Investing in Africa funds heavily lends itself to people who understand what the offering can add to a portfolio. It is also well suited to those still trying to understand the world of investing but willing to start small and build on their knowledge and investments. Regulation 28 of the Prudential Investment Regulations allows pension fund investors to invest up to ten percent (10%) of their assets in Africa. This is in addition to other foreign assets. To this end, we had the pleasure of hosting the Absa Asset Management (Pty)Ltd Pan-Africa franchise at our most recent monthly External Distribution Channels (EDC) lunches. The franchise is headed up by Godfrey Mwanza and Roy Motooni, as co-manager. Both individuals have extensive experience in African markets and have an inordinate amount of passion for not only the African continent but also for investments in African entities.
Godfrey set the scene by explaining that South Africans are currently underinvested when it comes to African investments. He argued that “Its an avenue where one can get diversification and most advisors want to know if it makes sense for their clients.” He further stated that there are many misconceptions about Africa. Most people view the continent as one where there is mismanagement of economies, and instability. The reality is actually that the continent, like others around the world, has a handful of controversial leaders, however, there are some great examples of success stories and everything in between. African growth is strong, especially when South Africa and Nigeria are removed. Investors can benefit significantly from the bulk of African economies, as GDP rates average over five percent (5%). Some examples of success stories on the continent are countries such as Egypt, Ethiopia, Morocco Rwanda and Tanzania as shown below.
Tsitsi Hatendi-Matika is Head: Retail Investment Specialist at Absa’s Wealth and Investment Management unit.