Published: January 4, 2010
Political instability and corruption may continue to deter foreign investment in sub-Saharan Africa, but growth potential remains in infrastructure, technology and telecoms, say analysts at development finance institution CDC.
Jonny Gill, a portfolio analyst at the firm, says attracting private investors has been a challenge for private equity firms operating in the region: “In 2010, interest from foreign investors is expected to grow but we expect investment levels to be lower than the peaks of 2007.” He adds that economies in sub-Saharan Africa have been less exposed to the worldwide downturn, with most countries still growing.
Catherine Swanepoel, an investment executive at CDC, says Ghana, the Ivory Coast, Mozambique, Zimbabwe and Burkina Faso could become attractive markets.
“Their wealth of natural resources has created a number of investment opportunities,” she says. “However, these countries would need to tackle a number of significant governmental issues and do more to encourage private sector growth.”
CDC recently committed more than US$100mn to funds investing in sub-Saharan Africa.