'Africa set to be investment capital'

'Africa set to be investment capital'

2011-05-18 16:34

Lagos - Resource-rich Africa is set to be the world's next investment destination thanks to an array of reforms sweeping across many previously troubled countries, a former Nigerian leader said on Wednesday.

Olusegun Obasanjo, in office in Nigeria for eight years until 2007, said that after many years of stagnation the continent's economies saw a sharp growth in the past decade. Real GDP increased by 5.2% annually, compared with 2.3% in the 1990s.

"Thus with political and social issues properly settled and put behind us, Africa is all set to become the next big investment destination," Obasanjo told an international investment conference here.

"Africa's growth story is not only about its natural resources, but about reforms, including restructuring of regulatory frameworks, and policy amendments that have brought a fundamental change in the business environment, earning Africa a permanent place on every major investor's map."

Many governments still have a long way to go in terms of reforms, Obasanjo said, but the growth rates recorded so far are important first steps that have set the pace for economic growth by attracting foreign investment.

Africa's collective GDP, at $1.7 trillion in 2010, is now roughly equal to Brazil's or Russia's, putting the continent among the world's most rapidly growing regions, he said.

Obasanjo said Africa's overall growth in the next five years is expected to be around 8% - almost double that of some advanced economies which are forecast to record around 4%. The world's average is expected to be 6%.

"Even when we compare this growth with the growth likely to be witnessed in the Bric (Brazil, Russia, India and China) countries, Africa overshadows Brazil which stands at 6.5% and is soon catching up with the rest of the giants who average around 11%," he said.

Obasanjo said Africa's economic pulse had quickened, infusing the continent with a new commercial vibrancy and many key sectors as banking, construction and telecommunications were treading upward.

"The resurgence has come about in spite of the fact that most African countries are still facing serious challenges such as poverty, disease and high infant and maternal mortality," he said.

The three-day conference is organised by an emerging markets investment bank, Renaissance Capital, which operates in eastern and central Europe, central Asia and Africa.