In spite of the political upheaval in Nigeria and some other countries, investment institutions polled by the Economist Intelligent Unit (EIU) said Nigeria, Kenya were likely to bring the best investment returns within Africa over the next three years, followed by Zimbabwe, Tanzania and Ghana.
The poll said more than one in two institutional investors saw Africa as the most attractive region to invest in the next decade, with one in three expecting to put at least 5 per cent of their portfolios into the continent by 2016.
“Some 158 institutions including pension funds, hedge funds and private banks polled by the Economist Intelligence Unit (EIU) said Nigeria and Kenya were likely to bring the best investment returns within Africa over the next three years, followed by Zimbabwe, Tanzania and Ghana.
Currently, almost half of respondents have either no exposure or less than a 1 per cent allocation to Africa, where an emerging middle class and growing consumerism are seen offering the most attractive investment opportunities.
“Africa was exclusively seen as a commodity play but now there are real economic growth drivers,” said Mohammed Al Hashemi, chief executive officer of Abu Dhabi government-owned Invest AD Asset Management, which commissioned the report.
Private equity and infrastructure are expected to outpace commodities as the best asset classes for investment in Africa in the next three years.
Forty six per cent of the investors said energy and natural resources offered the best investment return over the next three years, followed by agriculture and agribusiness, construction and real estate and financial services.
The most favoured investment vehicle is multi-asset class funds, but respondents thought equity funds would give the most opportunity in the next three years