Up until recently, Africa was a place best avoided. Apartfrom its natural resources, the continent was deemed pretty much insignificant.This notion has changed fundamentally over the past decade or two. Figures by the United Nations Conference on Trade and Development (Unctad) show that Foreign Direct Investment (FDI) inflows grew from $10 billion in 1999 to $55 billion last year.
Mining Indaba 2015
Robert Hersov, CEO and founder of Invest Africa, has an explanation for that. “Governance and regulatory frameworks have improved over the past years. In addition, people are no longer taking money out of Africa as more and more Africans are investing in their continent,” he said during the 2015 Mining Inbada conference, which took place in Cape Town, South Africa, from February 9-11. “More and more Africans, who once left the continent, want to come back because of the opportunities. The continent is going into theright direction rapidly. Five years ago, everyone was talking about the BRICS block. Now, everyone is talking about Africa.”
Hersov wasn't the only optimist attending the Mining Indaba, which is currently the world's largest mining and investment conference. “Every single day, we speak to investors who want to invest in Africa. The perceptional risk has changed,” said Paolo Scaroni, Deputy Chairman of financial advisory firm Rothschild. “The risk of Africa is not as high as itused to be. There are some challenges, of course. Electricity, for instance. Over half the population in sub-Saharan Africa does not have access to electricity. Without electricity there is no development. This needs to besolved.”
Whilst mining will undoubtedly continue to foster growth across Africa, other industries are expected to gain importance in the near future. “E-Commerce will be one of game changers,” says Ugandan businessman Ashish Thakkar, founder of the Mara Group. This conglomerate comprises financial services, infrastructure, technology and real estate businesses, and has a presence in 24 African countries. “It comes down to having the right products and the right platforms."
Thakkar added that the world can also expect African technological innovations in the future.
“Everyone keeps talking about bringing Silicon Valley to Africa, but the question is how we take Africa to Silicon Valley,” he said, adding that Africa is already producing innovations. One of them is M-pesa, which was developed in Kenya. The mobile currency has since made its way acrossthe continent, providing financial inclusion to millions of people. “Africa is not catching up with the rest of the world. This is our time already!”
Tonye Cole from Nigeria, co-founder of energy conglomerate Sahara Group, is equally positive about Africa as a business destination. “It is the only continent that has something for everyone,” he said. “Anyone can do something in Africa, from an entrepreneurial point of view. This region has produced great entrepreneurs who are doing things wenever thought were possible here.”
(Image credit: Getty Images)
Miriam Mannak focusses on politics, economics, business, human and social development, gender-based issues, humanitarian topics, and nature conservation. Over the past decade and a half or so, her byline has appeared in over 70 publications in South Africa, Europe, the United States, the United Arab Emirates and elsewhere. This article was first published on the International Finance Magazine.