British companies have made bigger profits investing in Africa than in any other region of the world, according to a new report from the Overseas Development Institute (ODI), which urges firms to seek profits on the continent rather than seeing it as a place to do charitable work.
Here Is All You Need To Know
- With 1.2 billion people and eight of the world’s 15 fastest-growing economies, the ODI says Africa offers world-beating returns on investment.
- The report looks at investment by British firms in Ghana, Kenya, Nigeria and South Africa. Its authors say the “young population, growing middle class, and planned industrial growth make the continent a great place to do business.”
- In 2019, the rate of return on all inward foreign direct investment in developing African countries was 6.5 percent, higher than the rates in developing Latin America and the Caribbean at 6.2 percent, and also higher than the 6 percent return in developed economies.
- The report was published as Britain formally left the European Union on January 31. The government repeatedly has said its ambition is to create a “global Britain” with new trading partners beyond the European continent. As part of the effort to court new partners, London hosted the Britain-Africa Investment summit last week.
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Investment in Africa
African entrepreneurs are seeking investment in proprietary technology. Mobihealth is a mobile app that seeks to offer top-level health care access across Africa. Founder Funmi Adewara believes Britain’s expertise in finance could help.
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“Ninety percent of our doctors are from Western countries, 10 percent from the rest of Africa,” Adewara said. “They provide video consultation, prescriptions, diagnostic tests. We are looking here to connect with people who can help us to scale up our business and take this global.”
The secretary-general of the United Nations Conference on Trade and Development, Mukhisa Kituyi, said in a recent interview that African nations need to work harder to attract investment.
“We need to develop this human resource as a contribution to the world’s economy, we need to create the conditions to make Africa the next factory of the world. Then you can say, can Britain step in, just like any other friend of Africa, and offer some of the solution?”
Britain says it can offer solutions. Many analysts warn, however, that negotiations over its future relationship with Europe likely will dominate trade talks in the coming months and years.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com