CEOs share their thoughts on Africa’s investment hot spots

In recent years returns of foreign direct investment in Africa have been among the highest in the world. But what sectors and African countries will offer the most profitable opportunities over the coming decade?

Martyn Davies, CEO of Frontier Advisory

During a session at the World Economic Forum on Africa, entitled Africa’s Investment Heatmap, a panel of business leaders shared their thoughts on this question.

Martyn Davies, CEO of South African-based Frontier Advisory, said that for him the most attractive investments are driven by specific sectors and consumers, rather than countries per se.

He said in the future African cities will compete for investment.

Davies, however, called Rwanda, Mauritius, Ghana and Ethiopia “agile states” that are differentiating themselves.

He added that Africa’s attractive investment destinations should not be defined according to countries, but by the actual economic activity taking place. For example, he said that the area of northern Namibia and southern Angola, or ‘Namgola’, is a hot spot. South African retail companies have set up operations on the Namibian side of the border to supply the southern Angolan market.

Geoffrey White, CEO of UK-based African investment firm Lonrho, said that his company’s investment decisions are based on specific projects or sectors, rather than geographies. He noted that Lonrho focuses on providing services to the major industries driving Africa’s economic growth, namely mining, oil & gas and agriculture. Lonrho operates a variety of businesses, including hotels, agricultural equipment and prefabricated housing for the mining industry, to name a few.

Michael Macharia, founder and CEO of Kenya-based IT company Seven Seas Technologies, said that a variety of sectors – such as agriculture, mining, telecommunications and banking – require technology, and that there are opportunities across Africa to service these industries.

Davies noted that although he is pleased that South Africa is now part of the BRICS nations, the “S” in the acronym should be for the Southern African Development Community (SADC), an economic bloc comprising 15 member countries, rather than only South Africa.

He added that the most progressive economic bloc on the continent is the East African Community.