Category: Economy Share

Foreign investors in African markets face challenges such as fragmented smallholder systems, where small-scale farmers produce limited quantities that do not meet the large-scale demands of processors, and the lack of infrastructure to aggregate these outputs into consistent supplies for buyers.

Title:

Content: ‘Africa must substitute food imports by producing locally’

Sanne Steemers, president of Rest of Africa at AFEX, shares insights on addressing the continent's agricultural trade deficit, combating persistent food price inflation and promoting intra-African trade, as the company expands in Africa.

Conversation with

by

Sanne Steemers is the president of Rest of Africa at AFEX, a Lagos-based commodities exchange platform that operates in three markets across the continent: Nigeria, Kenya, and Uganda. Steemers is responsible for rolling out infrastructure, markets, and capital to smallholder farmers and working on the company’s expansion into 10 markets over the next few years.

Prior to joining AFEX, Steemers worked in several roles as a manager, independent advisor, and entrepreneur in agriculture-focused companies and institutions. During those years, she helped facilitate $320m of investments in agribusiness, reaching 1.3m farmers, according to her own assessment.

After joining AFEX earlier this year, Steemers has now raised her target to $1bn and 10m people. In this interview, she explains her ambitions, AFEX’s expansion into new markets, and the role of commodities exchanges in fighting Africa’s trade deficit in agricultural products.

African Business: What do you identify as the main challenge in your journey to facilitating $1bn in investments into agribusiness?

Sanne Steemers: I think that both in trade and in investments there exist large gaps in the size of the different actors. You have farmers needing small amounts, maybe 100 or $200, to buy the seeds and inputs they need for a season. And then you have people sitting on $1m or $10m who can’t be dealing with hundreds of thousands of farmers at a time. The difference in size is one of the major challenges in bringing investors and smallholders together.

Regarding trade, a similar dynamic exists. In Africa, most farmers operate on small plots of land, typically 1 or 2 hectares, and produce a few bags of grain. But large buyers require truckloads of grain daily. Transforming the small quantities produced by individual farmers into large quantities demanded by processors is another significant hurdle. Addressing these issues is crucial to achieving my goals.

Related articles

What are the main trends you are observing in agriculture this year?

One emerging trend gaining traction and significance is regional trade. Recent events, such as Covid, the Black Sea blockade, and trade imbalances impacting shipping costs, have highlighted the risks associated with relying heavily on international trade, especially for critical commodities like food. As a result, integrating regional markets to reduce dependency on the global market and enhance trade balance is becoming increasingly important.

Another noticeable trend is the growing interest from investors, both local and international, in generating positive impact through their investments. In the past, agriculture, particularly smallholder agriculture in Africa, was often overlooked. But in recent years investors have become more conscious of the need for impactful investments. This shift in investor mindset has led to increased investments in agriculture, which in turn supports improved productivity, local production, market access, and infrastructure.

You’ve mentioned the Black Sea blockade. Food prices are set to spike again on the continent after Russia’s withdrawal from the export deal. This comes after a year of tremendous inflation in many African countries. How is the agriculture futures market reacting to these challenges?

The prices of food have been very high globally. And I think a lot of African countries are hit even harder because their currencies aren’t as strong as some international currencies. What we see is that food prices are definitely higher than they’ve been in previous years and there’s a strong push for substituting imports with local supply because that at least takes the currency dynamic out of the equation.

We have a very strong focus on our commodities exchange, which provides price transparency. In the past, middlemen used to buy commodities as cheap as they could and sell them as expensive as they could to make a high margin and put that in their own pocket, without necessarily adding much value.

What we quite strongly believe in is that in order for countries to be food secure, we need to get price transparency. Farmers should know what their product is worth and buyers what’s available in the market. This would eventually improve the prices for farmers as well as for the buyers in the long term.

On top of that, building infrastructure is critical. Agriculture generally depends on seasonality. Rain determines when the harvest is happening and prices are generally low at that point of time. If you offer farmers an opportunity to store their product for three months, they tend to get a 30% better price for that same product, and their income spreads out throughout the year. That storage also makes sure that food is available for the population throughout the year and not just at harvest time. Addressing these dynamics helps respond to higher food prices, but more efforts are needed in this direction.

Africa suffers from a major trade imbalance in agriculture, mainly driven by large imports of cereals. How can this trend be reversed?

Indeed, trade imbalances in commodities such as rice, wheat, sorghum, and maize are prevalent. I believe reversing this trend involves three things: addressing productivity, reducing waste, and connecting small farmers to larger buyers.

Enhancing productivity is crucial, as many smallholder farmers currently achieve lower yields due to factors like insufficient knowledge, inadequate tools, and limited access to inputs. AFEX addresses this productivity gap, for example through providing inputs on credit, and that input can then be repaid at harvest time, either in cash or in crop, as the farmer prefers. And what we observe is that, on average, it triples the yields that the farmer would otherwise get.

Reducing waste in the value chain is equally essential. Farmers often hold back some of their harvest for personal use or urgent financial needs, resulting in storage under suboptimal conditions and subsequent loss of quality and quantity. Reducing waste along the value chain would help capture additional value for them.

Lastly, aggregating small volumes from farmers can facilitate transactions with larger buyers. For processors to function efficiently, they need consistent supplies in large quantities, which is challenging with a fragmented smallholder system. The idea of a commodities exchange is to aggregate these small volumes to ensure a steady and reliable supply for larger buyers.

To promote intra-African trade in agriculture, what measures need to be taken to re-route current trade routes inwards?

Cross-border trade within Africa hasn’t always necessarily been very easy. There’s a lot of paperwork involved. I know progress is being made as the African Continental Free Trade Agreement is slowly being implemented, and streamlining those cross-border processes is going to help.

I think Africa would also strongly benefit from having unity in quality requirements. For example, in our operations in Kenya, we only do domestic trade, but we’ve seen that Kenya in recent weeks has rejected imports from several other neighbouring countries.

Part of it is also to recognise the opportunity in Africa. I think historically a lot of people haven’t really tried to fix this issue. I do believe that there’s a major opportunity to substitute imports by sourcing locally and supporting the farmers in the country of operation. And, on top of that, I think there’s a lot that can be done with regional trade.

Also, if you look at complementary harvest seasons, for example, when one country is harvesting, there might be higher demand in a different country. Those are the things that we’re trying to solve with our commodities exchange platform. But it’s also a process that requires commitment and willingness.

As a commodities exchange, what are your expectations from financial regulators in the countries you operate in?

What we see is that various countries have a very different view on regulation. If you look at Côte d’Ivoire, for example, historically, there’s been much more regulation in place for the agricultural sector. If you look at Nigeria, there’s hardly been any in the past. So it’s not easy to answer that question on a generic level.

But in most African countries that we work in, a lot of the governments are pro-business in the sense that they allow the private sector to conclude transactions. They’re moving away from the government as a “value chain actor”, and closer to the government as an enabler.

In Kenya, we were the first company to be certified by the Warehouse Receipt System Council, which means that any farmer that produces to our warehouse gets issued a warehouse receipt which is then recognised by a bank. They can then get finance against that receipt, which gives them the flexibility and empowers them to decide what they want to sell their commodity.

We also see that some governments are setting up or powering commodities exchanges. In some of the countries, those are private exchanges that are regulated by the government, such as what we do in Nigeria, but we also have several relations with governments in a number of countries where they want to set up a public commodities exchange. Overall, those initiatives are more towards enabling trade rather than controlling it, which, I think, is a healthy development.

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Leo Komminoth

Leo is tech reporter for African Business, based in Dakar, and also works on data visualisations.

Corruption, political instability, and inconsistent regulatory frameworks across African countries are significant barriers to foreign investment, as they create uncertainty and increase operational risks for international firms.

To address these challenges, initiatives such as AfCFTA aim to streamline cross-border trade processes, reduce logistical barriers, and harmonize regulations, while some countries like Mauritius have developed robust legal and tax frameworks to attract foreign investors.

Multinational organizations like the World Bank and IMF play a pivotal role in facilitating foreign investment in Africa by providing concessional credit and mobilizing private capital to address infrastructure gaps and support sustainable development projects.

Title:

Content: (Bloomberg) -- When Africa last played host to the International Monetary Fund and World Bank’s annual meetings in 1973, then Bank President Robert McNamara urged rich nations to show more generosity toward the poor.

A lot has changed since that gathering in Nairobi, but the region still desperately needs investment to defeat poverty and face the climate crisis. Renewed great power rivalry pitting the US-led West against China and Russia is ramping up pressure on the two Washington-based institutions to do more on the continent.

China’s lending to Africa has increased fivefold since 2010, analysis by Bloomberg Economics shows. The World Bank’s funding, by contrast, has grown roughly 2-1/2 times, and the region now faces a worsening funding squeeze amid rising interest rates and weakening currencies.

The continent’s miserly share of the global economy has barely budged since 1973 and African leaders complain they’re overlooked. But don’t ask them to choose between East or West — they want more investment from both.

“The choice is not about whether we’re picking friends and foes,” said Vera Songwe, the former Executive Secretary of the United Nations Economic Commission for Africa. “The choice should be about picking interests that will advance the objectives and interests of the continent.”

Songwe, now a senior fellow at the Brookings Institution in Washington and chair of the Liquidity and Sustainability Facility, says Africa should avoid involvement in any new “Cold-War” competition between the US and China, echoing many of the region’s leaders.

The determination to go ahead with the October annual meetings in Marrakech, Morocco, after an earthquake in mountains above the city last month killed nearly 3,000 is meant to signal the IMF and World Bank’s relevance to the region.

The need for such outreach was made clear when major emerging market powers gathered in August for the BRICS summit in Johannesburg, decrying the Western-led order and broadening their ranks to include Iran and Saudi Arabia. That meeting came a few weeks after Russian President Vladimir Putin hosted African leaders in St. Petersburg.

“What should be announced at least in Marrakech is boosting Africa’s representation within the governing bodies of the IMF and the World Bank,” Morocco’s central bank Chief Abdellatif Jouahri told reporters on Sept. 26.

The meetings are now also taking place against a backdrop of violence that has killed hundreds of Israelis and Palestinians, after Hamas attacked Israel from the Gaza Strip. Morocco has called for an emergency ministerial meeting of the Arab League Council to discuss the situation.

A key theme at the meetings will be the push to expand the World Bank’s resources to provide concessional credit on a much greater scale.

Boosting the ability to provide cheap finance is vital to defeat poverty, confront the climate crisis and deliver the development that the region’s youth demand. Failure to do so risks decades more stagnation and the type of anger that fomented coups in Niger and Gabon in recent months.

“We cannot have a prosperous world unless we also have stable and prosperous Africa,” IMF Managing Director Kristalina Georgieva told Bloomberg in an Oct. 3 interview.

The Biden administration has requested $2.25 billion for World Bank funding from Congress, which Treasury officials say could help “unlock” up to $25 billion in additional lending. And if other rich countries follow suit, the total effort, including private capital, could reach $100 billion.

But the region has already been looking elsewhere. Bloomberg Economics’ analysis shows China now holds about 10% of sub-Saharan Africa’s foreign debt, up from 1% two decades earlier, though its new lending to developing countries has also slowed substantially since 2020.

Even so, the scale of financing required is multiple times more than Africa has been able to attract from both sides combined.

An influential July report co-lead by former US Treasury Secretary Lawrence Summers, to which Songwe was a contributor, sees $3 trillion needed per year by 2030 for developing countries , including $500 billion from international development lenders.

“If you just catalogue all the needs these countries have it’s massive,” said Andrew Dabalen, World Bank chief economist for Africa. “But the key thing is the financing has to be cheap and they have to be transparent about what it is they are actually borrowing for.”

The Washington-based lenders’ inability to deliver anything like the funding needed by the continent is driving pressure for reform.

“The report card on the Fund and the Bank is at best mixed,” said Mavis Owusu-Gyamfi, Executive Vice President at the African Center for Economic Transformation in Accra, who cited their emergency aid during the pandemic as a clear win. “We’ve seen some successes and some great initiatives, and we’ve also seen some failures.”

On the fringes of the Nubian desert in Egypt, the Benban solar power project is a showcase for what can be achieved when development lenders get it right. The World Bank supported construction of the project, which attracted $2 billion in foreign direct investment.

With a current capacity of 1.465 gigawatts — enough to power more than a million homes — Benban has helped Egypt ease electricity shortages and scale back its use of fossil fuels. It’s also created an estimated 18,000 jobs in the north African nation.

“It totally changed our lives," says engineer Ahmed Atef. “Many of the people never had steady employment before the project.”

But other projects didn’t deliver. The World Bank suspended its funding for a Chad-Cameroon oil pipeline in 2006, for instance, after Chad broke its promise to use the income for development and some of the money went to the military instead.

Harsh structural adjustment programs imposed on troubled African economies as the price of borrowing from the Bank and Fund are also remembered with bitterness across the region.

The institutions are now being urged to be more nimble while also granting African nations direct input into the decisions, so that they reflect an African reality. This includes abandoning the tradition where a European leads the IMF and a US citizen is at the helm of the Bank.

“When Africa has a position, it has to start a whole global advocacy campaign to get anybody to listen to us,” said Owusu-Gyamfi. “It’s a bit tiring.”

Half a century has gone by since McNamara challenged the West — in a voice cracking with audible emotion — not to “turn away in cynicism and indifference.” That was music to the ears of Daniel Ritchie, a junior World Bank loan officer at the time, who was at the meeting because he’d learned Swahili as a Peace Corp volunteer in Kenya in the 1960s.

“It was a pioneering move,” said Ritchie, who retired in 1998 and still lives in Washington. “I didn’t realize it at the time, but 50 years later the World Bank is still talking about poverty.”

Indeed, the issue was foremost in remarks by new World Bank President Ajay Banga at the Group of 20 leaders summit in New Delhi last month. “We face declining progress in our fight against poverty, an existential climate crisis, food insecurity, fragility, a fledgling pandemic recovery, widening disparity, and a crippling war on the borders of Europe,” Banga said.

Certain gauges have improved:  Life expectancy in Africa has increased from 46 in 1973 to 60, according to World Bank data, while infant mortality rates have fallen sharply.

Africa’s poverty headcount ratio, or the share of the population living on less than $2.15 a day, has declined from around 56% at the turn of the century to 35%. But the same metric in South Asia has fallen from almost 40% to around 10% over a similar period.

Some of the things that went wrong for Africa — including the pandemic and global inflation — are not its fault. But poor decisions when money was flowing in when commodity prices were high, and gorging on cheap borrowing that become unsustainably expensive amid raising interest rates, are home-grown problems.

Zambia and Ghana have both received emergency bailouts from the IMF this year after defaulting. Many others face debt distress and are shut out of capital markets.

Andrews Kwame Pianim, a Ghanaian economist who attended the annual meetings in Washington in 1971, recalled the optimism of the era and how the hope faded in the ensuing half century.

“We thought we had the answers: As long as countries just followed the rules things would go the right way. Of course, we didn't have the answers,” he said. “Africans must do the work of economic growth and not expect the IMF and World Bank to do it.”

--With assistance from Yinka Ibukun, Souhail Karam and Antony Sguazzin.

©2023 Bloomberg L.P.

The International Finance Corporation (IFC), a member of the World Bank Group, focuses on fostering private sector growth in Africa by offering loans, equity investments, and advisory services to local businesses.

Title:

Content: Categories
News

How does the IFC work?

How the International Finance Corporation (IFC) Works: A Closer Look at its Operations

The International Finance Corporation (IFC) is a vital institution within the World Bank Group, dedicated to promoting sustainable economic growth in developing countries. Established in 1956, the IFC operates as a global development cooperative, providing investment and advisory services to the private sector in emerging markets. With a mission to alleviate poverty and improve living standards, the IFC plays a crucial role in fostering entrepreneurship, creating jobs, and mobilizing private capital for development projects.

How does the IFC work?

The IFC operates investing in private sector projects that have the potential to generate positive social and environmental impacts. These investments are made in various sectors, including infrastructure, manufacturing, agriculture, and financial services. By partnering with local businesses and financial institutions, the IFC aims to stimulate economic growth and enhance the competitiveness of developing countries.

Investment and Advisory Services:
The IFC provides both financial and non-financial support to its clients. Through its investment services, the IFC offers loans, equity investments, and guarantees to private companies, helping them expand their operations and access new markets. Additionally, the IFC provides advisory services, sharing its expertise in areas such as corporate governance, environmental and social sustainability, and financial management.

FAQ:
Q: What is the difference between the IFC and the World Bank?
A: While the World Bank focuses on providing financial assistance to governments, the IFC concentrates on supporting the private sector in developing countries.

Q: How does the IFC measure its impact?
A: The IFC assesses its impact through various indicators, including job creation, greenhouse gas emissions reduction, and improvements in access to finance and essential services.

Q: How does the IFC ensure environmental and social sustainability?
A: The IFC has a robust set of environmental and social standards that its clients must adhere to. These standards aim to mitigate potential risks and ensure that projects are developed in a sustainable and responsible manner.

In conclusion, the IFC plays a crucial role in promoting sustainable economic development in emerging markets. Through its investment and advisory services, the IFC supports private sector projects that have the potential to generate positive social and environmental impacts. By mobilizing private capital and sharing its expertise, the IFC contributes to poverty reduction and the improvement of living standards in developing countries.

African-based companies are leveraging foreign investment to expand operations and enter new markets by forming strategic partnerships and utilizing financing opportunities, as seen in collaborations like Formosa Plastics Group and SARL SMTP in Algeria.

Title:

Content: Go to main content
Trade Association Africa Business Opportunity Day and Taiwan-Africa CEO Forum Promotes Over US $30 Million in Business Opportunities
The URL of the current page has been copied to your clipboard!
Foreign Trade Association held the 2023 Africa Business Opportunity Day and the Taiwan-Africa CEO Forum on the 6th and 7th, inviting 25 buyers from 10 countries including Swaziland, South Africa, Nigeria, Somaliland, Egypt, Algeria, Kenya, Rwanda, Mozambique and Ivory Coast to hold 216 talks with 96 companies, resulting in 31.48 million US dollars of business opportunities.
Major buyers include Egypt ’ s El Sewedy Group, which operates energy and wire manufacturing with annual turnover of more than US $1 billion, Algeria ’ s Conserverie Du Maghreb, which operates food processing with annual turnover of more than US $100 million, etc. Products, food processing machinery, medical materials and green energy.
Among them, Formosa Plastics Group and SARL SMTP (AGGOUN GROUP) from Algiers rope manufacturer negotiate the purchase of PP plastic raw materials; Mingji Sanfeng medical materials and Mozambique buyers successfully contact, in the future, if the "disposable dialysis consumables" successfully enter the Mozambican market, there is a chance to expand sales to other neighboring countries in Africa.
As for the theme of the "Taiwan-Africa CEO Forum" focusing on the business opportunities, challenges and market trends in Africa under the long chain - short chain - multi-chain of global supply chains, the site attracted nearly 200 companies to participate.
Guo Wenliao, president of the Taiwanese Chamber of Commerce in Nigeria, said that he is optimistic about the potential of Africa and Nigeria as a whole, and it is worth our business to actively explore deep roots.
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What trends are emerging for African startups in 2022?

The African private wealth market is projected to grow by 38% over the next 10 years, highlighting the continent's potential for sustained foreign investment in sectors like real estate and eco-friendly developments.

Graduates should focus on acquiring knowledge in sustainable finance and environmental standards, as initiatives like Egypt's Sustainable Finance Academy emphasize the importance of integrating sustainability practices into business operations.

Title:

Content: CIB - Egypt Announces at Climate Conference Ways to Launch ‘ Sustainable Finance Academy ’
To support international financial institutions
Iman Ashraf
6: 32 PM, Mon, 21 Nov 22
CIB aims to integrate the concepts of climate action and awareness with the education and training system of the banking sector, as well as bridging the awareness gap on the United Nations Sustainable Development Goals. The initiative was launched during a panel discussion entitled “Education for Sustainable Development ”, which was moderated by CIB on the sidelines of the COP27 Climate Conference on Civil Society Day. November 15 under the theme“ COP27 Sharm El Sheikh: From Africa to the World ”.
The seminar was moderated by dr.
Dalia Abdelkader, CIB ’ s Head of Sustainable Finance, was a keynote speaker.
David Orr is Professor of Environmental Studies at Paul Sears College of Oberlin College.
James Marsh, a professor at the University of Vermont, and Natalie Mangondo, a member of the United Nations High-Level Champions of Climate Change in Finance team.
Jonathan Bedley, Dean of Henley Business School, Africa
Dina Abdel Fattah, Assistant Professor and Head of the Department of Economics at the American University in Cairo.
Helmy Abouleish, President of Heliopolis University for Sustainable Development and CEO of SEKEM Group, and Mikhail, Head of Learning and Development at CIB
She explained dr.
Despite the establishment of the United Nations Sustainable Development Goals (SDGs) under the Paris Agreement, held during COP21 in 2015, which committed signatory countries to confront climate change, the world is still going through remarkable developments, and global temperatures have increased dramatically over the past five years. The educational system is still based on 20th century concepts that have fragmented knowledge into isolated islands of independent specialized curricula that lack the holistic perspective and “system thinking ” that is the basis of sustainability.
She added: “We will find that graduates with finance degrees do not necessarily have any scientific knowledge or knowledge of environmental standards and environmental protection laws, which in turn attracts financial institutions annually thousands of graduates who lack knowledge of the application of sustainable development standards and practices required by working in the banking sector in compliance with the guidelines and instructions of the Central Bank of Egypt for sustainable development. Its educational curricula provide scientific and practical knowledge of sustainable development standards and practices. ”
COP27 focuses on mobilizing financing for climate action and developing innovative solutions to address obstacles to sustainable development, and one of the main themes of the panel was “Are education systems in the 21st century meeting the requirements of the Sustainable Development Goals? ”
In this context, Fr.
David Orr said that changing ideas and concepts has a high priority over changing economic policies and technological systems in order to address the worsening climate change crisis, stressing that this change requires the development of education systems.
He pointed out dr.
He stressed that African companies, universities and business schools should focus on adopting the idea of   achieving African renaissance and shared prosperity, instead of focusing on profitability only, stressing that capital investments based on profit only incur very high costs, as the impact of pressing issues such as poverty, exclusion, climate change and others will certainly negatively affect everyone and lead to undesirable consequences in the future.
Bidley added that the phenomenon we are currently facing is the lack of an alternative plan or plan to address such issues, and efforts should be concerted among all business schools to embed the idea of   achieving renaissance and shared prosperity in the ideology and minds of senior management and teams of institutions and companies, instead of efforts limited to achieving profitability only.
The new role that African universities and business schools should play is to establish a new approach in which an economic system is established that meets the requirements of the times, instead of the old curricula that do not keep pace with the surrounding developments.
The panel also addressed ways to bridge the gap between education systems and the current needs of companies and organizations to integrate sustainability standards and practices into their activities and businesses, in compliance with national regulations and laws.
Marcos Mikhail, CIB ’ s Head of Learning and Development, said: “Raising knowledge and scientific awareness of sustainability standards and practices is no longer optional, but an urgent necessity for everyone.
CIB is investing heavily in educating and training new graduates on the science and fundamentals of sustainable finance, raising their awareness of regulatory frameworks and policies in this area in general, and the objectives of CIB ’ s Sustainable Development Strategy in particular. ”
She said dr.
Education systems based on raising awareness of sustainability have become an indispensable tool to enable future generations to adapt and deal with the escalating climate challenges and reduce them, stressing that climate change has become an undeniable reality, and sustainability has become a matter of urgency and rooted in the minds of business leaders.
Presented by dr.
Helmy Abouleish highlighted his experience at Heliopolis University and stressed that the only way to address climate change is to conduct a community dialogue in which every citizen participates in order to propose new ideas to improve the quality of sustainable development education, and to present and discuss all the challenges faced by citizens, while making fundamental changes to the educational system at all levels to include various sciences and practices of sustainable development.
The panel discussion was a platform to announce the Bank ’ s plan to develop the Sustainable Finance Academy, which is part of the Bank ’ s sustainable finance strategy. CIB is keen to spread the science and knowledge of sustainable finance and the tools to enhance it, in order to enhance the capabilities of its team, all banking teams and all stakeholders.
Through these efforts, the Bank aims to integrate financial institutions operating in the Middle East and North Africa markets to adhere to sustainability standards and practices, as well as to enable future generations to continue on this path.

Special Economic Zones (SEZs) in Africa, such as those in Mauritius, Senegal, and Rwanda, offer a promising environment for skilled labor and entrepreneurship, providing graduates with opportunities to work in investor-friendly hubs.

Title:

Content: Free zones may be Africa’s best chance to accelerate wealth creation

By Sylvia Brune

Co-founder of AHOY – a flight booking and concierge app – Sylvia Brune discusses why free zones may be Africa’s best chance to accelerate wealth.

Given the demand for goods and services from Africa’s growing middle classes, the continent has huge potential for growth. Over the past year, Foreign Direct Investment (FDI) into Africa grew by 11%, bucking the global trend and potentially setting a bright precedent for the future.

Whether this upwards trend in FDI will have a positive effect on growth and wealth creation is, however, still unknown. Studies have shown that capital has little impact on an undeveloped foundation. Key components needed to enhance capital’s productivity are infrastructure (not just physical), a stable and transparent legal framework, and skilled labour.

Where these are lacking, investors into the continent have to first ‘build’ the commercial foundation, before commencing their projects. Like spending money on hiring advisors, lawyers, and accountants to navigate the various countries’ economic environments, political systems, and bureaucracy. This adds time and uncertainty to projects, acting as an effective ‘tax’ on any return on investment - meaning only projects with a very high upside will be embarked upon.

Evidence suggests that these key components are indeed lacking across most of Africa, albeit with a small handful of countries on the road to improvement.

Countries, like Senegal and Côte d'Ivoire, have made important strides to improve anti-corruption institutions. Cabo Verde and Gambia have managed to gain local trust with 85% and 84% believing their government is fundamentally sound. And Mauritius and Rwanda have made it into the top 35 countries in the world as measured by economic and personal freedom, with Mauritius marginally beating Norway in the global ranking.

The reality is, however, that corruption continues to undermine the rule of law across most of Africa (which hosts 13 of the globe’s 20 most corrupt countries). Rule of law relates to strong property rights, government integrity, and judicial effectiveness - the basis for a sound investment environment. What is even worse than corruption’s effect on FDI, though, is its effect on retaining and developing talent.

Instability and lack of opportunity continues to result in brain-drain - drawing talent and skill away from the continent. The World Bank estimates one-in-nine Africans with a tertiary education live away from Africa – a 50% growth since the mid-00s.

So, what’s the solution?

Given the long, tough road ahead towards building economically sound environments across Africa, I believe the only solution in the short run, is establishing 100s of Special Economic Zones (SEZs) throughout the continent.

For those unfamiliar with SEZs, they are areas which operate under a different legal framework to the country they inhabit – with investment-friendly laws around commercial transactions, taxes, and the protection of private property. SEZs’ advantage is that you avoid building on top of broken legacy system, instead creating a pre-packaged, investor-ready climate.

These zones have been successfully tested and run in China and the Four Tigers (Hong Kong, Singapore, South Korea and Taiwan) to attract considerable FDI, and experience decades of double-digit growth. This format could likewise be used to boost and sustain investor interest in Africa.

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SEZs as talent hubs

While SEZs are known mostly as attractive investment environments, with conducive infrastructure and legal frameworks, the secret to their success rate is actually in their ability to attract and retain talent and skilled labour in specialised hubs.

China showed just how powerful an industry focus within SEZs can be. Because they provide a magnetic effect of highly specialised knowledge hubs - comprised of domestic, regional, and international talent.

Capital is like fuel, it’s only effective where there is a flame to throw it on. And that flame is talent.

The potential is clear, and I believe Africa has a burgeoning pool of talent waiting to be tapped into. But whether they are able to put their talents to best use, collaborate, and innovate freely is uncertain, and will determine whether they stay, or search for opportunities elsewhere.

A common hurdle, for example, is work visa rules between African countries, which means it’s easier for talent to find good opportunities outside Africa than within Africa. Talented individuals want to work alongside other talent. Similarly, talent and specialists from outside Africa face considerable barriers when trying to obtain work permits.

For example, Mr. Eazi’s emPawa Masterclass, like many creative undertakings, is dependent on bringing together the best talent. Earlier this year, emPawa struggled to bring artists, producers, and mentors together from across Africa. Due to visa rules and uncertain processing times, some were only provided with visas after the masterclass was already over, some not at all.

Here, again, SEZs are a solution. SEZs are able to receive visa allocations relating to their area of specialisation, which increases the likelihood of collaboration and innovation - which in turn attracts capital.

The Andela example

There’s plenty of evidence that talent wants to stay, provided there are the right conditions to do so. A great example is tech recruitment platform Andela, which proves that when start-ups in Africa have access to the best talent, including a global support network, and then tap into local opportunity, they can raise substantial foreign capital, and the local business community benefits as well.

Andela trains candidates for six months before pairing them with clients, many are the Fortune 500 and a number of Silicon Valley start-ups. So far, more than 90% of Andela’s first batch of alumni are still working in Nigeria.

SEZs would be able to turbocharge the work of companies like Andela. After talent has been developed, they need environments where they can make most use of their skills.

Already, countries like Mauritius, Senegal, and Rwanda have and are in the process of creating SEZs, with the view to building infrastructure, a stable legal framework, and enticing skilled labour – it’s an exciting time and I for one, am eager to see the results as more African countries follow their footsteps.

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