Business
Africans investing more in Africa as western interests scale back
“The demands within African countries are so high and there’s so much room for efficiencies that these markets can be introspective for a long time still,” Mr. Deppe says.
To be sure, global economic malaise hasn’t spared Africa entirely and could yet crimp the continent’s growth. Falling commodity prices are weighing on Africa’s resource exporters. Crude-oil prices fell to an 18-month low in June, hammering big exporters like Nigeria, Angola and Ghana. The European debt crisis has hurt Africa’s more liquid currencies, like Ghana’s cedi and Kenya’s shilling, which depreciated sharply this year as investors fled risky assets. South Africa, the continent’s largest and most open economy, has been the hardest hit – the rand hit a three-year-low against the U.S. dollar last month, but has recovered since.
Some exporters are also struggling to find financing as the European banks that dominate that business have retrenched. “Africa is not divorced from the rest of the world,” says Arnold Ekpe, Togo-based Ecobank’s chief executive.
And a perennial challenge remains: the lack of reliable roads, phone lines and power grids to facilitate trade between countries. Trade between African countries has been stuck at about one-tenth of the continental total over the past decade, according to the International Monetary Fund (IMF).
But some improved cross-border connections are making it easier to operate between countries. Stretches of Africa’s potholed roadways are getting face-lifts, often thanks to Chinese and Indian companies that need them to get minerals to ports. Direct flights now link big commercial hubs, whereas flying from Dakar, Senegal, to Lagos, Nigeria, used to involve an eight-hour trek that stopped in three different countries.
Regional trade blocs are also eliminating tariffs between member countries and harmonizing customs and visa policies, reducing dayslong waits for trucks at some borders.
In South Africa, service providers are among those tapping into the continent’s new middle class. Johannesburg-based medication and equipment distributor RTT Group has opened regional hubs in Ghana and Kenya since 2006 and now delivers to 27 African countries.
