Una nueva oportunidad para entrar en Africa?
Security threats posed by the Boko Haram and Al Shabaab militant groups, political upheaval in Burkina Faso or the devastating Ebola outbreak that has killed thousands in West Africa, reminded investors of the risks that have led many to steer clear of the continent for decades.
China’s slowdown also jars African economies, whose fortunes have been tied heavily to minerals and oil exploration and which have soaked up swathes of direct Chinese investment.
But investors like Jonathan Stichbury, CEO of PineBridge East Africa which has $2.2bn under management in the region, excluding South Africa, say growth in sub-Saharan Africa is much less reliant on commodity prices and much more driven by developments on the ground.
“These countries are enjoying a period of growth which I think is almost unstoppable,” he says, citing factors like falling trade barriers, the elimination of currency controls in many countries and the emergence of a middle class.
For instance, the number of middle-class households in 11 of sub-Saharan Africa’s top economies, rose by 230 percent in the past 14 years to 15 million, according to a Standard Bank report. That number is expected to swell to 40 million by 2030.
Sub-Saharan African growth should top 5 percent this year, the International Monetary Fund says, rising to 5.8 percent in 2015. Nigeria, Africa’s biggest economy, should grow 7.3 percent next year, whilst Kenya is in line for a 6.2 percent boost.
Compare that with global growth forecasts of 3.9 percent.
Only a quarter of African countries actually produce oil, data from the African Development Bank shows. Some of the continent’s poorest countries such as Liberia and Sierra Leone spend 15 percent of their income on oil imports, the AfDB says. For them, oil’s 25 percent fall this year will be a boon.
Yet exporters like Nigeria and Angola will be hard hit. If US oil futures slip towards $70 a barrel — around $6 lower than current levels — and stay there a while, Angola and Gabon would face a three-notch ratings downgrade, while Nigeria risks being downgraded 1.1 notches, BNP Paribas calculates.
Fund flows paint a somewhat mixed picture. Recent months have seen a slowdown in equity investment flows, with funds dedicated to sub-Saharan Africa but excluding South Africa clocking outflows of $77m in 2014, adding to last year’s $23m losses, according to EPFR Global.