For a long time, the African continent has been crowned with negative stereotypes such as disease, famine, corruption and poor health system. Even so, according to Ngozi, Okonjo Iweala, the first minister of finance, Nigeria, there is another face of Africa which many people have not experienced. Ngozi argues that there is a good deal of economic growth, reform and many growing business opportunities happening on the African continent. As the finance minister in Nigeria in the early 2000s, Ngozi tirelessly fought against corruption and made transparent the finances of the country. She worked hard to reform Nigeria's economy to be more receptive to investments of the foreign countries.
Ngozi explains why she believes that Africa can prosper and further develop if the foreigners invest their businesses in Africa. In a speech she made on the March 2007 dubbed “Want to help Africa? Do business here,” Ngozi argues that all too often, Africa is negatively portrayed for disasters, diseases, poverty, and corruption but the continent has significantly changed, and the world should invest in the African people land and business. She further acknowledged the issues that severely hurt the image of Africa such as corruption and economic instability but highlights that such are declining problems in Nigeria in particular. She shares the steps Nigeria has taken as a country to reform itself. With her support, do execute the reforms, Nigeria put forward a complex reform program which they developed.
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There are many benefits to doing business in Africa. Many foreign countries have set their insight on Africa as a new frontier for business investment. There are several reasons to believe in business in Africa. The improved political environment as well as the high GDP growth rate as well as the promise of future rich opportunities in a developing continent. Even so, Africa just like any other developing economy is challenging to enter.
With the tremendous growth of the middle-class citizens in Africa, there is the development of new expectations. The urban professionals are brand aware and involved regarding their consumptions. Consumer and retailers brands anticipate buying preferences in lifestyle products, fashion, and home but they are aware they need international standards to meet their demands. The most significant forces of the economy in Africa range from small to medium enterprises struggling to meet the high requirements of competing with global brands.
Africa is the only continent which has resources which are needed by the western economies to sustain the growth and development rate today which is why it is essential to invest in Africa now. The average development and economic growth in the economy of the world are higher in Africa than in the developed countries. The African continent is currently leading in mobile adoption which continues to provide the most considerable cross-sectional opportunities in the economy (Denskus & Esser, 2015). Mobile payments systems in East Africa, for instance, have opened connected and world economy to the unbanked and poor rural and city dwellers. The mobile banking initiatives in Africa have achieved enormous success. Many opportunities are opening in Africa, and thus the foreign investors should continue to explore business opportunities.
Even with the many benefits of investing in Africa, there are several drawbacks to the idea of spending in Africa. First, there is a question of liquidity. The African markets are still small, and while there is increased turnover, they remain small as compared to the emerging markets (Mills, 2018). For this reason, the investors need to invest in a long horizon. Africa does not provide demands for short-term investors or tactical allocations, but instead, there is a satellite allocation to the long-term portfolio of the policy. The timescale enables the investors to allow the vitality that may sometimes come with frontier market investing. The issue of liquidity widely injures the size of the investment. It is not easy to run considerable sums in Africa.
References
Denskus, T., & Esser, D. E. (2015). TED talks on international development: trans-hegemonic promise and ritualistic constraints. Communication theory , 25 (2), 166-187.
Mills, G. (2018). Why Is Africa Poor?. In Culture and Civilization (pp. 52-62). Routledge.
