The Economist: Is the “African Golden Age” owerblown?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AFTER giving a speech at a business conference in London a young analyst chatted with investment executives in the audience, then followed two of them to a nearby hotel lobby. Over glasses of Chablis the executives raved about their company’s worldwide network of extravagantly decorated offices and their fat annual bonuses. Then they offered the analyst a job. What surprised him was not their interest, nor the chunky salary, but the place where they wanted him to help invest their millions: west Africa, the most backward part of a poor continent.

 

In recent years investors have been piling into Lagos and Nairobi as if they were Frankfurt and Tokyo of old. Anaemic growth in the rich world has made sub-Saharan Africa an attractive destination for money and its managers. Foreign direct investment has increased by about 50% since 2005. Once regarded as casinos, local capital markets now seem less risky. J.P. Morgan has just added Nigeria to its government-bond index for emerging markets; South Africa had hitherto been the only African country on its list. The American bank, the world’s biggest underwriter of emerging-market debt, predicts that adding Nigerian bonds to its benchmark will lure an extra $1.5 billion to the country. New funds will pay for so far non-existent infrastructure on a continent with a land mass equivalent to that of China, India, Japan, America, Mexico and Europe combined (see map).

 

Read more at The Economist webpage.

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