Custom Search 1

Why the time is right for serious investment in Africa

INVESTMENT: Women carry water in South Africa (PA)

IT'S A barely known or celebrated fact that many African countries have economic growth levels we would love to see here in the UK.

So why is the continent not viewed as one of opportunity, rather than a place rife with political instability, corruption and an increasing terrorism problem?

While I am not blind to these very real problems, the risks can be mitigated and, in some ways, be seen as opportunities. In the case of Zimbabwe, despite Robert Mugabe’s reign, tourists might start to flock there to see the Victoria Falls from both the Zimbabwean and Zambian sides of the border.

A calmer, more stable and truly democratic Zimbabwe could have a transformational effect on Southern Africa and, arguably, the leap it needs to take is much smaller than the political and economic transformation South Africa has experienced in the last 20 years.

I am not one of those who say "trade not aid" is the answer. I support the British aid pledge and help to run the Grow Movement, an African-based charity which assists African entrepreneurs.

But investing rather than giving can be a big help.

At just 23 years old, I ran a bank in Southern Africa and am convinced I did more good lending money than most aid workers did in redistributing money. Aid has a role - but we need to help Africa grow out of poverty, so investing is the way forward.

Rather than just talk about opportunities, I’m actively taking them and encouraging others to do likewise. I am making 12 investments in 12 different African companies, in 12 countries, in 12 different sectors. I am doing this by investing in shares listed on one of the 14 African stock exchanges.

Albeit that, at just £1,000 per share purchase, these are modest investments to overseas brokers, I still hope to prove a major point, that Africa is a place you can invest in ethically and for proven economic returns.

My first investment was in Wilderness Safaris in Botswana – a travel company offering ethical, ecologically-sensitive holidays and employer to 2,600 local people. Currently, I am considering the Nigerian branded foods sector for my next transaction, possibly Unilever Nigeria, and I’m also tempted to invest in a Kenyan company that will benefit from consumers in East Africa’s rising middle classes.

I could invest via the stock exchanges in London, New York or Johannesburg, but I think direct investment injects money more efficiently into smaller, local companies that need the equity to grow. However, others find it easier to start in the UK, benefitting from being able to choose from the large number of Africa-related shares available on the Alternative Investment Market.

You can also do this as part of an Individual Savings Account (ISA).

My message is this - the future is bright for Africa. By investing you will help the continent and enjoy good capital growth and some income in return. Imagine that - making money in a manner that is as socially just and rewarding for communities, as it is for you.

James Duddridge is Conservative MP for Rochford and Southend East (Essex) and a former banker with Barclays in Africa.

Facebook Comments