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SIGNIFICANT POTENTIAL

Angola is Africa’s fastest-growing economy; others offering significant potential include Botswana, Cameroon, Ghana, Kenya, Mauritius, Namibia, Nigeria, South Africa and Zambia. Zimbabwe will need to repair its damaged infrastructure.

The World Bank says: “This is the time to invest in Africa.” Despite challenges, the rate of return over years has exceeded other parts of the world. Its 2009 report Africa’s Infrastructure: A Time for Transformation estimated that US$93 billion a year is needed in the next decade. The biggest demand is for electricity (US$26.7 billion). Africa needs 7,000 megawatts (MW) a year of new power-generation capacity as many countries rely on inefficient, expensive, small-scale, oil-based power generation.

Water supply, sanitation and transportation also need US$14.9 billion and US$8.8billion, respectively. Improvements to air traffic controls and surveillance facilities are also vital to cope with recent strong growth in traffic, while rehabilitating regional rail lines requires a one-off outlay of US$3 billion. Moreover, improving road accessibility in rural areas is critical to boosting agricultural productivity.

The region has witnessed a ‘wireless revolution’, with mobile users rising from 10 million in 2000 to 180 million by 2007. Private operators have invested about US$28 billion in new mobile networks. Broadband is in its infancy, reflecting limited availability of fibre-optic cables and regulatory barriers. The sector needs US$7 billion a year to meet demand for ICT services. Mobile signal coverage could be expanded to cover more than 95 per cent of Africa’s population simply by reducing these barriers. Vodafone operates in the Democratic Republic of the Congo, Ghana, Lesotho, Mozambique, Tanzania and South Africa. In 2008, it acquired a 70 per cent stake in Ghana Telecom for US$900 million, along with its mobile subsidiary.


BRITISH PRESENCE

THE UK HAS BUILT A REPUTATION FOR SUSTAINABLE INVESTMENT AND IS ONE OF THE MOST SUBSTANTIAL CUMULATIVE FOREIGN INVESTORS ACROSS THE CONTINENT. UK EXPORTS OF GOODS AND SERVICES TO AFRICA TOTALLED OVER £14 BILLION IN 2009. AFRICAN FIRMS ARE KEEN TO ESTABLISH GOOD WORKING TIES WITH THE UK BOTH ENGLISH AND FRENCH ARE OFFICIAL BUSINESS LANGUAGES (WITH PORTUGUESE PREVAILING IN SOME MARKETS) AND MANY PROMINENT DECISION-MAKERS HAVE RECEIVED A BRITISH EDUCATION.

There are a host of blue-chip UK companies operating in the region, including: BAE Systems, BP, Unilever, Diageo, British Airways, Taylor Wimpey, Barclays, GSK and AstraZeneca. Babcock International Group, a key supplier to the energy, mining, forestry, material handling, road building, transport and construction sectors, boasts 120 years of experience in Africa. Bombardier Transportation, Britain’s biggest rolling-stock builder, is part of a consortium that is supplying 96 Electrostar vehicles to South Africa’s Gautrain rail link from its Derby site, as well as undertaking a 15-year maintenance contract. The UK Trade & Investment team in Johannesburg played a vital role in supporting the bid for this contract.

Biwater, global leader in water and wastewater treatment services, moved into South Africa in 1999 and supplies water to the Republic of Congo. Similarly, Lonrho boasts a track record of investing in and developing opportunities across the region.

Powerline Technologies is working with partners in South Africa, Tanzania and Ghana to develop broadband services. Gateway Communications, a leading provider of satellite network services in Africa, recently signed two separate deals in Guinea.

European and US firms, however, face stiff competition from China, which has invested US$6-8 billion in Africa’s infrastructure. Beijing has made offers of bilateral assistance in exchange for oil and mineral resources.

In Ethiopia, for example, the Chinese are funding a US$1.5 billion expansion of mobile telephone networks, while in Cameroon they offered to build a US$800 million hydro-electric dam.


Contact Carolyne Akers, head of the UK Trade & Investment Africa Unit, on 020 7215 4799 or email carolyne.akers@ukti.gsi.gov.uk