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AFRICA: A NEW DESTINATION FOR GLOBAL CAPITAL BY N E L S O N C H I WA R A ( P R I N C E TO N ‘ 1 1 )

R

of this new African renaissance, after all

currency derivatives exchange,

Africa has had many false dawns – but

a continent not a country; but the region’s

Walmart made a preliminary, non-

judging by current capital flows, most

recent economic track record and robust

binding proposal to enter the Southern

of the world is convinced. Standards

growth is testament to a changing

Africa retail market, and major venture

of governance have improved across

investment

capital

the

ecently, Africa opened its own

There are many that remain skeptical

To be sure, Africa continues to face

international commodity and

numerous challenges and Africa remains

environment.

According

major

to a report, by the Mckinsey Global

have trained their eyes on African

African cultural and economic centers

Institute, Africa is expected to have a

companies and African Real Estate.

and cities are as dynamic as any in the

collective GDP of $2.6 trillion, consumer

The

the

world. Africa’s Achilles heel remains the

expenditure of $1.4 trillion, 128 million

Africa based commodities exchange

misnomer that everything Africa is “dark”

households with progressively increasing

will sever the umbilical cord that ties

– both literally and figuratively: the rest

discretionary spending, and an urbanized

Africa’s commodity prices and trade to

of the world still associates Africa and

population - with 50% of Africans living

foreign exchanges, Walmart’s entrance

Africans with civil wars, disease, drought,

in towns – by 2020. The fact that the

into Africa is expected to herald a new

and brutal dictators, stereotypes that

African economy has weathered the

age of foreign direct investment in

are as wrong as they are tired. There

current economic impasse shows Africa

Africa, and venture capital injections

however is considerable evidence that

is a viable capital destination not only

into African firms should help reduce

such tired stereotypes are in decline;

for

unemployment and encourage growth

Indian and Chinese direct investments

but also for those seeking to diversify

and development across the continent.

in Africa have quadrupled each year

their incomes and shelter their future

Africa’s attractions are numerous; with

since 2000 and domestic savings rates

economic returns from the demographic

Europe and the USA experiencing

in Africa have seen similar rises. Chinese

(aging populations) and debt challenges

subpar growth rates, Africa has risen

and Indian capital has been attracted by

that are sure to be haunting Western

from an economic pariah to a viable

the fact that the rate of return on foreign

economies over the next decade.

investment

the

investments in Africa is now higher

As a young African growing up

commodities boom has resulted in one

than in any other developing region,

during this time of African economic

of the fastest middle-class expansions

ROI across the continent continues to

promise, I never cease to profess

in African history. Currently the Africa

outstrip more famous developing regions

to

region is one of the fastest growing

and is expected to continue to do so over

opportunities

in the world and Africa has a larger

the next decade. Such proven ROI has

youngest generation. We are growing

and faster growing middle class than

however failed to attract commensurate

up in an age when diseases are

India. By 2040, Africa is projected to

investments from the Western world;

in decline, warlords are in retreat,

be home to one in five of the planet’s

instead

and

opportunities are abundant, and Africa

young people and the world’s largest

companies have continued to emphasize

is opening its doors not to foreign

working-age population, making Africa

aid over direct investment. This is in spite

invaders but investment partners. The

the youngest, fastest growing and

of the fact that direct investment has

recent world cup, gloriously hosted

most natural resource abundant region

been shown to be a better harbinger for

by South Africa, is but one example

in the world.

growth than any type of aid.

of the the new face of Africa! iBR

and

private

implications

are

equity

colossal;

destination,

and

fi rms

continent

and

Western

numerous

governments

FA L L 2 0 1 0

111210 hq.indd 23

those

all

seeking

and

sundry

outsized

the

available

returns,

incredible to

Africa’s

I N T E R N AT I O N A L B U S I N E S S R E V I E W

23

11/27/2010 3:13:09 PM

Profile for Daniel Hellwig

International Business Review - Fall 2015  

Fall edition of the IBR magazine at the Wharton School.

International Business Review - Fall 2015  

Fall edition of the IBR magazine at the Wharton School.

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