The African continent has captured the imagination of man since time immemorial. Africa, the cradle of humankind, where humans first started out, has exerted a strong influence, not only on Africans, but also others, from the early explorers like Livingstone, to the Europeans who came to live and work in Africa.
For many people, the most romantic African love story is that of Karen Blixen whose story was immortalised by her book Out of Africa which was made into a film in 1985 with Robert Redford and Meryl Streep. Karen first came to Africa, to what is now Kenya, in 1914. She left Kenya in 1931, having failed as a coffee farmer. Her bankruptcy forced her back to her native Denmark and she became an authoress. If she had been successful as a coffee farmer, the book Out of Africa would possibly not have been written. For many people, Africa is summed-up by books such as this and images of safaris and beaches.
With these images in people’s minds it’s easy to see why so many people have a love affair with Africa. Karen, sitting in the evenings on the veranda of her home in Nairobi staring at the Ngong hills smoking her last cigarette of the day, is a powerful image.
Karen Blixen's House with a view of the Ngong hills in the background. The Ngong hills are named after the kuckles of a hand as they look like the four knuckles of a clenched fist.
While her story has captured imaginations, it also leads to the question of whether investors in Africa can make money, unlike poor Karen. The truth is that unfortunately, she chose a farm where coffee does not grow well. If she had been able to just hold out to present times, her farm would be worth a fortune as it is on the outskirts of Nairobi in the exclusive Karen area. A trip through Karen shows a mixture of old estates, brand new mansions and new shopping centres.
Many European companies such as Unilever, Nestlé, Heineken, Barclays, Standard Chartered and others, are successful investors in Africa for many decades. Their love affair with Africa is all about profits and dividends. Other home-grown companies such as Dangote Group in Nigeria which makes Dangote a US$ billionaire or, on the other side of the continent, Anglo American or Remgro which have done the same for families such as the Oppenhei-mers and Ruperts, are examples of indigenous companies that have done very well indeed from business in Africa.
Other companies that were founded in Africa and have become international business are companies such as Old Mutual and SABMiller.
Currently, many more companies are falling in love with Africa, its growing consumer markets, its expanding infrastructure and its huge resource base - companies such as Visa, who are expanding in East Africa or Odebrecht, which is investing in Angola. While others, such as Safaricom and Equity Bank, have done very well out of the growing consumer markets providing people with phones and finance.
With over 1,500 listed companies, many more unlisted ones and many foreign investors, many business people have fallen in love with the profits they can make in Africa. And, with GDP growth averaging over 6% per annum many more are following, looking for new markets and opportunities.
Important notice
Renaissance Asset Managers does not represent that this information is accurate or complete and it should not be relied upon as such. Opinions expressed herein reflect the opinion of the asset manager and are subject to change without notice. We recommend that you seek you own independent legal and financial advice where necessary. This has been issued by Renaissance Asset Managers (Guernsey) Limited who are licensed to carry on controlled investment business under the Guernsey Financial Services Commission (GSFC): Reference Number 2008335.
