All Articles Tagged "investing in africa"
It’s time for another Back to Africa movement…but this time updated to the times in which we live. First, I already know that the vast majority of so-called African Americans have little desire to even visit Africa, much less move there. That’s not what I’m suggesting here, although everyone should make the pilgrimage “home” at least once. While I do encourage people to start physically moving to Africa if they find an opportunity and desire to do so, what I’m really suggesting is that we start going “back to Africa” economically. Look at the chart above. Now think about the US economy. Look at your stock portfolio and your bank accounts, then look at the chart above again. Now look at me. I’m on a horse. Old Spice.
It is estimated that out of the top 10 fastest growing economies IN THE WORLD over the next 5 years, 7 will be in Africa. Black people are missing out, and our “Black leaders” are completely clueless. Meanwhile, the richest Black person in America (Oprah) is not even close to the richest African in terms of net worth (and no, you won’t find those numbers in Forbes because they’re not public…just ask any Nigerian). Read one issue of the African Business Magazine (they have a free iphone app) and you’ll begin to see the vast opportunity that is not even on Black folks’ radar right now. While we’re worried about begging for jobs and scraps in America and spending money that we don’t have, there are billions of dollars ready and waiting for Africa’s long lost sons and daughters who are willing to help contribute to Africa’s sustainable development and help themselves in the process.
African immigrants and first-generation Africans in America already know this, and since the financial meltdown in the West, many are returning home to greener pastures. Europeans, East Indians, Australians, and Chinese investors all know this. So-called African Americans, those who’s families haven’t stepped foot in Africa in 100 years or more, need to wake up. Those other groups have no interest in the sustainable development of Africa or her people. They see dollar signs, and they’re going after them. You can’t blame them for acting in self-interest. Why aren’t we?
But Black people in America have an advantage. First, we have the technical and managerial knowledge that is desperately needed in Africa. Second, we’ve been integrated in white schools and companies for over 50 years now, so we know everything they know, plus some. Third, we look like Africans…we are Africans. We just haven’t been home in a while. And in reality, most people are more comfortable doing business with people that look like them. Despite popular belief, most Africans will welcome us back with open arms. Yes, there is still some tension left in the relationship between “African-Americans” and Africans, but these are small potatoes compared to the generally destructive and exploitative relationship between everyone else and Africans. So if the Europeans, Indians, and Chinese can invest in Africa…we should be able to as well. We can do it better.
There are a lot of negative views about Africa in the Black community, some of which are true, but many of which are perpetrated to keep the secret about the land of opportunity from us. Most people think the BRIC (Brazil, Russia, India, and China) countries are where the hottest investments are. Well guess where the BRIC countries are investing? Africa.
So how does one invest in Africa you ask? That’s the tricky part. There are some African stocks you can invest in directly or through ETFs, and that’s a good start, but that’s not where the high returns are. You need connections and people on the ground in Africa to see any real money. If you don’t know the right people you will probably lose your money.
By Charlotte Young
From famine in Somalia to genocide in Sudan and bombings in Nigeria, the media puts out a very bleak image of African development. But in economic reality, this couldn’t be further from the truth. For investors in the global market, much of the real growth and opportunity is stemming from Africa.
Marketwatch reports the continent is “home to a host of fast-growing economies.” In addition the growth possibilities have the potential to provide large returns.
Plamen Monovski, chief investment officer of Renaissance Asset Managers, one of the biggest investors on the continent, relays that the images of Africa “are rooted in the past” and the “BBC effect.” “But Africa is now the last frontier left in the market. Nowhere else has the same kind of growth potential,” Monovski tells Marketwatch.
The media seems to neglect Africa’s stories of triumphant and success as it zeroes in on political unrest, poverty and hunger. But after enduring 30 years of stagnation and decolonization, Africa is growing rapidly. There are 11 African countries that now see growth rates higher that 7 percent annually, which is higher than the rates in East Asia. Nigeria, one of the largest countries in Africa, is growing at 9 percent a year, one percent below the magic percentage when economies really begin to take off. Three countries have already reached a 10 percent growth rate.
In addition, while many countries worldwide are facing labor shortages, Africa boasts of a rising labor force. With secondary school enrollment also rising, the continent will be able to see a generation of more educated youth as well.
All of the growth does not negate that there is truth in the media coverage. Governments across the continent have their share of problems, but what government doesn’t? China has continued to succeed economically without a democracy and many Asian nations also face corruptions.
African infrastructure is not always the best, which can provide a setback to companies seeking to build presence. But with investments comes financial capital to improve upon roads and broadband connections.
Those that are forward thinkers understand how important it is that Africa continues to grow. With or without personal attachments to the continent, Africa’s success is important to everyone. Its rise could help to alleviate much of the despair around the global markets and end the threat of another recession. As investors know best, there’s nothing like an emerging market. Only they are capable of the “explosive growth,” that provides the fast expansion effect desperately needed around the world.
(GlobalAtlanta) — A delegation of businesspeople, academics and pastors traveled to the western African nation Liberiain March to lay the groundwork for future collaborations between Atlanta and the country. ”There is a significant relationship between Georgia and Liberia that we want to continue to build on,” said Cynthia Nash, honorary consul general of Liberia in Georgia, noting that the ties began with freed African American slaves that emigrated to the country. Supported by a movement to return freed slaves to Africa, Liberia was founded and colonized 1821-22. Ms. Nash told GlobalAtlanta that her office is working to expand Georgia’s relationship with the country through technology transfers, research partnerships and tourism.
(Businessweek) — Business just doesn’t seem to be a priority in Africa. Or does it? While most of us have trained our eyes in recent years on the rapidly developing economies and companies of China, India, Eastern Europe, and Latin America, parts of Africa also have surged.
Some African economies, thanks to economic and political reforms, are growing impressively, bringing new wealth to the region and making local companies attractive merger-and-acquisition targets. During the July-September quarter of 2010, for example, Japan’s NTT (NTT) announced plans to purchase Dimension Data, a South African-based IT powerhouse with operations in 47 countries, and Wal-Mart (WMT) made known its intention to buy a controlling share of Massmart (MMRTY), the South African operator of nine wholesale and retail chains in 14 sub-Saharan countries and the third-largest distributor of consumer goods on the continent. (Massmart shareholders approved the Wal-Mart takeover in mid-January.)
by R. Asmerom
Much has been made about China’s involvement in sub-Saharan Africa. Some call it a new phase of colonialism for the continent and others cite it as a much needed economic injection into territories starving for opportunities.
Whatever the case, China wants the world to know that its “massive grab” for African resources is not totally selfish. Recently, according to Fast Company, the Information Office of the State Council issued a white paper to tout the mutually beneficial relationship between China, the country, and Africa, the continent. Amidst worldwide criticism of China’s intensive efforts to exploit the continents resources, including oil in Nigeria, it seems apparent that the country is looking to calm accusations of an inequitable relationship. As it stands today, the second largest world economy has a lot invested in Africa. Whether the involvement is a plus for Africans, or a negative presence, depends on the standards by which the investments are measured.
“The positive side of the China-Africa relationship is that China offers another source of investment and is an important purchaser of African raw materials, especially oil and minerals, that Africa needs to sell to someone, said David Shinn, an adjunct professor at the Elliott School of International Affairs of George Washington University. “These arrangements are, in my view, win-win-win arrangements. The Africans get needed infrastructure but Chinese companies build the projects with money provided by Chinese banks that is paid back by the African country usually in the form of oil or minerals.”
Is it fair to say that some business is better than no business? The Africa we see today, mired in conflict and poverty, is a manifestation of the centuries of colonialism, exploitation and faulty aid relationships with the IMF and World Bank.
(Money Control) — Walmart, the world’s largest retailer by sales, has offered USD 2.4bn for a majority stake in the South African company Massmart, as it looks to enter the fast-growing African consumer market. Massmart is the third-biggest retailer in South Africa, with 288 stores including outlets in 13 other African countries. Walmart revealed its intention to pursue a full takeover of the company in September, but was forced to scale back the bid after leading shareholders insisted on retaining exposure to Massmart.
(PRNewswire) — As the British Prime Minister and U.S. President broker Chinese and Asian investment deals, Africa is the latest emerging economy to attract Anglo-American attention with the announcement of a landmark joint venture that promises to deliver economic growth across the African continent.
British-born Ashish Thakkar of Mara Group and Quintin E. Primo III of Capri Global Capital have signed agreements to form Mara Capri Africa Ltd. with the goal of pursuing high quality commercial and residential African real estate developments.
Both Thakkar and Primo have a distinguished track record in the property sector. Mara Group has a $1bn portfolio spanning four continents and Primo – said by Forbes Magazine to be one of the U.S.’s top ten wealthiest African-American’s – co-founded the U.S.-based Capri Capital Partners LLC with $3.6 billion in fair market value assets under management as of the end of September 2010.
“Africa needs investment, not aid,” said Ashish Thakkar, Founder and Managing Director of Mara Group. “I’m so excited that we’re able to partner with a real estate visionary like Quintin Primo and I sincerely hope that our combined skills can harness the amazing opportunities of this great continent.”
“Africa’s un-tapped potential is staggering,” said Quintin Primo. ”As one of the world’s fastest growing economic regions it desperately needs quality real estate. And, by seeking to address Africa’s challenges, shared expertise means we can also potentially help our economy and jobs at home – it’s a win-win for both continents.”
“By 2040, Africa is projected to be home to one in five of the planet’s young people and the world’s largest working-age population,” said Thakkar. “That, alongside increasing political stability and a rising middle-class means that Africa is ripe for foreign direct investment and we hope to be at the forefront of that.”
Mara Capri Africa is expected to pursue substantial real estate opportunities across all property sectors, including retail, office, hospitality and residential.
(CNN) – In Africa, we have made great strides towards poverty reduction and broader development in recent years and indeed, we are one of the first regions to show signs of recovery from the global downturn. Our challenge now, however, is to build on this early recovery and truly drive sustainable growth and development. It is widely recognized that Information and Communication Technology (ICT) is one of the driving forces that will accelerate Africa’s economic and social development, by supporting the creation of wealth and sustainable growth in the region.
by Charing Ball
Several years ago, I took a stroll down the streets of Salvador Bahia, Brazil looking for a bite to eat. It had been a long day sight-seeing with my African-American tour group and we were given the evening free to do some exploring of our own. As I walked the cobblestone streets near my hotel, I came across a restaurant district with every kind of food imaginable. There was Italian and Mexican, Chinese and even Thai. And of course, there were several local food eateries, each with their own flare of authentic Brazilian cuisine. Just about every culture through food was represented with the exception of African-American. All of sudden, my hunger pains were replaced by the movement of the wheels turning in my mind; why isn’t there any a chain of soul foods restaurants, specializing in African-American cuisines, in places outside of America and parts of the UK?
I imagine this is how Billionaire Bob Johnson, founder of B.E.T and first African-American to control a company on the New York Stock Exchange, must have felt when he choose Liberia as the site of his latest venture - but instead of food, he was thinking a hotel spa. In an interview with CNN, Johnson said that he knew that choosing Liberia, which has been ravaged through years of civil war and unrest, to construct his 78-room beach side resort was a risk but he’s also banking on a big reward.
Granted, we are talking about Robert “Bob” Johnson, the same Bob Johnson, who once took out a full-page ad urging for a repeal of an estate tax, which he argued would close the wealth gap between white and black families. However, after careful consideration, I began to wonder: what if Johnson has a point. What if more African-Americans took his, as well as the nameless black investors, lead and started putting their financial faith more in the Motherland?
Many African Americans have distorted views of the region, thanks to the sensationalism of civil wars, famine and regional destabilization in the mainstream media. But by other indications, Africa is now an emerging market. The continent is sharply growing out of the recession with 4.5% of growth in its regional economy]. Moreover, China and India are investing heavily throughout the continent - although, much of the Chinese and Indian investments are contingent on extraction industries such as oil and mining, which is more about taking from the continent rather than putting in.
But perhaps this focus on one or two natural resources can present more valuable opportunities for African-Americans to engage African countries with more meaningful investments options including agriculture, arts and entertainment, hospitality, textiles, media and retail. With our historical and cultural affinity with the continent and the African Growth Opportunity Act, which offers tangible incentives for African countries to continue their efforts to open their economies and build free markets, African-Americans have a stronger reason and advantage to invest in the region. And that investment can produce return greater rewards for not only African-Americans but the continent as a whole.
Now granted, I would have loved to have been reading about a better symbol of a black billionaire opening up shop in Africa. Johnson, who is also planning similar ventures in Haiti, was also quoted sd saying that he’s avoiding Liberia’s capital of Monrovia because of its social problems and basically would be displacing people from the resort site.
However, Johnson’s actions could be the catalyst for more blacks business folks and investment capitalists to consider continent, as well as other less developed black nations, which could go a long way in reconciling Diaspora relations, more effectively building wealth and circulating black dollars for generations to come.
African-American prosperity is producing surpluses that can fund a wide spectrum of new endeavors. Given the relatively slow growth outlook for the U.S., black entrepreneurs should consider using those resources to fund international ventures which hold the promise of higher returns.
The timing is perfect for such considerations as the administration has plans to double U.S. exports by 2015. Larger foreign direct investment flows are likely to accompany the surge in exports.
Traditional thinking concerning African-American business abroad has mainly focused on Africa. Following that tradition may seem logical today as many of the continent’s economies are expanding. The International Monetary Fund’s (IMF’s) outlook for Africa’s growth averages 5.2% over the next two years, compared to 2.9% for the U.S.
In addition to market projections, there are other factors that may lead some to Africa’s doorstep. Like Malcolm X, who’s journeys and diplomacy raised the specter of opportunity for blacks on the continent, these individuals are drawn by concepts like brotherhood and self-sufficiency. One need only look at Andrew Young, former ambassador to the United Nations and former mayor of Atlanta, and his deal-making track record in Africa, as proof that entrepreneurial success is possible.
But even as it is possible, there are valid reasons to hang back. While a few countries offer dual citizenship to black Americans, suggesting that the door is open, some Africans offer a more tepid reception. Real or perceived, the role of blacks in Liberia’s recent turmoil, U.S. operations in Somalia and inaction during Rwanda’s crisis, serve to chill what might otherwise be warm relations across the diaspora.
Entrepreneurs undeterred by the obstacles, anxious for a foothold in a growing economy, are wise to investigate the impetus for that growth. It is true that the quality of African leadership is improving. True that this leadership is engineering stronger economies. But it is also true that a significant portion of growth within some of these markets is attributable to outsiders. China, India, and Japan, for instance, have all convened African summits in the past few years, during which they’ve made plans to increase their economic presence in the region.
Consequently, investors face increasingly stiff competition in Africa. But decreasing opportunities in Africa are likely to be more than offset by increasing opportunities in Asia. Given the IMF’s outlook for “Emerging Asia” of 8.7% growth through 2011, blacks cannot afford to overlook this opportunity. The three-billion-person-strong Asian market offers substantial opportunities for businesspeople willing to entertain global ambitions.
Both China and India have rural populations of at least 600 million for whom income is on the rise. Significant opportunities across the service sector will surface as people begin to demand services commonplace in advanced economies.
But lest you think that one need only be eager and able to build a viable enterprise, I will remind you that much in business, as in life turns, on perception. Just as adverse images of African-Americans are damaging to progress in this country, those same images are a hurdle to success abroad.
We can hope that within an increasingly globalized world and continued exposure to various cultures, this might one day be overcome. In the meantime, African-Americans should consider partnering with Asians who have facility with the language and would be motivated due to their partial claim on profits. This is an old strategy. Blacks have long sought collaborations in the U.S. to circumvent discrimination. Bringing that same practice to bear on international business ventures is critical.
Dr. B.B. Robinson is an economist and director of BlackEconomics.org, a resource for economic concepts, issues and policies affecting African-Americans.