Determinants for investor perceptions of African markets

Abstract

Background:The
African
continent
has
shown
significant
social
and
economical
improvements
during
the
past
decade.
This
has
increased
the
incitements
for
investors
to
enter
the
continent.
However
great
internal
differences
still
exist
and
the
attractiveness
of
different
regions
and
sectors
differs
widely
from
an
investor’s
perspective.
Markets
Speaking
is
a
Sweish-­‐Ghanian
consultancy
who
has
specialised
in
assisting
investors
targeting
Africa.
The
focus
of
their
services
lies
in
providing
qualitative
market
research.
In
order
to
further
develop
their
services
Markets
Speaking
has
identified
the
need
for
an
extensive
mapping
of
the
key
determinants
that
affects
investors’
decisions
when
investing
in
Africa.
Purpose:
The
purpose
of
this
thesis
is
to
identify
the
key
determinants
of
an
attractive
African
market
and
sector
from
an
investor’s
perspective.
Further,
the
current
trends
among
investors
targeting
Africa
will
be
mapped.
Objective:
The
objective
of
this
thesis
is
to
present
a
platform
of
information
to
build
Market
Speaking’s
future
services
on.
Method:
This
study
has
been
done
in
two
stages.
First
a
theoretical
framework
was
established
in
order
to
provide
a
knowledge
base
of
possible
factors
that
may
have
an
impact
on
investors
targeting
African
markets.
These
factors
were
then
examined
through
extensive
literature
reviews,
statistical
data
and
interviews
with
representatives
from
the
private
equity
sector.
Conclusions:
Given
the
vast
differences
in
investor
strategies
it
is
hard
to
identify
an
attractive
market
or
country
that
suits
every
investor.
However,
there
are
some
key
determinants
that
are
identified
through
literature
as
well
as
through
interviews
as
having
great
influence
on
the
attractiveness
of
a
market.
A
few
of
these
key
determinates
are
high
economical
growth,
availability
of
qualitative
infrastructure
and
ability
to
rely
on
institutions
and
government.
Further,
it
can
be
concluded
that
the
access
to
knowledge
and
experience
of
the
local
markets
are
of
great
importance
for
investors
when
entering
Africa.
Therefor
joint
ventures
and
M&A´s
were
identified
as
preferable
modes
of
entry.
The
preferred
target
company
has
ideally
been
active
for
a
number
of
years
and
hence
possesses
knowledge
and
experience
of
the
local
market.

• author: Hamilton, Kristian
• supervisor: Bertil Nilsson
• organization: Production Management
• course: MIO920
• year: 2011
• type: M1 - University Diploma
• subject: Technology and Engineering
• keywords: Africa, Private Equity, Foreign Direct Investment
• other publication id: 11/5401
• language: English
• id: 2199039
• date added to LUP: 2011-10-25 16:27:23
• date last changed: 2011-10-25 16:27:23