True or False? Is Africa the new face of International Investment
IMPORTS AND EXPORTS
International investment in this sector can reap a lot of rewards.There are abundant indigenous products that need capital infusion to be developed into exports, for instance, tropical fruits. Tropical fruits usually go to waste because of poor storage and lack of a good transportation system. If such products are processed well, the agriculture sector can provide more income.
CONSTRUCTION OF COMMERCIAL REAL ESTATE
The continent is in great need of commercial real estate investment. Over 50% of the real estate needs modernization. With entry into the "billion population club" It will take about 50 million apartment units, at a cost of 30,000 per unit to appropriately house people. Total estimation cost would be $1.5 trillion dollars. With in the next 20 years.
100 million residential houses (single family homes, town houses, condominiums) in the next 30 years, at a cost of $70 thousand per unit, at an estimated cost of 7 trillion dollars. Real Estate is another untapped avenue for international investment.
TOURISM AND HOSPITALITY INDUSTRY
Tourism is another source for international investment. About5,300 hotels and motels should be built, within the next 25yrs, to be able to accommodate tourism. This will only enhance the already existing industry.
Africa needs a super highway from Cairo to Cape Town from Dakar to Addis Ababa. As long as a railway line on the coast, from Dakar to South Africa, From Egypt to Mozambique. By so doing a network is created which can enhance trade.
There is a need for creation of African made vehicle powered by solar energy , liquid gas or nuclear power. This will help in conserving the environment. All of the above can be cheap alternatives to oil.
AIRCRAFT MANUFACTURINGAfrica should find a way to start aircraft manufacturing because they have the necessary raw materials. The availability of the raw materials makes it cheaper because they do not have to rely on exportation. Those looking for international investment can find this cost-effective
Africa nations need partnerships to develop the ship building industry. Ghana for example signed a partnership with South Korean ship manufacturing company to build ships in Ghana.
In the next 50 years there is room for at least 2228 mines to be set up in Africa, in different fields. Assuming 70% of her resources have not been tapped. African entrepreneurs should enlarge their vision and become owners and operators of these mines. Gold mining, diamond mining, manganese, iron ore, boaxite, copper, silver, coltan. Africans will therefore have more capital in their hands and broker more business deals with those looking for international investment.
Industries should specialize in processing and semi processing these minerals.
MINING EQUIPMENT MANUFACTURING
The continent has room for manufacturing and assembling mining equipments. This is so because they have the necessary untapped resources.
HEALTH CARE INDUSTRY
The latest African boom is private healthcare. According "Sarah Rundell reports," the private sector with financing from both foreign and domestic capital, is becoming significant component of Africa's healthcare mix.Accounting for around 60% of the $16.7bn spend on the sector. With the growth of the African middle classes, this sector's expansion is on par with that of telecoms or infrastructure.
BANKING AND FINANCE
The continent is lacking enough cash liquidity, and it is necessary for financial institutions to make capital accessible to the average African entrepreneur, especially women.
It is a big growth industry that needs to be developed more. Although a lot of major insurance co operations are in Africa, there is room for insurance agencies to service the lower income earners.
Over 50% of Africa's fishery needs are imported with their scarce foreign exchange, and this is due to lack of technology, Inadequate fishing methods, exploitation of foreign fishing vessels and inadequate coast guard vessels. consumption is imported.
African Hollywood spearheaded by Nigeria. Nigeria has embarked on the film industry, and their influence has expanded to other African countries.
This needs great capital infusion to develop. There is tremendous untapped talent in music and film industry. Capital is needed to develop such industries.
The reason Africa cannot feed herself is because the bulk of her fertile lands has been used to cultivate cash crops, namely, Cocoa, coffee, tea, tobacco, rubber, cotton, flowers, palm trees and tropical fruits. The rest of the land for farming needs reclamation and modernization.
As indicated in his book, "No Apology: The case for American greatness," former Governor of Massachusetts, Mitt Romney. He explains that America should use her soft power to gain influence in the world. America can create education institutions to duplicate themselves in Africa, that will limit the brain drain. Also make up for the shortfalls in American institutions.
Africa has a wide variety of rivers and waterfalls which can be used to channel more Hydro-electricity power. This power can be used to build and run more manufacturing industries. Americans can work hand in hand with Africa to expand its power source, and in long run plant more industries in Africa.
The Owen Falls Dam in Uganda, helps to feed its neighboring countries in Africa. What if another dam was built in Sub Saharan Africa to unearth electricity to enhance the manufacturing industries in Africa.
"The Victoria Falls Project"It would take 40 billion to construct the largest hydro-electricity dam to solve the acute electricity shortages in Africa.
NUCLEAR POWER STATIONS
Another good international investment would be a nuclear power station, following the model of South Africa. This could open the door for the industrialization of Africa.
Capital infusion is necessary through international investment and Africans get fully involved in the economic industries.
The race is on for African resources, especially as growing emerging markets become fully developed. Indeed, China and India are already in the game, and it's rumored that India's Oil & Natural Gas Corp. was considering a bid for Cove Energy, as well.
This is going to be a major trend over the next few years as Africa becomes a pool for international investment.
More than one in two institutional investors see Africa as the most attractive region to invest in the next decade, with one in three expecting to put at least 5 percent of their portfolios into the continent by 2016, a survey showed on Tuesday, January 24, 2012.
"Africa was a destination for grants and aid but going forward it will be the destination for trade and investment." This is a profound statement.
The video illustrates how the environment for business has changed for the better in Africa. For example there is more urbanization, increase in middle class and the political climate is becoming better.
Africa can be a glowing light for international investment.
From 1995 to 2005, Africa's rate of economic growth increased, averaging 5% in 2005. Some countries experienced still higher growth rates, notably Angola, Sudan and Equatorial Guinea, all three of which had recently begun extracting their petroleum reserves or had expanded their oil extraction capacity.
The continent is believed to hold 90% of the world’s cobalt, 90% of its platinum, 50% of its gold, 98% of its chromium, 70% of its tantalite, 64% of its manganese and one-third of its uranium.
The Democratic Republic of the Congo (DRC) has 70% of the world’s coltan, and most mobile phones in the world are made with elements refined from this mineral. The DRC also has more than 30% of the world’s diamond reserves.
Guinea is the world’s largest exporter of bauxite. As the growth in Africa has been driven mainly by services and not manufacturing or agriculture, it has been growth without jobs and without reduction in poverty levels.
In fact, the food security crisis of 2008 which took place on the heels of the global financial crisis has pushed back 100 million people into food insecurity
In recent years, the People's Republic of China has built increasingly stronger ties with African nations. In 2007, Chinese companies invested a total of US$1 billion in Africa.
A Harvard University study showed that Africa could easily feed itself, if only it had decent governance. Good governance can lead to healthy international investment.
Invest in Africa to boost world economy
Donald Kaberuka, the head of the African Development Bank, had an interview with AFP, and promoted the idea of Africa being the face of international investment for the future. Below is the report:
WASHINGTON - With an ailing US economy, European debt battles and Japan rebuilding after a crisis, investors should be looking south - to Africa, the head of the African Development Bank said.
International investment in the continent at a time when developed countries' economies are struggling would boost the world economy, Donald Kaberuka told AFP in an interview in Washington this week.
Africa is rich in mineral wealth and proven oil reserves, has a growing, urban middle class and undeveloped infrastructure.
And its leaders are working to improve security, stability and rule of law.
They have also learned from the uprisings in North Africa and the Middle East that economic advances have to benefit a country's people, not just its president and his inner circle, in order to be sustainable.
"Opportunities elsewhere are not many. So Africa is the opportunity," Kaberuka said.
"Some of our bonds are better than, certainly, Greek bonds."
Economies in sub-Saharan Africa are projected to grow at 5.6 per cent this year and 6.5 per cent next year, with a dozen countries growing at the critical rate of seven per cent, considered the minimum for sustainable poverty reduction.
"Growth now is happening in emerging markets," Kaberuka said.
"Imagine if there were no China and India or Brazil at a time when Europe and the US are in difficulty. It would be a big recession because China and India and Brazil are picking up the slack.
"If we could now add Africa, I think that that could give a boost to the world economy," he continued.
Besides Africa's oil and mineral wealth, which foreign investors have long had a hand in exploiting, Africa offers other business opportunities up for grabs.
"Forty per cent of Africans live in urban areas. That means they want housing, infrastructure. They'll be using Colgate; they'll need fridges, household appliances," said Kaberuka.
"You have the choice of making it in Africa or importing it. Either way creates business."
The bank chief also advocated setting up free trade agreements with Africa.
Just last month, British Prime Minister David Cameron said that an African free trade zone could increase gross domestic product across the continent by $60 billion a year - $20 million more than the world now gives Africa in aid.
"Rich countries would not have to give us aid; trade would create wealth," Kaberuka said.
African leaders agreed in South Africa in June to launch negotiations on creating a free trade zone that would include 26 countries with a combined economy estimated at $875 billion.
For their part, African leaders are working to improve stability and security and ensure that the continent's wealth benefits its people.
Kaberuka said the popular uprisings now roiling Arab countries highlighted the importance of "inclusive, shared" economic growth rather than national wealth figures alone.
"Tunisia was growing at about 5.5 per cent for almost seven years, and many international organizations were effusive in their praise of its achievements.
What they didn't look at were the growing inequalities and that an authoritarian model that was clearly denying rights to the people," he said.
"We can no longer turn a blind eye to these issues. Today we have to keep an eye on whether economies are growing and ask if the fruits of growth are getting to the people.
"Because if they aren't, this thing is not sustainable."
Africa should be the future face of international investment, this would help the continent develop as well as the world economy. There are a lot of hidden treasurers in Africa waiting to be tapped.
The true size of Africa, a size that is full of untapped potential.
See the image of the true size of Africa.
This size is becoming a magnet for international investment. Investors have realized, if the hidden potential of Africa is birthed, the rewards are incomprehensible.
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