Wednesday, October 24, 2012

Should You Invest in Africa?

The World Bank appears to be bullish on Africa, according to this week's Economist, although I admit that I have not found the World Bank report that is obliquely referenced in the Economist article. Still, the Economist gives some details, and two of the four reasons for this positive attitude are related to demographics:
First, the continent has the right kind of population growth: most Africans live increasingly longer while having fewer children, rather than the other way round. The UN says that Nigeria may overtake the United States by 2055 as the third-most-populous country after India and China, yet simultaneously reduce its birth rate.
Second, rapid urbanisation is creating efficiency gains and luring investors to capital cities that have begun to thrive and where growing population density cuts transport times and fosters small-scale industrialisation.
The other two reasons for optimism are the opportunities for technology to make inroads, because most things are at such a low level, and the improvement in governance in the region.

At the same time, this sense of Africa as a place to invest money with expectation of a substantial return seems at odds with the email announcement I received today from Worldwatch seeking donations to help them bring sustainable sources of energy to Africa "where seven out of ten people lack reliable and affordable access to electricity."

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