Abu Dhabi Investment Authority (Adia), the sovereign wealth fund of the emirate, opens a two-day investment conference in the UAE capital today. The event brings global long-term investors and African sovereign funds together to explore the investment potential of Africa.
The Africa Investment Summit (AIS), through a series of presentations and workshops, casts light on ways long-term asset owners can access investment opportunities in the continent, Adia said. The summit presents investors with Africa's macroeconomic outlook, public and private capital markets, infrastructure investment potential and high growth sectors.
Adia is hosting more than 180 representatives of wealth funds, institutional investors, Africa-focused asset managers, banks, corporates and supra-national agencies and companies at the event. AIS participants represent 22 countries, including seven African nations, along with senior delegates from 13 sovereign wealth funds, Adia said.
"With young and rapidly growing populations and an emerging middle class, Africa is an increasingly important and attractive market for investors," said Sheikh Hamed bin Zayed, managing director of Adia. "With their long term outlooks, sovereign wealth funds and other long-term asset owners make ideal investment partners for African organisations seeking stable capital."
Africa, regarded as the world's last frontier of growth, has a population of about 1.3 billion people and is home to major economies such as South Africa and Opec members Nigeria, Gabon, Algeria and Congo. Africa's economy is forecast to accelerate to 4 per cent this year, and 4.1 per cent in 2020, slower than that of India and China, but higher than other emerging and developing countries, according to the African Development Bank.
Sub-Saharan African economies are expected to grow 3.4 per cent in 2019 and 3.6 per cent in 2020, according to the International Monetary Fund. Higher, albeit volatile oil prices have supported the outlook for countries such as Angola, Nigeria and other oil-exporting countries in the region, according to the fund.
Africa presents investment opportunities across various sectors as countries look to modernise their infrastructures. Energy, renewables, health care, education, agriculture, rail and roads, airports, trade and logistics zones are areas open to investment. Several African countries are also trying to improve their oil and gas infrastructure and broaden their industrial base to diversify their economies.
AfDB estimates the continent’s infrastructure needs alone are between $130 billion (Dh477.1bn) to $170bn a year, with a financing gap at $67.6bn to $107.5bn.
The summit aims to "identify areas of mutual interest and seek ways to overcome barriers that are hindering long-term investment into the continent", Sheikh Hamed said. Bringing together long-term investors and sovereign wealth funds looking for joint investments and partnerships can help address financing needs and provide solutions.
Through the summit, Adia has begun an initiative where "Africa, the Middle East and Abu Dhabi can sit down and have a discussion about the opportunities that exist … and [hopefully] get some co-investments and transaction done between the two regions," Uche Orji, chief executive of the Nigeria Sovereign Investment Authority, told The National.
“This event, quite frankly, creates a market place where all the parties involved can discuss openly and in the process build understanding and trust, which is a bedrock of investments, and seek out opportunities in each other’s regions.”
Established in 1976, Adia is one the world’s largest sovereign funds, according to ranking providers, that invests on behalf of the government – after Norway and China. Adia’s investment strategy is focused on long-term value creation and it holds directly, or through its subsidiaries, investments across various asset classes including equities, fixed income, real estate and private equity and infrastructure. Adia is currently chair of the International Forum of Sovereign Wealth and a founding member of the One Planet Sovereign Wealth Fund Working Group.