News Column

Africa Is Not a Charity Case

February 3, 2014

The Independent Team and Agencies

President Kagame woos investors at Davos When President Paul Kagame told a meeting at the World Economic Forum in Davos, Switzerland , not to shun investment opportunities in Africa recently, he was repeating a point that was echoed by many others. They included Marriott International's chief executive, Arne Sorenson , Sev Vettivetpillai, of the private equity firm, Abraaj Group , Uganda billionaire Ashish Thakkar of Mara Group , and Tony Elumelu, chairman of Lagos -based private-equity fund Heirs Holdings . Sorenson announced that the Kigali Marriot plans to open by December 2014 while Sev Vettivetpillai, a speaker from Abraaj Group which has over 400 investments in 45 countries, told the meeting that although most of the discussion on emerging markets tends to focus on the BRICS, better opportunities lie in Sub-Saharan Africa. The Brics refers to the top emerging market economies of Brazil , Russia , India , China and South Africa . "There are many headlines about the Brics, but the more interesting markets are often outside of this bloc, and they often have better governments" says Vettivetpillai. It was noted that Rwanda has won plaudits for its economic renewal over the past few years. Philipp Missfelder, a member of German Bundestag recognised the role of Rwanda's history in shaping the nation: "We should never forget what you did 20 years ago to end the Genocide and your efforts for the reconciliation efforts in Rwanda ." Vettivetpillai said rather than using GDP growth as indicator, Abraaj prefers to look at the regions where sustained growth might come from consumption and infrastructure. He said in that regard, two groups of countries are now interesting. One is the Pacific Alliance , which includes Chile , Peru , Colombia , and Mexico . The other is sub-Saharan Africa, most importantly Ghana , Uganda , Tanzania , Kenya , Mozambique and Nigeria . On the evening of Jan. 24 President Kagame, Nouriel Roubini , chairm of Roubini Global Economics, and Carlos Ghosn , the chairman and CEO of the carmaker Renault discussed the future of emerging markets, Rwanda among them. President Kagame also addressed an event titled " Germany meets Africa " at the World Economic Forum . The event, according to an official release, aimed at strengthening mutually beneficial relations between Germany and Rwanda was attended by President Johnson Sirleaf of Liberia as well leaders in the German public and private sector. President Kagame shared Rwanda's story with those present emphasizing Rwandans determination to transform their nation: "Twenty years ago," he said, "the country sunk so low it hit the bottom. We couldn't go lower and we couldn't stay at the bottom. The only way was up." Speaking on Africa's economy, President Kagame shared his belief that Africa is headed for continued progress: "Each individual country in Africa is reforming. We are working to create the better future Africans deserve and leave the image we have come to be known for behind us. The belief in Rwanda is that there are no insurmountable challenges. With hard work we can succeed together as a continent." President Kagame urged the investors to move away from the belief that Africa is a charity case: "We need to change the perception that Africa is a place where people go to help, do good and sympathise. This will only change if both sides do the right thing to make sure that everyone is a winner." President Kagame added that investing in Africa leads to gains that go beyond monetary profits: "The return on investments made in Africa is not just good in terms of numbers. You make an impact on the ground and change people's lives. In the near future we see Africa standing on its own feet and taking its rightful place." Introducing President Kagame, former Chief Executive of Barclays Bob Diamond described Rwanda as an example of nation building through education, technology and business friendly environment: " Rwanda is an example of rebuilding a country into one that is successful for the benefit of its citizens." Addressing the argument that Africa represents a risky investment, President Kagame added that the reason for some of the risk associated with Africa is because the right investments have not been made over the years. "With the right investments and by working together, we can make sure the risks are minimized and the benefits help address issues where they exist on our continent." Private-equity firms run by African investors were also in Davos and spoke of opportunities on the continent. "No one can develop Africa better than Africans and I believe foreign investors would be happier to have local investors there too," Tony Elumelu, chairman of Lagos -based private-equity fund Heirs Holdings , said in an interview on the sidelines of the World Economic Forum . Ugandan born billionaire Ashish Thakkar , who Mara Group is based in Dubai , said the global financial crisis opened the door for African investors on the continent because, at the time, many foreign investors were rushing for the exits. "This led to a huge shift in government attitudes toward local investors," said Thakkar. "They know we're from this place, we're not going anywhere." He has joined forces with Robert Diamond , the former chief executive of Barclays PLC , to form Atlas Mara. Mara Group , a holdings company, has assets in 19 sub-Saharan countries. The newly formed Atlas Mara is expected to go into financial-sector acquisitions in Africa starting this year.


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Source: AllAfrica


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