Vusumuzi Dube
Judith Phiri, Business Reporter
THE CEO Africa Roundtable has called for collaborative efforts that will see more investment in Africa, a development that will contribute to the development and growth of the continent.
In a statement, CEO Africa Roundtable said Africa remains attractive to investors, despite occasionally complex local and geopolitical situations.
“Investments happening in Africa over the past few decades have raised billions of dollars, hitting a record US$83 billion in 2021. There are diverse investment opportunities across the globe, from Cairo to Cape Town, these include agriculture, mining, infrastructure, ICT, natural resources, tourism and pharmaceuticals among others.”
It said geopolitical tensions and the global economic slowdown have made economies more inward-looking, while geopolitical tensions have raised the prospect that strategic competition and national security concerns may trump the shared economic benefits of global trade.
CEO Africa Roundtable said for instance, the Russia-Ukraine war highlighted how geopolitical uncertainty disrupt supply chains and weaponised trade.
“Geopolitical risk has a strong correlation with GDP per capita, meaning that developing economies typically have less stability. There is need to explore how African economies can thrive beyond the uncertainties linked with geopolitics at regional and global levels,” read part of the statement.
It said less than 10 percent of infrastructure investments in Africa are from private sources, such as banks and private equity.
CEO Africa Roundtable said despite colossal needs of between US$100 billion and US$170 billion per year and significant local resource availability (approximately US$2 trillion of local currency equivalent financing available in African pension funds, life insurance and sovereign funds), local sources of private capital were struggling to contribute.
“From insufficient return on investment (ROI), risk allocation, regulations and capacity to ensure long-term loans, the obstacles are numerous. While power and telecommunication projects have succeeded in attracting investors in recent years, how can local investors be encouraged to provide for other sectors?”
The CEO Africa Roundtable which is set to host its annual conference next month said there was need to tackle issues to do with local currency, how to mobilise the vast local currency resources on the continent and local banks on innovating towards project finance transactions.
It said there was need to also have dialogue on international investors and unpack what they looking for in local equity and financing partners.
CEO Africa Roundtable added: “There are just 345 companies in Africa with revenues over US$1 billion. Compare that to Asia (3 341), the USA and Canada (1 585), or Europe (2 752) and it becomes clear that Africa’s companies are leaving money on the table. What do all these companies have in common? They have cracked code to exponential returns: fast and sustained growth, and a high return on invested capital.”
It said at the conference there will be a CEO Talk, where they have asked leaders who have reached the magic milestone and business executives of future African champions to discuss what it takes to reach a billion-dollar revenue.
The conference slated for 11 to 14 October in Victoria Falls and will run under the theme: “Delivering the Vision: Prospering through Smart Partnerships”.
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