By Sunil Vaswani
The continent is still abundant with natural resources, massive consumer power and other key factors that make it a lucrative investment
First of all, let me convey my most respectful greetings to Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on the glorious occasion of the 10th anniversary of his accession day. Thanks to His Highness and the country’s leadership, the UAE continues to flourish even under a tough global economic environment.
With the world still within the decade of the global financial crisis, new concerns have risen over the past few months, with lower oil prices and geo-political threats. The bleak outlook for the Chinese economy, record inventories of commodities piling up and other macro-economic concerns have added fuel to the fire. In the Middle East and Africa oil dependant economies are making significant fiscal adjustments as a response to unanticipated deficits – with a resultant adverse impact on government expenditure.
Our group is UAE headquartered and is predominantly active in the Sub-Saharan African markets. The growth in this region is dampened by lower oil prices, depreciating currencies, depleting foreign exchange reserves and a host of other issues. Priority sectors with high impact on people like food, power, infrastructure, healthcare and education have become challenging with receding government funding.
However, like any accomplished business house, we believe that every crisis presents an opportunity. The African continent is still abundant with natural resources, massive consumer power and other key factors. The circumstances call for significant investments flowing in from the private sector, with active policy support from the governments.
With challenging fiscal positions, it is beyond the immediate capability of governments to engage solely on development projects without private sector involvement. Therefore major opportunities await international companies and investors aspiring for a presence in the continent, where the need is more prominent than ever. However, it is not as easy as it sounds.
Our experience dictates that technical expertise, capital and expert knowledge of the local terrain are the key essential success factors in Sub-Saharan Africa.
Over the last 45 years, we have deployed the three factors with success in the continent across a wide selection of industries. We have partnered with multiple global companies to successfully create new businesses.
We strongly feel that the next two decades will see Africa emerge as a very strong world economy. The change will be driven by growing captive demand, a surging middle class, a majority young population, increasing will power of governments to make the region self-sufficient, an improved investment climate that will aid foreign investment taking advantage of natural resources, and others.
Africa could potentially see large capital inflows as the perception of risk gradually diminishes in the coming years. Countries like Nigeria, Ghana, Ivory Coast, Mozambique, Tanzania, Ethiopia and Kenya should be watched closely for opportunities.
The UAE will play a major role in acting as a hub for investments and trade flows into and from Africa. Accordingly, the UAE has positioned itself in a strategic manner to attract international and regional corporates to be based in the country to conduct Africa-related business operations.
Our plan for 2016 involves creating a UAE based specialist platform wherein we aim to table our extensive experience to structure projects in Africa in collaboration with renowned international companies and investors. We have an impressive pipeline of projects in heavy gas based industries, power, logistics, agriculture, healthcare and others already being developed for implementation.
The UAE base provides us with an ideal platform to collaborate with large regional and Asian partners and attract requisite capital to structure scalable, transformative ventures in the African continent delivering value to all stakeholders. Investment interest for Africa is still strong with investors from the Middle East, the US and Asia – direct foreign investors have also shown massive interest specifically in projects with high socio-economic impact.
With our experience operating in the world’s most complex markets, we seek to mitigate risks for our partners, providing them a stable environment for investments and access for their goods and services. Therefore, as the world struggles to deal with the prevalent uncertainties, it is time to explore new opportunities that meet consumers’ critical needs in Africa.
Sunil Vaswani, chairman of Stallion Group.