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28 October 2015

Investors in Africa are increasingly buying a big-picture story of progress towards a formal and regulated economy with stable politics, the rule of law, independent central banks and stricter accounting rules.

That prospect is brighter than it was. Nobody can guarantee that future progress will be in a straight line. That’s why cross-border investments, namely, Africans investing in Africa is growing by more than 30 percent per annum.
Because they realize that Africa today has notched strong growth for the last decade and is likely still in the early stages of a powerful and transforming spurt of economic progress. The following themes support their investment thesis for Africa.
1) Africa is growing rapidly, 2) Africa has immense natural wealth, 3) Africa has favorable demographics (for investors), 4) Technology is accelerating change in Africa, 5) Africa is joining the global financial system.
The mature economies of the developed world—the U.S., Europe and Japan—must contend with tepid growth, aging populations and painful fiscal retrenchment for years or even decades to come. But Africa is in precisely the opposite position. Having enacted economic and political reforms and shaken off its post-colonial torpor, Africa is on an impressive growth trajectory. The continent’s market-based ideals are solidifying, and it is simply a matter of time before its capital markets and economies become more developed, liquid and integrated with the global financial system.
According to Ernst & Young, South Africa is the largest domestic investor in the continent (Shoprite, Standard Bank, bottler Coca-Cola Sabco and telecom group MTN), accounting for 35 per cent, followed by Kenya with 16 per cent and Nigeria with 11.6 per cent.
Check-out Dangote Cement Plc, a company controlled by the continent’s richest man Aliko Dangote, with growing manufacturing investments in the continent. The company is investing $5 billion to build an African cement empire, with factories in Cameroon, Senegal, Ethiopia, Zambia and South Africa.
The continent needs more Africans like Dangote of Nigeria, Manu Chandaria of Kenya, Kone Dossongui of Cote d’Ivoire, Yerim Sow of Senegal and Ashish Thakkar of Uganda to be at the forefront of promoting intra- African investments. It should celebrate the likes of Standard Bank of South Africa, the largest African banking group by assets and earnings with footprint in 20 African countries, Ecobank of Togo, present in 36 countries across the continent; AttijariWaffa Bank of Morocco with operations in ten African nations. In ICT there is the MTN, a multinational telecommunications firm with branches in 21 countries across Africa and the Middle East. Businesses are moving ahead in Africa.
We believe that investment pioneers in Africa are likely to find the journey challenging and often unpredictable, but ultimately very rewarding in the long run.

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The Pan African Chamber of Commerce and Industry was established in 2009 by 35 founding national business chambers to influence government policy and create a better operating environment for business.

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