Africa next: The quest for Africa’s riches – by Geoffrey York (Globe and Mail – September 24, 2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

LUBUMBASHI, DEMOCRATIC REPUBLIC OF THE CONGO – Driving north in Africa’s copper belt, Mark Crandon marvels at the new factories and offices along the highway. “It’s crazy,” he says. “None of this was here three weeks ago.”

upermarkets and shopping malls are opening too. They’re fresh fuel for his theory that anyone can make money in this corner of Africa. “You could almost blindly open any business here and it would be a success,” he says . There’s just no competition.”

It’s an unlikely place for a foreign investor to be raving about. The Democratic Republic of the Congo is one of the world’s most corrupt, impoverished and war-torn countries. Millions have died in the military and political chaos of recent years. Yet even here, the lure of the Africa boom is proving irresistible.

In the copper-belt city of Lubumbashi, the nouveaux riches of the mining industry can be spotted at upscale businesses such as La Plage – a glitzy suburban mall with a gelato shop, high-priced supermarket and cafés, not to mention a swimming pool and an artificial sand beach with parasols and volleyball nets.

Mr. Crandon’s employer, Renaissance Partners – a unit of leading Moscow-based emerging-markets investment bank Renaissance Group – is making an aggressive gamble on the future of Congo: It is investing $50-million in the first phase of a hugely ambitious 4,000-hectare property development. Luxury homes and retail shops will soon be springing up in the planned “satellite city” of Kiswishi on the outskirts of Lubumbashi.

In both its boldness and the nationality of its creators, Kiswishi (which means “there is wealth”) represents the new face of African economic development.

The dramatic rise in trade and investment from the BRIC countries – Brazil, Russia, India and China – provides a crucial source of capital for African countries, new markets for African commodities, and cheap new technology besides.

Annual trade between Africa and the BRIC nations, led by China, has already climbed past $200-billion and is expected to reach $530-billion by 2015. Direct investment in Africa by the BRIC nations is forecast to reach $150-billion by 2015, compared to about $60-billion in 2010.

The sources of foreign investment are changing partly because BRIC investors can more easily tolerate the political risks in African countries than their counterparts in the West.

For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/report-on-business/international-business/african-and-mideast-business/africa-next-the-quest-for-africas-riches/article4562456/

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