Investors are wise to revisit the world’s forgotten continent.
Question: Is Africa a good investment?
Michael Landau: Africa is a very much an untapped economy. When you’ve got, you know, close to a billion people, there’s just, there’s got to be tremendous opportunity over there.
But one has to be careful. You know, you got to be careful what you invest, how you invest. And it’s got to be done smartly. I’m a big believer in Africa and I’ve made major investments in Africa. And I believe that if other countries take up MAP, obviously, you know, I think these economies are going to grow exponentially.
Just using Uganda as an example, if we’re able to take the billion-dollar salary that they pay on a yearly basis, and that money is going to flow through a formal sector through our system. It’s going to go through the post bank to be able to pay all the salaries and the pensions of a billion dollars.
Currently, that billion dollars is going straight into the informal economy. When that money, now, starts to go into the formal economy because it’s going to go through a formal banking sector, we’re going to be providing lots of ways for people to use their money electronically. So 30, 40, who knows, maybe 50, 60 percent of that money, ultimately, is going to start sticking in the float, in that formal economy. So it means that there’s going to be $3, $4, $500 million a year and accumulating exponentially, that is going to be available to help these countries go, build factories in rural areas. Instead of the mangoes rotting, they’ll build a plant in the rural area to be able to make mango juice.
So there’s going to be tremendous opportunities as the population gets richer, as they have needs for processing. I mean, Africa got tremendous opportunities. Uganda, for example, they got some of the most fertile land in the world. So there’s tremendous opportunity for growing things and then for processing the things in the country that it’s growing. So, for example, Uganda, whether it’s coffee, whether it’s mangoes, whether it’s bananas, there are so many opportunities to grow things there. And then, if you were to process, the processing is going to be much cheaper in Uganda than it is to do it elsewhere. The government will give grants. They’ll give tax holidays to people. Salaries are lower than they are in other places in the world.
So there are tremendous opportunities for people to invest. The AGOA agreement between United States and Africa, which allows imports to the United States from Africa to come in duty-free. So you just got to have a little bit of faith. Anybody who wants me to help introduce them to the right people so they can have the faith in the country or speak to me so I can give them, you know, kind of beyond, you know, kind of this interview’s confidence level, there are tremendous opportunities. I would strongly advise people against any form of corruption whatsoever because it’s just not necessary and it muddies the waters in terms of the way people need to look doing business over there. So they shouldn’t think not to go because they’re just going to have to get involved in corruption and bribery, et cetera, it’s not true. Don’t, that should not be a reason why big corporates shouldn’t go out there. Individuals who got some, you know, kind of extra money or want to feel that they want to do good, there’s tremendous opportunities to make money and do good in Africa.
Question: Can you give us an economic success story in Africa?
Michael Landau: Rwanda is very much a success story. They have a very strong focus on technology. They have a president who’s extremely focused on driving his country forward. And that’s a country that we’re hoping to be working in, you know, kind of in the short-term. But that’s clearly kind of a success story of taking a country that was at the, below death’s door and literally forcing a success. And, so that’s one country which I believe is a tremendous success.
And there are other, there are other examples out there. There are tremendous opportunities, you know, kind of in sub-Saharan in Africa, of countries where have taken a more positive approach to the use of ICT. But I would say, Rwanda is probably one of the most aggressive in that. I don’t want to talk to many of the other countries because they don’t know enough about them.
South Africa is clearly a leader in using technology. Our technology is developed, primarily, kind of out of South Africa. So there are clearly leaders in the space and they’re doing things but South Africa is a bit of a different story to many of the other countries in sub-Saharan Africa. So there’s clearly a lot of opportunity and there’s lot of desire on the part of these countries to evolve and use technology as they move their countries into the 21st century.
Recorded on: May 15, 2009
