The “Where and Why” of investing in Africa


Isabelle Alenus-Crosby

Gong recently hosted a breakfast meeting chaired by The Economist’s Business Editor, Robert Guest.

One of the topics discussed was that too much “ignorant” money is going into Africa simply because there are not enough listed companies outside of Nigeria. The big question is therefore “where to invest?”  Where are the various opportunities that tomorrow’s Africa presents, and what makes one country more attractive than another?

With 54 diverse markets offering unique prospects and challenges, most delegates had different opinions.  What they didn’t have however, was conflicting opinions. Most agreed that there are still only a handful of  good entry point to expand into Africa today.

Here are the top 5.

1. With a population of 170 million people, a growing middle class, and a reputable stock exchange, Nigeria is a notable market for those looking to target a large consumer base in Africa. With reformed petroleum regulations, Nigeria has also become an appealing market for multinational companies.

2. Ghana is doing incredibly well and has proven to be politically stable. The fact that Ghana and Nigeria have space programmes is a measure of how much these two countries are ahead of the game. The difference between Ghana and other countries is that everything (power, institutions, infrastructure) works. With the discovery of offshore oil, the country now really has everything to soon be claiming the number 1 spot.

3. Kenya is more business friendly compared to other regions on the continent. In addition, there is access to good human capital, excellent IT infrastructure, and IT skills.

4. Tanzania has always been politically stable and is therefore emerging as the most effective gateway for trade into Eastern, Southern and Central Africa. It has lucrative investment opportunities in infrastructure, privatization and value-adding facilities, and oil has recently been discovered off-shore.

5. Mozambique is developing at a rapid pace, has much oil and is also politically stable.

I should add that Ethiopia received an honourable mention at the Gong breakfast meeting; It has become Africa’s fastest-growing non-energy economy and Diageo and Heineken recently paid nearly $400m combined to acquire state breweries in the country. Ethiopia is not for the faint-hearted, however. Its population of 85 million people still ranks among the world’s poorest.

The conclusion was to watch what the diaspora is doing – and  they are returning first and foremost to our top 3.

Countdown to Kenyan elections


Kirsten Smith

It’s Saturday. Having listened all week to local radio stations talk about peace (in 2007 the press were taking sides, so having the media on board is very important this time round), and with all the peace rallies that have been held, (there’s another one happening today I think), and peace concerts, and deliberately-public shows of the two main candidates, Uhuru Kenyatta and Raila Odinga, shaking hands, and President Kibaki appealing for ‘the losers to accept defeat and winner to embrace rivals’, the general feeling here in Nairobi is that everyone is doing all they can for Monday to be a peaceful day.

Not that there aren’t queues at petrol stations today with people stocking up on fuel, and supermarkets full of local residents buying up supplies, but that’s just in case.

There might be skirmishes at polling stations people say, but the real danger comes once the results are announced on Wednesday or Thursday, and then no one knows what will happen. There has already been trouble in other parts of the country, and there are rumours of the intimidation gangs of 2007 regrouping.

Monday is a holiday. Polling stations will open at 6am and close at 5pm, but if you are already in the queue at 5, you will be allowed to vote, so I’m told that people will probably be casting their votes up until about 9pm. I’m relying on taxi drivers for the word on the street – perhaps not the most reliable source of information but then I’ve never claimed to be a journalist and I usually find I learn a lot of interesting things from taxi drivers.

For example, what I hadn’t realised until this week was that everyone will be voting for six different people, from the President as Head of State, to the Governor (there are 47 counties so will be 47 Governors elected on Monday), Senator (47 again), Member of Parliament representing every constituency (eg Nairobi has 17 constituencies), a woman representative (47 women will be elected as part of the new constitution, which says each county gets a woman representative), and then finally a County Ward Representative (initially called councillors) – so everyone is voting for 6 different people! Andrew, my favourite taxi driver with whom I regularly sit in Nairobi traffic having long conversations, is confident that most people understand the new system and know what they have to do. He patiently explained the whole thing to me, including percentages. 98% of the 14 million registered electorate will vote on Monday he says.

I think it’s very positive that Kenya has automated it’s voting system, so it’s all digital this time round and supposedly less likely to be rigged as a result. But this election has also apparently been one of the most expensive in the world to organise, and Kenyan politicians are some of the highest paid, which is not so great to hear.

Last year in August everyone voted for the new Constitution, a simple ‘yes’ or ‘no’ vote, and were given a booklet outlining all of the information they needed on how the new constitution would work. 90% voted yes. DJs on Royal Media radio stations in each of the different tribal languages worked hard to explain the details and make sure everyone knew what was what. 90% of Kenyans now understand what it’s about and how it all works (again, these numbers are from Andrew, and by no means official stats, but a cheering vote of confidence on the new system and your fellow Kenyan).

I tried to register two SIM cards this week and spent ages waiting for someone to do all the paperwork, and then once I’d left found that only one works because it isn’t registered. Admittedly that was Safaricom, but getting six votes accurately inputted into the new digital system, and counted up is going to be quite a feat in and of itself.

And who’s going to win? Uhuru is from the Kikuyu tribe and Raila is Luo, and Kikuyu vastly outnumber the Luo in Kenya (Barak Obama’s father was Luo). Andrew reckons Uhuru will win hands down and that lots of other tribes are voting for him as well, but someone pointed out to me that Andrew’s Kikuyu, so he would say that.

He also assures me it will be peaceful.