Risk analyst paints broadly positive picture of investment in Africa

Africa is extremely well placed to take advantage of the huge investment interest in the continent, according to international risk forecaster Control Risks. “Investment in Africa is booming as investors seek opportunities away from low growth, developed markets,” said Dave Butler, Control Risks managing director for southern and east Africa. “Driven by the growth of the dynamic markets of India, China and Brazil, the global commodities super-cycle and consistently high oil prices, Africa is well placed to take advantage. It has abundant hydrocarbon and base metal reserves, a young working population, increasing market liberalisation, robust domestic demand from the emerging middle class, and low debt to GDP ratios.” But, warned Butler, although the continent offers strong prospects for extractives, infrastructure and consumer goods, it remains a complex operational environment, particularly with respect to political and security risks. “Resource nationalisation, regulatory changes, and even war and violent regime change is a reality. The continent has a poor track record for business regulation and red tape, with taxation being the highest in the world and the most administratively challenging, and corruption is pervasive.” Despite this, the forecast for the continent for 2012 is set to be broadly positive.