Doing Business

August 30, 2012

Investing In Africa: The Bridge Bypassed?

When the global economy was shaken by the debt crisis in Europe and the United States, investors develop a keen interest in Africa, a continent considered the new Eldorado for business. Mauritius is positioning itself as a bridge to Africa, but the traffic is expected.

Platform between Asia and Africa, platform to launch the African continent, 'Gateway to Africa', in short ... so many adjectives to summarize the strategic importance of Mauritius. But is it really necessary to go through Mauritius to invest in Africa? 

There are many Asian companies, Chinese and others who invest directly, seeing no use to use Mauritius as a platform. The reason, according to the company Afribrains, specializing in African affairs, that is beyond words, Mauritius has not really developed a strategy and structures needed to guide any foreign businessmen in route to Africa, and take local benefits. 

Someone who shows up in Mauritius to learn about opportunities in Africa, especially through Mauritius, will return empty-handed. Because, beyond the clichés base, we have not yet probed the continent, and we do not have the necessary information in order to advise investors accurately. For Afribrains, Mauritius is certainly late, but he can still catch up. 

Hence the goal of this company to fill this gap by offering a range of services, from in-depth research, analysis, industrial market research, investment opportunities, supporting administrative and economic relations sector, among others. 

It is sure that Africa has not yet sophisticated infrastructure to accommodate investment, but it will come quickly. The continent has a very broad middle class looking for new products that meet global standards. If we look at each country, we have a distorted view of each nation. But if we look at the continent as a whole, we see that it is growing. With its immense natural resources, the potential is enormous. For some businessmen, it is much better to invest where others do not want that to invest where everyone does. 

Five 'boom towns' African 

According to the website "How we made it in Africa", the five African cities missed the point and offer multiple opportunities are Tete and Pemba (Mozambique), Solwezi (Zambia), Takoradi (Ghana) and Juba (South Sudan).These cities must appear on the radar of investors. 

 

  • Tete (Mozambique): The city of Tete is located in the heart of the mining industry in Mozambique and the region has huge reserves of coal. These activities develop the city and thus create other opportunities.
  • Solwezi (Zambia): Solwezi is the city that dominates the nickel and copper mines in Zambia. Development in recent years has led other sectors including retail, hotels, banking services and real estate.
  • Takoradi (Ghana): Takoradi is located near oil on the west coast of Ghana, where real estate development, hotel especially in full swing in order to meet the demand of visitors.
  • Juba (South Sudan): Juba, the capital of South Sudan, has the ability to become the next Nairobi, according to analysts. The main industry of the region is oil.
  • Pemba (Mozambique): The tourist town of Pemba is also home to a regional port in northern Mozambique. It is also close to the natural gas fields, or new deposits have been discovered. The city of Pemba was stormed by investors, given the business opportunities it offers.

Where to invest? 

Investing in Africa, but where exactly? The sub-Saharan region has experienced an annual growth of between 5 and 6% over the last decade, with six of the most dynamic countries in the world therein. 

According to forecasts from FMII, six of the ten best performing economies in the next five years will be in that region which offers a market of 840 million people, with a purchasing power of $ 1.9 trillion. It should also be noted that political conflicts are declining, and the business climate is improving gradually. The region includes 46 sub-Saharan countries, including South Sudan. According to UN figures, South Africa and Nigeria are the largest volume of foreign investment, while countries such as Angola, Ghana, Guinea, Zambia, Kenya, Tanzania and Uganda are also a good Performance. 

Chinese subsidiaries 

According to CCTV, about 2,000 Chinese companies have at least one subsidiary in Africa. They create jobs for the locals, but also face competition. The 5th China-Africa Ministerial Conference last July, was an opportunity to launch a new series of investments in Africa for three years. Meanwhile, the Mauritius Jin Fei zone still awaiting its first customers. 

Regional cooperation 

It's been years since Maurice received farmland in Mozambique, but the projects are slow to materialize. Several agreements have been signed with other countries such as Benin and Congo for bilateral trade. The Mauritian expertise is sought especially in improving the business climate and to this end a dozen agreements were signed with agencies promotions African and Indian Ocean region. 

French interest 

French companies are more attracted to North Africa, West Africa and Central Africa, mainly because of the French language spoken in these regions. In addition, the time zone is an advantage for them, with a maximum of three hours time difference with France. Historically, in the former French colonies, France, French, and French products enjoy an excellent reputation for quality and reliability, even if there are sometimes a few memories of a painful past. In most Francophone African countries, legislation is modeled on French law, which greatly facilitates trade relations. 

Asian interest 

While the Chinese and Indians tend to focus in Anglophone Africa, China has also invested heavily in Algeria, Nigeria and Congo. Other countries, including Sudan, Ethiopia, Angola, Zimbabwe, Malawi, Mozambique, Kenya, Tanzania and South Africa, also attract Chinese investors. 

China has become the largest trading partner of Africa. India is also becoming increasingly present on the African continent. India-Africa summit in Addis Ababa at the end of May 2011 and was attended by Prime Minister Manmohan Singh, has strengthened economic ties between the two parties. To fuel its growth, India has more need than ever of African resources and also exports its products to Africa. 

Its private groups are on the niche a long time. Indian giants like Tata invested nearly a billion dollars in the telecom and automotive industries in Kenya, Zambia or South Africa. Kalindee Rail, Indian manufacturer, renovating the railway from Ghana while the pharmaceutical Ciplan distributes generic Uganda, Cameroon, Togo and elsewhere. These multinationals did not really need to cross the bridge Mauritius. 

Investing in Africa: The BDO assists 

BDO Mauritius, recently renovated with a new "leadership team" manages its new regional structure, which includes BDO Mauritius, Kenya, Tanzania, Uganda, Seychelles and Madagascar. The company offers its services to companies wishing to set up in Mauritius in Africa and also a presence in Rwanda, Burundi and Congo. 

Africa Centre for Business 

The Board of Investment has launched an online platform to disseminate information on Africa. The Africa Centre of Excellence for Business wants to position Mauritius as a hub for the region. This platform provides necessary and useful information to potential investors. However, it seems that the site is not updated regularly. This can confuse investors. Thus, this platform indicates that the Treaty of double taxation with Nigeria is under negotiation, while the DTA has been signed on 10 August. In addition, the site that reproduce data already available elsewhere, without value-added analysis. As the office of the Africa Centre, whose opening was announced for July 2012, it is still not ready. 

Feroz Dahoo, Economic Observer: "Maurice risk of missing the train African" 

In their last report, the analysts recommend MCB Focus authorities to play the card of Africa. What is the role played by the Mauritius Africa in the years to come? 
"Africa remains the global center of attention, but Maurice risk of missing the train! Traditionally, our markets were Western Europe and the United States. Then we turned to Asia. 

Although we are part of Africa, we are only talking about our intention to enter, "says Feroz Dahoo. Economic Observer quoted a "simple example to demonstrate our reluctance." "The rate of people with a bank account in Africa is around 3%, although Maurice champion of banking services in the region, has seen very little penetration of local banks in Africa. Mauritius offers economic, social and political stable in this part of the world, with a very high level of infrastructure. This has certainly been brandished as our strength in the past, but this is not enough. " 

Hence his recommendation: "We need to go beyond the old beaten track and create new sectors, such as pharmaceuticals. It is not surprising that alternative medicines are gaining ground in many developed countries and many medicinal plants are on African soil. We need to explore this track. " Another sector of tertiary education, where progress is slow. 

"The American and British universities setting up in China and India. In Mauritius, educational projects announced have not been made. The size of the market does not provide the critical mass for success, but we must see Mauritius as a center of quality education for many Africans who come to study here, "says Feroz Dahoo. 

"Our telecommunications sector is recognized in Africa and we can explore opportunities in African landline and mobile also. Thus, mobile service providers with all integrated peripheral activities may have their headquarters in Mauritius. Unfortunately, very little is being done to really attract multinational companies to come and set up their regional offices in Mauritius. Our air access also remains a challenge, "he says. 

"Outward investment" Mauritius 

For some time now, we speak of "Outward investment", that is to say, invest abroad, mainly in Africa. The high cost of raw materials, freight costs and unavailability of labor lead some companies to relocate to Africa. Others are tempted by the vast African market. 

Whatever the reason, companies have much to gain by investing in Africa, in several areas. The "Outward Investment" was Rs 1.8 billion in 2007, Rs 1.6 billion in 2008, Rs 1.4 billion in 2009, Rs 4 billion in 2010 and Rs 2.5 billion in 2011. Mauritian investments abroad were made primarily in Africa. Popular sectors are agriculture, manufacturing, construction, trade and retail, hospitality, financial services and real estate. Groups such as CMT and SKY are moving into Africa and Asia. Madagascar is also an important destination for investment Mauritian FAIL group is present, then qu'Innodis invested in agro-industry in Mozambique. In the banking sector, is Afrasia Zimbabwe and Mozambique to the MCB.

 

 

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