Two recent stories caught my attention for their deeper analysis of African economic growth:
A post in LinkedIn’s African Financial Professionals group links to an article about the Africa 8. The Africa 8 are 8 countries highlighted in a study by Ecobank, a pan African bank based in Togo. Ecobank predicts Angola, Republic of the Congo, Cote d’Ivoire, Ghana, Kenya, Mozambique, Nigeria, and Rwanda to be the drivers of growth on the the continent. Ghana, Nigeria and Kenya are known to be attractive due to their political stability (Ghana), size (Nigeria) and tech driven dynamism (Kenya). Cote d’Ivoire has put its civil conflict in the past and in some ways is like a francophone version of Ghana. Congo and Angola are all about oil. Mozambique shows high rates of growth but one wonders if its influence is felt beyond its borders.
The question for all these countries is whether they will evolve into more than just natural resource plays which are vulnerable to market swings and technological and social trends such as the global imperative to move away from fossil fuels. Many of these economies are also carrying large amounts of public debt which could become a problem if US interest rates rise or commodity prices fall.
The second story identifies three African cities that are at the beginning of their growth curve: 1) Abidjan, Cote d’Ivoire, 2) Dakar, Senegal, 3) Ouagadougou, Burkina Faso. http://www.emia.org/news/story/978 This is another way of acknowledging the growth prospects of the countries for which these are the major cities.
In addition to Cote d’Ivoire’s positive outlook, Abidjan is considered one of the most attractive cities in West Africa and is an important center for meetings, tourism and commerce. Dakar, the capital of Senegal is a port at the westernmost location on the African continent, giving it easy access to Europe, North and South America. If West Africa is serious about regional integration then Dakar will become even more attractive as a gateway city. Ouagadougou stands out in this group in that although it is a national capital it is not one of the region’s most important cities. It is included largely because of growth in Burkina Faso’s gold mines.
Investors and entrepreneurs considering entry into Africa should start by investigating the locations cited above. Each is brimming with opportunities and fraught with challenges—all for different reasons. Knowledgeable advisors both at home and on the ground can help point the way.