"East and West African economies are doing the best and strongly outpacing
the world's economy. Here too, specifics matter: Sierra Leone, Eritrea and
Zambia are among the top ten countries expected to have the world's highest
GDP growth rates in 2014, but they also among the world's poorest. Yet,
the International Monetary Fund (IMF) finds that eight of the 12 recently
fastest-growing economies in Africa did not rely on natural resources and
together grew more quickly even than oil producers."
http://www.natlawreview.com/article/foreign-investment-africa-booming
Foreign Investment in Africa is Booming
Article By:
Anne Pence
Witney Schneidman
Covington & Burling LLP
posted on: Thursday, May 22, 2014
This week U.S. Commerce Secretary Penny Pritzker is leading an energy
business development mission to West Africa with stops in Ghana and
Nigeria. The mission will help US companies launch or increase their
business in West Africa. Both countries are facing considerable growth and
need the foreign investment as they expand their energy resources.
This Pritzker mission is just one more example of the remarkable growth in
foreign investment taking place in Africa. The Wall Street Journal
projects that foreign investment in African economics will reach a record
$80 billion in 2014 and that Africa will see robust economic growth of 4.3
percent in 2014 and 5.7 percent in 2015.
The US, the UK, and France are still leading the way in foreign investment.
However, the Chinese are catching up fast. We expect to see China
continue to compete vigorously in Africa on infrastructure, agriculture,
mining, energy and other projects as well as for access to resources. In
addition, other countries, such as India, Turkey and Brazil are paying
increased attention to Africa's commercial opportunities.
While growth and foreign investment in Africa overall is very strong, the
underlying performance of specific economies varies dramatically. East and
West African economies are doing the best and strongly outpacing the
world's economy. Here too, specifics matter: Sierra Leone, Eritrea and
Zambia are among the top ten countries expected to have the world's highest
GDP growth rates in 2014, but they also among the world's poorest. Yet,
the International Monetary Fund (IMF) finds that eight of the 12 recently
fastest-growing economies in Africa did not rely on natural resources and
together grew more quickly even than oil producers. Six diverse countries
have had years of sustained growth and investment: Burkina Faso, Ethiopia,
Mozambique, Rwanda, Tanzania and Uganda. There is also strong growth and
investment in Morocco, Tunisia, Ghana, Kenya and Nigeria.
For those companies planning to invest in the African market, care must be
given to select the right place in terms of growth, market composition and
infrastructure, among other considerations. Also, governance, policy and
legal considerations vary greatly from country to country and from sector
to sector. In addition, a company is strongly advised to analyze the
regulatory terrain they will face. Companies also benefit from seeking to
ensure that their investments are consistent with national development
strategies, including as it relates to job creation, technology transfer,
and local market development.
(c) 2014 Covington & Burling LLP
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About the Author
Anne Pence
Senior International Adviser
Constance Anne Pence, a non-lawyer, is a senior international advisor in
Covington's Washington, DC office. As a policy-oriented economist for over
20 years, Ms. Pence has tremendous experience advising sovereign and
corporate clients, as well as coalitions in both domestic and international
policy settings. Before joining Covington, she was the special advisor to
the newly-created USG Millennium Challenge Corporation. Ms. Pence also
served with the U.S. State Department for 16 years. For eight of those
years she was the Department's G8 Summit policy...
apence_at_cov.com
202.662.5443
www.cov.com
www.globalpolicywatch.com
About the Author
Witney Schneidman
Senior International Adviser
Witney Schneidman is a senior international advisor for Africa. Dr.
Schneidman, a non-lawyer, has a deep understanding of many of the major
African countries, as well as uniquely valuable insight into the recurrent
challenges and opportunities across the continent. He provides strategic
advice on the varied political, economic, social and regulatory issues that
are critical to companies' success in Africa. Dr. Schneidman's work
focuses on US-African relations, trade and investment in Sub-Saharan
Africa, and issues related to economic growth and regional...
wschneidman_at_cov.com
202.662.5375
www.cov.com
Received on Fri May 23 2014 - 08:07:48 EDT