Africans investing more in Africa as western interests scale back
Dangote cement’ Obajana plant. PHOTO/File
As American and European companies retrench from their efforts to bankroll projects across Africa, a group of investors is quickly emerging to pick up the slack—other Africans.
Even as overall western foreign investment into Africa has contracted, a cohort of homegrown companies has mounted an unprecedented expansion drive.
Investment between African countries has almost doubled in the past five years, to 13 percent of new projects started on the continent last year, according to a report on foreign direct investment (FDI) released Thursday by the United Nations Conference on Trade and Development.
The companies behind those investments are chasing high growth rates in fast-developing markets, many of them buoyed by resource exports. Oil in Angola and Nigeria, copper in Zambia and coal in Mozambique have each attracted tens of billions of dollars over the past decade. Over the period, the continent’s supermarket chains, construction companies and banks have expanded rapidly.
South Africa’s Shoprite Group raised US$1 billion in bonds and new stock in March to fuel expansion into markets including Nigeria and the Democratic Republic of Congo, adding to the 223 stores in 16 countries it already has outside South Africa. The Nigerian industrial conglomerate Dangote Group spent U$93 million on a majority stake in a South African cement maker in 2010 and US$400 million to build a cement factory in Zambia in 2011. Togo-based Ecobank Transnational Inc. was the second-biggest investor in Africa over the past decade in terms of new projects; the bank now operates in 32 African countries.
China has maintained its position as the continent’s top investor, pumping US$56.4 billion into sub-Saharan Africa since 2005, the Heritage Foundation says.