Africa Investors Look East as Commodity-Driven Boom Withers
Author: Michael Cohen
Investors targeting Africa are looking east, as depressed commodity prices and slowing growth in China put the brakes on a two-decade growth surge in the world’s poorest continent.
Kenya, Tanzania and host Rwanda are the countries in vogue at the World Economic Forum’s annual confab of Africa’s business and political leaders that began Wednesday in Kigali. All three economies should expand at least 6 percent this year, double the sub-Saharan Africa average, according to the International Monetary Fund. Growth in Ethiopia, the investors’ darling at last year’s WEF Africa summit, is set to slow to 4.5 percent this year, from 10.2 percent in 2015, as a drought curbs farm output.
“Looking at East Africa, anything below 6 percent growth is considered a really poor performance,” Martyn Davies, the managing director of emerging markets and Africa at Frontier Advisory Deloitte, said in an interview at the WEF summit. “Low oil prices are a tailwind for growth in this part of the world.”