Why it’s Time to Invest in Africa

The people, through their representation, this last week sought an affirmative action for degree holders.Through a bill, which the president declined to sign into law, the people had sought to make a law that requires a minimum of a degree for elected leaders.

It is an indication of the frustration degree holders go through in trying to compete their way into elective positions.

A realization that capital, more than anything else, determines who gets elected.

This sort of advocacy, is comparable to one adopted for minority groups and the fairer sex. It is also a pointer to a growing number of intellectuals who feel excluded.

It is an attempt to claim their ‘rights’ in a, supposedly, meritocratic society.

To the strategic investor this is a pointer to a continent that is ready for investment. Industry, unlike politics, has some respect for merit.

The demographics point to pyramid structured population, with majority being in their most productive age (15 – 65 years); educated and living in increasingly progressive democracies.

The cultural dynamics are increasingly favoring companies that are daring to en culture within local realities.

Diageo and Vodafone are examples of global multinationals that have harnessed the local realities to their benefit.

While many investors tend to shy from local realities, such as, infrastructure problems and low purchasing power, Vodafone, for example has built it synergies around market niches responsive to lower priced products; and the social nature of the locals, hence the relative success of mobile cash transfers.

In other instances, as in the case of Diageo, companies have had to invest in their own power and other infrastructure in order for them to function optimally.

The result has, though apparently not attractive in the short run, has been tremendous within mid to long term. The initial costs are offset by lower production costs driven by competitive raw material and labor.

At a time when Europe and the United States are grappling with major recession, Africa provides a perfect place for new investment. An opportunity to reduce global inflation by providing global populace with quality (and organic), affordable product and services.

To the investor the benefits: free weather all year round; productive land, as well as rapidly emerging and growing markets for raw materials, labor and end products.

Such investments are also likely to contribute to global peace by empowering natives and hence stemming the growth of terrorism fed by notions of oppression and dominance.

The growth potential of the investments can only go high, considering the abundant unexploited natural and human resources.