This presents considerable challenges for the continent’s ambitious businesses. Many of these are seeking international investment to finance expansion, some even beginning to raise finance through international capital markets. Cooling enthusiasm for emerging markets as an asset class – and specifically assets linked to the region – makes a challenging job more difficult.
In many cases, however, the solution lies in differentiation. Aggregate Sub-Saharan growth figures conceal a wide divergence in performance across markets and sectors. For example, while oil exporting nations may be under pressure, the IMF expects growth of more than 6% this year in a number of markets such as Ghana, Rwanda, Côte d’Ivoire, Ethiopia, Kenya and Tanzania.
And while, say, the Nigerian or South African economies as a whole may not be expanding at the rate we have seen in recent years, there are still sectors and regions that can grab investors’ interest.
‘Africa Rising’ was a narrative that allowed many companies and countries to take advantage of positive sentiment towards the region to obtain access to the finance that has fuelled their growth. But even if some of the shine has come off of that narrative, there are still many exciting growth stories across Africa and investors willing to back them, if those stories are told in the right way.