Africa is a collection of 54 nations with different attitudes and economies. Speaking about Africa in generality as if it is one monolithic continent governed and ruled from same playbook has become a default stance. Far from the truth. Africa is not a new continent – it has existed longer than most. The world is aware of Africa but Africa does not appeal to the world even though the continent is laden with glaring opportunities.
No sector of the world is without glaring opportunities. Opportunities in Africa are not exceptional, they are rather extremely difficult to measure. What matters is the infrastructure in place to take advantage of the opportunities such that undue influence is not brought to bear to play. Africa has been discovered. It is like Siberia; everyone knows where it is but no one wants to go.
Africa supplies to the world a third of raw materials needed to run industries, but that is where it ends - extractive industries that exploits. In the non-extractive industries, Africa is last. In 2017, a total of $42B in Foreign Direct Investments (FDI) flowed into Africa, a 22% decline from 2016. Majority of the FDI went into extractive industries/sectors. Technically, on a straight allocation of total FDI divided by number of countries, no country would have received $1b.
What this means is that Africa is not serious in addressing the institutional bottlenecks and obstacles that limits its ability to attract resources to boost local needs. Even with foreign hesitance, most native Africans do not like to invest in their own country because of investment uncertainty, always weakening currencies, knee jerk lending rates, legal issues that deals with ownership, pace of court disposition, etc.
These fundaments are generally lacking and when they exist are shrouded in many unknowns that most seasoned investors get wary and stay away. Africans cannot look to foreigners to invest more in their own continent. They should lead the charge (Equity) and move to straighten conditions that impedes investment (Debt).
Mere availability of glaring opportunities does not attract investments. Investments as money looks for good products/projects driven by an enabling environment that is transparent, legally reliable, maximally productive, robust and devoid of personality plays which Africa unfortunately thrives in. One is likely to borrow money in most African nations on the basis of who they as opposed to necessarily on the basis of a project feasibility and viability.
That is the case with Nigeria AMCON where 95%+ of its defaulted loans are signature notes – unsecured.
By Ejike E. Okpa II