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World Business

Africa boom lures investors

By Nasreen Seria and Renee Bonorchis (China Daily)
Updated: 2010-05-04 11:14

A truck driver dumps ore at Metorox's Chibuluma copper mine, near Kitwe, Zambia.[Agencies]

JOHANNESBURG - Investment in Africa from countries such as China and India has rekindled optimism in a continent that sits on the world's biggest deposits of platinum, chrome and diamonds, attracting a record number of delegates to this year's World Economic Forum on Africa.

Bankers may make up the largest group of delegates as they look to profit from an economy expanding at double the pace of rich nations and a market that has just surpassed 1 billion people. Banks like Barclays Plc and Standard Chartered Plc aim to be dealmakers as rising industrial powers such as China look to the continent to supply raw materials and India buys up land to feed its growing population.

"Africa has a yet-to-be-tapped investment, trade and market potential," said Kuseni Dlamini, the chief executive officer of Johannesburg-based Old Mutual Plc's South African unit, the largest African insurer. "I'm always on the look for investment and other value-enhancing opportunities."

South African President Jacob Zuma, World Trade Organization head Pascal Lamy and Absa Group Ltd Chief Executive Officer Maria Ramos are some of the more than 1,000 attendees in Dar es Salaam, Tanzania from Wednesday to Friday.

Sub-Saharan Africa's economy will probably expand 4.7 percent this year, double the pace of 2009, according to the International Monetary Fund. Commodity exporters, including Angola, which vies with Nigeria as the continent's largest oil producer, and Botswana, the world's biggest diamond supplier, will lead the growth.

Capital flows into Africa rose 16 percent in 2008 to a record $62 billion even as foreign direct investment that year fell 20 percent worldwide, according to the World Economic Forum. Standard Chartered said on April 23 it plans to offer more securities-related services to its 20,000 corporate clients in Africa, the Middle East and Asia.

The conference opens the way for more "deal-flow and investment opportunities in Africa", said Mike Brown, chief executive officer of Johannesburg-based Nedbank Group Ltd.

While much of the world slid into recession in 2009, Chinese companies signed deals worth at least $600 million in Namibia, Ghana, Kenya and Mozambique in industries from fisheries to paper, according to Bloomberg data. China National Offshore Oil Corp is now bidding for oil fields in Ghana, Nigeria and Uganda, following investments by other Chinese companies in mining and construction in Zambia and the Democratic Republic of Congo.

Bloomberg News