To their value, many international traders are getting Africa incorrect.
This was the stark message delivered by African leaders and enterprise executives on the World Governments Summit in Dubai this week, the place they challenged persistent misconceptions about funding danger on the continent.
“Africa’s risk is not different from any part of the world,” declared Dr Akinwumi Adesina, President and Chair of the Boards of Directors of the African Development Bank Group. Speaking at a panel titled “The New Economic Revolution: An African Perspective” on February 11, 2025, he cited hanging information that turns standard knowledge on its head.
“We actually asked Moody’s Analytics to look at the risk profile of Africa, of investments and infrastructure over the last 14 years. Guess what they found? The rate of loss in Africa is 1.7%. That in Latin America was about 13%. The one in Eastern Europe was more about 10%.”
These statistics paint an image starkly completely different from the danger premiums usually demanded for African investments. The continent’s precise efficiency suggests it could be one of many world’s most secure funding locations—a actuality masked by persistent unfavorable stereotypes.
Tony Elumelu, founding father of the Tony Elumelu Foundation and chairman of a number of African companies, spoke from direct expertise: “There’s nowhere else we get the kind of returns on investments as what we make in Africa.” Elumelu, whose portfolio spans energy, oil and fuel, monetary companies, and healthcare throughout 4 continents, together with investments within the Gulf states.
He emphasised that success lies in seeing alternative the place others see danger.
“There’s nowhere else we get the kind of returns on investments as what we make in Africa,” mentioned Tony Elumelu, founding father of the Tony Elumelu Foundation.
“You may decide to see risks or challenges, or you may see opportunities,” Elumelu defined. “But ability to identify opportunities and structure your approach in a way that addresses and mitigates those risks confers extra competitive advantage on you and your business.”
To bridge this notion hole, the African Development Bank Group introduced plans to determine a brand new Africa Investment Guarantee Agency. The establishment will supply complete protection in opposition to local weather, fairness, political, and forex dangers—addressing key issues which have traditionally deterred worldwide traders.
The timing couldn’t be extra crucial. Africa stands on the nexus of a number of international transitions: demographic, power, and agricultural. With 75% of its inhabitants beneath 35 years outdated, together with 600 million individuals between ages 15 and 35, the continent is positioned to turn out to be the world’s workforce. Its huge mineral sources—together with crucial supplies for electrical automobiles and renewable power—make it indispensable to the worldwide power transition.
“Whether it is lithium-ion batteries, whether it is electric vehicles, whether it’s platinum, whether it’s copper, whether it’s graphite, whether it’s any of this lithium-ion, all is in Africa,” Adesina famous. “So what Africa actually does with its resources will shape the future of the world.”
The narrative of a “resource curse” that has lengthy haunted Africa’s growth story additionally got here beneath scrutiny on the summit. Sierra Leone’s Chief Minister David Moinina Sengeh rejected this framing completely, introducing as an alternative the idea of “conscientious concessions”.
These, he defined, are offers that profit traders, governments, and native communities alike.
“It’s so easy to speak about concessions from any one of these countries or from private sector that is 100 years, lots of waivers, employees coming from abroad, everything gets shipped out. That’s not consensual. You’re talking about bad deals, by the way, which turned things into a curse, and I think that’s what people talk about,” Sengeh defined. He pointed to latest developments in Sierra Leone’s rutile mining sector, the place home possession is altering the dynamics of useful resource administration.
The narrative of a “resource curse” that has lengthy haunted Africa’s growth is incorrect, mentioned Sierra Leone’s Chief Minister David Moinina Sengeh.
“If we think about not just pennies, but the people and the planet, then the deals and the agreements we sign, with our conscience, will work for the people, will bring economic value for everyone, for the investor, for the government, and the people who are there,” Sengeh added.
The African Development Bank Group is actively working to facilitate such balanced agreements. “We have the African Legal Support Facility at the African Development Bank to help Sierra Leone and DRC, several other countries, to be able to structure deals that are in their own interest,” Adesina defined.
The Africa Investment Forum Market Days held in Morocco in December 2024 demonstrated robust investor urge for food when limitations are eliminated, securing $29.4 billion in funding curiosity inside simply 72 hours! This contributed to over $225 billion in funding pursuits mobilized because the Africa Investment Forum’s inception in 2018. This success is a part of a broader push to industrialize the continent and transfer past uncooked commodity exports.
“The export of raw commodities of any kind is a door to poverty,” Adesina emphasised. “But the export of industrial value-added manufacturing to allow Africa’s share of global manufacturing to rise and to move up in global value chains, that is the highway to prosperity.”
Major initiatives are already underway to construct this infrastructure. The African Development Bank Group is investing $3 billion in particular agro-industrial processing zones, whereas “Mission 300,” a partnership with the World Bank, goals to offer electrical energy entry to 300 million Africans. These tasks characterize important alternatives for personal funding in energy era, transmission, and distribution.
“The export of raw commodities of any kind is a door to poverty,” mentioned Dr. Akinwumi Adesina, President and Chair of the Boards, African Development Bank Group. “But the export of industrial value-added manufacturing to allow Africa’s share of global manufacturing to rise and to move up in global value chains, that is the highway to prosperity.”
The African Continental Free Trade Area, with its $3.4 trillion market potential and inhabitants of almost 1.5 billion individuals, provides one other layer of alternative. “Africa is not going to beg its way into development,” Adesina insisted. “Africa is going to trade and invest its way into development.”
Looking forward, African leaders are clear about who will drive this transformation. As Sierra Leone’s Chief Minister Sengeh put it: “Who’s going to dominate in Africa? Africans are going to dominate in Africa.” He known as for “progressive, social, democratic radicalism” to make sure growth advantages all Africans.
For international traders, the message from Dubai was clear: the danger will not be in investing in Africa, however in lacking out on its alternatives. As Elumelu concluded: “The time is now.”
Source African Development Bank Group
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