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Traditional big guns in Africa being replaced

Mar 09 2017 19:32
Carin Smith

Cape Town - Traditional big guns in Africa like South Africa and Nigeria have increasingly been replaced over the past ten years in the eyes of investors.

This is the view shared by Robert Besseling, executive director of EXX Africa, at GTR Africa Trade Finance Week 2017 on Thursday. He named countries like Ethiopia, the Ivory Coast and Senegal as having become increasingly favourable to investors.

"There has been a shift from former key players on the continent. Some of these larger economies like Nigeria and South Africa are not regarded as part of the big opportunities on the continent anymore," said Besseling.

"It is important to meet expectations in Africa and one needs knowledge of a country to realise what the investment opportunities are."

At the same time he said SA could benefit from iron ore, nickel and steel prices if the idea of rising commodity prices becomes a reality.

READ: EXCLUSIVE: Why Time put SA on risk list of shame

In his view, Brexit could also mean certain African countries have more bargaining power.

It also remains to be seen what will happen to US initiatives like USAID, AGOA and Power Africa, although so far the rhetoric of the Trump administration has not targeted these initiatives.

As for the political scene, Besseling said the debate continues regarding to what extent African elections remain a key impact factor.

"There seems to be a new shift of political risk in, for instance, state-led authoritisation," said Besseling.

He mentioned that the question remains whether Africa could face a banking crisis and the amount of risk posed by potential bank failures on the continent - so-called uncontrolled zombie banks.

Lastly, Besseling named the real threat of water security in 14 African countries which could lead to potential violence and security risks.

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africa  |  sa economy  |  risk  |  africa economy
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