African countries including Nigeria, Ghana, Uganda, Egypt and Zambia are attracting renewed investor interest as economic reforms begin to yield positive results, according to Dalu Ajene, Africa chief executive and head of coverage at Standard Chartered.
Speaking to Reuters, Ajene said Governments across the continent have succeeded in drawing support from export credit agencies, development finance institutions, private investors and Gulf states through measures aimed at strengthening economic stability.
The reforms include streamlining regulations, improving transparency, maintaining credible central bank policies and, in some cases, removing costly subsidies. Nigeria’s decision to end fuel subsidies was cited as one of the key reforms helping to improve investor sentiment.
Ajene noted that the financial difficulties faced by many African countries following the COVID-19 pandemic had led to a cautious approach among investors. However, he said confidence has improved significantly over the past three years as governments have strengthened their economic fundamentals.
He explained that both concessional funding and commercial investment are now flowing back into Africa, with asset managers and hedge funds showing renewed interest in local-currency sovereign debt markets in countries such as Nigeria, Ghana, Uganda, Egypt and Zambia.
The banker also pointed to increasing investment from Gulf countries, particularly the United Arab Emirates, as economic partnership agreements with African nations including Kenya, Mauritius, Morocco and Nigeria take effect. He said these agreements could unlock larger investments in sectors such as mining, energy and food security.
Ajene further defended the use of financial instruments such as total return swaps, which have been adopted by countries including Angola, Nigeria and Senegal. According to Ajene, continued reforms and improved governance are helping to make Africa a more attractive destination for international investors and development partners.