Africa: Ripe for reappraisal

FT

19 May 2011

.COMMENT

Africa: Ripe for reappraisal

By William Wallis, Andrew England and Katrina Manson

Sir Bob Geldof’s latest incarnation says something about Africa’s changing place in the world. Not for the first time, the Irish rock star turned campaigner for aid and debt relief in Africa has been seeking to raise as much as $1bn. This time, however, he hopes to champion investment in a continent that he had tended to portray as a basket case in perennially urgent need of alms.

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Sir Bob’s journey nevertheless chimes with a turnround in global perceptions.

With many of its 48 economies rebounding from the crisis faster than the rest of the world, sub-Saharan Africa is increasingly viewed as an opportunity rather than a burden. It is rising rapidly up the agenda for global investment managers and is talked about as never before in almost every big financial centre.

For the past few years big names including Jamie Dimon, chief executive of JPMorgan Chase of the US, have been popping up in places such as newly oil-rich Ghana. In London, Helios Investment Partners, an investment firm founded by young Nigerians, is poised to close subscriptions to a $900m fund, so far the largest private equity fundraising exercise to target Africa. This comes as the much bigger Carlyle Group of the US is backing the continent for the first time, setting up in South Africa and Nigeria – the two biggest economies south of the Sahara.

The perception that Africa has reached a turning point – one qualitatively different from previous false dawns – stems from a combination of global and regional circumstance. “If the politics can be managed, there are the talent and resources in Africa for this story to be real,” says Michael Turner, managing director in east Africa of Actis, a UK fund backed by pension funds, sovereign wealth funds and international development institutions. “The more people become confident with that idea, so the more the other big players will start to come in, especially now that big US institutions like Carlyle are coming.”