LAGOS: Investment firm Renaissance Group believes African economies can outpace the fastest growing countries in Asia and expects to invest around $2 billion in the continent by 2014, the CEO of the group's investment bank told Reuters.
The Moscow-based investment group, focused on emerging markets, believes countries like Nigeria, Liberia, Ghana and Uganda could emulate the sustained double-digit GDP growth seen in some of the fastest growing emerging economies like India and China.
"I think it is probable that in the coming decade’s large parts of Africa will outpace the growth enjoyed by Asia," Stephen Jennings, the CEO of investment bank Renaissance Capital told Reuters on Wednesday at its investment conference in Nigeria's commercial-hub Lagos.
"We have expansion plans across the continent. I can easily imagine us investing a couple of billion dollars over the next three years," Jennings said.
Political turmoil in North Africa this year has turned some investors to safer havens but many international banks are looking to raise their exposure in a continent which has rich natural resource reserves and strong trade ties with Asia.
Jennings believes sub-Saharan Africa will be attractive to investors because it has a more stable political outlook than its northern neighbours and some of the booming emerging economies of the BRIC (Brazil, Russia, India, and China) group.
"Not only is political risk coming down quite dramatically and government improving in sub-Saharan Africa but compared with some other quite big emerging markets it is actually in a more advanced democratic stage...there are some BRICs I could name that have to go through phases of (democratic) transition."
NIGERIA
RenCap intends to make Nigeria its main African investment banking hub, a country it says has huge economic growth potential due to its vast population of 150 million people, improved political landscape and reform plans.
Nigeria held elections last month that were considered the fairest Africa's most populous nation has held since the end of military rule in 1999, although they were also some of the bloodiest with post-election violence killing at least 800.
Although its large population attracts investors because of the mass potential consumer base many of the country's inhabitants live on less than $2 a day, while businesses are hampered by poor infrastructure and chronic power shortages.
April's elections and the passing of a sovereign wealth fund bill this week have given some investors confidence that ongoing reform plans for Nigeria's power and energy sectors could succeed where decades of former attempts have failed.
Goodluck Jonathan made ending chronic power outages one of his key campaign commitments before winning the presidential vote and has laid out a roadmap for privatising the sector."Power is key. I'm very positive about reform. Reform has been improving in Nigeria for sometime," Jennings said. "I'm very bullish we see Nigeria as the next Brazil or Russia."
Rencap has around 120 staff across six African offices.
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