31 Mar Africa’s next move
Global Opportunity 2015 | Business Council for Africa
Africa is not one homogeneous mass, but a combination of 54 sovereign states, with the result that each of these countries has its own blueprint for economic success and its own strategy for attracting foreign investment, says Karen Taylor CEO Business Council For Africa
Africa’s next move is difficult to predict when associated with the concept that the African continent as a whole is developing a single, comprehensive strategy for economic growth and development.
According to African Economic Outlook, a collaborative product between the African Development Bank, the OECD Development Centre and the UN Development Programme, Africa’s GDP growth is expected to strengthen to 5% in 2016, with Nigeria taking the helm as the continent’s largest economy.
Consequently there has never been more opportunity for the UK to invest in nearly all sectors on the Continent.
The Business Council for Africa (BCA) has successfully promoted investment into numerous African countries for the past 60 years.
Headquartered in London, the BCA has established a reputation as the leading independent, not for profit organisation, which brings together foreign and African business interests under one roof (www.bcafrica.co.uk).
Originally founded to promote British interests in Africa, the BCA has evolved into an organisation that recognises the ‘Global Village’ mentality that now influences business transactions around the world.
As such it is poised to lead the way in channeling foreign investment into Africa, assisting African governments in securing that investment and providing a conduit through which an exchange of ideas and actions can take place between Sub-Saharan Africa and the international investor community.
The BCA has a diverse membership and enjoys affiliations with 33 different Sub-Saharan African countries, which means that BCA remains an impartial, membership driven organisation, with no particular focus on, or bias towards any one country.
It is worth mentioning that the BCA focuses mostly on western and southern Africa whilst its partner organisation, the Eastern Africa Association covers the east Africa region.
As such, it is more effective to consider investment in Africa in terms of sectors, rather than geographies.
The sector that is dominating virtually every African country’s investment agenda is energy.
There are more than 600m people in Africa without access to electricity at the moment – some 70% of the continent’s population – and African governments are working hard to address that imbalance.
A lack of constant, reliable energy supply is restricting GDP growth and holding back development in all other sectors of their economies, including education and health, and many countries are making affordable energy their main investment priority.
Energy self-sufficiency is seen as the springboard to all other development processes and renewable energy is increasingly being accepted as a major part of the electricity blend in any African country.
If there is any one, single ‘next move’ for Africa, then investment into the energy sector would be it.
Infrastructure and agribusiness
After energy, the next most important investment areas to focus on in Africa are infrastructure (ports, roads, railways, water systems, etc.) and agribusiness (improved farming methods, higher yields, value-addition and processing).
The knock-on effect from investment into these two sectors would include increased intra-African trade and smoother logistics chains, both of which become investment opportunities in their own right.
SMEs and entrepreneurship
With a diverse membership base, the BCA is only too aware of the value of small and medium sized enterprises (SMEs) and the massive role entrepreneurship plays in African economies.
Too often overlooked in the grand scheme of things, SMEs are the engines that power economies in Africa and provide much needed employment. Investment into smaller businesses can quite often pay handsome dividends in the long run.
Tourism and service industries
With beautiful coastlines, stunning scenery and a plethora of flora and fauna, Africa is arguably one of the best places in the world to visit.
Tourism plays a large part in many African economies, but there is still room for expansion, with quality tourist accommodation (hotels, resorts) being high on the list in order to attract increased tourism revenue.
The knock-on effect from investment into the infrastructure in this sector would be a further need to provide associated services such as tourist attractions, car hire facilities, foreign exchange and many more.
Health and education
Although not necessarily obvious investment sectors in Africa, access to better health and education facilities are high on many African governments’ agendas.
To that end there are opportunities for partnerships with governments.
Combined with an increasingly wealthy middle class in Africa looking for improved health and education facilities for their families, these infrastructure and the value-addition opportunities are becoming attractive investment priorities.
Other investment areas
There are obviously many other sectors that merit attention from investors into Africa (manufacturing and maritime opportunities being just two examples) and the BCA is able to assist its members and governments explore those sectors, which are all part of the big picture in Africa’s next move as an investment destination.