Into Africa: The Attraction to Russian Investors
Africa has 10% of the world's oil reserves, 40% of the gold, and up to 90% of the chromium and other metals.At the moment several of Russia’s largest companies as well as a number of banks are active in the continent. Gazprom in Algeria, RusAl in Nigeria and Guinea, Alrosa in Angola, metal group Evraz in South Africa are among them. Recently oil major Lukoil announced plans to invest up to $900 million in projects in Ghana, Ivory Coast and Sierra Leone.As the African middle class is getting wealthier and spending more money, experts say, this is attracting not only mining companies, but also financial organizations.Meanwhile investors can’t underestimate the economic and political risks in this developing market. There is a long history of conflicts and crises, but experts suppose the reward outweighs the risk.“The African landscape itself on the political and economic front has been changing significantly. The political environment has become far more stable, fewer conflicts, in terms of the macroeconomic story of Africa, far better economic management – all of that is contributing to making that more interesting investment destination”, according to Hasnen Varawalla from Renaissance Capital.The International Monetary Fund expects sub-Saharan Africa's economy to expand by 5.5 percent this year, and 5.9 percent in 2012. Experts predict that 7 out of the world's ten fastest-growing economies in the next five years will be in the region.