Though the allure of private equity might have faded in
developed markets, we at Blackhawk believe that Africa is providing golden
opportunities for funds that are willing to swallow a bit more risk.
It was a geographer, George Kimble, who best summed up
Western perceptions two centuries after Swift when he said: “The darkest thing
about Africa has always been our ignorance of it.” This is just as true among
our financial community today.
Risk-averse Western investors have traditionally avoided
Africa, citing the high political and economic risk that goes with investing
there. Just mention Rwanda in the US and people will probably think of genocide
and murder rather than the current political stability or the leaps and bounds
taken by Rwandan banks.
The attitude to Africa is indeed evolving. Changed
perceptions have been driven in part by a series of funds that have been
investing in Africa for many years but are only now attracting the world’s
attention. The credit crunch in global markets has left investors with little
choice but to search for returns in emerging markets, and in particular in
Africa.
The impact of the credit crisis on Africa has been
limited. Countries such as Nigeria do not have developed credit markets or
over-leveraged homeowners. What they do have though is enormous potential at a
time when the rest of the world is still hurtling in recession.
There is no doubt
that Africa is today ready for business: With better democratization and good
growth, people are realizing that the rule of law prevails and business can be
done.
Read More..... Opportunities in Africa
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