The Economist has a rather nice article about investing in Africa this week, The sunny continent. It is mostly about two businessmen, Mo Ibrahim and Sam Jonah, and their thoughts and plans about the future.
Mr Ibrahim . . . is ebullient about the potential for mobile phones and mass entrepreneurship to deliver even more dramatic growth and poverty reduction in future, in Africa as well as elsewhere. He recently established a $150m fund to invest in African business.
Mr Jonah is a larger-than-life hail-fellow-well-met Ghanaian, who made his first fortune by selling Ashanti Goldfields, a Ghanaian mining company, to South Africa’s mighty AngloGold . . . He is now doing well in private equity. As evidence of his bullishness, Mr Jonah is trying to raise $250m to build long-distance roads across Africa—the lack which is one of the most obvious failures in the continent’s infrastructure. His goal is to find 50 successful African business people, each willing to invest $5m in the fund, and then to use multilateral funds to leverage the money into the billions.
. . .
There is increasingly a pro-African mood in the global business community nowadays, says Mr Jonah.
. . .
. . . much of the “help” Africa has had from outside has been of the wrong sort. By way of illustration, Mr Jonah points to three once impoverished European countries—Spain, Portugal and Greece—that might have stayed poor had they not been “rescued by their sugar daddy, the European Union.” The point, he says, is that richer European countries invested in these poor countries, “not as charity, but because they saw a win-win opportunity.” The same is now true of Africa, he argues. With a handful of headline-grabbing exceptions, “everyone in Africa is now getting their act together, with free markets and democracy.”
This is where Mr Jonah and Mr Ibrahim are somewhat at odds with each other. Last year Mr Ibrahim endowed an annual prize for leadership in Africa, which will recognise a retired African leader who did a good job in office. Mr Ibrahim, one of Africa’s first home-grown philanthropists, believes this prize will help raise the standard of leadership across the continent.
I have read elsewhere, I think it might have been in the Wall Street Journal a few years ago, that if Africa had received the same kind of investment eastern Europe did after the fall of the Berlin wall, there would have been even more to show for it. The United States has mostly engaged in military assistance, that has destabilized and impoverished its targets.
Many of the top U.S. arms clients –Liberia, Somalia, the Sudan, and Zaire (now the Democratic Republic of the Congo or DRC) — have turned out to be the top basket cases . . . in terms of violence, instability, and economic collapse.
The US is always claiming to be businesslike. It should act a bit more businesslike.
Business investment can have its downside, think Enron as just one example, and some of my friends think Jonah is a crook. I know very little about Ibrahim. But both men are on the right track in what they are saying. I hope the optimism and investment continue and pay off.
(If the Economist link does not let you in and you would like a copy of this article, or others I cite, email me at crossedcrocodiles, on gmail, I can email a copy.)