How Africa can attract more investors

The African continent has long been perceived as a risky investment destination, with issues around transparency and governance often cited as key barriers for potential investors. In a recent interview with CNBC Africa, Dion Shango, CEO of PricewaterhouseCoopers Southern Africa, highlighted the need for governments across the continent to do more to improve transparency and governance practices in order to attract capital that is seeking a viable home for investment. Shango emphasized the importance of providing accurate and consistent data to investors, noting that the availability and reliability of data are crucial factors for decision-making. He pointed to the case of Mozambique, where a lack of disclosure regarding debt levels led to negative consequences for both investors and the country itself, underscoring the need for improved transparency. Shango also addressed the issue of credit ratings, highlighting their significance in attracting investment. He noted that global funds often require a minimum sovereign credit rating for investment, making it challenging for countries like Tanzania, which lack a credit rating, to attract the right type of investors. Despite some criticisms of credit rating agencies and their role in past financial crises, Shango emphasized the importance of credit ratings in the current investment landscape. Turning to the challenge of current account deficits in East Africa, Shango highlighted the need for sound policy frameworks and consistency in their application to address these economic concerns. He noted that while current account deficits are a concern, there is a delicate balance between the need for growth and fiscal responsibility, requiring governments to make careful decisions in order to attract the right investment for sustainable development. Overall, Shango's insights underscore the importance of governance, transparency, and effective policy frameworks in attracting investors to Africa and promoting economic growth in the region.