What’s the Interest in Investing into Africa?

[mstakh.i.mo.mi]

Introduction
The fiduciary world expends much effort and resources in establishing suitable structures for the migration of wealth out of Africa, particularly South Africa. However, little thought is given to the vast opportunities for inward investment into the African continent itself, investment that will also require structures.

Over the past few years Dixcart has seen a steady stream of enquiries for structuring investments into the African Continent for family offices, Private Equity (PE) Houses and groups of mutual interest investors. Structures are usually bespoke and often feature an ESG (environment, social and governance) investment strategy. Both corporate and fund vehicles are typically used with Private Investment Funds (PIFs) the favoured fund route.

What has been particularly interesting is the high number of acquisitions or investments targeted at the sub-Saharan region ranging from process and production facilities, mining and mineral exploration, through to infrastructure projects such as renewable energy and water.

Whilst these investment structures are applicable to investments around the world the question is what is it that attracts investors to the African Continent and why use Guernsey structures for inward investment?

The African Continent
The big opportunity is the fact that the African continent is one of the final norway mobile database frontiers as other emerging markets such as Asia Pacific are maturing.

A few key reminders about this amazing continent:

The Continent of Africa
Second largest continent by area and population
54 countries fully recognised by the United Nations
Significant natural resources
Africa’s complicated political situation, history of colonialism, and ongoing insurrections in many countries has largely kept multinational and institutional investors away from some countries
South Africa – probably the most developed country, driven by raw materials & mining industries (largest producer of gold / platinum / chromium in world). Also, strong banking and agricultural industries.
Southern Africa – Generally the more developed market with strong mining industry
North Africa – Similar to the Middle East with oil reserves attracting oil related activities and industries.
Sub-Saharan – The lessor developed economies and often untouched by international investors where infrastructure type projects are key opportunities.