Fortune Favors the Informed – the African Paradox

(PRNewswire) – Africa is unquestionably a continent of opportunity – its sheer size, rapid economic growth, expanding middle class and steadily improving governance indicators provide ample justification for optimism.

However, looking at the investment landscape, it is clear many investors have yet to subscribe to this ‘golden age’ notion. While the performance of the Dow Jones Africa Titans Index has recently surpassed similar BRICS and Global indices, private equity fundraising and FDI trail other emerging regions.

One plausible explanation for such a disconnect lies in the perception gap influencing investment in Africa. While one might conclude that a good proportion of international investors (mostly from the United States and Europe) perceive the risks to overshadow the rewards, a growing number have recognised the value-creation opportunities yet remain frustrated by the limited platforms available through which to navigate the challenges.

How, then, is this relevant and what are the implications for telecommunications investment? The reality is that telecommunications, media and technology lies at the very core of the African opportunity. Mobile services have material growth potential, with penetration over population of 61 percent compared with 103 percent for Latin America and 77 percent in Asia. Underserved demand for Internet services is 10 times higher than in peer markets, and infrastructure-related investment has risen to more than US$60 billion in the last five years.

Investment opportunities in telecommunications, media and technology stem from prevailing market imbalances, attractive multiples relative to other emerging markets, deal fallouts, and the reluctance of operators and governments alike to address the need for infrastructure-sharing and new business models.

Overall, Africa presents undeniable opportunities for investors who are able to get under the skin of the continent, truly understand specific markets and their characteristics, and ultimately separate the wheat from the chaff. The logical corollary is that risk and value destruction lie in wait for investors incapable of disentangling the challenges of the continent and its defining market forces.

To download the full whitepaper, please visit http://www.deltapartnersgroup.com/our_insights/whitepapers

About Delta Partners: Delta Partners is the leading telecommunications, media and technology advisory and investment firm in high growth and emerging markets. With more than 180 professionals, the firm operates across 50 markets in the Middle East, Africa, Eastern Europe, Emerging Asia and Latin America. Delta Partners provides three synergistic services: management advisory, corporate finance and investments from its offices in the UAE, South Africa, Spain, Singapore and Colombia.

Contact: Karen Cordeiro, Marketing Department, Delta Partners +971(4)369-2999 (office), kc@deltapartnersgroup.com