As the crisis between Iran and the US deepens and threatens to create further chaos in the Middle East and beyond, and a trade war between US and China beckons, international investors are turning their gaze south to Africa.
Two big Africa Investment Summits are planned this quarter which are designed to set a new investment path into the continent. Later this month the UK Prime Minister Boris Johnson will open the UK-Africa Investment Summit in London, and in February the Africa-Middle East Business Forum opens in Nairobi.
The London Summit will bring together UK and African business leaders and investment institutions to seek new opportunities for both international investors and Africa’s growing pool of young entrepreneurs and start-ups.
Africa’s demographic explosion makes the continent ripe for investment. By 2050 one in four global consumers will be based in Africa. By then the continent will have a larger working-age population than both China and India.
The International Monetary Fund says Africa is home to eight of the world’s fifteen fastest growing economies. According to the UK’s International Development Secretary Alok Sharma 2020 could be a “transformative year” for Africa. The UK already invests some £38 billion into Africa and he has outlined the case for further investment:
“Investment in businesses creates sustainable jobs. Investment in infrastructure enables children to go to school. Investment in vital public services like health and education gives young people the opportunity to shape their own futures and reach their potential. It is the difference between surviving and thriving”.
The fact that the British Prime Minister Johnson is hosting the London Summit is a sign of how the UK’s taking the African market very seriously. Last year his predecessor Theresa May made Britain’s first Prime Ministerial visit to Africa in five years — now with Brexit looming the UK is eagerly looking to Asia and Africa as it shifts its trading focus from Europe to the developing world.
The remit is clear — In the words of the UK’s Trade Commissioner for Africa Emma Wade-Smith “Africa’s success matters to the UK”.
The London Summit is designed to:
*Unlock inclusive economic growth in Africa
*Boost security and stability
*Support initiatives to counter Climate Change
*Invest in People across education, health and employment
Britain is not alone. This new scramble for Africa is seeing an unprecedented foreign engagement with the Chinese, the Indians, the Japanese, the Turks, the Russians, the Gulf States and many more, all jostling for business alongside the more traditional players from the US and Europe.
The Chinese presence in Africa is already massive, making it the number one source of investment expenditure. In addition, the last three years have seen Turkey and Indonesia triple their trade with Africa. Meanwhile Russia’s trade has quadrupled and the European Union has increased its trade with Africa by 41% over the same period.
Africa still has many challenges to overcome but this growing level of international interest is already making an impact. GDP per head of population in Sub-Saharan Africa is two-fifths higher today than it was in 2000. The fact that the continent needs so much in terms of infrastructure and services makes it a “target-rich” environment for the world’s investors.
That’s why there’s so much interest in next month’s Africa-Middle East Business Forum in Nairobi. Over two days the cream of business leaders from the Middle East and Gulf States will meet their counterparts from across Africa to discuss trade deals.
The Forum is organised by the ADAM Global Network and will highlight the latest facts and business cases for investing in East Africa, West Africa and southern Africa with expert speakers like the UAE’s Muhammad Hammad Chaudhry the MD of Murasa Al Mas discussing the opportunities for scaling-up Africa’s booming start-up communities.
There will also be a key number of representatives from north Africa as more and more business leaders from countries like Egypt, Tunisia and Morocco see that their future lies south into Africa rather than in the uncertain climate of the Middle East.
The case for Africa is being heard louder and louder. China’s President Xi and his Foreign Minister are regular visitors as their Belt and Road Policy targets the continent, France’s President Macron is also making frequent trips to Africa.
Japan has already hosted its International Conference of Africa’s Development (TICAD) in Tokyo. The US as well is seeking significantly increased investment through its Overseas Private Investment Corporation (OPIC).
And, as we’ll no doubt hear from the UK Prime Minister when he opens the UK-Africa Investment Summit in London later this month, the UK has big ambitions to be the G7’s biggest investor into this increasingly attractive continent.
Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect the views of 7Dnews.