London. The World Bank has called on investors worldwide to invest in Africa as the continent’s outlook remains positive. “Africa has taught the world a lesson in macroeconomic reform and stability,” World Bank Vice President for Africa, Obiageli (Oby) Ezekwesili said.
She was speaking at the first-ever African Investment Summit organized by the London Stock Exchange (LSE) in partnership with the Financial Times, CNBC, Citigroup, Banco Espirito Santo, among others,Ms Oby urged investors who are in search of the right market at a time of growing fears of a global recession to “rediscover Africa” and invest in its budding markets.
“Africa’s fundamentals appear strong, and the continent’s outlook remains positive,” Oby said, pointing to the continent’s rapid rebound from the 2008-2009 global financial crisis and its higher GDP growth rates projected to be 4.8 per cent, 5.2 per cent and 5.5 per cent respectively in 2011, 2012 and 2013.
It makes business sense to bet on Africa’s capital markets, Oby said, at a time when “global equity markets are headed for their worst quarter since 2008”, and returns on investments in Africa are among some of the best anywhere in the world.
She cited a recent study by Oxford University Professor, Paul Collier, which found the return on capital for over 950 African enterprises to be on the average 11 per cent higher than in Latin America and Asia, and 70 per cent more profitable if compared against similar Chinese firms.
Capital is flowing to Africa, the World Bank Vice President explained, “because the continent has become a friendlier and more profitable market, about which businesses, consumers, investors and development partners are all bullish.
Investors who joined the flight for quality at the onset of the 2008-2009 global crisis can now testify, Oby argued, that “Africa stayed stable” even as the global stock exchanges went on a wild roller coaster ride.
Recovery on African stock markets came fast despite the fact that their limited liquidity and relative small size was amplified.
One explanation of Africa’s success is the region’s sustained pace of meaningful reforms. As many as 36 of the 46 African countries surveyed by the Doing Business report have implemented major reforms over the last five years, including those whose ranking has slipped or has not improved.
She described it as a region of abundant opportunities in agriculture, agribusiness and agro-processing; with strong demand for capital in infrastructure development; but also a region in need of a second round of investments to upgrade the ICT sector, expand broadband use, mobile banking and internet access.
Source – The Citizen – By The Citizen Reporter and Agencies