Paul Collier
To sustain rapid growth, Africa will need to substantially raise the rate of investment. In recent years it has averaged only around 20 percent of GDP, whereas the rapidly growing Asian economies invest above 30 percent.
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Peter Lacy
As we begin to look beyond the economic downturn to recovery and global growth, it has perhaps never been more timely to examine the state of corporate sustainability. Despite the downturn, we see corporate commitment to environmental, social, and governance issues remaining exceptionally strong: 93 percent of CEOs in our recent survey see sustainability as critical to their company’s future success.
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David Aserkoff
Given South Africa’s showing in the recent World Cup it would appear that Africa in 2010 is a lot like the US in 1994 – better at hosting the tournament than playing. Similarly, sub-Saharan stock markets in 2010 are a lot like the S&P 500 in 1994: poised for five very strong years of appreciation.
More . . .- For mining firms being big matters
Despite the recent recession, mining fundamentals remain strong, fuelled by robust demand from urbanising economies, especially China’s, and by constrained supply for many metals and minerals.
- Few reasons for Africa to fear EU’s fund directive
Much has been written in the financial press about the draft EU directive on alternative investment fund managers. The usual focus is on the directive’s potential impact on remuneration and the additional regulatory burden it seeks to impose. A lesser-told story is the potential impact of the directive on Africa-based funds, whose investments play a key part in the economic development of the continent, particularly with regards to infrastructure. We look at the history of the directive and how it might affect Africa-based funds.
- Build on broadband – and the rest will follow Information and communication technologies underpin almost every single activity undertaken in the modern world. Today, it is no exaggeration to say that the great majority of people are dependent in some way on ICT networks and applications, even if they do not themselves have first-hand access.
- Mobile health: from silos to systems Still in its infancy, the emerging field of mHealth – the use of mobile technologies to improve health outcomes – runs the risk of not realising its full potential.
- Why food could be Africa’s sweet spot The food industry has been amongst the best performing sectors in Africa and has shown an average annualized growth of 20 percent in the last 4 years. Investors in Africa are slow to adjust to this reality as most of them are still focused on finding the next oil field or securing the next plot of arable land. Silk Invest is launching its African Food Fund because investors are much better off investing in food companies that service the local consumer rather than investing in commodities or farmland.
- New developments in African telephony In OECD countries mobile telephony is seen as a business with utility-like characteristics. Saturated penetration levels and established competition are pervasive. Africa exhibits the polar opposite of this; there are thought to be 500m potential new subscribers and currently there is a scramble for mobile assets across the continent as multinational mobile operators seek growth away from their stagnated markets.
- Lending to Africa’s small holder farmers means improving efficiencies Developing innovative solutions is the key when lending to small holder farmers and small to medium sized businesses in Africa’s agricultural sector.
- Africa can help the world build its way out of the crisis The world needs to build itself out of the financial crisis by investing funds in poor countries – it makes good economic sense and it can help reduce poverty, whether in Ethiopia, Ghana, Malawi or Zambia.
- Now is the time to focus on Rwanda Fast forward to the year 2025 and find yourself in Kigali, Rwanda’s thriving capital, where there are now direct flights to all major global cities. Few children are in the streets as they are busy in school, with homework or other formative activities. There’s an unmistakable international flair. Compared to the past, it is evident that international aid does not feature in any significant way in the national budget and planning – years of attracting investment and streamlining bureaucratic processes have paid off.
- Plenty of life left in African equity markets In 2009 there was a marked divergence between the performance of the larger emerging markets (up 74.5 percent) and the G7 markets (up 24.2 percent) relative to frontier markets (up 7 percent) and Africa (down 6.9 percent) making 2009 the second consecutive year in which African equities have underperformed most other regions of the world.
- 2009 performance masks 2010 potential To the casual observer, one glance at the performance of African stocks in 2009 may be enough to convince them that they don’t need to take a second look. The continent’s stock exchanges severely underperformed last year. Nigeria, for example, normally one of the continent’s most reliable performers, lost 34 percent.
- Can investors handle polarised metal prices? Metal prices may be notoriously volatile in the short term, driven by a combination of price inelasticity and the violent stock changes commonly seen at the front end of long supply chains. Whilst this volatility may offer arbitrage opportunities for metals traders, it may be viewed as ‘noise’ for analysts trying to determine the long-term value of a company.
- Capturing Africa’s agricultural potential African agriculture has become an appealing theme for international investors: large swathes of sub-Saharan Africa offer fertile land, abundant water resources and proximity to transportation links or regional markets. Against this backdrop, it is remarkable that, while less than one quarter of the land suitable for crop production in sub-Saharan Africa is under cultivation, many African countries are unable to meet local food requirements. We believe a sustainable business model for farming in Africa must not only take advantage of the continent’s impressive agricultural potential, but also implement strategies that will make Africans successful farmers in the years ahead.
- Foolish to ignore the facts It is a fact that more than one billion people worldwide are starving. The climate is changing all over the globe with alarming consequences for millions of poor people especially in developing countries and, above all, in countries on the African continent. The number of people on the planet will increase from approximately 6 billion today to over 9 billion in 2050, which will put enormous pressure on the resources at our disposal.
- Experts - Simon Norris and Kaushik Ray: The rocky road to independents Africa is in desperate need of power. It has little: the same amount as Spain, despite having over 20 times the population. Privately-financed independent power projects are essential to meeting this need, though the development of IPPs on African soil presents acute challenges. What can be learned from those African IPPs that have been successful?
- Experts - Tom Harden and Daniel Jones: Diverse drivers of telecoms investment The African telecoms market is attracting a lot of investor interest of late. Privatisations of telecoms operators, including Nigeria’s Nitel and Zambia’s Zamtel, have caught the eye of various potential suitors, including Indian state-owned companies BSNL and MTNL. Essar’s buyout of Warid’s operations in Uganda and Congo also illustrates recent activity emanating from the sub-continent. Another large M&A deal involving an Indian operator, the proposed merger of South Africa’s MTN with Bharti, only failed to materialise because MTN was unable to gain the approval of the South African government.
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