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Nigeria tops Africa foreign reserve ranking
WITH an estimated $43.307 billion in her coffers Nigeria now leads her African counterparts in the ranking table of countries foreign reserves.
In the Africa ranking, Nigeria is followed by South Africa ($29.334 billion) Botswana ($7.445 billion) Angola ($6.750 billion) and Sudan with $3.552 billion).
These are Equitorial Guinea, Kenya, Tanzania, Ghana and Cote d'Ivoire followed with $2.680 billion, $2.375 billion, $2.098 billion and $1.400 billion in the order.
The United States of America is ranked 20th in the world with foreign reserves totaling $65.855 billion, the United Kingdom (U.K) is 13th with $95.515 billion.
The statistics was made available to The Guardian by Mr. Zemedeneh Negatu, managing partner with Ernst and Young, a leading global provider of professional services to the transportation industry with over 130,000 employees worldwide, including more than 4,000 in Africa.
Negatu, while presenting a paper at the just concluded 16th yearly African Aviation Finance conference held in Nairobi, Kenya disclosed that the Foreign Direct Investment (FDI) in Africa has been consistently higher than in most regions of the world.
He explained that since 1990, the rate of return of FDI in Africa has averaged 29 per cent, higher than in all other regions, in many years by a factor of two.
"The great secret of doing business in Africa is that returns on investment on the continent typically reach 30 per cent compared to 10 per cent in European Union (E.U). Substantial businesses that do not just depend on resource extraction are cropping up, and educated Africans are increasingly looking for opportunities to start new ventures at home, instead of moving to the U.S. and Europe," he added.
According to him, South Africa replaced the U.S. and France as the largest foreign investment spender on the continent as far back as 1998, with South Africa companies making 350 new investments in the last three years, compared to 230 between 1996 and 2000.
This, he said, included investments in telecommunications, information technology, banking, media and retail among others.
The finance and aviation expert noted that between 1995 and 2005, African stocks showed compound annual growth of 22 per cent.
"Last year, the stock market in Kenya rallied 46 per cent and the local index up to nine times in dollar terms over the last 10 years. In 2006, equities in Morocco were up 75 per cent, 69 per cent in Uganda and 55 per cent in Botswana. Nigeria's stock market capitalization has doubled over the months to about $45 billion", he added.
He further disclosed that of the 20 fastest growing economies in the world, Africa has six.
He, however, cautioned that African economies must grow at a yearly rate of about seven per cent at par with India and China in order to meet their target of cutting poverty in half by 2015.
Negatu added that the best option for investing the $1.3 trillion in foreign currency reserves would be to invest in emerging markets, especially in Africa.
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