There is real economic opportunity for island based investors and businesses in Africa, the world’s fastest growing region.
There is much to support the argument that while Africa still offers great challenges, it also has tremendous potential, it has been claimed.
This was the message from one of Africa’s leading economists Goolam Ballim during a whistlestop visit to the island.
Asked if there are rich pickings to be had from the huge continent he told Business News: ‘I’d say it should be a geography that should form part of the Isle of Man’s broad er radar.
‘It will not instantly be a substantial part of the Isle of Man portfolio but starting small it could prove to be part of a faster growing area of commercial pursuit.’
He added that in terms of ‘putting boots on the ground’ and ‘factories on the ground’ there was a lot to be optimistic about.
Goolam heads up a team of 53 who analyse the world’s economies, but most recently the dynamic but diverse continent of Africa.
He is South Africa based Standard Bank’s chief economist and head of research and was in the island to address a talk at the Standard Bank branch in Douglas.
Speaking to Business News Mr Ballim said he had received a lot of interest from local business people who attended the presentation in which he highlighted the growing middle class in Africa.
Countries such as Nigeria were singled out as becoming particularly more affluent with a growing middle class.
He highlighted 11 nations within Africa where the middle class is rising fast,
Nigeria is leading the pack and over the next 15 years it’s estimated there will be a further seven million households classified as middle class in that country alone.
Even countries which have been ravaged by war and are seen as risky, such as Angola, will see big rises. It’s estimated Angola’s middle class will rise from the 1.2 to 1.3 million it is today, and around 33 per cent of the population, to around 45 per cent by 2030.
He told Business News: ‘What this analysis attempts to argue is that increasingly the consumer in Africa, especially in the frontier markets is becoming a force to be reckoned with.
‘And it is a market that global multinationals can now extend their marketing and sales and distribution strategeies towards.’
He said there would be much call for firms being able to give contractual advice to rich Africans who are buying luxury goods , apartments and even private planes.
‘I’ve just spoken to a client who is doing just that and is providing advice for new clients who are African who lead international lives and need global advice.
‘[It is] a spin off when you have a middle class who are globalising their lifestyles and assets.’
Standard Bank is Africa’s largest bank and earlier this year Mr Ballim was speaking in Washington at the US Africa Summit, attended by President Barack Obama.
He said: ‘Most of Africa is growing at a rate of 5 per cent or better which is astonishing when you consider that growth in the rest of the world is at best weak. Even fragile economies in Africa like Mozambique, are showing promise. We are seeing political maturity in many countries such as Ghana.’
He has made several visits to the island which he enjoys.
Referring to the recent economic crisis in the world he said that in 2009 ‘when America sneezed and stumbled, 80 per cent of the world GDP contracted. But Africa merely slowed and did not contract.’
More than 40 Isle of Man business people turned out for the Standard Bank seminar on the ‘seismic’ developments taking place in Africa, and the opportunities they present.
The event was hosted by Jason Gaines of Standard Bank’s Isle of Man Corporate and Business Banking team.
He said: ‘We have to look to new markets if we want to grow our economy, and Africa is without doubt the rising international star.
‘It is however also a difficult world to penetrate and each of the countries in the continent is different. While the risk appetite of many counterparties has decreased, as Africa’s largest bank the continent is our specialism.
‘Goolam emphasised how imperative it is that you understand the local market conditions, know who to talk to and how to talk to them, and that’s where we can help.
‘We cannot ignore Africa and her potential, or we will run the risk of being left behind by the Chinese and Indians who are investing heavily in the continent.’