Published On: Wed, Nov 18th, 2015

Africa’s most attractive markets for Gulf investors revealed

Gulf investors,LAGOS, (CAJ News) – KENYA, Nigeria, South Africa and Uganda have emerged as the Sub-Saharan African countries that have attracted the largest number of Gulf investments over the years.

This is according to research by the Dubai Chamber of Commerce and Industry.

The organisation said the four countries had attracted the largest number of Gulf investors, which was between 10-25 firms each.

The most prominent Gulf investments into listed African companies so far, both in 2014, have been QNB’s purchase of a 23 percent stake in Ecobank of Togo and the Investment Corporation of Dubai’s US$300 million investment into Dangote Cement of Nigeria.

The chamber said a prominent entry method was acquiring a company with regional coverage located in an advantageous country with a pro-business environment. An example is Etisalat’s 2014 purchase of a majority stake in Maroc Telecom, which has a network of subsidiaries across West Africa.

Etisalat subsequently folded its pre-existing holdings in six West Africa countries into the Maroc Telecom Group, which is better placed given its regional expertise, language skills and experience managing a low-income customer base.

However, inadequate access to financial services, including banking and
insurance, has long been a barrier to development in Africa. Nonetheless, the study noted two major banks that had put Africa at the heart of their expansion plans- Qatar National Bank and the National Bank of Abu Dhabi.

The latter has aims to open a branch in Nigeria, as does Mashreq, which is considering offices in Kenya and Nigeria.

Poor infrastructure is seen making logistics expensive for companies in every sector but opportunities are currently most apparent in Mozambique, Tanzania, Angola, Nigeria and Ghana.

On the other hand, a number of pan-African companies have relocated their headquarters to Dubai, boosting links between the Gulf and Africa. These include Stallion Group, the second largest conglomerate in Nigeria and active across West Africa, Atlantic Holdings of Ghana and Mara Group of Kenya. Gulf firms provide US$2,7 billion in foreign direct investment into Sub-Saharan Africa in the first half of 2015, and a total of US$9,3 billion from 2005-14.

CAJ News

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