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Cape Town - One of the big impediments to investing in Africa is that investors should realise that the continent is no get-rich-quick-scheme, cautioned Tiger Brands [JSE:TBS] CEO Peter Matlare at the World Economic Forum on Africa (WEF Africa) on Thursday.
He was part of a panel discussion hosted by FTI Consulting on the future of cross-border mergers and acquisitions in Africa.
“One has to build a business in Africa over the long term. The road to success is always under construction and one of the lessons we learnt in Africa is that one has to be willing to stay the cycle,” said Matlare.
“Investors get skittish too easily. At the same time I know Africa is not a romantic story or a Jack and the beanstalk story where one can sow seeds and they come up quickly. Yet, success breeds success in Africa.”
He said he is especially interested in East Africa, since great strides have already been taken there with cross-border trade – more so than in southern Africa.
“Regulatory barriers have to be broken down on the continent. Why is it easier for me to bring in pasta from Europe than from Nigeria?” he concluded.
Brian Orjiako, co-founder and chair of Seplat Petroleum Development, an independent oil and gas company listed in London and in Nigeria, there is indeed a growing demand and interest in cross-border investments in Africa.
In his view the challenges are related to infrastructure. While he sees the next revolution in Africa to be gas reform, he also sees opportunities in agriculture.
Mining expert Rick Menell, currently chair of the development agency the Tourism Enterprise Partnership, said 80% of Africa’s gross domestic product comes from just ten of the countries – including Nigeria and South Africa.
“There are, therefore, ten gateways to Africa – South Africa is not the only one any more,” said Menell.
For Donna Oosthuyse, director of Capital Markets at the JSE, this stock exchange is a conduit for investment in Africa, as it is important to have a good back office service in place.
She pointed out that China is not the largest investor in Africa. South African companies are.
At the same time, in her view, the biggest constraint on the continent is a lack of regional integration and the resultant fragmentation. She did mention Angola and Ethiopia as two countries with increasing success.
She also sees tourism as a good sector with opportunities on the continent, but emphasised that it is important to market Africa better and more.
