# Foreign Investment in Africa: Trends and Opportunities

## Executive Summary

This report provides an overview of foreign investment trends in Africa, highlighting key figures, geographical and industrial focus areas, major investors, and partnership formations.

The information is intended to help business administration students at the University of Nairobi understand career opportunities that may arise from Africa's evolving investment landscape.

## Global Foreign Direct Investment Context

In 2021, global foreign direct investment (FDI) reached $1.

65 trillion, exceeding pre-pandemic levels with a 77% increase from 2020.

However, investment distribution remains uneven, with developed countries receiving nearly three-quarters of global FDI.

Despite this, Africa saw an increase in overseas funds compared to previous years, though it continues to receive a smaller share relative to other regions.

## Key Investment Figures in Africa

### Country-Specific FDI (2021)
- Morocco: $2.

15 billion
- Bahrain: $1.

8 billion
- Iran: $1.

4 billion
- Algeria: $870 million
- Tunisia: $660 million
- Jordan: $622 million
- Sudan: $462 million
- Somalia: $456 million
- Lebanon: $273 million
- Palestine: $256 million
- Kuwait: $198 million
- Djibouti: $167 million
- Mauritania: $22 million
- Comoros: $4 million

### Projected Investment Figures
- Geothermal sector: Projected investments of at least $35 billion between 2024 and 2050
- Nigeria: Infrastructure projects valued at over NGN3.

6 trillion (approximately $7.

8 billion USD)

## Geographical Investment Focus

### East Africa
- Kenya and Ethiopia are leading geothermal energy investments, contributing nearly 90% of the region's total geothermal capacity
- Ethiopia's need to diversify its power sector (currently 88% hydro-based) is driving investment expansion

### West Africa
- Nigeria, Africa's largest country by population and GDP, is a major investment destination
- The Nigerian government is undertaking 11,800 new infrastructure projects
- Nigeria offers extensive natural resources, young labor force, and a fast-growing consumer market

### North Africa
- Morocco received the highest FDI in North Africa at $2.

15 billion in 2021
- Algeria and Tunisia also received significant investments at $870 million and $660 million respectively

## Industrial Investment Areas

### Energy Sector
- Geothermal energy is experiencing significant growth, with Africa's capacity expected to double by 2050
- The continent is projected to move from the 6th largest geothermal power generator in 2023 to the 3rd largest by 2030
- Africa is expected to exceed Europe's total installed geothermal capacity by 2050
- There is a critical need for increased energy investments across the continent

### Infrastructure
- Infrastructure was the biggest winner in global investment trends, with financing deals increasing by 53% and amounts jumping by 91%
- Nigeria's infrastructure projects include schools, hospitals, roads, bridges, houses, energy, and telecommunication infrastructure
- China has invested heavily in large-scale infrastructure projects, including ports, roads, and power stations

### Human Capital Development
- There is growing emphasis on investing in human capital, with Africa having over 400 million young people aged 15-35
- Quality education is identified as a pivotal lever for sustainable growth

## Major Foreign Investors and Investment Trends

### China
- China is investing heavily in African countries through loans for large infrastructure projects
- Chinese investments are driven by geopolitical interests rather than purely economic considerations
- China aims to maintain superiority in strategic industries, particularly electric vehicle batteries and renewable energy technologies
- Chinese investments have made it difficult for the United States and other Western countries to compete

### Western Countries
- Western investments in Africa are described as slow and cautious, often tied to political considerations
- The United States and European countries are attempting to strengthen their presence in Africa
- Western investors face challenges in competing with China's approach to investment

## Partnerships and Collaborations

### Government-Private Sector Partnerships
- The Nigerian government is actively encouraging private sector participation in infrastructure development
- There is a growing emphasis on strategic partnerships rather than donor-recipient relationships
- African leaders, as expressed by Senegalese President Macky Sall, are seeking partnerships "without anyone telling us what to do or what not to do"

### Challenges to Investment
- High cost of capital in Africa (three times higher than in Europe, North America, and China) hinders investment
- Many investors perceive economic and political conditions in Africa as making investments risky
- African countries face budget pressures that impede large-scale investment in economic development
- The continent faces the quadruple threat of climate change, disease outbreaks, food insecurity, and political instability

## Career Implications for Business Administration Students

The current investment landscape in Africa presents several opportunities for business administration graduates:

1.

**Infrastructure Development**: With Nigeria planning 11,800 new projects and significant infrastructure investments across the continent, there are opportunities in project management, construction management, and logistics.

**Energy Sector**: The projected $35 billion investment in geothermal energy between 2024-2050 creates opportunities in energy management, renewable energy project development, and environmental consulting.

**International Business**: Understanding the dynamics between Chinese and Western investors in Africa can lead to careers in international business development, cross-cultural management, and investment analysis.

**Human Capital Development**: With Africa's young population and emphasis on education, opportunities exist in human resource management, training and development, and educational administration.

**Entrepreneurship**: The growing consumer markets and infrastructure gaps present entrepreneurial opportunities for graduates interested in starting their own businesses.

## Conclusion

Foreign investment in Africa is growing, with significant opportunities in energy, infrastructure, and human capital development.

While challenges remain, particularly regarding the cost of capital and perceived investment risks, the continent's natural resources, young population, and growing markets make it an attractive destination for foreign investors.

Business administration students who understand these trends and develop relevant skills will be well-positioned to take advantage of the career opportunities emerging from Africa's evolving investment landscape.

# Foreign Investment in Africa: Trends and Opportunities

## Executive Summary

This report provides an overview of foreign investment trends in Africa, highlighting key figures, geographical and industrial focus areas, major investors, and partnership formations.

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Content: With Kenya and Ethiopia in the lead, increased investment in the geothermal sector will double Africa’s geothermal capacity by 2050 and see the continent exceed the total installed capacity in Europe, according to a recent report.

This story was contributed to TechCabal by Bonface Orucho via bird story agency.

The latest report from Norwegian energy research firm Rystad Energy sheds light on the prospects of geothermal energy to play a crucial role in meeting Africa’s increasing energy demands in the coming decades.

“This growth will take the continent from being the sixth largest geothermal power generator in 2023 to the third largest in 2030,” Daniel Holmedal, a senior supply chain analyst at Rystad Energy, said of the region’s current geothermal trajectory.

“Developments that we project to come online given economics and demand really highlight the rapid buildout.”

The forecast anticipates that investments in Africa’s geothermal sector will soar to at least US$35 billion between 2024 and 2050, driven by the surging energy demand in East Africa.

Kenya and Ethiopia are poised to spearhead this growth, contributing nearly 90% of the total capacity. Their abundant geothermal resources and Ethiopia’s need to diversify its power sector, which is 88% hydro-based, will be the driving factors behind the expansion of geothermal installations in this sector, according to the report.

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Power supply in both countries is expected to increase sixfold from 2023 to 2050, surging from 34 terawatt-hours (TWh) to 222 TWh. Rystad Energy projects that the geothermal capacity in Kenya and Ethiopia will soar well beyond 10 GW by 2050, with the potential to reach as high as 12 GW.

Given its abundant geothermal resources, robust local expertise, and growing interest from international players, it is foreseeable that Kenya’s share of this total will surpass 8 GW in the projected period.

Recent developments in both countries affirm the report’s projections, emphasizing the substantial potential for these nations and the wider region to integrate geothermal energy into their energy mix.

With close to 1000 MW already installed, Kenya ranks as the 8th largest geothermal power producer globally and has more geothermal power capacity under construction than any other country, globally.

With an ambitious plan to double the current capacity by 2030, the Kenyan government is actively working to establish solid frameworks to support and fast-track the achievement of these targets.

In the latest development, legislators in Kenya directed the national utility, Kenya Power, to terminate a deal with Africa Geothermal International due to “continued delays in starting exploration of geothermal power on an allocated block.”

This termination will leave KenGen free to directly explore additional blocks in Olkaria, where 34 wells, including 26 production wells and 8 injection wells, with a tipped generation capacity of more than 1100 MW, are yet to be exploited, as reported by the country’s Business Daily.

Exploration and development activity is underway, too, at other geothermal sites in Kenya. In August, the Baringo-Silali Geothermal Project successfully drilled a new well, the Paka Well 8-A, adding 20 MW of electricity to the national grid.

More such explorations and rollouts can be expected, especially now that Kenya has secured a US$48 million (45 million euros) loan from Germany for the development and upgrade of geothermal wells in the country.

There is also a noticeable surge in geothermal activity in Ethiopia, which has the potential to generate at least 10 GW of energy from geothermal sources.

In September, the Ethiopian Electric Power (EEP) Geothermal Sector Development Project Directorate announced the successful completion of production tests for six geothermal wells for the 35 MW phase 1 of the Aluto Langano project. The project plans to generate 70 MW in two phases.

Earlier that same month, Canada-based 4th Resource signed a memorandum of understanding with Ethiopia Investment Holdings (EIH), the strategic investment arm of the Government of Ethiopia, for the development of the Hermokale geothermal project. These are among the 24 sites that the Ethiopian Geological Survey discovered in 2018 as potential geothermal drilling sites.

Interest in harnessing geothermal energy resources is also growing in African countries situated along the same East African Rift System currently being tapped by Ethiopia and Kenya. These countries include Tanzania, Burundi, Rwanda, Uganda, Kenya, Ethiopia, Djibouti, and Eritrea.

In Tanzania, 50 sites have been earmarked as potential locations to generate geothermal electricity. Kenya’s electricity generating company, KenGen, is leveraging its expertise and technical know-how to explore drilling opportunities in Tanzania and Malawi. According to The East African, KenGen already operates drilling sites in Ethiopia and Djibouti.

Kiiza Hussein, a creative consultant at UNDP, underscores the significance of international collaboration and knowledge sharing in accelerating exploration and rollouts.

“African nations can leverage partnerships with countries, organizations, and institutions that have expertise in renewable energy to accelerate their own development,” he explains.

“African countries can also allocate resources to research initiatives that focus on adapting and optimizing technologies to their specific climatic and geographic conditions,” he adds.

According to the United Nations Environment Program and the Infrastructure Consortium, the geothermal potential capacity for eastern Africa exceeds 20 GW, highlighting the considerable opportunities that lie ahead in the region for geothermal energy.

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Useful link: https://www.rystadenergy.com/news/africa-overtake-europe-geothermal-capacity

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Content: Thursday 25 May 2023
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Hassan Abdullah: African markets have the highest return on investment in the world
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The African Development Bank Group ’ s annual meetings for 2023, hosted by Egypt in Sharm El-Sheikh from 22-26 May 2023, and chaired by the Governor of the Central Bank of Egypt, Hassan Abdullah, addressed a number of important topics, foremost of which was to put forward a complete vision to attract the private sector and expand business in the continent, according to real investment standards based on feasibility studies and profit, rather than social responsibility. African countries have unprecedented competitive opportunities and high returns on invested capital.
In this regard, Hassan Abdullah, Governor of the Central Bank of Egypt and Chairman of the Board of Governors of the African Development Bank Group, said that the African continent has the highest return on investment in the world for the private sector and has huge and unprecedented investment opportunities for investors, pointing out that this potential qualifies the continent to attract private capital and international investments to work within its countries based on the principles of investment such as profitability and return on capital.
He also stressed the importance of providing mechanisms to reduce the risks that hinder the expansion of private sector investments in Africa, while creating financing opportunities commensurate with the conditions of the African continent, in terms of long lending terms and low cost of interest, in order to encourage attracting private investments, enhance capital flows to promote the economies of the region, and benefit from the strong competitive opportunities offered by African countries.
He expected that the provision of incentives to attract private investments in the African continent, and the arrival of the private sector to invest in the countries of the continent, will contribute to making Africa at the forefront of the continents to achieve growth rates, because of the resources it has to qualify to achieve this.
The meetings of the Board of Governors of the African Development Bank Group, chaired by the Governor of the Central Bank of Egypt, witnessed the attendance of about 3,650 participants, representatives of 81 countries, with the participation of central bank governors, ministers of finance, planning and investment, and senior government officials, including 54 African countries and 27 non-African countries, in addition to the participation of the G7 countries: America, France, Britain, Italy, Canada, Japan and Germany.
The African Development Bank (AfDB) is a multilateral development finance institution established in 1964 to contribute to economic development and social progress in African countries.

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Content: Africa absorbs only 3% of global energy investment
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In its latest report, the International Energy Agency (IEA) confirmed that “the proportion absorbed by the African continent of global investments allocated to energy does not exceed 3%, a proportion considered by the agency to be small, compared to the population of the continent.
“This reality shows two challenges that must be addressed in a continent where 600 million people still have no access to electricity (43% of the continent ’ s total population in 2022).
The International Energy Agency (IEA) presented these conclusions in a report presented at the first Africa Energy Summit, which took place on the 6th of this month in Nairobi, the capital of Kenya.
The agency explained the weak access of global investment to the continent of Africa mainly because of the high cost of capital from borrowing, which is three times higher in Europe and North America, but also in China.
“Many investors believe that the combined economic and political situation in Africa makes investment in many projects on the African continent very risky, ” said Ama Gordon, co-editor of the report, adding that“ there is a difference between real risk and expected risk. ”
Akinwumi Adsina, President of the African Development Bank, said in the introduction to the report that “capital cost prices must be reduced, ” stressing that“ the solution lies in targeted support and the assistance of international financial institutions and multilateral bodies, through the granting of loans on affordable terms, as there is an urgent need to increase energy investments within the continent, at a time when the public finances of many African countries are facing suffocating pressures. ”
From here to 2030, the International Atomic Energy Agency (IAEA) has proposed that the private sector finance half of Africa ’ s energy investments, pending the completion of alternative energy projects that are expected to provide a quarter of Africa ’ s energy needs, nearly eight times as much as in 2020, through solar and wind-saving energy.
The International Energy Agency predicts that around 1 billion people in sub-Saharan Africa will have access to power from the public grid by 2040; however, half a billion people will remain off the grid.
Investors believe that solar power can fill this gap, while also helping to reduce greenhouse gas emissions.
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The 2022 Nigeria Construction Market Report

2022 Nigeria Construction Market Report

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The Nigeria Construction Market Report is focused on delivering indepth analysis, projections and insights about the lucrative Nigerian Construction Industry

The Nigerian Construction Market report therefore serves as a guidebook to investors on how to enter and navigate smoothly in the market with as much intelligence as possible.”
— Dr. Segun Faniran

AL MARYAH ISLAND, ABU DHABI, UNITED ARAB EMIRATES, January 15, 2023 /EINPresswire.com/ -- The Nigerian construction market is valued at about US$39.5 billion. The sector's contribution to the country's economy stood at 9.56% and grew by 4.8% in the first quarter of 2022.

And with extensive natural resources, a high volume of young and cheap labor, a fast-growing consumer market, and immense investment opportunities in energy and infrastructure, the West African country will always be a target destination for many large economies.

Nigeria is the largest country in Africa by population and gross domestic product (GDP). The government at all levels is committed to infrastructure development, with the private sector actively responding to the call for partnership by the government. There is a huge advantage for early entrants as the urbanization rate grows.

The government looks to embark on 11,800 new projects and continue old ones. These projects, valued at over NGN3.6 trillion, would involve constructing schools, hospitals, roads, bridges, houses, energy, and telecommunication infrastructure.

Therefore, for global infrastructure investors thinking about entering the Nigerian construction industry, there's no better time.

ConstructAfrica has worked with diligent specialists to create this Nigeria construction market report that will give the readers all the information required to succeed in the Nigerian construction market.

The report offers the following benefits :
Understand challenges and opportunities in the Nigerian construction market.
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To Download the 2022 Nigeria Construction Market Report Sample Presentation for FREE, please click : http://nigeriareport.constructafrica.com

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Content: DWN: Chinese investors are fleeing the West – the EU and the US are driving themselves into isolation
Chinese investors are investing less and less money in Western countries, according to Deutsche Wirtschafts Nachrichten.
They are deterred by growing restrictions, high costs, exacerbating synophobia, as well as other factors of uncertainty, in particular high electricity prices and a shortage of personnel.
Depositors from China prefer to give the funds released to the countries of the so-called global South.
Moreover, such a strategy Beijing pursues not economic, but rather geopolitical interests, explains the German edition.
In 2016, China ’ s foreign investment amounted to $200 billion, writes Deutsche Wirtschafts Nachrichten.
But by 2022, this value decreased by 25%, reaching $146.5 billion.
And analysts believe that this trend will continue provided that Chinese President Xi Jinping continues his course.
But the decline in investment is not uniform.
The fact is that Beijing began to invest significantly less money in Western countries, and in the countries of the so-called global South, on the contrary, invests more.
Chinese investors are fleeing the West, continues the German edition.
They are deterred by growing restrictions, high costs and other factors of uncertainty, in particular high electricity prices and a shortage of personnel, as in Germany.
In addition, the exodus of investors from China is explained by the exacerbation of synophobia.
For example, the US authorities are going to limit the possibilities of investing in Chinese companies related to the high-tech and military sector.
This step in Washington is explained by the protection of national security.
Usually, foreign investments help create jobs, give start-up companies the capital they need and ultimately lead to economic growth in the country, explains Deutsche Wirtschafts Nachrichten.
Accordingly, the withdrawal of Chinese investors will deprive Western states of all these advantages.
And in the short term, smaller economies, such as Australia, Canada and Hungary, will be hardest hit.
But the West does not seem to be taking this seriously.
In contrast, the United States and Europe are pursuing a deliberate policy of reducing Chinese influence, thus driving themselves into isolation, and in the long term, perhaps even a new resource dependence on China and the global South.
Western countries will simply lack the capital to launch startups.
The departure of investors from China will deprive the countries on the periphery of Europe of the base for economic growth, and then this trend can spread to Germany and France.
At the same time, investing in the states of Africa, Southeast Asia and South America, Beijing pursues not economic, but rather geopolitical interests, the publication explains.
With their help, he wants to maintain superiority in certain sectors of industry, in particular in the production of batteries for electric vehicles and technologies for the extraction of renewable energy sources.
In the global South, China is primarily attracted by fast-growing markets with a lot of resources.
The West is also trying to gain a foothold in these regions.
And in the short term, attempts to charm potential partners, as well as the policy of restrictions may provide Washington and Brussels with certain advantages, but it is only a matter of time before, as Chinese influence grows, countries such as Brazil and Indonesia will switch to the side of China, concludes Deutsche Wirtschafts Nachrichten.
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Global FDI reached US $1.65 trillion last year, surpassing pre-pandemic levels
According to the latest report of the United Nations, global foreign direct investment (FDI) surged 77% last year from the previous year, rebounding strongly from the impact of the COVID-19 epidemic and surpassing the pre-epidemic level, but the distribution of overseas funds is uneven, mainly concentrated in the developed countries of Europe and the United States, followed by the developing countries, and the poorest countries.
The United Nations Conference on Trade and Development (UNCTAD) released data on the 19th, the total overseas investment of global enterprises in 2021 reached 1.65 trillion US dollars, up from 929 billion US dollars in 2020, of which nearly three-quarters went to developed countries.
According to the report, FDI from rich countries reached an estimated $777.7 billion last year, three times the previous year.
FDI in the United States jumped 114% from the previous year, and in Europe by more than 80%, thanks to the surge in cross-border M & A transactions (M & A).
FDI inflows to developing countries increased by 30 per cent last year to close to $870 billion, including accelerated growth in East and Southeast Asia, a return to near pre-pandemic levels in Latin America and the Caribbean, and an increase in West Asia.
As for the poorest countries, more foreign capital flowed into Africa last year than in the previous year.
FDI by most African firms has increased.
In terms of industry, driven by favorable long-term financing conditions, economic stimulus packages and overseas investment plans, the infrastructure sector was a big winner last year, with financing increasing by 53% in several years and 91% in value, mostly in high-income regions and in Asia, Latin America and the Caribbean.
In contrast, new investment in industry and global value chains was weak last year.
The number of greenfield investments announced last year was almost flat (down 1% year-on-year), but the amount increased slightly by 7%.
New investment plans in global value chain-intensive industries, such as electronics, fell further.
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Content: Is Biden ’ s diplomacy working in Africa?
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Over the course of three days, the US-Africa summit called by the administration of President Joe Biden was held in Washington, and concludes today with many expectations and challenges for both sides.
The United States says it wants to build a strong partnership, and the summit is meant to show its “enduring commitment to Africa, ” while African leaders speak of their aspiration to build strong relationships“ beyond the politics of diktat. ”
What is no secret is that the summit comes in the context of America ’ s strategy to curb the Chinese and Russian influence that has grown dramatically on the African continent over the past two decades.
The Biden administration has been keen to invite all African countries, including some that have reservations about its policies, and has excluded only Sudan, Mali, Guinea and Burkina Faso because of the military coups that took place in them.
Africa is important in the context of the US-China competition for influence because it is the second largest continent after Asia, with a population of 1.4 billion people, 60 percent of the population is young people under the age of 25, a figure that is increasing.
U.S. Vice President Kamala Harris said that Africa is the fastest-growing continent in the world and is increasingly in need of education, technology and infrastructure, with a population increase that means a $2.1 trillion purchasing power for the global economy.
The question is, will America succeed in curbing Chinese influence in Africa?
It's certainly not going to be easy.
China has become Africa ’ s largest trading partner in the last decade.
According to official figures released by Beijing, the volume of its trade with Africa increased by 35 percent in 2021 to $254 billion, in addition to Beijing being the largest lender to African countries.
At a time when trade between the United States and Africa is estimated at $64 billion, placing America fourth in the list of trading partners with Africa.
While Western investments in the African continent appear slow and cautious, often tied to estimates and political factors, China is pouring huge money into African countries in the form of loans to finance massive infrastructure projects, from ports to roads and power plants, making it difficult for the United States and other Western countries to compete.
In its efforts today to make a strong return to Africa, what the administration hears most from African leaders is that they want from Washington a strategic partnership away from dictatorial politics, or, as Senegalese President Macky Sall, whose country holds the current chair of the African Union, they want a partnership “without anyone telling us what to do, or what not to do. ”
Many African governments may see China as comfortable in dealing because it does not interfere in their political affairs and does not raise issues of human rights and democracy with them.
But this does not negate that they also raise their concerns when their debt burdens accumulate and they are unable to pay, because China will not hesitate - as it has shown in several cases - to seize their resources or national assets such as ports and airports, in exchange for these debts.
Too often, loans have been squandered by waste, corruption, and lack of transparency and accountability, putting these countries at the mercy of creditor nations.
China, however, prioritizes its interests, which are acquiring natural resources and raw materials, while marketing its products, expanding and diversifying its trade so that it is not too dependent on trade with the West, amid the new Cold War on the international stage and the growing strategic conflict with America and the West.
Washington may not be able to keep up with Beijing ’ s massive infusion of money without monitoring or demanding transparency, but it appears to be working on several fronts to try to build strong ties with Africa.
Since the first day of the summit in Washington, the Biden administration has announced a series of decisions to emphasize its seriousness in building a new partnership strategy, including a $55 billion investment in Africa over the next three years in the areas of food security, education, health, environment, infrastructure and renewable energy.
To counter previous criticism that many of the recommendations and promises are not being implemented, Washington appointed former Assistant Secretary of State Johnny Carson, who has also served as ambassador to a number of African countries and in the Department of African Affairs at the State Department to follow up on the implementation of the decisions and initiatives emanating from this summit.
At the same time, Biden signed a resolution establishing a presidential advisory board to promote the involvement of African expatriates in the United States and to advise the White House on how to strengthen U.S.-African ties.
This suggests that the US administration is counting on a large role for expatriates and residents of its territory coming from Africa, who represent a large proportion of the African diaspora around the world.
At the same time, Washington seems interested in focusing on Africa ’ s youth, who represent the highest percentage of its population, whether by supporting education programs, training opportunities, or investments in areas to create employment opportunities for young people.
Washington is trying to distinguish its support and investments by asserting that, unlike China, it does not link its investments to the recruitment of American workers, for example, while China often brings its workers to carry out its projects.
The Biden administration was also keen to reaffirm its support for the African Union ’ s accession to the G-20, and for Africa to be given a permanent seat on the Security Council as part of the reforms that several countries are calling for in the structures and work of the United Nations.
These steps are important, but are they enough to restore momentum to U.S.-African relations?
Much will depend on the implementation of the decisions, on the steps America takes to strengthen relations, to develop trade cooperation and investments, and to show that it is adopting a new strategy of strong and sustained relations with African countries that have long complained of Washington ’ s neglect or fluctuating relations with the continent.
The administration of former President Barack Obama had shown similar enthusiasm to that of the Biden administration, and organized the first African-American summit in Washington in 2014, on the basis that those summits will continue periodically, which did not happen, but relations deteriorated under the administration of Donald Trump, who showed no interest in the African continent, and even showed clear contempt for it in some of his statements.
Africa is also waiting for Washington to help with debt relief, support development projects, grant tax concessions and exemptions for African exports, and obtain compensation for the damage caused to the continent by climate change.
In any case, international relations are always subject to calculations of interests, this applies to China as it does to America, and Africa cannot expect to receive free support, and if it wants to get rid of the pressure, its governments must better employ loans and aid in real development projects, and make better use of its resources.
The policy of borrowing to fill budget deficits, or financing ill-considered projects, and wasting money in the absence of transparency and widespread corruption, is the disastrous recipe that has contributed to the impoverishment of Africa and undermined stability in it.
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November 13, 2023

We are building power house around investment in Africa – Adesina

AfDB President, Dr. Akinwumi Adesina

By Jimoh Babatunde

The President of the African Development Bank , Dr. Akinwumi Adesina, says the bank is building a formidable powerhouse around investments in Africa, that will deliver transformative impacts on the lives of people.
He made this known in the Moroccan city of Marrakech, weekend, at the close of the day global event, Africa Investment Forum’s 2023.

The Africa Investment Forum’s 2023, which drew over 1,000 delegates from more than 60 countries , generated $34.82 billion in investment interest for infrastructure, agriculture, health, and creative industry projects.
Speaking on the event with the theme “Unlocking African Value Chains,” Adesina said “We are building a formidable powerhouse around investments in Africa, that will deliver transformative impacts on the lives of people.
“That is the bottom line of the Africa Investment Forum: investing to improve lives.”
The African Development Bank Group President, and Chairperson of the Africa Investment Forum, Dr. Akinwumi Adesina,thanked Moroccan King Mohammed VI who placed the event under his high patronage.

“Morocco is the right choice. We have been treated to incredible hospitality. The decision of the Africa Investment Forum founding partners to hold the 2023 Market Days in Marrakech two months after September’s devastating earthquake, and the support and resilience of the Kingdom and government of Morocco is highly commendable.”

Morocco’s Minister of Economic Inclusion, Small Business, Employment and Skills Younes Sekkouri, said the Forum underlined the critical importance of South-South partnerships and the crucial issue of financing infrastructure.

“Africa is at the forefront of international attention as one of the most dynamic and promising markets in the world…The Africa Investment Forum has been a turning point to explore these opportunities, discuss challenges and solutions and strengthen the partnerships necessary to realise our aspirations,” Sekkouri said.

Among delegates were several African heads of state and government, including President Azali Assoumani of Comoros and current chair of the African Union, President Samia Suluhu Hassan of Tanzania, President Julius Maada Bio of Sierra Leone, Rwanda’s Prime Minister Eduoard Ngirente. Also in attendance was the Prime Minister of Barbados, Mia Mottley.

The Africa Investment Forum is a multi-stakeholder platform focused on continental dealmaking and project facilitation between project sponsors, policy makers and investors. With this edition, the Forum has attracted nearly $180 billion in investment interest since it was launched in 2018.

Deals covered several sectors including the Mtwara-Mbamba Bay standard Gauge railway line in Tanzania, and the Mangapwani II Integrated Port in Zanzibar. There were also deals in agri-business, renewable energy, creative industries and healthcare.
At the launch event of the Alliance for Special Agro-Industrial Processing Zones, the African Development Bank, the Africa Export-Import Bank, the United Nations Industrial Development Organization, committed $3 billion to the alliance.

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The Chief Executive Officer of the Islamic Trade Finance Corporation Eng. Hani Salem Sonbol, representing the President of the Islamic Development Bank Dr. Muhammed Sulaiman Al Jasser, said Africa was a land of boundless possibilities and a dynamic engine of growth.

“As a founding partner of the Alliance for Special Agro-Industrial Processing Zones, IsDB committed $300 million to fuel Africa’s agro-industrial growth. We are ready to partner with investors, businesses, and development partners to unlock the full potential of the continent,” he said.

The Africa Investment Forum showcased several key side events including regional transport corridors, a roundtable with a Japanese business delegation, and a Mayor’s Forum on leveraging cities and municipalities to unleash growth and development.
The Mayoral event included mayors and governors from Lagos, Nairobi, Addis Ababa, Abidjan and ministerial representation from Rwanda.

The information is intended to help business administration students at the University of Nairobi understand career opportunities that may arise from Africa's evolving investment landscape.

Title:

Content: Monday, May 27, 2024
HomeBusinessZIMCODD Calls For Human Capital Investment In Africa

ZIMCODD Calls For Human Capital Investment In Africa

The Zimbabwe Coalition on Debt and Development (ZIMCODD) has emphasized the critical importance of investing in human capital to propel Africa toward its developmental goals.

The coalition acknowledged the strides made in the quest for socioeconomic freedom but noted the persistent challenges that impede this journey.

The theme for 2024, “Educate an African Fit for the 21st Century: Building Resilient Education Systems for Increased Access to Inclusive, Lifelong, Quality, and Relevant Learning in Africa,” resonates with the coalition’s call for a robust investment in the continent’s burgeoning youth population.

With over 400 million young people aged between 15-35 years, Africa boasts the youngest demographic globally, making quality education a pivotal lever for sustainable growth.

ZIMCODD underscored the significance of inclusivity as a cornerstone for unlocking Africa’s latent potential. Despite progress in integrating women and youth into governance and socioeconomic conversations, the coalition advocates for their substantial representation in leadership and the labor market, given that they constitute over half of the continent’s populace.

The vulnerability of Africa to climate change, primarily due to its dependence on rain-fed agriculture, was another concern raised by ZIMCODD. The increasing frequency of droughts and natural disasters necessitates governmental action to bolster climate change initiatives and foster innovative domestic resource generation strategies.

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Corruption and resource leakages continue to undermine Africa’s capacity for domestic resource mobilization, with political patronage and illicit financial flows eroding the continent’s developmental prospects. This reliance on external borrowing has led to unsustainable debt burdens, stifling national development as funds are diverted to service debts, often lacking transparency and accountability.

Notably, the debt-to-GDP ratios in Malawi, Zambia, and Zimbabwe have escalated alarmingly, posing a significant challenge for Southern Africa.

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Multi-award winning journalist/photojournalist with keen interests in politics, youth, child rights, women and development issues. Follow Lovejoy On Twitter @L_JayMut

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Title:

Content: Is Africa a good place to start a business?

Africa is experiencing a technology boom: the rapid penetration of Internet and mobile technologies make this region more and more interesting for IT entrepreneurs, despite the specificity and heterogeneity of the market.

IT in Africa

The African continent is a large market, as well as a source of direct access to a large audience with smartphones and a wide range of resources. The region is rich in coal, oil, ferrous metal ores, graphite, aluminum, and phosphate and consists of 54 countries, extremely diverse in terms of population, digitalization, economy, and purchasing power. Since January 2021, the continent has had a free trade zone between the countries of the African Union.

The market entry threshold is low, there is no fierce competition, and the potential for growth and demand for technology projects is enormous: the region has many problems that can be solved through innovation.

The continent has a crazy rate of Internet development and a native love of smartphones. You can buy bananas on the street and pay with your mobile account.

Students are often interested in starting their businesses. More often than not, students choose completely new locations and new startup ideas. We recommend that you consider Africa for your business because in a few years it will bring you success. But first, we recommend visiting Africa as a tourist to get a feel for the atmosphere. If you got carried away with preparing for a trip to Africa and forgot to write a research paper on time do not panic. After all, it’s no trouble, because a student service will always come to your aid. So if you’re wondering if you can pay someone to write my paper, always go to the WritingAPaper service. Its experts will help with any academic paper, and you will have time for exciting trips.

By 2025, experts predict Africa’s Internet economy should reach 5.1% of GDP – about $185 billion. FinTech, AgroTech, eCommerce, InsureTech, HealthTech, and CleanTech are considered the most in-demand areas.

According to research firm Briter Bridges, venture capital investment in African startups totaled $1.31 billion in 2021, most of which came from fintech projects. Kenya, Nigeria, and Egypt are considered to be the drivers of the region’s venture capital ecosystem: projects from these countries have received the most investment over the past few years compared with their neighbors on the continent. More than 30% of the continent’s technology hubs are concentrated here.

“The GDP of the entire region is $6.8 trillion. If Africa were a single country, it would be fourth in the world after China, the U.S., and India. Undoubtedly, the economic power of the region is still small, but in the next 30-50 years, it is predicted a stable growth in the range of 6-12% per year, and this process will be accompanied by the creation of new industries and businesses.

GDP per capita in terms of purchasing power parity in Africa is $5.2 thousand, for comparison, in the Russian Federation – $29.4 thousand, in the USA – $68.3 thousand, in Europe – about $41 thousand. However, in the top 20 fast-growing economies of the world, six lines are African countries: Benin, Ghana, Ethiopia, Tanzania, Rwanda, and Cote d’Ivoire. The main technological hubs on the continent are concentrated in South Africa, Nigeria, and Egypt.

The level of development of the IT market in Africa is 5-10 years behind other countries. Until now, only 28% of the continent’s population has access to the Internet, but in the last few years, the situation is gradually changing. Now the digital industry in Africa is actively developing, and the international market is noticing this trend.

African Accelerators & Incubators

There are more than 600 technology centers in Africa, among them incubators, gas pedals, and co-working spaces for companies. One of the most famous technology centers is the CcHUB. It is located in Yaba, Nigeria’s Silicon Valley. CcHUB boasts a rich network of 650 startups across Africa.

CcHUB partners with Amazon, and Google for Startups, Visa, and other international companies. The incubator focuses on projects in health, smart transportation infrastructure, fintech, education, and cybersecurity.

Another major center actively developing a technology and innovation startup environment is the MEST incubator in Ghana. Assistance from the Meltwater Foundation allows MEST to target startups from all over Africa at the earliest stages of development, train entrepreneurs for free, and help with product prototyping and hypothesis testing.

MEST is an educational program for IT entrepreneurs, an internal seed fund, and a network of incubators for technology startups in Africa. The hubs are located in Accra, Lagos, Cape Town, and Nairobi. The organization has been active since 2008, actively supporting programmers and engineers. One of the programs lasts a year, is designed for 60 start-ups, and is completely free. MEST has many famous partners, such as the acceleration program for fintech startups supported by the French bank Societe Generale.

In Ethiopia today, three private business incubators are systematically working with technology startups: BlueMoon, iceAddis, and iCog/Solve. The first has more AgriTech, the second has eCommerce startups, and the third has programming, including AI projects.

The iCog/Solve gas pedal hosts Ethiopia Hacks, a series of 12 hackathons in which 600 people have already participated. The project is funded by the U.S. Department of State and the U.S. Agency for International Development, with Google Developers Group (GDG) and the Center for Accelerated Women’s Economic Empowerment (CAWEE) as partners.

Here, with the support of Kenya’s Ministries of Health and Transport, the famous MSafari service was created to monitor the passenger flow of public transport.

The Cape Innovation and Technology Initiative (CiTi) is the oldest technology business incubator on the continent. Located in Cape Town and founded in 1999, it focuses on the development of IT projects. During its existence, it has helped three thousand entrepreneurs to create more than two thousand companies and continues to be actively involved in the Cape Town technology community.

iHub – each year the gas pedal supports 450 startups. The gas pedal has a wide range of programs for business startups. One of them is aimed at the development of IT projects run by women.

Startupbootcamp Afritech – runs several accelerator programs, including ASIP Accelerator Program and iNovo. Project recruitment happens all the time, and there is a virtual and offline passing format. The program is supported by Amazon, Nedbank, PwC, and other large companies. Participants have a chance to receive an investment of 15 thousand euros.

The most specialized technoparks are presented in South Africa – Technopark Stellenbosch, Highveld Techno Park, and The Innovation Hub. Notable technoparks exist in Senegal (Dakar Technopolis), Rwanda (Kigali ICT Park), Madagascar, and Zimbabwe at NUST University.

Africa, with a population of 1.35 billion, could overtake China and India in the next decade. McKinsey estimates that by 2025, the region will have 360 million smartphones and 240 million computers and laptops, and digitalization will increase GDP by $140-320 billion. Not surprisingly, such a large – and still technologically untapped – market is beginning to play an increasingly prominent role in the economic arena.

Thanks to the serious penetration of smartphones and the large percentage of the young population, the African market is becoming a convenient environment for launching and developing technological projects. A large number of fragmented states at different stages of economic development makes it difficult to create a unified startup industry in the region but does not prevent the effective functioning of individual technology hubs with which large international companies are willing to cooperate.

Localization of foreign projects in Africa is complicated by a large language group, corruption, and the specific mentality of the population, but the potential growth opportunities and lack of serious competition more than offset the possible risks.

We are committed to Africa

Unlike many global publications, for nearly a decade we have been committed to showing a complete picture of Africa – not just a single story.  Offended by one-sided coverage of wars, disasters and disease, the founders of Africa.com created a website that provides a balanced view of Africa – current events, business, arts & culture, travel, fashion, sports, information, development, and more.

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## Global Foreign Direct Investment Context

In 2021, global foreign direct investment (FDI) reached $1.

Title:

Content: The rise of foreign investment in the Middle East and reveals its proportions
Palestine Today - Gaza
Time: 05: 36 PM
June 11, 2022
Foreign direct investment (FDI) flows to the countries of the Arab world and the Middle East in 2021 increased by 44.2% to reach $66.85 billion compared to $46.37 billion in 2020.
In a report based on data from the United Nations Conference on Trade and Development (UNCTAD), Al-Iqtisadiyah newspaper pointed out that "this rise in foreign direct investment to the region was mainly supported by Saudi Arabia, which contributed about 68% of the increase in investments to the region by $13.9 billion, while the increase for the region in total $20.5 billion."
“Foreign direct investment (FDI) flowing to Saudi Arabia rose 257%, the fastest pace in history, to reach $19.3 billion in 2021, compared to $5.4 billion in 2020, ” the report said, pointing out that“ FDI flowing to Saudi Arabia in 2021 is the highest since 2010, when it reached $28.3 billion, as a result of overcoming obstacles to foreign investment in the Kingdom and the huge investment opportunities available under the Kingdom ’ s Vision 2030. sectors ".
The report pointed to "the highest countries in the region attracted foreign direct investment in 2021," explaining that "led by the UAE with 20.7 billion dollars, followed by Saudi Arabia, third Turkey with 12.5 billion dollars, followed by Egypt with 5.1 billion dollars, and Salman 3.6 billion dollars."
The report revealed that "Iraq recorded a departure for foreign investments worth $2.6 billion, to continue foreign investments in the exit for more than six consecutive years, and that Qatar recorded a departure for foreign investments for the fourth year in a row to reach $1.1 billion in 2021."
“Unlike the previous seven countries, the flow of foreign direct investment in 2021 amounted to about $2.15 billion for Morocco, Bahrain $1.8 billion, and Iran $1.4 billion, ” she said, noting that“ foreign investment amounted to less than $1 billion in Algeria by $870 million, and $660 million in Tunisia, while in Jordan $622 million, Sudan $462 million, Somalia $456 million and $273 million in Lebanon. ” Palestine was $256 million, Kuwait $198 million, Djibouti $167 million, Mauritania $22 million and Comoros $4 million.
According to the World Investment Report, “FDI recovered and recovered to pre-Coronavirus levels, up 64% from 2020 to reach $1.58 trillion in 2021, driven by momentum from M & A activity and rapid growth in international project financing due to loose financing and stimulus packages for key infrastructure. ”
While all regions benefited from the recovery, three-quarters of growth was concentrated in advanced economies, where foreign investment inflows rose 134 percent, and multinationals made record profits, the top 10 receiving FDI in 2021 were the United States, China, Hong Kong, Singapore, Canada, Brazil, India, South Africa, Russia and Mexico.
“Flows to developing economies rose 30% to $837 billion, the highest level ever recorded, due to strength in Asia, a partial recovery in Latin America and the Caribbean and recovery in Africa, ” she said, noting that the outlook for the current year was more bleak, according to the report, released by the United Nations Development Programme (UNCTAD) entitled“ International tax reforms and sustainable investments ”. This is because the business and investment climate has changed dramatically.

65 trillion, exceeding pre-pandemic levels with a 77% increase from 2020.

However, investment distribution remains uneven, with developed countries receiving nearly three-quarters of global FDI.

Despite this, Africa saw an increase in overseas funds compared to previous years, though it continues to receive a smaller share relative to other regions.

Title:

Content: Africa absorbs only 3% of global energy investment
Abdallah Mouloud
Font size
Nouakchott - "Arab Jerusalem":
In its latest report, the International Energy Agency (IEA) confirmed that “the proportion absorbed by the African continent of global investments allocated to energy does not exceed 3%, a proportion considered by the agency to be small, compared to the population of the continent.
“This reality shows two challenges that must be addressed in a continent where 600 million people still have no access to electricity (43% of the continent ’ s total population in 2022).
The International Energy Agency (IEA) presented these conclusions in a report presented at the first Africa Energy Summit, which took place on the 6th of this month in Nairobi, the capital of Kenya.
The agency explained the weak access of global investment to the continent of Africa mainly because of the high cost of capital from borrowing, which is three times higher in Europe and North America, but also in China.
“Many investors believe that the combined economic and political situation in Africa makes investment in many projects on the African continent very risky, ” said Ama Gordon, co-editor of the report, adding that“ there is a difference between real risk and expected risk. ”
Akinwumi Adsina, President of the African Development Bank, said in the introduction to the report that “capital cost prices must be reduced, ” stressing that“ the solution lies in targeted support and the assistance of international financial institutions and multilateral bodies, through the granting of loans on affordable terms, as there is an urgent need to increase energy investments within the continent, at a time when the public finances of many African countries are facing suffocating pressures. ”
From here to 2030, the International Atomic Energy Agency (IAEA) has proposed that the private sector finance half of Africa ’ s energy investments, pending the completion of alternative energy projects that are expected to provide a quarter of Africa ’ s energy needs, nearly eight times as much as in 2020, through solar and wind-saving energy.
The International Energy Agency predicts that around 1 billion people in sub-Saharan Africa will have access to power from the public grid by 2040; however, half a billion people will remain off the grid.
Investors believe that solar power can fill this gap, while also helping to reduce greenhouse gas emissions.
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What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

## Key Investment Figures in Africa

### Country-Specific FDI (2021)
- Morocco: $2.

15 billion
- Bahrain: $1.

8 billion
- Iran: $1.

4 billion
- Algeria: $870 million
- Tunisia: $660 million
- Jordan: $622 million
- Sudan: $462 million
- Somalia: $456 million
- Lebanon: $273 million
- Palestine: $256 million
- Kuwait: $198 million
- Djibouti: $167 million
- Mauritania: $22 million
- Comoros: $4 million

### Projected Investment Figures
- Geothermal sector: Projected investments of at least $35 billion between 2024 and 2050
- Nigeria: Infrastructure projects valued at over NGN3.

6 trillion (approximately $7.

8 billion USD)

## Geographical Investment Focus

### East Africa
- Kenya and Ethiopia are leading geothermal energy investments, contributing nearly 90% of the region's total geothermal capacity
- Ethiopia's need to diversify its power sector (currently 88% hydro-based) is driving investment expansion

### West Africa
- Nigeria, Africa's largest country by population and GDP, is a major investment destination
- The Nigerian government is undertaking 11,800 new infrastructure projects
- Nigeria offers extensive natural resources, young labor force, and a fast-growing consumer market

### North Africa
- Morocco received the highest FDI in North Africa at $2.

Which African countries are driving the venture capital ecosystem?

Which countries are preferred FDI destinations in Africa?

Which African countries are driving the venture capital ecosystem?

Which countries are preferred FDI destinations in Africa?

15 billion in 2021
- Algeria and Tunisia also received significant investments at $870 million and $660 million respectively

## Industrial Investment Areas

### Energy Sector
- Geothermal energy is experiencing significant growth, with Africa's capacity expected to double by 2050
- The continent is projected to move from the 6th largest geothermal power generator in 2023 to the 3rd largest by 2030
- Africa is expected to exceed Europe's total installed geothermal capacity by 2050
- There is a critical need for increased energy investments across the continent

### Infrastructure
- Infrastructure was the biggest winner in global investment trends, with financing deals increasing by 53% and amounts jumping by 91%
- Nigeria's infrastructure projects include schools, hospitals, roads, bridges, houses, energy, and telecommunication infrastructure
- China has invested heavily in large-scale infrastructure projects, including ports, roads, and power stations

### Human Capital Development
- There is growing emphasis on investing in human capital, with Africa having over 400 million young people aged 15-35
- Quality education is identified as a pivotal lever for sustainable growth

## Major Foreign Investors and Investment Trends

### China
- China is investing heavily in African countries through loans for large infrastructure projects
- Chinese investments are driven by geopolitical interests rather than purely economic considerations
- China aims to maintain superiority in strategic industries, particularly electric vehicle batteries and renewable energy technologies
- Chinese investments have made it difficult for the United States and other Western countries to compete

### Western Countries
- Western investments in Africa are described as slow and cautious, often tied to political considerations
- The United States and European countries are attempting to strengthen their presence in Africa
- Western investors face challenges in competing with China's approach to investment

## Partnerships and Collaborations

### Government-Private Sector Partnerships
- The Nigerian government is actively encouraging private sector participation in infrastructure development
- There is a growing emphasis on strategic partnerships rather than donor-recipient relationships
- African leaders, as expressed by Senegalese President Macky Sall, are seeking partnerships "without anyone telling us what to do or what not to do"

### Challenges to Investment
- High cost of capital in Africa (three times higher than in Europe, North America, and China) hinders investment
- Many investors perceive economic and political conditions in Africa as making investments risky
- African countries face budget pressures that impede large-scale investment in economic development
- The continent faces the quadruple threat of climate change, disease outbreaks, food insecurity, and political instability

## Career Implications for Business Administration Students

The current investment landscape in Africa presents several opportunities for business administration graduates:

1.

Title:

Content: Africa absorbs only 3% of global energy investment
Abdallah Mouloud
Font size
Nouakchott - "Arab Jerusalem":
In its latest report, the International Energy Agency (IEA) confirmed that “the proportion absorbed by the African continent of global investments allocated to energy does not exceed 3%, a proportion considered by the agency to be small, compared to the population of the continent.
“This reality shows two challenges that must be addressed in a continent where 600 million people still have no access to electricity (43% of the continent ’ s total population in 2022).
The International Energy Agency (IEA) presented these conclusions in a report presented at the first Africa Energy Summit, which took place on the 6th of this month in Nairobi, the capital of Kenya.
The agency explained the weak access of global investment to the continent of Africa mainly because of the high cost of capital from borrowing, which is three times higher in Europe and North America, but also in China.
“Many investors believe that the combined economic and political situation in Africa makes investment in many projects on the African continent very risky, ” said Ama Gordon, co-editor of the report, adding that“ there is a difference between real risk and expected risk. ”
Akinwumi Adsina, President of the African Development Bank, said in the introduction to the report that “capital cost prices must be reduced, ” stressing that“ the solution lies in targeted support and the assistance of international financial institutions and multilateral bodies, through the granting of loans on affordable terms, as there is an urgent need to increase energy investments within the continent, at a time when the public finances of many African countries are facing suffocating pressures. ”
From here to 2030, the International Atomic Energy Agency (IAEA) has proposed that the private sector finance half of Africa ’ s energy investments, pending the completion of alternative energy projects that are expected to provide a quarter of Africa ’ s energy needs, nearly eight times as much as in 2020, through solar and wind-saving energy.
The International Energy Agency predicts that around 1 billion people in sub-Saharan Africa will have access to power from the public grid by 2040; however, half a billion people will remain off the grid.
Investors believe that solar power can fill this gap, while also helping to reduce greenhouse gas emissions.
Subscribe to our mailing list

Title:

Content: en English

Fairer Green Finance

Increasingly shut out of capital markets, African countries face huge budget pressures that impede large-scale investment in economic development. To limit global warming and avert an environmental catastrophe, the international community must help developing countries overcome investors' biased risk perceptions.

CAIRO – This month’s United Nations Climate Change Conference (COP27) in Egypt looks set to be a defining moment in what will surely be a pivotal decade for climate action. Whereas COP26 in Glasgow last year was dubbed the “finance COP,” this gathering has been dubbed by some the “implementation COP” to reflect its focus on translating funding commitments into concrete plans.

COP27’s agenda underscores the need for stronger multilateral cooperation and highlights the urgency of honoring the international community’s pledge to close climate-financing gaps in the Global South. Failing to do so will make it difficult to meet the 2015 Paris climate agreement’s central goal of limiting global warming to well below 2° Celsius, relative to pre-industrial levels, and will render the efforts to limit the temperature increase to 1.5°C all but impossible.

Converting financial commitments to investment opportunities is critical to strengthening climate resilience in Africa. While the continent faces the quadruple threat of climate change, disease outbreaks, food insecurity, and political instability, African countries also struggle with huge budget pressures that impede large-scale investment in economic development. If funding gaps go unaddressed, they will continue to undermine the continent’s opportunity to leapfrog the need for carbon-intensive technologies for progress in achieving the UN’s Sustainable Development Goals (SDGs) and hamper efforts to avert climate catastrophe. The consequences will be felt far beyond Africa’s borders.

According to recent Climate Policy Initiative estimates, the global climate-financing gap – the difference between the total cost of combined Nationally Determined Contributions under the Paris climate agreement and the financing that governments can provide from their own resources to support the net-zero transition until 2030 – is roughly $2.5 trillion. Moreover, funding for climate-adaptation programs currently lags behind investment in mitigation measures, despite the Paris climate agreement’s emphasis on the need to balance the two.

But Africa’s budget shortfall also reflects the structural problems of African economies. In particular, energy poverty has historically undermined economic diversification and exposed the region to negative global shocks. The continent’s climate-funding gap amounts to 10% of its combined $2.4 trillion GDP – more than double its annual spending on health and social programs – as chronic deficits have constrained governments’ ability to expand public investment and attract private capital.

In 2018, the International Monetary Fund highlighted the myriad challenges facing Sub-Saharan African countries in closing the financing gap, including the need to broaden the tax base to increase the capacity of governments to mobilize more revenues domestically. While significant progress has been made over the last two decades, the region’s performance remains dismal. Africa’s median revenue-to-GDP ratio is 20%, compared to 28% in East Asia and 42.3% in Europe.

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The financing gap has been magnified by the incidence of sovereign debt which reflects pernicious “perception premiums” – the overinflated risks that credit-rating agencies assign to African countries, irrespective of these countries’ macroeconomic improvements or growth prospects. With the spreads between African sovereign bonds and US Treasuries now in the double digits, debt-service payments have become African governments’ largest expenditure. Interest payments are expected to consume more than 45% of Egypt’s government revenues this fiscal year and swallow up over half of the government revenues in Ghana and Sri Lanka.

While elevated interest rates deter investment by setting unrealistically high return expectations, they also directly affect public spending. Financing gaps tend to cloud countries’ development horizons, with urgent short-term needs crowding out the most important long-term investments required to transform economies and expand opportunities for the benefit of future generations. Honoring external debt commitments, for example, will always trump funding climate-resilient infrastructure projects.

But in a world awash with cash, countries should not have to choose between saving the planet and preserving their access to capital markets. At $210 trillion, global financial assets are worth roughly double world GDP. An inclusive framework that fosters multilateral cooperation between key stakeholders (governments, donors, development banks, and private companies) and promotes innovative financing mechanisms could de-risk investment to catalyze private-sector financing. Such a framework must also improve the global distribution of green financing, which to date has been skewed heavily toward developed economies. In the first half of 2021, for example, high-income countries issued 76% of the world’s green bonds.

Policymakers and multilateral development banks can help de-risk green infrastructure investment by encouraging the use of innovative financing instruments such as guarantees, insurance, blended finance, and credit-enhanced bonds. Attracting more banks and institutional investors would raise Africa’s share of global climate financing, which is currently just 5.5%.

Insuring investors against specific hazards and reducing the risk of losses, policymakers could increase that share. Similarly, offering credit protection and extending loan maturities would help leverage more private capital to develop long-term green infrastructure projects.

Donors and multilateral lenders have a crucial role to play in mitigating overinflated risk perceptions and creating incentives for investors to finance green projects in developing economies. Through concessional funds employed for blended finance and grants, these stakeholders could create first-loss positions to improve portfolio ratings and de-risk projects. As more investors enter the climate-debt market, multilateral institutions could also enhance the credit of green bonds, thus raising risk appetites and channeling patient capital to where it is most needed.

A robust global carbon market would promote transparency and encourage decarbonization. Likewise, multilateral development banks’ ability to leverage their financial resources to support a liquid secondary market in developing-country sovereign bonds is essential to putting African economies on a path to sustainable development. The nexus between the SDGs and climate change is such that environmental leapfrogging could also set the region on such a path.

The burgeoning green-bond market has entered a virtuous growth cycle and is fast approaching the long-awaited milestone of $1 trillion in annual green investment. But to encourage equitable climate finance, investors must avoid the stigmas that have long plagued the fixed-income market, where foreign investors either shun Africa or invest there only at exceedingly high premiums.

Unbiased financing is crucial to winning the global battle against climate change. To ensure sustainable development, we must encourage asset managers to lead the charge.

https://prosyn.org/hCzdpar

Which countries are actively investing in Africa besides China?

Which countries are actively investing in Africa besides China?

Which countries are actively investing in Africa besides China?

Which countries are actively investing in Africa besides China?

Which countries are actively investing in Africa besides China?

Which countries are actively investing in Africa besides China?

Which countries are actively investing in Africa besides China?

Which countries are actively investing in Africa besides China?

**Infrastructure Development**: With Nigeria planning 11,800 new projects and significant infrastructure investments across the continent, there are opportunities in project management, construction management, and logistics.

Which African countries are driving the venture capital ecosystem?

Which countries are preferred FDI destinations in Africa?

Title:

Content: Monday, 11 September, 2023, 1:07 AM
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Home Op-Ed

Investing in power sector, foreign investors transform the lives of millions of people in Bangladesh

Published : Monday, 11 September, 2023 at 12:00 AM  Count : 85

Mr. Nafees Sharafat, founder of Canadian University and Chairman of Padma Bank, presented this paper at South East Asia Client Forum, hosted by DEG.

We join to celebrate mutual cooperation and friendship that will result in plenty and prosperity not for a selected group of individuals, but for people from all over the world coming from all social and economic strata. By facilitating cross-country exchange, knowledge sharing, nations around the world will foster future growth by exploiting new global trends and opportunities. After all, that is the vision and purpose of DEG, to help developing and emerging economies by cooperating with private sector players that will lead toward a better and sustainable future for the underprivileged and underserved. For 6 decades, it has worked with this motto and helped to transform the lives of millions of people all over the world.

I come from Bangladesh, a case of paradox in terms of economic development. Once cited as a 'basket case' of development, it is now on its way to become the next Asian Tiger. Often cited as a model case for development in the global economic circle, its remarkable achievement has raised widespread inquisitiveness among global experts to figure out the secrets behind. Bangladesh had maintained 7 percent GDP growth from 2016, and achieved 8.2 percent GDP growth rate by 2019 before COVID pandemic hit. During COVID, while most of the countries around the world has suffered recession and declining economic growth, Bangladesh maintained an impressive positive 3.5% growth rate during 2020 and once again reached the 7% growth rate mark by 2022. The resilience and consistency of economic progress has far-reaching impact to alleviate the lives of the millions of people of Bangladesh. According to UNDP, our poverty incidence declined from 50.4% in 1990 to 20.5% in 2019.

This rising economic prowess has gained praise from global experts. Former UN Secretary General Ban Ki-Moon praised Bangladesh as 'Role Model' for developing nations. Bangladesh has taken spot in the next eleven list in Goldman Sachs in 2012. J.P. Morgan Sachs gave Bangladesh spot in its 'Frontier Five' list. PWC declared in 2017 that by 2030, Bangladesh will be 28th economy of the world.

Alongside the rapid growth, Bangladesh has shown remarkable financial prudence. We have maintained a Debt/GDP ratio of 32.55%, which is far below the IMF recommended 55%. We have never defaulted in any foreign loan repayment terms and always maintained prudent financial practice over the years.

One of the major pushes for this momentous growth came from power sector, one of the most crucial sectors of our economy.

The massive economic growth has been fueled by energy sector as it has provided the required energy consumption demand. Energy growth has outpaced GDP growth rate by 1.5% over the last decade. It is not only one of the main drivers of growth, but also a sector with remarkable investment opportunity.
According to 2016 Power Sector Master plan or PSMP, planned energy generation is going to be 60000 MW to fulfill the growing energy demand by 2041. Per-capita electricity consumption will reach to 1475 KWh from 2019's 510 KWh by this time. This massive growth in electricity generation demand will also lead to dynamic changes in the current structure of energy production. We are planning to shift toward more diverse fuel sources which will emphasis on renewables for ensuring energy security and less Green House Gas emission. This is paramount importance for Bangladesh and will also help the country to achieve SDG goal 7, 8, 9 and 14 of affordable and clean energy, decent work and economic growth, industry, innovation and infrastructure, and climate action.

According to PSMP, by 2041, we are planning to reduce gas-based production to 35%, which currently stood 60.44%. We want to produce at least 15% from renewable energy, which currently stood around only 2%. To achieve this energy growth powered by diverse fuel source, foreign investor and lenders must come forward. Their expertise and funding can transform power sector scenario rapidly and accelerate economic growth of our country. For investors, Bangladesh provides a lucrative investment opportunity in power sector. Government of Bangladesh has made energy a priority sector and providing tremendous incentives for investors.

The government has provided such incentives to both public and private institutions and foreign investors that opens up door for huge profitable investment opportunities. Legislations such as Policy guidelines for Enhancement of Private Participation in the power sector, 2008 has been drawn to promote such investment activities.

Our education sector has produced ample qualified graduates to fulfill the workforce demand for the burgeoning power sector. Institutions such as banks and others are also extremely supportive for power sector investors and regulators are supporting easy facilitation of regulatory support. For institutions like DEG, it is a golden opportunity to invest in the power sector in Bangladesh.

By investing in power sector, foreign investors are getting opportunity not only to invest in a highly profitable industry, but also to transform the lives of millions of people. At the same time, investors can restructure current industry landscape by investing in alternative energy sources such as solar, wind and other renewables. Collaborative approach is paramount for any success in such endeavor. Historical precedence strongly supports this.

When Germany introduced feed-in-tariff system, that not only fueled renewable electricity production in its own country, but also helped the growth of solar panel production, an activity concentrated in China. Today Bangladesh may require energy generation, but foreign investors also need profitable and inclusive investment opportunity that power sector can provide. It will fuel growth, increase global trade, and improve international relations among participants. Together we can build a more inclusive, prosperous, and resilient future for all.

For this purpose, I welcome foreign investment to continue its support for energy sector in Bangladesh. This is a win-win situation for Bangladeshi producers, DEG or any other foreign investors as together we can lead a change for more democratic, inclusive, and prosperous future.

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**Energy Sector**: The projected $35 billion investment in geothermal energy between 2024-2050 creates opportunities in energy management, renewable energy project development, and environmental consulting.

**International Business**: Understanding the dynamics between Chinese and Western investors in Africa can lead to careers in international business development, cross-cultural management, and investment analysis.

Title:

Content: Africa absorbs only 3% of global energy investment
Abdallah Mouloud
Font size
Nouakchott - "Arab Jerusalem":
In its latest report, the International Energy Agency (IEA) confirmed that “the proportion absorbed by the African continent of global investments allocated to energy does not exceed 3%, a proportion considered by the agency to be small, compared to the population of the continent.
“This reality shows two challenges that must be addressed in a continent where 600 million people still have no access to electricity (43% of the continent ’ s total population in 2022).
The International Energy Agency (IEA) presented these conclusions in a report presented at the first Africa Energy Summit, which took place on the 6th of this month in Nairobi, the capital of Kenya.
The agency explained the weak access of global investment to the continent of Africa mainly because of the high cost of capital from borrowing, which is three times higher in Europe and North America, but also in China.
“Many investors believe that the combined economic and political situation in Africa makes investment in many projects on the African continent very risky, ” said Ama Gordon, co-editor of the report, adding that“ there is a difference between real risk and expected risk. ”
Akinwumi Adsina, President of the African Development Bank, said in the introduction to the report that “capital cost prices must be reduced, ” stressing that“ the solution lies in targeted support and the assistance of international financial institutions and multilateral bodies, through the granting of loans on affordable terms, as there is an urgent need to increase energy investments within the continent, at a time when the public finances of many African countries are facing suffocating pressures. ”
From here to 2030, the International Atomic Energy Agency (IAEA) has proposed that the private sector finance half of Africa ’ s energy investments, pending the completion of alternative energy projects that are expected to provide a quarter of Africa ’ s energy needs, nearly eight times as much as in 2020, through solar and wind-saving energy.
The International Energy Agency predicts that around 1 billion people in sub-Saharan Africa will have access to power from the public grid by 2040; however, half a billion people will remain off the grid.
Investors believe that solar power can fill this gap, while also helping to reduce greenhouse gas emissions.
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Which countries are actively investing in Africa besides China?

Which countries are actively investing in Africa besides China?

Which countries are actively investing in Africa besides China?

**Human Capital Development**: With Africa's young population and emphasis on education, opportunities exist in human resource management, training and development, and educational administration.

**Entrepreneurship**: The growing consumer markets and infrastructure gaps present entrepreneurial opportunities for graduates interested in starting their own businesses.

## Conclusion

Foreign investment in Africa is growing, with significant opportunities in energy, infrastructure, and human capital development.

Title:

Content: Africa absorbs only 3% of global energy investment
Abdallah Mouloud
Font size
Nouakchott - "Arab Jerusalem":
In its latest report, the International Energy Agency (IEA) confirmed that “the proportion absorbed by the African continent of global investments allocated to energy does not exceed 3%, a proportion considered by the agency to be small, compared to the population of the continent.
“This reality shows two challenges that must be addressed in a continent where 600 million people still have no access to electricity (43% of the continent ’ s total population in 2022).
The International Energy Agency (IEA) presented these conclusions in a report presented at the first Africa Energy Summit, which took place on the 6th of this month in Nairobi, the capital of Kenya.
The agency explained the weak access of global investment to the continent of Africa mainly because of the high cost of capital from borrowing, which is three times higher in Europe and North America, but also in China.
“Many investors believe that the combined economic and political situation in Africa makes investment in many projects on the African continent very risky, ” said Ama Gordon, co-editor of the report, adding that“ there is a difference between real risk and expected risk. ”
Akinwumi Adsina, President of the African Development Bank, said in the introduction to the report that “capital cost prices must be reduced, ” stressing that“ the solution lies in targeted support and the assistance of international financial institutions and multilateral bodies, through the granting of loans on affordable terms, as there is an urgent need to increase energy investments within the continent, at a time when the public finances of many African countries are facing suffocating pressures. ”
From here to 2030, the International Atomic Energy Agency (IAEA) has proposed that the private sector finance half of Africa ’ s energy investments, pending the completion of alternative energy projects that are expected to provide a quarter of Africa ’ s energy needs, nearly eight times as much as in 2020, through solar and wind-saving energy.
The International Energy Agency predicts that around 1 billion people in sub-Saharan Africa will have access to power from the public grid by 2040; however, half a billion people will remain off the grid.
Investors believe that solar power can fill this gap, while also helping to reduce greenhouse gas emissions.
Subscribe to our mailing list

Title:

Content:
President William Ruto has raised concerns over the underfunding of Africa’s renewable energy development.

He said though it was encouraging that 2023 recorded the largest increase in renewable energy capacity, with the addition of about 500 gigawatts globally and new investments worth $600 billion, Africa fared badly.

The President said Africa possesses the highest untapped potential of renewable energy reserves in the world but had only managed 3 gigawatts of the global increase.

“The continent with the world’s greatest potential and the highest demand currently accounts for a paltry 1.6% of the world’s total renewable energy capacity,” he said.

He pointed out that Africa offers huge opportunities for wealthy investors from the Global North in clean energy, offering a win-win outcome for them and the continent.

“African leaders endorsed the Nairobi Declaration, which set the continent’s green power generation target at a five-fold increase from 56GW in 2022 to at least 300 GW by 2030,” he said.

President Ruto made the remarks on Wednesday when he addressed the High-Level Business Segment on Climate Change Response and Transition to Carbon-Free Energy in Seoul, South Korea.

The President said recent floods in Kenya and other parts of the world were a result of climate change and called for joint efforts to mitigate the effects of the phenomenon.

He said Kenya had made tremendous efforts in renewable and clean energy, adding that the country’s power grid is 93% green.

He urged Korea and Korean investors to continue supporting Kenya in clean energy adoption as the country pursues the ambitious plan to enhance the current grid from 3GW to 100GW by 2040.

“The ambition is realistic because Kenya is endowed with abundant potential in every type of renewable energy,” he said.

The President said Africa launched the Africa Green Industrialisation Initiative at COP28 to promote the growth of clean energy manufacturing.

He said this potential puts the continent at an advantage to seize the economic opportunities within the global energy transition.

“This can be achieved by mobilising $1 trillion from public and private finance by 2030,” he said.

Distributed by APO Group on behalf of President of the Republic of Kenya.

Title:

Content: Monday, May 27, 2024
HomeBusinessZIMCODD Calls For Human Capital Investment In Africa

ZIMCODD Calls For Human Capital Investment In Africa

The Zimbabwe Coalition on Debt and Development (ZIMCODD) has emphasized the critical importance of investing in human capital to propel Africa toward its developmental goals.

The coalition acknowledged the strides made in the quest for socioeconomic freedom but noted the persistent challenges that impede this journey.

The theme for 2024, “Educate an African Fit for the 21st Century: Building Resilient Education Systems for Increased Access to Inclusive, Lifelong, Quality, and Relevant Learning in Africa,” resonates with the coalition’s call for a robust investment in the continent’s burgeoning youth population.

With over 400 million young people aged between 15-35 years, Africa boasts the youngest demographic globally, making quality education a pivotal lever for sustainable growth.

ZIMCODD underscored the significance of inclusivity as a cornerstone for unlocking Africa’s latent potential. Despite progress in integrating women and youth into governance and socioeconomic conversations, the coalition advocates for their substantial representation in leadership and the labor market, given that they constitute over half of the continent’s populace.

The vulnerability of Africa to climate change, primarily due to its dependence on rain-fed agriculture, was another concern raised by ZIMCODD. The increasing frequency of droughts and natural disasters necessitates governmental action to bolster climate change initiatives and foster innovative domestic resource generation strategies.

ALSO ON 263Chat:  Hwange Colliery Caution Shareholders on Company Shares

Corruption and resource leakages continue to undermine Africa’s capacity for domestic resource mobilization, with political patronage and illicit financial flows eroding the continent’s developmental prospects. This reliance on external borrowing has led to unsustainable debt burdens, stifling national development as funds are diverted to service debts, often lacking transparency and accountability.

Notably, the debt-to-GDP ratios in Malawi, Zambia, and Zimbabwe have escalated alarmingly, posing a significant challenge for Southern Africa.

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Multi-award winning journalist/photojournalist with keen interests in politics, youth, child rights, women and development issues. Follow Lovejoy On Twitter @L_JayMut

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What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

While challenges remain, particularly regarding the cost of capital and perceived investment risks, the continent's natural resources, young population, and growing markets make it an attractive destination for foreign investors.

What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

What trends are emerging for African startups in 2022?

Business administration students who understand these trends and develop relevant skills will be well-positioned to take advantage of the career opportunities emerging from Africa's evolving investment landscape.

Title:

Content: Africa absorbs only 3% of global energy investment
Abdallah Mouloud
Font size
Nouakchott - "Arab Jerusalem":
In its latest report, the International Energy Agency (IEA) confirmed that “the proportion absorbed by the African continent of global investments allocated to energy does not exceed 3%, a proportion considered by the agency to be small, compared to the population of the continent.
“This reality shows two challenges that must be addressed in a continent where 600 million people still have no access to electricity (43% of the continent ’ s total population in 2022).
The International Energy Agency (IEA) presented these conclusions in a report presented at the first Africa Energy Summit, which took place on the 6th of this month in Nairobi, the capital of Kenya.
The agency explained the weak access of global investment to the continent of Africa mainly because of the high cost of capital from borrowing, which is three times higher in Europe and North America, but also in China.
“Many investors believe that the combined economic and political situation in Africa makes investment in many projects on the African continent very risky, ” said Ama Gordon, co-editor of the report, adding that“ there is a difference between real risk and expected risk. ”
Akinwumi Adsina, President of the African Development Bank, said in the introduction to the report that “capital cost prices must be reduced, ” stressing that“ the solution lies in targeted support and the assistance of international financial institutions and multilateral bodies, through the granting of loans on affordable terms, as there is an urgent need to increase energy investments within the continent, at a time when the public finances of many African countries are facing suffocating pressures. ”
From here to 2030, the International Atomic Energy Agency (IAEA) has proposed that the private sector finance half of Africa ’ s energy investments, pending the completion of alternative energy projects that are expected to provide a quarter of Africa ’ s energy needs, nearly eight times as much as in 2020, through solar and wind-saving energy.
The International Energy Agency predicts that around 1 billion people in sub-Saharan Africa will have access to power from the public grid by 2040; however, half a billion people will remain off the grid.
Investors believe that solar power can fill this gap, while also helping to reduce greenhouse gas emissions.
Subscribe to our mailing list

Title:

Content: Monday, May 27, 2024
HomeBusinessZIMCODD Calls For Human Capital Investment In Africa

ZIMCODD Calls For Human Capital Investment In Africa

The Zimbabwe Coalition on Debt and Development (ZIMCODD) has emphasized the critical importance of investing in human capital to propel Africa toward its developmental goals.

The coalition acknowledged the strides made in the quest for socioeconomic freedom but noted the persistent challenges that impede this journey.

The theme for 2024, “Educate an African Fit for the 21st Century: Building Resilient Education Systems for Increased Access to Inclusive, Lifelong, Quality, and Relevant Learning in Africa,” resonates with the coalition’s call for a robust investment in the continent’s burgeoning youth population.

With over 400 million young people aged between 15-35 years, Africa boasts the youngest demographic globally, making quality education a pivotal lever for sustainable growth.

ZIMCODD underscored the significance of inclusivity as a cornerstone for unlocking Africa’s latent potential. Despite progress in integrating women and youth into governance and socioeconomic conversations, the coalition advocates for their substantial representation in leadership and the labor market, given that they constitute over half of the continent’s populace.

The vulnerability of Africa to climate change, primarily due to its dependence on rain-fed agriculture, was another concern raised by ZIMCODD. The increasing frequency of droughts and natural disasters necessitates governmental action to bolster climate change initiatives and foster innovative domestic resource generation strategies.

ALSO ON 263Chat:  Hwange Colliery Caution Shareholders on Company Shares

Corruption and resource leakages continue to undermine Africa’s capacity for domestic resource mobilization, with political patronage and illicit financial flows eroding the continent’s developmental prospects. This reliance on external borrowing has led to unsustainable debt burdens, stifling national development as funds are diverted to service debts, often lacking transparency and accountability.

Notably, the debt-to-GDP ratios in Malawi, Zambia, and Zimbabwe have escalated alarmingly, posing a significant challenge for Southern Africa.

Share this article

Tags

Written by

Multi-award winning journalist/photojournalist with keen interests in politics, youth, child rights, women and development issues. Follow Lovejoy On Twitter @L_JayMut

You cannot copy content of this page