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Sponsored: The Africa opportunity: balancing risk and reward

Africa / 05-07-17 / by

As growth opportunities go, the massive potential on offer in Africa will not be unnoticed, but it has been underappreciated for a long time now for a variety of reasons. In this article, Paul Cardoen, CEO of FBNUK, offers his insight into the commercial opportunities African markets offer those who can navigate the region’s challenges.


While the potential of Africa has been the subject of much commentary in recent years, the continent still appears to be lagging behind other emerging markets when it comes to attracting foreign investment. The United Nations (UN) World Investment Report 2017 said Africa saw foreign direct investment (FDI) flows of US$59bn in 2016, compared to US$142bn in Latin America and the Caribbean, and US$443bn for developing Asia.1

Despite Africa’s smaller share of FDI relative to the rest of the world, FDI flows are going into markets such as Nigeria, Mozambique, South Africa, Angola and Côte d’Ivoire, and these collectively comprise 37% of FDI market share in Africa.2 In terms of sectors, Africa is diverse. While commodities continue to dominate FDI flows, foreign investors are looking at infrastructure, agribusinesses, financial services, technology and telecommunications, and consumer products as they seek medium to long-term returns.

Global trade figures also suggest that the potential of the African continent remains largely untapped, accounting for a mere 2.4% of global exports, with Sub-Saharan Africa comprising just 1.7%,3 but Paul Cardoen, CEO of FBNUK, believes that the situation may change very quickly. “While Africa is currently a marginal player in global trade, there is great growth potential – particularly as the region improves its agricultural productivity, and develops niche and high-quality products. The demographic figures and trends – particularly the emergence of a middle class – could also spur an increase in intra-regional trade.”


The opportunity

Emerging markets present significant opportunities for foreign investors. Cardoen points out that forward-thinking investors already sense that Africa will deliver impressive prospects. He says: “While capital flows entering the region remain incremental, this also means there are rich pickings for savvy investors.” In 2015, FDI into Africa accounted for just 8% of the global total FDIs.4

The sources of this investment into Africa are varied, although it is predominantly driven by flows from Western Europe from a combination of portfolio and strategic investors. Those engaging in FDI financing in the African markets include development financial institutions, who typically possess preferred creditor status, and can supply cheap financing to private sector enterprises. Equally, major trading houses looking for long-term commodity sources are also pivoting towards Africa in increasing numbers.

Private equity managers, many of whom are looking to invest their record sums of dry powder, have refocused their efforts on the African market with around US$16bn being allocated into the region since 2011.5

Many investors remain bullish on Africa. An EY study found that investors – who already have a footing in Africa – described the continent as the most attractive investment destination in the world whilst 81% predicted Africa would become even more attractive during the next three years.6 There is certainly solid grounding for this optimism with eight of the world’s top 20 fastest growing economies being located in Africa.7


Winds of change

Positive change in Africa is indeed gaining momentum. A growing number of countries are holding multiparty elections which meet international standards, while governance has clearly undergone a constructive evolution. Botswana, for example, is the top ranked African country in the World Bank’s Governance Indicators, putting it on a par with Ireland.8

However, full-scale social reforms, such as integrating women into leadership roles, needs to be advanced further across several markets. Cardoen admits that this is still a challenge for the region – something that he and his team are cognizant of. “We see the need for us to help spur positive change, and lead by example. FBNUK, is actively promoting women to senior roles. 38% of our executive committee are female, while there has been a 22% increase in women within management positions over the last year.”

Cardoen believes that diversity is a driver for success in business, as evidenced by McKinsey data which found companies in the top quartile for gender diversity are 15% more likely to have financial returns above their industry medians.9 He says however that “gender diversity is something that should be encouraged not just in Africa but globally”.


Managing risk

But Africa is not a market where investors can go without impediment. It is a challenging region for foreign investors to gain a foothold, with entry into many African markets requiring careful thought and implementation, and a strong service provider partner to help guide the way.

FDI flows into African markets are occasionally hampered by some vulnerabilities that must be identified and addressed by investors. Cardoen says: “CEOs and CFOs – while mindful of delivering shareholder value by increasing Africa exposure – have to be aware of the risks. While there is often a reality perception gap around risk in Africa, there are some ingrained issues that cannot be ignored such as weak infrastructure and an absence of a supportive legal framework. But these risks are not different from those in other emerging markets – the only difference is in the intensity of the risks.”

There are other factors that may discourage FDI flows. Liquidity restrictions have been imposed in countries such as Ghana or Uganda, but less so in Nigeria, Kenya or South Africa. The absence of secondary markets in these economies can also limit liquidity. There is also an absence of medium and long-term bond market activity, in addition to a lack of benchmark debt instruments.

FX risk has also deterred some investors from enlarging their Africa presence. Foreign investors have been reluctant to gain portfolio exposures to Nigeria due to concerns around currency controls and FX restrictions, implemented because of unstable macroeconomic conditions arising from the drop off in commodity prices. However, FX controls in Nigeria have been eased recently but fears of cash being trapped in certain African markets is a risk institutions are reluctant to incur.

Regulations in African markets are not always to the advantage of international investors. There is limited standardisation of rules across individual markets, while efforts to bring about integration have been slow. Many jurisdictions are saddled with weak regulatory infrastructure and slow legal processes, and this is a natural concern for international investors.
While investors can of course have an ‘Africa’ strategy, they must consider the diversity of risks in each country, and have a tailored approach to managing the challenges in those jurisdictions.


Experience and expertise

Counterparty risk is something international investors with exposure to frontier markets must always consider. Cardoen advises investors to identify counterparties in these markets which have strong product depth and capabilities, as well as risk management standards that are in line with universally accepted benchmarks. He says: “We at FBNUK take risk management seriously, that’s why our strategy takes us to African countries where we have operations and local people on the ground so that we can properly monitor the various risks. Having a deep knowledge of individual countries, sectors and market players is critical, and this helps us drive industry leading governance, risk management and controls.”

Other providers may lack strong compliance processes to deal with the fluidity of local or even global regulations. Working with a counterparty in emerging and frontier markets which prides itself on following the rules and promoting transparency is absolutely critical, particularly when ensuring compliance with supply chain risk.

A handful of financial institutions have left the continent citing compliance challenges. Such actions are short-termist, mainly because Africa is a promising growth region, and such difficulties faced on the continent are not that different to the problems endured in other new markets. “Keeping on top of compliance matters in African markets is something banks can achieve by having robust infrastructure, policies and procedures, which is something we at FBNUK are heavily focused on,” says Cardoen.


The balance

Striking the balance between risk and reward can be daunting, but it is not impossible. A strong bank with deep-rooted capabilities and market knowledge can help foreign investors navigate their way through Africa, along with its embedded complexities, and related opportunities. Cardoen concludes: “FBNUK is a subsidiary of the First Bank of Nigeria – the largest and most respected banking institution in Nigeria. We benefit from our parent’s rich heritage of operating in the region for over 125 years. As the offshore banking and international treasury centre for the Group, we work both through First Bank of Nigeria’s extensive African network, as well as FBNUK’s branches in London, Paris and Lagos. We have the experience and expertise to help our clients navigate the unique challenges of Africa. We have the longevity and the commitment to the African continent – it is our core business, and not just part of a global, opportunist expansion exercise.”



  1. United Nations. 2017. World Investment Report 2017. [ONLINE]
  2. FDI Intelligence. 2016. The Africa Investment Report 2016. [ONLINE]
  3. Dr Evita Schmieg, SWP. 2016. Africa’s Position in Global Trade. [ONLINE]
  4. FDI Intelligence. 2016. The Africa Investment Report 2016. [ONLINE]
  5. FT. 2017. Private equity falls short in spurring African development. [ONLINE]
  6. EY. 2016. EY’s Africa Attractiveness Program 2016. [ONLINE]
  7. FDI Intelligence. 2016. The Africa Investment Report 2016. [ONLINE]
  8. FDI Intelligence. 2016. The Africa Investment Report 2016. [ONLINE]
  9. Mckinsey & Company. 2015. Why diversity matters. [ONLINE]


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Established in 2002 and with offices in London and Singapore, Exporta Publishing & Events Ltd is the world’s leading trade and trade finance media company, offering information, news, events and services for companies and individuals involved in global trade.

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This Data Protection Policy explains when and why we collect personal information about people who visit our website, how we use it, the conditions under which we may disclose it to others and how we keep it secure.

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We collect certain personal data from you, which you give to us when using our Site and/or registering or subscribing for our products and services. However, we also give you the option to access our Sites’ home pages without subscribing or registering or disclosing your personal data.

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On some Sites, Exporta Publishing & Events Ltd collects personal data such as your name, job title, department, company, e-mail, phone, work and/or home address, in order to register you for access to certain content, subscriptions and events. In addition, we may also store information including IP address and page analytics, including information regarding what pages are accessed, by whom and when.

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Where, as part of our Site services, we enable you to post information or materials on our Site, we may access and monitor any information which you upload or input, including in any password-protected sections. Subject to any necessary consents, we also monitor and/or record the different Sites you visit and actions taken on those Sites, e.g. content viewed or searched for. If you are a registered user (e.g. a subscriber or taking a trial), when you log on, this places a cookie on your machine. This enables your access to content and services that

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Please see paragraph 5 below for more information on cookies and similar technologies and a link to a page where you can turn them on or off.

3.      Marketing

Some of your personal data collected under paragraphs 1 and 2 above may be used by us to contact you by e-mail, telephone and/or post for sending information or promotional material on our products and/or services and/or those of our other group companies.
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4.      Profiling

We may analyse your personal information to create a profile of your interests and preferences so that we can contact you with information relevant to you.

5.      Cookies and similar technologies

All our Sites use cookies and similar technical tools to collect information about your access to the Site and the services we provide.

What is a cookie?

When you enter some sites, your computer will be issued with a cookie. Cookies are text files that identify your computer to servers. Cookies in themselves do not identify the individual user, just the computer used.

Many sites do this whenever a user visits their site in order to track traffic flows, recording those areas of the site that have been visited by the computer in question, and for how long.

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Why do we use cookies?

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E-mail tracking is a method for monitoring the e-mail delivery to those subscribers who have opted-in to receive marketing e-mails from GTR, including GTR Africa, GTR Asia, GTR Americas, GTR Europe, GTR Mena, GTR eNews, Third party e-mails and GTR Ventures.

Why do we track e-mails?

So that we can better understand our users’ needs, we track responses, subscription behaviour and engagement to our e-mails – for example, to see which links are the most popular in newsletters. They enable us to understand the consumers journey through metrics including open rate, click-through rate, bounces and unsubscribes. Any other purposes for which Exporta Publishing & Events Ltd wishes to use your personal data will be notified to you and your personal data will not be used for any such purpose without obtaining your prior consent.

How do you track GTR eNewsletters?

To do this, we use pixel GIFs, also known as “pixel tags” – these are small image files that are placed within the body of our e-mail messages. When that image is downloaded from our web servers, the e-mail is recorded as being opened. By using some form of digitally time-stamped record to reveal the exact time and date that an e-mail was received or opened, as well the IP address of the recipient.

7.      Consents and opt-outs

You can give your consent to opt-out of all or any particular uses of your data as indicated above by:

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To turn cookies and similar technologies on and off, see the information in paragraph 5 above. Any questions regarding consents and opt-outs should be sent by e-mail to or by writing to Data Protection Officer at, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, United Kingdom. Alternatively, you can telephone our London headquarters at +44 (0) 20 8673 9666.

8.      Disclosures

Information collected at one Site may be shared between Exporta Publishing & Events Ltd and other group companies for the purposes listed above.

We may transfer, sell or assign any of the information described in this policy to third parties as a result of a sale, merger, consolidation, change of control, transfer of assets or reorganisation of our business.

9.      Public forums, message boards and blogs

Some of our Sites may have a message board, blogs or other facilities for user generated content available and users can participate in these facilities. Any information that is disclosed in these areas becomes public information and you should always be careful when deciding to disclose your personal information.

10.  Data outside the EEA

Services on the Internet are accessible globally so collection and transmission of personal data is not always limited to one country. Exporta Publishing & Events Ltd may transfer your personal data, for the above-listed purposes to other third parties, which may be located outside the European Economic Area and/or with a different level of personal data protection. However, when conducting transfers, we take all necessary steps to ensure that your data is treated reasonably, securely and in accordance with this Privacy Statement.

Who has access to your information?

Confidentiality and Security of Your Personal Data

We are committed to keeping the data you provide us secure and will take reasonable precautions to protect your personal data from loss, misuse or alteration.

However, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our Site; any transmission is at your own risk. Once we have received your information, we will use strict procedures and security features described above to try to prevent unauthorised access.

We have implemented information security policies, rules and technical measures to protect the personal data that we have under our control from:

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All our employees, contractors and data processors (i.e. those who process your personal data on our behalf, for the purposes listed above), who have access to, and are associated with the processing of your personal data, are obliged to keep the information confidential and not use it for any other purpose than to carry out the services they are performing for us.


Everyone who works for or with Exporta Publishing & Events Ltd has some responsibility for ensuring data is collected, stored and handled appropriately. Each team handling personal data must ensure that it is handled and processed in line with this policy and data protection principles. However, the following people have key areas of responsibility. The board of directors is ultimately responsible for ensuring that Exporta Publishing & Events Ltd meets its legal obligations.

Name of Data Controller

The Data Controller is Exporta Publishing & Events Ltd. Exporta Publishing & Events Ltd is subject to the UK Data Protection Act 1998 and is registered in the UK with the Information Commissioner`s Office.

How to access, update and erase your personal information

If you wish to know whether we are keeping personal data about you, or if you have an enquiry about our privacy policy or your personal data held by us, in relation to any of the Sites, you can contact the Data Protection Officer via:

  • By writing to this address: Data Protection Officer, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, UK
  • Telephone: +44 (0) 20 8673 9666
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Upon request, we will provide you with a readable copy of the personal data which we keep about you. We may require proof of your identity and may charge a small fee (not exceeding the statutory maximum fee that can be charged) to cover administration and postage.

Exporta Publishing & Events Ltd allows you to challenge the data that we hold about you and, where appropriate in accordance with applicable laws, you may have your personal information:

  • erased
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  • completed

Disclosing data for other reasons

In certain circumstances, the Data Protection Act allows personal data to be disclosed to law enforcement agencies without the consent of the data subject. Under these circumstances, Exporta Publishing & Events Ltd, will disclose requested data. However, the Data Controller will ensure the request is legitimate, seeking assistance from the board and from the company’s legal advisors where necessary.

Changes to this Privacy Statement

We will occasionally update this Privacy Statement to reflect new legislation or industry practice, group company changes and customer feedback. We encourage you to review this Privacy Statement periodically to be informed of how we are protecting your personal data.

Providing information

Exporta Publishing & Events Ltd aims to ensure that individuals are aware that their data is being processed, and that they understand.

  • How the data is being used
  • How to exercise their rights

To this end, the company has a privacy statement, setting out how data relating to individuals is used by the company. This is available on request and available on the company’s website.

Review of this policy

We keep this Policy under regular review. This Privacy Statement was last updated in April 2018.

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