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Positive trends in Africa

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Positive trends in Africa and sunrise in Tanzania. Tanzania is expected to be a top performer in Africa in 2024. Image credit: Leon Louw for WhyAfrica

Positive trends in Africa

Despite many challenges, there are positive and exciting developments and opportunities across the continent.

By Leon Louw, owner of WhyAfrica and editor of the WhyAfrica magazine                  

Notwithstanding global headwinds there are several positive developments in countries like Namibia, Zambia, Angola, Tanzania, Kenya, Morocco, Mozambique, Egypt, and to a lesser extent in Malawi and Guinea. However, these pockets of growth are offset by serious concerns in the West African region, the Sahel, and in the Horn of Africa.

Despite complex problems and concerning challenges facing many countries across Africa, the overall outlook for 2024 remains positive with some exceptional prospects.

Zambia and the DRC face an uphill battle but at the same time, interest in their extra-ordinary copper, cobalt and other critical mineral reserves is at an all-time high.

Mineral exploration companies, agribusiness, infrastructure, and tourism interests are lining up in Angola, which has opened the floodgates in a country so long off bounds for foreign investors.

Notwithstanding isolated reports of attacks in the Cabo Delgado Province of Mozambique, TotalEnergies announced that it will resume construction of its giant Liquified Natural Gas (LNG) project in the north of Mozambique towards the end of this year.

Malawi’s revival is gaining some traction as the country pins its hope on mining, agriculture, and tourism to get itself out of a terrible poverty rut, while Morocco continues to wow tourists and outperform most other African countries in all sectors.

Egypt and Nigeria remain politically volatile, as does South Africa, but these giants of Africa can never be ignored.

Tanzania in the pole position  (Positive trends in Africa)

Tanzania is in pole position for the top spot as premier investment destination in Africa though. This East African country under President Samia Suluhu, continues to lure foreign investors in all economic sectors.

Lat year, Tanzania secured financing to upgrade the port of Dar Es Salaam, made exceptional progress in building its standard gauge railway (SGR) to bolster its connections to central Africa, and signed a host of government agreements to launch an important Liquified natural Gas (LNG) project.

In the first two months of this year, a host of mineral exploration companies started early-stage drilling and the country looks set for spectacular growth in 2024.

If the Tanzanian government gets adequate financing and successfully signs the deal to transport crude oil from Uganda through Tanzania with the East African Crude Pipleine (EACOP) this year, the country would be assured of surpassing Kenya as the regional powerhouse in East Africa.

FDI on an all-time high

An increased interest by mainly the USA and the European Union, by historic African investors like China and Russia and now joined by countries like India, Saudi Arabia, Türkiye, and the United Arab Emirates (UAE) in the critical materials space have seen a new scramble for strategic positions in the Southern, East, and Central African regions.

In addition, the energy sector in Africa is raking in foreign direct investment (FDI) especially from Middle Eastern investors.

According to fDi Markets ( https://www.fdimarkets.com/) greenfield foreign direct investment (FDI) announcements by Middle Eastern investors in Africa have boomed in recent years, due to ambitious plans to produce renewable energy like green hydrogen and develop infrastructure such as ports, warehouses and data centres.

“Companies based in Gulf Cooperation Council (GCC) countries — namely the UAE, Saudi Arabia, Kuwait, Qatar, Bahrain and Oman — announced 73 FDI projects in Africa worth more than USD53-billion last year, according to the latest data from fDi Markets.

The only year GCC investors announced more FDI capital expenditure into the continent was 2022, when they pledged USD60-billion across 83 projects. More than 90% of this FDI came from the UAE and Saudi Arabia, most notably into hydrogen and other renewable energy projects.

Project to keep an eye on (Positive trends in Africa)

Projects to keep an eye on in 2024 include a green hydrogen project in Egypt, a large solar projects in South Africa, a hydrogen project in Kenya, renewable projects in Morocco and a hydrogen investment in Mauritania.

Saudi Arabia-based ACWA Power will invest more than USD4-billion in a green hydrogen project in the Suez Canal Economic Zone which, in its first phase has the goal of producing 600,000 tonnes of green ammonia per year.

ACWA will also invest USD800-million to establish a new 442-megawatt solar park in the Northern Cape Province of South Africa.

The UAE’s AMEA Power plans to build a hydrogen project in Kenya and the Abu Dhabi National Energy Company will invest USD1.6-billion into renewables in Morocco.

In Mauritania the UAE’s Infinity Power has signed a memorandum of understanding (MoU) with Germany’s Conjuncta to develop a USD34-billion project.

According to fDi Markets, the growing prominence of Middle Eastern investors in Africa comes alongside an uptick in investment from other major source markets.

Total announced FDI by Hong Kong- and China-based companies on the continent reached USD38.5-billion in 2023 — an all-time high which aligned with the USD38-billion committed by Western European companies.

Meanwhile, greenfield FDI from the US into Africa was less than USD10-billion last year — its highest since 2018, but still markedly lower than the Middle East and other regions, according to preliminary fDi Markets figures.

Read more about the outlook for Africa in the WhyAfrica Hawks Eye Report 2024 which is now available to purchase for R80 from our online shop. To purchase the report click here:  https://www.whyafrica.co.za/shop/

Remember if you are a WhyAfrica member, you receive free copies of all our reports, including our annual WhyAfrica Road Trip Report, which provides you with on the ground business intelligence, including opportunities and challenges in the countries that we visit during our trip. To become a WhyAfrica member you pay R6500 and your membership is valid for 12 months. To become a member and pay online click here:  https://www.whyafrica.co.za/product/membership/

Positive trends in Africa

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Positive trends in Africa

 

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