Widespread and typically exaggerated perceptions of corruption and violence do not deter some Western firms from putting money into African nations – often with impressive results.
Read the news about the so-called “civil war” in Kenya, unrest in Chad, or genocide in Darfur, and you could conclude that Africa is no place to invest money.
But behind the headlines lies business opportunity. Africa’s economy is growing at 5 to 6% a year. Inflation is down. Prices are rising for commodities like oil, copper, and gold.
Like all emerging markets, Africa is a risky place to invest but “the perceived risk is greater than the actual risk,” says Tom Gibian, the chief executive of Emerging Capital Partners (ECP), a private equity firm based in Washington, D.C., that focuses on Africa.
Emerging Capital Partners (ECP) has invested more than $1.2 billion in several Africa funds since 1999. ECP has invested in 48 companies, exited from 18, recouped more than $600 million, and posted an average return of three times its initial investment. “The financial performance has been terrific,” Gibian says. Read the rest of this entry »
