NAIROBI, Kenya, Dec 18 – Business leaders with investment interests in Africa have expressed confidence that the continent presents a favourable outlook in 2009.
According to a survey conducted by communications consultancy firm Africapractice, 62 percent of the investors said they planned to expand their operations significantly across Africa while the rest said they would do so to a lesser extent.
“It is encouraging to see that so many leading businesses expect their operations in Africa to continue growing at rates above the global average in 2009, albeit slower than in recent years,” enthused Africapractice Managing Director Marcus Courage.
Mr Courage predicted that the continent would be the fastest growing region for many multinational companies next year and it will also receive a disproportionate amount of resources to support that growth.
His forecast can be supported by economists’ arguments that African markets have not been largely affected by the ongoing meltdown due to their minimal integration with global financial institutions.
The International Monetary Fund projects that the overall economic growth in Sub-Saharan Africa would be just over six percent in 2008/2009.
When asked what the greatest challenge would be for their business in 2009, majority of the executives cited issues around market volatility, weathering the global credit crunch, cash flow and credit.
“The key challenges will be in the unknown impact of the global downturn on our economies, with ongoing instability caused by the likes of Zimbabwe and DRC,” said Chris Stephenson, the Managing Director of McKinney Rogers Kenya.
Africa 24 Media Chief Executive Officer Asif Sheikh reckoned that talent was the biggest concern for many companies including his.
“While opportunities exist in many sectors, particularly energy, finance and telecoms, capacity building will be almost as important as financing,” Mr Sheikh said.
Many of the respondents however expect Foreign Direct Investment (FDI) to drop next year, while about 23 percent predict that Africa’s engagement with China will be sustained.
In 2006, net FDI was estimated to be at $15 billion with South Africa receiving more than a third of the inflows.
The survey also indicated that the rise of the middle class, with discretionary spending power in many African countries would help to support consumer industries.