Invest In Africa's Future, Not Its Past

Companies involved in the development of the continent are not necessarily listed on African stock exchanges. But investors do have options to put their money into one of the highest growth regions on the globe.

- Nerina Visser

An overhead view of the African continent – with the railroad infrastructure highlighted – provides a stark reminder of its colonial past, and especially the extent to which infrastructural development focused on exports to the rest of the world, rather than on transport on the continent. Not only are the clear majority of railway tracks laid down between the mining operations and ports of export harbours; many of these railway sections cannot be connected to one another as there are differences in gauges and other specifications, making them incompatible with one another. The former “Dark Continent” is currently on a significant infrastructure development drive – especially of the physical kind. Simultaneously, technological “highways and rural byways” are also being rolled out, as both telecommunications and financial services providers compete to reach the millions of unconnected and unbanked throughout the “Middle Africa” region – essentially subSaharan Africa excluding South Africa.

Unless we heed the lessons from the past, we run the risk of making the same mistakes in technological and financial market infrastructural development, as were previously made with the rail infrastructure. An analysis of Society for Worldwide Interbank Financial Telecommunication (SWIFT) data on transaction volume in Africa present warning lights of development that is too focused on traffic flow in and out of the African continent (like the export of raw materials and the import of beneficiated finished goods), and not enough on intra-African trade and investment “traffic” flow.