by Cindy Zentle

Shifting focus

Africa in the spotlight

Unlock Africa's hidden potential.
Invest in Africa

The world is currently battling a meltdown of financial and social economies and analysts are of the opinion that Africa has hidden potential, just waiting to be unlocked.

The continent is far from achieving its title as global contender yet it is a goal that can be easily achieved.

We need to focus on improving political and commercial governance, decreasing corruption, invest in large-scale infrastructure projects, implement widespread education programs and improve the living conditions of its people.

This can be done if it has appropriate financial backing.

We have experienced an increase in basic needs development with regard to educational improvements (school buildings and qualified teachers), roads (qualified contractors are costly, as are laborers and material), and the overall governance of the continent needs improvement.

We can only reach financial freedom as a continent, if we unlock the investment potential within it.

Typically investors and financial institutions such as banks have attempted to facilitate this by entering African markets at the retail level and extending loans to the man on the street.

The biggest concern with this is the fact that the risks involved are seldom consolidated. As a result, banks are reluctant to lend a significant amount of money to the people of Africa.

This creates barriers for the average Joe when he considers buying property or starting his own business.

Entrepreneurship has proven to aid employment and boost the development of various industries including the construction of houses, roads, ports and power stations.

It stands to reason that an investor would require a premium above state or government risk for an investment in a parastatal, a premium on top of that for an investment in a national company, an even higher premium for an investment in a small business and, finally, a further premium for investing in a home loan.

Thus, by approaching investing and financing in Africa through a top-down approach, it becomes possible for investors to assess the risks at the various levels of that economy.

Once this takes place, and the top-down approach is adopted by investors entering into Africa, financial freedom can be achieved at all levels of the economy.

And because of this, Africa will be better placed to live up to its hidden economic potential.

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Issue 23


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