8 African Countries In The Forefront For Formal Retail Investment In 2017

Kurt Davis Jr.
Written by Kurt Davis Jr.
Salvatore Ferragamo store, Katameya Mall, Cairo, Egypt. Photo: cpp-luxury.com

Egypt

Egypt endured a tough 2016. Cross-border M&A activity, as a barometer of retail investment interest, was down around 50 percent in 2016. Ever since the Airbus A321, operated by the Russian airline Kogalymavia, was brought down by a bomb in Egypt’s Sinai Peninsula on October 31, 2015, the storyline on Egypt has trended south with concerns around security and political stability.

But midway into 2017, the Egyptian economy will grow north of 4 percent during 2017 and average north of 5 percent in 2018 and 2019. Cross border M&A activity is expected to triple (in value) in 2017, with investors seeing four positives in the current market.

First, asset prices dropped significantly at the end of 2015 and through 2016 as many investors angled to exit the country. Secondly, accessing both a generally rebounding North Africa and Middle East can best be achieved through retail and consumer goods companies in Egypt. Third, Egyptian companies possess strong networks in sub-Saharan Africa and provide exposure to such markets for international investors. Lastly, diversification is a growing interest for Egyptian CEOs with concerns over currency issues, foreign reserves, and long-term instability in the local market.