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Africans Investing in Africa explores intra-African trade and investment by showing how, where and why Africans invest across Africa; to identify the economic, political and social experiences that hinder or stimulate investment; and to highlight examples of pan-African investors.





This is a timely book. Although for Africa the past decade has been economically benign, attention in the international business media has been narrowly focused. International investors have concentrated on the natural resource sector, due to high prices for its exports, and international consumer businesses have been attracted by the consequential scope for expanding imports of consumer goods. Yet Africa’s economies have huge potential for growth that is more widely diffused across many sectors. Despite softer commodity prices, during the coming decade Africa will continue to catch up with the world economy.

Paul Collier

Cross-Cutting Issues


1. The Wangara Trading Network in Precolonial West Africa: An Early Example of Africans Investing in Africa

This study focuses on the extensive business and trading empire that Mande-speaking merchants, trade brokers, and financiers built and ran across West Africa between the fourteenth and nineteenth centuries. The Wangara feature prominently in the economic and mercantile history of West Africa because they pioneered intra-regional long distance trading and investments. They faced and overcame obstacles to trade and investments in diverse cultural and political settings, leaving a legacy that is instructive for current discussions about Africans investing and trading across Africa.

Moses E. Ochonu

2. Why Governance Matters for Investment

After decades of decline, per capita incomes in Sub-Saharan Africa started rising from 1995 onwards. By 2008, they finally passed their previous peak of $941, seen 34 years previously, in 1974. Since then, they have continued rising, reaching a level of $1,016 in 2013, the latest data available.1

John Endres

3. Regional Economic Communities

There is, arguably, no greater topical issue in Africa than that of regional integration — a concept whose time has definitely come but whose operationalisation is still in the making and upon which Africa’s massive unrealised potential lies. Central to the importance of Regional Economic Communities (RECs) is their cross-cutting nature that transcends virtually all economic activity and sectors — from manufacturing, energy, infrastructure and financial services to tourism — underpinned by a very simple rationale — that there is strength in numbers. Given the transformative potential of regional integration, the integration discourse is actually best located in the broader context of development and economic transformation — beyond merely ‘fixing borders’ as an end in itself. Marcelo Giugale, the World Bank’s Africa Director for Poverty Reduction and Economic Management, aptly expressed it as follows: ‘The final prize is clear: … Africans trad[ing] goods and services with each other. Few contributions carry more development power than that’.1

Jacqueline Chimhanzi

4. Transport Infrastructure

Much has been written about Africa’s lack of transport infrastructure and the detrimental effect poor transport infrastructure has on economic development. The Programme for Infrastructure Development in Africa (PIDA) Study Synthesis1 shows that infrastructure plays a key role in economic growth and poverty reduction and that, conversely, the lack of infrastructure adversely affects productivity and raises production and transaction costs. This, in turn, hinders growth by reducing the competitiveness of businesses and the ability of governments to pursue economic and social development policies. According to the PIDA Study Synthesis, ‘Deficient infrastructure in today’s Africa has been found to sap growth by as much as 2 per cent a year (Calderón 2008)’.

Mark Pearson

5. The Growth of Continental African Brands

To gain a better understanding of the drivers behind the recent growth of consumer brands across Africa, two very important demographic groups need to be highlighted.

Nicholas J. W. Kühne

6. Is It Time for Open Borders in Southern Africa? The Case for Free Labour Movement in SADC

Southern Africa is facing significant skills shortages. This is evident in countries such as South Africa, where the scarcity of particularly high-skilled workers in sectors including engineering, medicine and senior management has the potential to limit the country’s long-term economic growth.1 A recent report2 by Adcorp, a labour market specialist, estimates that there are 470,000 vacancies in South Africa’s private sector which are currently not filled because of unavailable skills. These shortages are attributed to ‘brain drain’ from South Africa, immigration restrictions on high-skilled foreigners and failings in the education system.3 South Africa is not alone — regional neighbours such as Namibia also report that their economic growth targets are stymied by shortages of workers in industries that are critical to their economies.4

Adrian Kitimbo

Sectors with African Champions


7. Banking and the Financial Sector

Investment in Africa’s financial sector has the ability to transform the lives of individual Africans by greatly enhancing access to financial resources and opportunities and increasing economic development across the continent. Indeed, ‘banking is not one sector in a vibrant economy: it is the foundation upon which most other sectors are built’.1 However, as the global financial industry moves towards convergence in terms of regulations and practices facilitating investment across countries, across the African continent the ease of investment is less realised. Only 12 per cent of total trade and investment on the African continent is between African countries.2

Lite J. Nartey

8. The Case of Cement

Cement is an integral part of economic growth and development. As economies grow, so too does the demand for these commodities. This direct correlation extends to productivity and overall economic performance, where the per capita consumption of cement is highest in some of the larger, more developed economies.

Lyal White

9. The Fast-Moving Consumer Goods and Retail Sectors

The new battleground in Africa is that for the soul — and the disposable income — of the African consumer. Multinationals from across the globe are ramping up their investments in the continent and local industries are growing, flexing muscle in highly competitive markets with some of the most rapidly growing populations in the world. Rising incomes, changing tastes and shopping profiles, and urbanisation have sparked a vibrancy in African markets that is driving opportunity across the board, but particularly in the consumer goods and retail sectors

Dianna Games

10. Information and Communications Technologies

Africa is transforming from a continent that has been riddled with poverty for the past 50 years to one with an emerging middle-class income status, with its economy growing spectacularly at an average GDP growth rate of approximately 7 per cent per annum. Assisting this growth is a decrease in armed conflict that has placed most African countries at peace, increasing foreign direct investments and improvements in life expectancy. Additionally, the Information and Communications Technology (ICT) sector is increasingly becoming a major driver in enabling greater efficiencies in the continent by allowing Africans to communicate more with each other — the basis of greater intra-Africa trade and investment.

Bitange Ndemo, Muriuki Mureithi

11. Entertainment and Media

The media and entertainment (M&E) industry provides products and services that serve to keep consumers engaged and up to date. It is a key strategic sector with high potential for trade and investment diversification, job creation, creating shared meaning and influencing public discourse.

Eric Kacou

Emerging Pan-African Sectors


12. Petroleum, Gas and Mining Sectors in East African Community

Contributing to the study ‘Africans Investing in Africa’, which is aimed at understanding the challenges and latent opportunities existing on the continent for more African involvement, this chapter sheds light on the Petroleum, Gas and Mining Sectors in the East African Community (EAC) countries. The EAC as a block was chosen as a case due to some of its shared similarities, most of which are influenced by the history of the block. For example, Kenya, Uganda and Tanzania fell under the earlier (1970s) East African Community whereby some socio-economic domains, including education, trade (air transport, railways and marine) and so on, were under shared arrangements. On the other hand, Burundi and Rwanda, beyond the fact that they happen to have quite similar geographical and geological features, also happened to fall under a single colony that influenced common trade practices and geopolitical structures. Today, under the current East African Community (with five countries), most of the trade aspects enjoy harmonised trade policies that may characterise attractive investment interests as a block rather than as individual countries.

Albert Butare

13. Private Security

The global private security industry is by no means new, but its growth since the 1990s has been phenomenal, stimulated by economic liberalisation and the downsizing of government security services in the aftermath of the Cold War. By 2012, the sector was worth an estimated US$190 billion in global annual revenues, a figure expected to climb to US$240 billion by the end of 2017.1 While much attention has focused on the Middle East and the rise of controversial mega-companies such as Blackwater, considerable growth has occurred in emerging markets. Africa is clearly no exception. British company G4S, for example, employs over 110,000 people across 29 African countries, making it the largest private sector employer on the continent.2 But with its history of mercenarism and its continuing post-colonial preoccupation with liberation ideology, policy debate and academic study in Africa has centred on the ethics of private security and the need to create appropriate regulatory structures.3 Necessary though the ethical debate is, it has predominated at the expense of other matters of importance. Relatively little is known about the industry from an economic perspective — about its economic impact in statistical terms or about the entrepreneurs that are spreading across the continent, both from bases in Africa and abroad.

Stuart Doran

14. The Private Sector’s Role in Africa’s Water Infrastructure

Water is a precious natural resource, vital for life, development and the environment. It can be a matter of life and death, depending on how it occurs and how it is managed. When there is too much or too little, it can bring destruction, misery or death. Irrespective of how it occurs, if properly managed, it can be an instrument for economic survival and growth. It can be an instrument for poverty alleviation, lifting people out of the degradation of having to live without access to safe water and sanitation, while at the same time bringing prosperity to all on the continent (Box 14.1).

David A. Rice

15. Transport and Logistics Sector

As part of the Africans Investing in Africa series, this chapter looks at the opportunities and challenges in the transport and logistics sector. This is a very large and strategic economic sector, and the companies interviewed were mainly in the road transport and logistics sectors. Most freight moved between African countries is moved by road as, apart from South Africa, the railway sector in Africa has been allowed to decline so that rail, typically, accounts for less than 5 per cent of the volume of goods transported in Africa. Volumes of cargo moved by air are insignificant compared to that which travels by road within Africa and by ship to and from the rest of the world, although this air cargo is important and has a high value, such as diamond and gold exports and urgent replacement parts for industrial machinery, or are time sensitive, such as cut flowers and vegetable exports to Europe. Although there used to be regular ferry services and cargo carriers on Africa’s major water ways, water transport in Africa has declined to almost non-existent except on sections of major rivers such as the Congo and the Nile.

Mark Pearson

16. Tourism and Travel

The travel and tourism industry has evolved over the past six decades into one of the world’s most significant economic sectors, contributing 9.5 per cent (US$7 trillion) to global GDP, 5.8 per cent of all exports globally (US$1.1 trillion) and 4.5 per cent of total global capital investment (US$652 billion).1 The United Nations World Tourism Organisation (UNWTO) estimates that international tourism arrivals have expanded at a constant average rate of over 5 per cent annually (despite severe interim economic downturns) from 25 million arrivals in 1950 to 1,087 million arrivals in 2013. The growth of the industry has not only outpaced that of financial and business services, but also transport and manufacturing.2 The tourism sector is moreover the biggest employer globally providing 1 in 11 of all jobs (nearly 266 million jobs) and is the principal foreign exchange earner for 46 out of 49 developing countries.3

Terence McNamee, Daniella Sachs


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