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Africa’s green pastures for foreign investors

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Tue, 25 Aug 2015 Source: Bonus Williams

Searching for greener pastures abroad would not have become a norm for most African people, especially the unemployed graduates, if systems that attracted their attention to relocate abroad were also put in place in Africa.

Many youth in Africa resigned to fate after much deliberate efforts to add economic value to change their lives.

Due to lack of understanding of investment trend, many Africans are yet to acknowledge the fact that Africa is a goldmine. The recent foreign direct investments in Africa disclosed that westerners are making Africa as their prominent investment hub, to escape from saturated markets in their respective countries.

Victoria Mensah, British and Ghanaian citizen (Fashion and Style Consultant) laments that anytime she sees the ignorance of Africans, her heart weeps. She said “Look around you. You would see major economy developments taking place, but my people refuse to see how best they can dig into the opportunities.”

This development would have been regarded as good news for Africans. Only the few who recognize this trend utilize the opportunity it presents, but large proportions of Africans are hind-sighted by the myriad of personal challenges facing them.

Victoria further expressed that recent trends have shown that many Africans are returning home from the western world to take advantage of the opportunities that Africa holds.

The key players seeing these opportunities are the citizens from the Western countries. Africans refuse to see the goldmines lying around their respective cities, goldmines you can hardly see in Europe, America, Asia or the Middle East.

“I agree that our African leaders are not putting the systems in place to favour their interests but in every rough country’s economy situation, there is always treasure lying beneath it. The westerners recognize where these treasures are lying and they explore it, despite all difficulties of doing business that were stated out to them in their respective countries and by their embassies in Africa,” Victoria Acknowledged.

In addition to Victoria’s insights on Africa, Dutch businessman Nico Van Staalduinen enthused that there is a bright future for Africa. He observed that “as the development and incomes grow in the continent, there are countless needs to be met. You just have to look at what you can do in your country, how you can go about what we are not doing here that we are now buying abroad, and reflect on the advantages of doing it.”

"While Africa's challenges are well documented, there is an increasing recognition that the continent is on an upward trajectory; economically, politically and socially," Ernst & Young’s Africa Attractiveness Survey 2015 assured.

The annual report provides insights on Africa’s investment attractiveness, and whose first edition’s title was declared “It’s time for Africa”. The report highlighted the possibility of Africa attracting billions of dollars more in new investments in the next few years.

With recent foreign investment inflows of $54 billion in Africa, the continent remains the most attractive investment destination for the westerners. The GDP was projected to grow to $2.6 trillion by 2020 from $1.6 trillion in 2008, with a 62 percent ($1.4 trillion) increase in consumer spending over the same period.

Due to this acknowledgement, the continent is currently ranked in the same category as Latin America and Eastern Europe in terms of investment attractiveness.

A survey was conducted by Ernst & Young on over 562 global executives to determine where their investment decisions would be implemented over the next decade and 42 percent of them were considering investing further in Africa while an additional 19 percent confirmed maintaining operations in the continent.

Additionally, the report further revealed that the traditional perception of investing in Africa has been rather negative, coupled with the fear of the unknown. However, in 2014, traditional investors refocused their attention on the continent, attracted by its strong macroeconomic growth and outlook, improving business environment, a rising consumer class, abundant natural resources and infrastructure development.

“These factors have resulted in global capital investment and job creation hitting an all-time high during 2014 on the continent. The investors believe that, despite challenges stated above, profitability levels compensated for the risks”, the report highlighted.

In the report, consumer products, construction, telecom, financial services, mining and metals are the key sectors targeted by investors perceived as the highest growth potential over the next few years.

This trend translates to the emergence of this seemingly high level of investment penetrations in Africa. It represents significantly more employment, improved or increased living conditions, demands for more raw materials, infrastructure developments and many more.

It was observed that in the face of improving perceptions of Africa, it is in competition for the international capital and resources that will help drive, sustain growth and social development.

As this development in Africa is being perceived by the experts, searching for greener pasture abroad may not necessarily be the ultimate solution. Open your mind and you would see the greener part of Africa, which only a fraction of Africans can see.

Columnist: Bonus Williams