Local Investors urged to look into regional markets
Boitshepo Majube | Friday November 15, 2013 16:36
The business magnate said the return on investment from regional markets is very good, compared to the local market. 'Why are local investors not servicing Africa while the Europeans, Americans and Chinese do,' he wondered. He said that ignoring the African market will be a missed opportunity for Botswana investors. Botswana is faced with a stagnant investment market due to low population. This has left many investors with no option but to look elsewhere or face doom.
Abdoola noted that Batswana have an upper hand going into Africa as they have strong financial systems in place and support from government. 'Batswana have had good systems in place which accords them an opportunity to invest in the region, where return on investment is very good, and better than locally,' he stressed.
Abdoola's views are shared by Mark Kalil of Stanbic Bank who recently said the Botswana investment market is faced with challenges especially lack of local investiable assets.
'Despite huge amounts of capital in the local market, Botswana is faced with lack of investiable assets, and my advice will be for local investors to look into cross border investment opportunities,' Kalil told the annual conference of Botswana Pensions Society. He urged local asset managers to tap into the regional market, which he said provides opportunities in infrastructure, property and private equity.
Last year, former BOCCIM president Alex Monchusi wondered why Batswana investors are not venturing in Africa. At the time BOCCIM held a dinner with the theme: 'Into Africa: Entry Strategies'.
'This is what we should be thinking, how to access regional markets, and how to attract regional investors into Botswana,' Monchusi told the dinner. He said the global market is easier to exploit nowadays because of integrated technology. 'The world is looking to Africa, but are we?' he questioned.
From 2001 to 2010, the International Monetary Fund (IMF) said six of the world's 10 fastest growing economies were in Africa: Angola, Nigeria, Ethiopia, Chad, Mozambique and Rwanda.
Nigeria and Angola are Africa's top oil producers. Chad is a recent petro-state, so surging crude prices had a lot to with its growth. Aid flows are said to be responsible for growth in Ethiopia, Mozambique and Rwanda.
The latest edition of Africa's Pulse indicate that new discoveries of oil, gas, and other minerals in the continent will generate a wave of significant mineral wealth in the region.
Africa's Pulse says the economic importance of natural resources is likely to continue in the medium term in several established oil and mineral producers, thanks to the sizeable stock of resource wealth and the prospects of continued, high commodity prices.