Business
Africa Investment – From Foreign Direct Investment to Africans investing in Africa
“There is a lot of potential in sectors like oil and gas which in the next ten years will still be booming in Africa,” Emmanuel Nnorom, chief executive of UBA Africa, told reporters.
Africa’s burgeoning pool of savings will help to drive the intra-regional investment surge.
“Everybody talks about the rising middle class, growing urbanization of the labor force. Even more important is the formalization of the labor force which is creating more contributors to pension funds,” said Eliot Pence, who heads the Africa practice at U.S. advisory firm McLarty Associates.
Like the rest of the developing world, Sub-Saharan Africa’s stock of capital is set to balloon in the next two decades and will rise to US$23.3 trillion in 2030, from US$11 trillion in 2010, according to a World Bank report published in May.
Pension funds in Africa could become prominent continental investors, though analysts say many will need to update their asset allocation regulations.
Renaissance Capital estimates that total assets under management of sub-Saharan Africa’s six biggest pension funds could surge to US$622 billion by 2020, from US$260 billion in 2010, and by 2050 they could balloon to US$7.3 trillion.
Africa-focused private equity firms are already tapping local pools of capital. Emerging Capital Partners said 44 percent of investors in its third Africa fund established in 2008 were local institutions, up from 26.8 percent in its first fund set up in 2000.
