PARIS — As Europe barely recovers from an unprecedented crisis, the African continent is experiencing a vigorous period of growth. This long-awaited shift is slowly but steadily making investors more confident, even if they remain aware of the risks. According to a recent study conducted by Havas Horizon, investors are showing broad optimism concerning the future of the African economy, and are now ready to reinforce their positions and investments on the continent. At the same time, however, big European companies willing to invest in Africa are still too rare.
After remaining shut out from the high-stakes economic calculus for years, Africa has now become a key component of global trade. Since 2001, the continent's annual GDP has grown on average 5%, and is expected to accelerate this year again thanks to Eastern Africa and its estimated growth rate of 7%, as well as Central and Western Africa, which are heading towards 5 to 6% growth.
The main explanation for this new prosperous era is the transformation of the development model of the continent. African economies have long organized themselves around the exploitation of natural resources — being vulnerable to the fluctuations in the market of raw materials as well as deteriorating terms of trade. In Africa, the priorities now are focused around the diversification of its economic sectors, in particular to the digitial world, which was at the heart of the Forbes Forum Afrique held on July 21 in Brazzaville, Congo.
Africa is also characterized by an undeniable demographic dynamism, which has directly spurred growth and is a determinant criteria for investment. No fewer than one human out of four will live in Africa by 2050. This demographic explosion comes along with the development of a middle class of 300 million people with soaring overall purchasing power.
Africa attracted a record 50 billion euros in foreign direct investment in 2013, and nearly 80 billion in 2014, proving that investor perception has been changing these last few years. Investors now see in Africa numerous prospects and growth levers thanks to the extraordinary natural potential of the continent (immense farmlands, abundant mining resources representing 30% of global reserves), but also thanks to its identified needs in terms of infrastructures (cable television, fiber optic, satellite ...).
The Havas Horizons study found that the investor community now considers Africa a dynamic, ingenuous, agile and innovative continent. Several notable inter-African entrepreneurial successes — such as Ecobank, SPAR Group, Aspen Pharmacare — as well as the launch of broader global innovations such as "mobile-banking," and other applications linked to mobile phones, also have helped boost the continent's image in the eyes of investors.
Major international groups such as Orange, Huawei or Rocket Internet have devoted massive investments in the potential of the continent, to the point where some African countries are considered privileged strategic partners. European companies, in particular French ones, are now looking to take greater opportunity that Africa offers, just as China, Brazil and Turkey already do. The long-term vision requires the establishment of a sustainable collaboration based on common economic, social and societal values.
*Dorent is managing director of Havas Horizons; Lorot is president of the Institut Choiseul.