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Africa’s move to diversify its economies and its rising consuming class are creating an array of new investment opportunities
With the United Kingdom having voted in its recent referendum to leave the European Union, many businesses with existing or planned investments in the UK will be looking to new investment frontiers.
Kenya, Côte d’Ivoire, Senegal, Ghana and Ethiopia are the best examples in Africa, with broad-based economic growth, young populations and rising urbanisation.
A positive outlook forms the core of the Middle Africa Fixed Income Currency and Commodities (FICC) guidebook 2016, being launched by Ecobank. The guidebook contains an economic outlook for the region, an overview of the key sectors financial, energy & soft commodities), and a detailed country-by-country guide of 41 countries in sub-Saharan Africa.
Chi Onwurah, MP for Newcastle upon Tyne Central and Chair of the All-Party Parliamentary Group (APPG) for Africa, and one of the keynote speakers at the launch, said, “The impact of Brexit on the global economy cannot be overestimated. But while we are faced with huge challenges, we also should look at opportunities for Africa. The EU's trade agreement with Africa has been criticised for its negative effects on African industry and agriculture. The UK could be in a position to develop a more mutually beneficial policy.”
Edward George, head of Ecobank Group research, whose team created the guidebook, added, “Today, we only hear about the downward economic spiral in Nigeria, South Africa and Angola. But this masks the real story going on elsewhere on the continent, which is about impressive and dynamic growth. Despite the danger posed by low commodity prices and falling demand from China, new trends are transforming the region’s economies, particularly in telecommunications, fintech and services. Yes, the ‘Africa Rising’ story may no longer apply across the board, but a more textured and sober ‘Africa changing’ economic narrative is replacing it. Africa is not a country – it is 54 countries, and they are growing at different speeds and diversifying in different ways, offering opportunities for business and investment.”
The FICC guidebook provides information drawn from local knowledge on foreign exchange markets, interest rate products, and commodity markets, helping investors to navigate through the risks.
As the UK assesses how to navigate through the challenge of a vote to leave the EU, it is essential that investors and businesses understand the opportunities that Africa’s new economic frontiers present.