Africa seeks to change per­cep­tions

The Star Early Edition - - BUSINESS REPORT - Claire Mil­hench

AFRICA, no­to­ri­ously short of new roads, ports and power sta­tions, is in­creas­ingly lean­ing on its own sov­er­eign in­vest­ment funds to help fix its in­fra­struc­ture gap.

The funds – which have around $150 bil­lion (R1.9 tril­lion) be­tween them, ac­cord­ing to re­search firm Pre­qin – are dig­ging in them­selves and of­fer­ing co-in­vest­ment op­por­tu­ni­ties and guar­an­tees to at­tract for­eign cap­i­tal.

The scale of the prob­lem is huge – some 600 mil­lion Africans or half the con­ti­nent’s pop­u­la­tion, still lack re­li­able power, ac­cord­ing to a panel dis­cus­sion at last week’s World Eco­nomic Fo­rum in Davos.

Home-grown funds

Mean­while, con­sul­tancy McKin­sey has es­ti­mated that in­vest­ment in African in­fra­struc­ture is so poor it needs to dou­ble to $150bn a year.

But while in­vestors world­wide are queue­ing up to fi­nance planned over­hauls of trans­port and en­ergy in­fra­struc­ture in the West – part of a global search for re­turns – they have largely by­passed Africa, still con­sid­ered the pre­serve of de­vel­op­ment agen­cies or spe­cial­ist funds.

Africa is still viewed in some cir­cles as a dif­fi­cult in­vest­ment, ham­pered by cor­rup­tion, war and po­lit­i­cal risk.

But now home-grown sov­er­eign wealth funds are seek­ing to change this per­cep­tion and kick-start projects them­selves.

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