Five African Investment Hotspots For 2015

One African investor’s views on the top 5 African investment markets for 2015:

1. Tanzania

The large East African nation has strong and consistent economic growth, 7% last year, and will undoubtedly be a rising force in the region in years to come. Dar es Salaam is rapidly becoming a hub city for businesses, with a growing population and market place. Discoveries of significant offshore natural gas offer huge potential rewards although developments have already shown difficulties with handling such projects. And with elections on the horizon it may take time for these to come to fruition. Instead, I’d point to a sector already seeing massive investment and with clear support behind it – transport infrastructure and logistics.

Dar es Salaam’s port is relatively efficient but feeling the strain of increased traffic. However, it’s undergoing significant upgrades to lessen cargo waiting times, and with a new $10bn port at Bagamoyo, along with a handful of others, investments in the sector are already underway.

An estimated $19bn of new roads and rail are also in the pipeline. With infrastructure not just critical for the nation, but also for neighbours Malawi, Zambia, Democratic Republic of Congo, Rwanda, Uganda and Burundi, the development of the transport sector will offer new and exciting opportunities for public-private partnerships.

2. Angola

While oil revenues dominate headlines, other attractive sectors in Angola’s continued growth seem to slip under the radar. Most prominently, agriculture offers significant potential for rapid but sustainable growth. Let’s not forget the long and proud history of farming in the country, once the fourth largest coffee producer in the world.

The government has announced plans to produce 2.5m tons of cereals each year from 2017 (up from 1m today) and increase cassava production by 25%. They have also begun a process of consolidation of some medium and large-scale agribusiness projects to seek efficiencies and improve joint production. And in addition are investing in new technology and research-based partnerships with countries such as Brazil. This will lead to an increase in the quality and yield.

3. Mauritius

Compared to some booming African economies, Mauritius’ annual growth rate of around 3-3.5% seems relatively modest, but the business environment, stability and incentives to invest are amongst the best on the continent. As well as having some of the lowest corporate and income tax rates in the world, and a favourable foreign tax credit system, it’s also a gateway for operations on the mainland, in East Africa and beyond. On the island itself, there are a number of sectors worth consideration, particularly in renewable energies, including solar and wind projects.

4. Botswana

The Baseline Profitability Index for 2014 puts Botswana at the top of the list for investment returns, not just in Africa but also the world. While other rankings dampen the excitement a little, there is no doubt the country has a growing reputation for stability and safety in terms of investment.

While mining opportunities will continue to expand, particularly in coal, there is a specific interest in renewable energies too, with Botswana currently importing 80% of its energy use. The Government has plans for ultimate energy self-sufficiency, and the new innovation hubs and focus on science and technology will also address the issue of local skills for such high-tech industries.

5. Namibia

Namibia is constantly ranked as one of the top countries to do business in Africa, with a fast-paced economy and reduction in inflationary pressures. The Government has now placed special emphasis on the manufacturing sector. As such, massive tax incentives have been introduced, including VAT, corporation tax, training, transport and logistics and building and planning.

Away from the dominant manufacturing areas of meat and fish processing, as well as the well-established drinks industry, sectors including automotive production and textiles offer excellent opportunities for investors, especially given the potential to export regionally through Walvis Bay port and improving road networks.

This entry was posted on Sunday, February 8th, 2015 at 11:52 am and is filed under Uncategorized.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.