Africa’s debt spree

$57bn – The record amount of credit the World Bank has just made available to sub-Saharan Africa over the next three years.

$5.9bn – The value of bond issuances by African governments this year according to Dealogic data – more than the total for 2016

Source: African Business, May 2017

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Prospects for Africa are very promising

First, increased investment in Africa’s infrastructure is critically needed. The substantial an rapidly increasing amount of capital being allocated to this sector provides a great growth opportunity.

Second, there are compelling opportunities across the continent for consumer goods and services,  particularly given limited growth opportunities in much of the developed world. This opportunity for investment in consumer growth across Africa is underprimed by three trends: a growing population, rapid urbanisation and an emerging middle class.

However, it’s important not to discount commodities, which will remain the most obvious opportunity. Africa holds a large proportion of the world’s mineral reserves, and the continent’s significant reserves of oil and gas make it well poised to play a key role in the supply of the world’s energy needs, particularly as other emerging economies grow and the demand for precious metals follow suit.

Free movement of people and goods will also be a major driver of growth in Africa in the coming years.

Source: African Businees, May 2017

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Africa’s workforce

According to a McKinsey report, the region is expected to enjoy the fastest urbanisation of any region in the world, and to have a larger workforce than either India or China by 2034. This opens up incredible opportunities for the continent’s 54 nations.

Source: African Business, May 2017

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NIGERIA TO BORROW $7bn FROM CHINA AND WORLD BANK

President Muhammadu Buhari of Nigeria is seeking approval form parliament to borrow nearly 7$bn. A $5.85bn loan from China would be used to modernize Nigeria’s railways and a $1.07bn loan from the World Bank would help fund reconstruction in the northeast, which has been ravaged by insurgency. Nigeria is experiencing the first recession in 25 years.

.Source: African Business, May 2017

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Investments in Africa