4 posts tagged wsj
4 posts tagged wsj
As growth stagnates in the U.S. and Europe, Ghana’s robust multiparty democracy has turned its capital into a hub for companies chasing business—on a continent that grew 5.5% this year, according to the IMF.
Other things have gone Ghana’s way, too. As leading cacao producer Ivory Coast descended into civil conflict this year, Ghana stepped up production of the chocolate ingredient. For the first time, Ghana farmed one million tons of cacao, as the cash crop hit a 32-year high on London markets.
Ghana’s growth has made the nation of 24 million Africa’s newest middle-income country, joining Namibia, Botswana and South Africa. Nigeria will soon join them, economists forecast.
It has been a noisy transition. In Accra, drivers in newly purchased Toyotas and Peugeots honk in traffic and blare gospel music. The number of passenger sedans on Accra’s roads has doubled in the past ten years, and the number of motorcycles has tripled, according to Ghana’s government figures. Vehicles crowding narrow roads have squeezed pedestrians onto tight sidewalks.
In September, chicken chain KFC opened a three-story restaurant in downtown Accra. Google Inc., IBM Corp., and Cargill Inc. have set up offices in the country.
In the first nine months of 2011, Ghana attracted $4.23 billion in foreign direct investment, tripling last year’s rate. But Ghana’s bottlenecks are curbing what economists say could be even faster growth, offering lessons for other African countries that may follow a similar path of development.
Indeed, the upheaval across the Middle East has provided “compelling opportunities,” Mr. Heikal says.
While stressing the long-term positives of Egypt, he talks at length about the potential of Africa as an investment proposition, emphasizing its abundance of natural resources, favorable demographics and untapped growth.
“Africa is outside the comfort zone of most private-equity investors,” he says. “When I did my Ph.D. at Stanford in 1987, Egypt was very little known. I remember getting a question on whether there were cars in Egypt or did people travel by camel. My answer was: I have a three-camel garage underneath my tent,” he laughs.
Africa is, he argues, the next great frontier where, “you can still do things on a massive scale, own major arteries of infrastructure, major arteries of electricity grids, major arteries of water, transportation and agriculture.
“Think of Africa as the way China was 30 years ago,” he says. “You have a huge population that requires everything. The only thing that is needed is the discipline of work and, of course, a stable government.”