By M. Isi Eromosele
Africa has the largest accumulated unexplored reserves of gold, antimony, bauxite, chromite, cobalt, diamonds, fluorspar, hafnium, manganese, phosphate rock, platinum metals, titanium, vanadium, vermiculite and zirconium, key minerals that are crucial to economies in the developed world economies. Africa supplies 8 percent of the world’s demand for aluminum, cement, coal, copper, graphite, iron ore, lead, steel and zinc; and it supplies 33 percent of the world’s need for bauxite, cobalt, gold, manganese, phosphate and uranium. Additionally, Africa supplies 62 percent of the world need for chromium and diamonds.
Many investment opportunities have been lost by foreign investors because of they believe the supposition espoused by the international media that investment in
Africa is highly risky. This supposition does not represent the reality on the ground in
Africa. The level of risk involved in investing in Africa is no higher than that present in other emerging economies of the world, including in
Asia.
According to the Overseas Private Investment Corporation (OPIC) and the UN trade agency, UNCTAD,
Africa offers one of the highest returns on direct foreign investment in the world, far exceeding all other global regions. While production of oil is the major driver behind those returns, other sectors offer impressive growth potential. One of the fastest or these growth areas is telecommunications. Cell phone use in
Africa has been growing at an annual rate of 52%, higher than in any other region of the world.
The strategic role played by
Africa within the world economy is expanding. The combination of
Nigeria and
Angola will soon surpass the Middle East as the main supplier of oil to the
United States. It should be noted that the bulk of the gasoline used in the
U.S. is derived from the sweet crude light oil supplied by
Nigeria.
Angola is the top supplier of oil to
China.
China,
India and
Brazil are rapidly increasing their business dealings with
Africa. These new emerging economic powers often beat out firms from developed countries in their bidding for major development contracts in
Africa.
With a population that continues to grow exponentially,
Africa offers a consumer base of more than 900 million people. While more than half of
Africa is estimated to live on a dollar or less a day, there is a growing well educated, high earning middle class who have high spending power. There are also surprising opportunities among the lower income population.
Nigeria, the largest African country by population, with the second largest economy in the continent have considerably improved the excellence of its capital markets, fronted by a visible and transparent reform in its banking industry. This has resulted in regulated and affordable bank lending that has helped spur growth in the country’s economy. Nigeria’s stock market has risen by 20 percent in 2010 and its inflation rate is well under control.The financial reforms in Nigeria have led to similar developments in other African countries.
Africa is becoming a more attractive target for all types of investors, including strategic and institutional investors, who see the reforms that are being implemented in its regions and recognize the continent’s potential for economic growth. The countries that will benefit the most from this increased interest are those that are politically stable and continue to implement economic reforms and improve the business climate.
M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of
Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance
Copyright Control © 2010 Oseme Group
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