The choice to invest somewhere is a matter of numbers as much as feelings. On these two counts, Africa is struggling these days to make its own publicity: for several months, inflation, the collapse of currencies, the stagnation of incomes and the multiplication of coups d’état have hardly reassured about the prospects. of a good part of the continent.
At the Africa CEO Forum, mini-African Davos of business organized by the media Young Africa which was held on Thursday May 16 and Friday May 17 in Kigali, Rwanda, the business community did not ignore the difficulties. “It is clear that the context is tough and this has been going on for several years. We are no longer at all in the situation of ten years ago, when almost all countries were experiencing strong growth”recognized Acha Leke, Africa president of the consulting firm McKinsey.
From the Nigerian naira to the Kenyan shilling via the Congolese franc, the decline in many African currencies since 2023 weighs heavily on the balance sheets of foreign companies present on the continent. An equation made even more complicated by the rise in global interest rates in the wake of inflation. “When rates were close to zero in Western countries, we said to ourselves, Africa is dangerous, but it can be profitablesummarizes Jean-Michel Huet, from the Bearing Point firm. Today, many believe that the risk is no longer sufficiently compensated. »
“Political instability is scary”
Besides, “all the big American pension funds that we saw in this type of forum in 2013-2015 are no longer making the trip”remarks a French investor who prefers to remain anonymous. “Political instability is scary and we see that the fundamentals are not improving quickly. Africa is bankable if you take a bet over fifty years, not fivehe believes. The continent is no longer fashionable and the multinationals are leaving. »
The large consumer groups Unilever and Procter & Gamble, as well as the pharmaceutical giant GSK, have made a big splash by announcing, in recent months, their withdrawal from Nigeria. In South Africa, Nestlé has stopped production of Nesquik chocolate milk powder, citing a drop in demand. And from Société Générale to BNP, including the British Barclays and Standard Chartered, European banks are withdrawing one after the other.
But a good part of the business world gathered in Kigali refused to brood. “The perception of African risk seems exaggerated to meMarlène Ngoyi, boss of the Fund for the Development of Exports in Africa (FEDA), said during a panel. In the United States, people ask me if it is not dangerous to invest in Africa, but it is often the same people who buy FTX”this cryptocurrency at the origin of a financial scandal.
And if big companies choose to leave, “there are also all those that remain, Coca-Cola, Total, Orange or General Electric. Africa’s potential has not disappeared », insists Acha Leke. The continent, he recalls, remains a reservoir of minerals essential to the energy transition. It also contains most of the planet’s still uncultivated arable land. And, of the 25 best-performing economies in the world in terms of growth rates in 2024, a dozen are in the region. Rwanda, host country of the forum, offers a striking illustration of this: activity there has been growing at an average rate of 6.6% per year for ten years.
” Human capital “
The formation of a real middle class is taking longer than expected to materialize. But consumer spending in sub-Saharan Africa still increased more than fourfold between 2001 and 2021, to reach 1,400 billion dollars (1,289 billion euros), according to the World Bank. And realities vary greatly from one region to another on a continent made up of 54 countries with varied trajectories.
“There is, in many countries, a population with real purchasing power whose needs are unmet”, assures Olivier Granet, boss of Kasada, a platform specializing in the financing of hotel assets in Africa. In three years, this vehicle created by the sovereign fund of Qatar and the French group Accor has invested in no less than twenty hotels across eight countries. Establishments intended for tourism and business trips, but also for the leisure of a local clientele looking for places to have fun and meet up.
Generally speaking, Africa remains a continent in need of equipment, in terms of distribution, electricity or infrastructure, against a backdrop of rampant demographic growth. By 2050, one in four humans will be African and even one in three among 15-24 year olds. A youth which could stimulate the interest of certain sectors, such as that of the cultural and creative industries. Witness the acquisition by Canal+ of the South African audiovisual operator Multichoice. An acquisition which aims in particular to expand its content offering on the continent.
“The reason for my optimism is human capital”, also argues Cyrille Nkontchou, boss of the Enko Capital investment fund. The Cameroonian financier has chosen to target education among its new priority investment sectors. “ In a world where populations everywhere are aging and shrinkinghe indicates, Africa will be the reservoir of youth and many countries will need this human resource. »