Angola is amongst future African “giants” and Mozambique amongst those implementing most reforms, EIU says

2 July 2012

Africa is becoming increasingly important for international business and, whilst Angola is positioned to become a bigger “giant” than South Africa, Mozambique is amongst the African countries to implement the most reforms, according to the Economist Intelligence Unit (EIU).

In its latest report, “Into Africa: Emerging Business Opportunities,” the EIU places Mozambique amongst the countries that are expected to see growth of between 7.5 percent and 10 percent between 2012 and 2016, whilst Angola will post growth of between 5 percent and 7.5 percent.

Although the weight of the continent within the world economy is small, and estimated at just 3 percent, the trend is for growth and a recent EIU survey of multinational companies showed that the continent is seen as having the biggest potential amongst new markets and is a target for long term investment.

China has strongly increased its weight in trade and investment due to its “need for resources, but also to its long term policy,” of internationalisation, the EIU said.

This policy is “based on the need to develop consumer markets that will buy Chinese goods and services not today, not even tomorrow, but after tomorrow,” and this is a “strategy of transferring low value added industry abroad, to markets where real salaries are lower,” than in China.

The EIU identifies agriculture and agri-industry as key areas of development given that Africa is a continent that imports food “when it ought to be supplying the world,” with an area of arable land calculated at 40 percent of the world total.

Another opportunity area is infrastructure, such as railroads, roads, and electricity, despite, “a substantial amount of work having been done in the last decade with the help of Chinese investment.”

“Chinese companies are making roads, refurbishing railways, ports and airports. But much more needs to be done,” said the EIU. (macauhub)