Conference Presentation, Panel
Investing in Growth: Accessing Global Capital
- Developing economies are forecast to surpass developed economies in global GDP share within the next five to ten years, with double-digit year-over-year growth expected specifically in developing Asia, Sub-Saharan Africa, the Middle East, North Africa, and Latin America.
- Investors are anticipated to shift strategies from domestic or "own backyard" allocations to aggressive overseas investments in developing markets to secure higher yields, driven by the prospect of better returns in regions like Asia and Africa.
- The Abu Dhabi Investment Council plans to identify long-term high-performing countries rather than making immediate allocations to underdeveloped equity markets, expecting emerging African markets to perform well over time despite market fluctuations.
- GE intends to invest up to $800 million in CapEx for four or five assembly manufacturing projects in Nigeria, Angola, South Africa, Kenya, and Ghana, while using cash to finance development phases to attract other investors.
- Investments in Africa will prioritize countries demonstrating good governance and stable rules to limit corruption, with a specific focus on Rwanda, which recorded a 22-place jump in the Doing Business index, the largest ever in the index's history.
- The East African Community, comprising Kenya, Uganda, Tanzania, Burundi, and Rwanda, is expected to integrate its young capital markets serving 140 million people, moving toward a common currency and political federation with a master plan for infrastructure including railways, pipelines, and fiber optics.
- If full integration of all five East African nations is not achieved simultaneously, the plan allows two to four countries to proceed with the initiative while others join later upon resolving blocking problems.
- The Mara Group projects continued transformation of the African continent based on 78% financial penetration and 52 cities with populations exceeding one million, noting that India and China are expected to direct significant capital to the region as a final destination for returns.
- The Access to Global Capital Initiative plans to create packaged business opportunities for investors ranging from multinational corporations to pension funds, anticipating that private equity firms will enter the market later to acquire or enhance businesses after initial manufacturing and financing stages are established.
- Investors lacking the capacity to manage African investments directly are expected to wait for more structured opportunities, such as through an Africa ETF or entry by major private equity firms like Blackstone and Apollo, as private equity is not currently considered the optimal model but is anticipated to become viable in five to seven years as businesses scale.
- Rwanda and other developing countries are expected to leverage technology to leapfrog development stages, specifically in ICT through expanded 4G LTE, mobile banking transition from telecom operators to financial institutions, and serving rural farmers and the health sector.
- Economic sectors in Africa are projected to see agriculture yields increase at least five times via super seeds and irrigation, while grid systems are expected to be rebuilt as prepaid smart grids managed through mobile technology.
- Governments in Africa are expected to address investor concerns regarding corruption by adopting digital, online systems to track transactions, while LiquidNet intends to uncouple the lending environment from major banks to broadcast global investment concepts in debt or equity.
- GE expects its supply chain development in Nigeria, Angola, and South Africa to generate a multiplicative effect on job creation that exceeds the current one-to-one ratio as local suppliers develop.