Brigg Macadam on what the Russia-Ukraine conflict means for SSA economies

Geopolitical tensions between Ukraine and Russia have had a ripple effect across global economies, with Africa emerging as a potential beneficiary, particularly in the commodities and agriculture sectors. Greg Swenson, the founding partner at Brigg Macadam, a London-based investment bank specializing in infrastructure projects in Africa and the Middle East, shared insights on the impact of the Russia-Ukraine conflict on African economies. The recent surge in commodity prices, driven by the crisis, has led to increased export earnings for countries in sub-Saharan Africa, positioning the continent for growth opportunities in the long term. Swenson emphasized the importance of viewing Africa as a lucrative long-term investment destination despite the short-term gains driven by soaring energy prices. He highlighted two key trends resulting from the conflict that are likely to shape investment strategies in Africa. Firstly, the crisis has underscored the significance of energy independence and the imperative of diversifying energy sources to reduce reliance on Russian natural gas. This realization is expected to drive long-term investments in energy infrastructure across the continent. Secondly, the disruption in grain exports from Russia and Ukraine has highlighted the importance of food security, presenting investment opportunities in agricultural production, logistics, and processing in sub-Saharan Africa. Swenson noted that an estimated 25-30% of global grain imports come from the two conflict-affected countries, creating a demand for alternative food sources and supply chains. The interview also explored the implications of the crisis on foreign investment in Africa. Swenson emphasized the role of development financial institutions (DFIs) in driving capital inflows to the region. He stressed the need for increased FDI to address energy and food security challenges, which have now become key priorities in light of the Russia-Ukraine conflict. Swenson highlighted the sectors garnering significant investor interest in Africa, including agriculture, energy, social housing, and mobile telecommunications. He cited examples of ongoing projects in Malawi and Mozambique that focus on inflation-adjusting mechanisms and sustainability measures to mitigate economic risks. Swenson expressed optimism about the long-term growth prospects in sub-Saharan Africa, particularly in sectors interconnected with energy and agriculture. The interview concluded with a positive outlook on investment opportunities in the region, driven by the interconnected ecosystem of housing, agriculture, and energy sectors. Swenson's insights shed light on Africa's potential to attract capital inflows and foster sustainable development amid geopolitical uncertainties.