It is becoming increasingly risky not to invest in Africa says KPMG’s John Geel. Not too long ago, the refrain globally was that African markets are among the world’s riskiest investment regions. However, KPMG’s Head of Transactions and Restructuring, John Geel, thinks otherwise.
“We have seen private equity firms starting to change their mandates and [are] now looking at Africa.” he said. “We see the big multinationals are now no longer ignoring Africa,” he stressed. “Historically people were saying there was a risk with investing in Africa and I think people are now seeing it as: if you don’t invest in Africa, there is a risk.”
Overall, trends like the growing African middle class and massive Chinese investment in African infrastructure is helping reshape the African story.
On the growing African middle class, Carel Smith, KPMG’s Africa head of energy and natural resources for instance had this to say: “There is a lot of debate as to how you define the African middle class and you can debate about what the definition is, but the fact is its growing and it is increasingly urbanising which makes it possible for the FMCG [companies] and other service providers to get economies of scale because you are increasingly going to have cities in excess of 10 million people on this continent over the next few decades,” said Smith.
She also believes that there is a much more positive view of the Chinese in Africa because everyone is benefiting. “I think even businesses and other companies active on the continent are starting to see the Chinese as partners, and investing in the infrastructure that is so critical to do along the whole resource boom, but also to enable … the growth which is everywhere forecasted for the continent.”