Africa can’t shake FDI risk perceptions

Author: Danielle Myles | Published: 2 Mar 2015
Macro risks in Africa are a matter of interpretation

Political instability is slowing investment into Africa’s most promising markets and bilateral investment treaties (BIT) are doing little to ease concerns, according to the general counsel of a global conglomerate.

The market is, however, working to address more tangible macro risks such as regime change and government intervention through local content rules.

There is growing evidence that political risk in many sub-Saharan African countries is overhyped, yet many foreign investors still practice caution when assessing local targets. Speaking at an International Bar Association (IBA) event in London last week, Hinduja Group general counsel Abhhjit Mukhopadhay explained why.

"One of the reasons why international investors like us are holding back investments in Africa is really due to the political situation and stability of the governments," he said at IBA’s BRICs to MINT conference.

KEY TKEAWAYS

Despite African countries’ improvements in governance...