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How we manage investment risk in Africa |
The beauty of the Africa Invest Capital Protected Plan is that the investment you make will be returned to you after seven years based on AA- or better credit rated institutions, not Africa. Africa forms the basis of any profit you make from the Plan. Please note the risk associated by this is detailed here in ‘Investment risks’. There is a deeply entrenched view of Africa amongst many of us in the UK and the West. We have been fed a media diet of Africa plagued by starvation, drought, war, disease and corruption that has resulted in many of us having stereotyped views. Much of the media coverage is true but it lacks balance. We must also be mindful that the entire charitable industry needs us to see Africa in a certain way, particularly in a way that drives us to give. For instance, continual media focus on Zimbabwe creates the impression that all African countries are in a similar state. This is very unfair and simply not true. Botswana is actually better managed than Italy*. Ghana, Namibia and South Africa are better managed than the much lauded quartet of Brazil, Russia, India and China (the so called Bric economies)*. Africa is making significant strides towards good economic management. A function of acceptance of better fiscal discipline, the increasing adoption of the multi-party democratic system, allied with a rejection of corruption, has resulted in the world’s largest economies (G8) forgiving much of Africa’s crippling long-term debt. This has fuelled strong economic growth, considerably ahead of the global average, attracting increased investment from the likes of China, Europe, the US and others. Inflation and interest rates are falling and investors across the world are beginning to see Africa as the most under-developed investment opportunity left. As Asia was dubbed the Tiger Economies of the 1980s, we describe Africa as the Lion Economies of the new Millennium. Essentially
many African countries exhibit no more risk than any other emerging
market and much of the corruption does not take place in private
enterprise, rather in Government where poor wages and governance
create a culture of enticement. That said, the British Government
is now confident enough in the Malawi Government’s internal
control mechanisms to provide £100million of budget support
direct, in cash, to the Malawi Government. This is a significant
vote of confidence in Malawi’s improving standing. | |||
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