In the middle of a global financial crisis and in the face of political upheaval in the Middle-East, Africa finds itself in demand, whether for its natural resources, for access to its fast growing and increasingly discerning consumer market, its fertile agricultural land, or for its political votes in international institutions.
Africa has always been naturally rich, but now finds itself consistently amongst the fastest growing regions in the world when it comes to GDP growth. The IMF expects Africa (a continent of 55 nations) to grow by 6% this year and nearly the same again next year – about the same as Asia.
Africa has experienced many false dawns, but this might just be the time when it emerges as a force finally beginning to deliver on its long held potential.
The world's largest consumer goods companies are not trying to work out how to grow in Africa, growth is assumed; they are focusing on how to ensure that they grow faster than the competition and secure the most market share. At the same time some African companies are beginning to emerge as global players, from the Dangote Group in Nigeria to MTN in South Africa and Angola's Sonangol.
Portugal, for so long Angola's colonial master, has gone begging bowl in hand to be bailed out by its former colony. Traditional roles are being reversed and relationships fundamentally altered as the global balance of power shifts.
Conventional analysis labelled African nations as risky. But the last three years have proven that all countries are risky, even the most developed ones.
The opportunity in Africa; or the ultimate scale of her potential has long been obscured by a lack of access to information and reliable data, as well as a perception of risk that has discouraged market entry. Conventional analysis labelled all African nations as risky. The last three years have proven that all countries are risky, even the most developed ones. Marry this realisation with the size of Africa’s population (1 billion today and forecast to double by the middle of the Century), the proliferation of mobile internet services, peace and improved leadership, and it’s easy to see why perceptions among investors are changing.
As the clamour to do business in Africa grows (the number of investor conferences is a good indicator of the appeal Africa holds today), African governments are recognising that the balance of power is shifting. Resource nationalism is rising as leaders seek to ensure the best deals possible.
Competition is proliferating and African governments are reaching out beyond traditional partners to market themselves. Investors themselves are also recognising that taking advantage of the opportunities in Africa requires access to a level of market knowledge not previously envisaged.
Increased competition has made stakeholder engagement and communications fundamental to success as European, North and South American, Russian, Indian, Chinese, Middle Eastern and Asian investors jockey for position.
Today, investors are not questioning whether Africa will ever be on the agenda. They are asking ‘when we do enter, how are we going to do it and how can we minimise our risk profile?’ Those who can provide the answers to these questions will also be in demand.