Tapping into Africa’s investment potential
Wednesday, July 14, 2010
City A.M.’s Juliet Samuel reports on the appeal of African investments for funds looking to diversify their portfolios. Two groups, Sanlam Investment Management and Silver Street Capital, have recently established new African orientated funds. This source of financing should be welcomed with open arms by economies looking to give their entrepreneurs and business the capital and expertise they need to kick-start their operations.
Unfortunately, as we have previous reported, many African governments continue to implement measures that make it difficult for foreign investors to operate. Weak property rights (both physical and intellectual), excessive regulation and red tape, and arcane government bureaucracies increase the risks and cost for potential investors, forcing them to look elsewhere. With investment groups increasingly seeking to hedge traditional investments with developing market based funds, African governments should seize upon this opportunity and open their doors for business.