GUEST COMMENT: North Africa, Sub-Sahara and Saharan Africa - the future?

6 October 2008

2 minute read

GUEST COMMENT: North Africa, Sub-Sahara and Saharan Africa - the future?

Whether you call this a 'downturn', a 'readjustment', or on the verge of 'depression', is neither here nor there. The sentiment is the same: Europe is struggling. There are still some exceptions to the rule: mezzanine finance, debt origination (well, if you can raise it people want it) and private equity are taking up the slack.

But where should you be looking if you really want the opportunities? Dubai? Sovereign states generally? We have found that although the market in UAE, Oman, Qatar, etc. is very strong and the rewards pretty high, the real excitement is in Africa.

Why? Africa is the Middle East five to 10 years ago. There is an extensive array of opportunities, some with high socio and economic risks attached, but others with relatively low risk and stable business environments in which there are minimal financing abilities.

These are the areas our clients seem really to be looking at seriously: the players in these markets now will be the established players there in five to 10 years' time. The old-school businesses with a big aversion to risk are avoiding this area, so now is the time for small and middle-tier players to make a name in the market.

The field is open. There are established players who have been there for several years, but the really exciting businesses are those making four to five times returns on investments. These are the new players who are driving from the front with a different attitude to investment (several businesses actually invest with a concern for the environment and the people!).

These ideas are what will differentiate them from the competition in Africa and give them a better name than their UK counterparts in the private equity field, let alone the traditional investment banks.

So now is the time to get in, before the investment banks (with one or two notable exceptions) realise that they should be in there too.

Andrew Pringle is director of CircleSquare Consulting.

AUTHORAndrew Pringle

Insider Comment

Se
Seb
15 October 2008
Pathetic article. I'm a HH and i know babble when i see it. Any facts?
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Ev
Evans Sakyi
9 October 2008
In fact a peacefull and democratic country like Ghana among other similar promising countries in Africa are very good grounds for investors who want to tripple profit within the shortest possible time. No wonder many financial institutions and manufacturing companies to mention a few , are migrating from their original homes in the Europe and America to Africa in other to maximise profit to escape economic crises on going in their original home countries. In Africa, the future of your investment is much brighter.
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Ev
Evans Sakyi
9 October 2008
investors who want to tripple profit within the shortest possible time. No wonder many financial institutions and manufacturing companies to mention a few , are migrating from their original homes in the Europe and America to Africa in other to maximise profit to escape economic crises on going in their original home countries. In Africa, the future of your investment is much brighter.
Reply
Za
Zack Kilba
9 October 2008
Speaking as a Ghanaian living and working in London currently, I have to say that there are pros and cons relating to Africa as the next big thing.
Howvere, its a very unsaturated market. It's actually the only place that I know of where you can pick an idea from Europe, replicate it and reap vast rewards!
The standard of living is very low as compared to Europe. There are a lot of big banks operating outside Ghana for instance (Barclays, SocGen etc) and they have a huge number if expatriates working in the country, who have a good life, are free to go and come as they please.
Of course, crime is there just as anywhere else, but you need to know where to go and where not to go, keep a low profile and enjoy the country.
In the last year I went back home, I have seen growth at an alarming pace...new buildings, facilities, advertisements everywhere, the increase in the number of US and European investment houses, locals with good education being paid in dollars (sometimes to the European pay equivalent but at a fraction of the costs here) and a great increase in entrepreneurs and millionaires.
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BY
BYRONMUDHUNE
8 October 2008
from my experiences of both continents, negative perceptions of Africa is a past time preoccupation of the Europe and America. Come to Africa and see the banks that have taken the high risks and reaping the rewards ! Furthermore, with the oil producing economies in africa growing at an average rate of 7% p.a where else do youn see that other than india and China !
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