Africa: now is the time to invest: Robert Hersov – chairman and CEO, Invest Africa

‘We think the risk is actually very low relative to the reward.’

SIKI MGABADELI: In conversation now with Robert Hersov who is Founder and Chief Executive of Invest Africa. Robert, thanks so much for your time today.

Robert Hersov: Thank you.

SIKI MGABADELI: What is Invest Africa?

Robert Hersov: Well, I live in London at the moment but I’ve always been passionate about Africa. I cannot help, but I keep coming back, my family is here, I love it and it’s not just South Africa where I’m from but the rest of Africa as well. And I set up Invest Africa because I truly believe Africa as a continent, time has come, and the time is now. Africa has improved incredibly over the last 10 years from a governance point of view and from an investment environment point of view, and I believe we need to get the message across to the international money that now is the time to invest, that in 10 years’ time they will have missed the greatest investment opportunity of their lifetime.

SIKI MGABADELI: The difficulty for many people who come from outside of the continent is that they look at the continent as one place, homogenous, they don’t quite know where to start. So what do you say to them?

Robert Hersov: I break it down into regions, so, you know, there’s Southern Africa region and the East African region and the West African region and that’s how I look at it and within those regions there are obviously pillars, country pillars and industry pillars and I try and simplify it in that way. But it is a mistake to market Africa as one investment area. It’s just too big, 54 countries.

SIKI MGABADELI: Ok. So what is your approach then for investment? I mean we’re here obviously at the Investing in Africa Mining Indaba, but mining is such an old industry. Is that where the opportunities are?

Robert Hersov: Not right now, although if you’re a contrarian investor which is often an intelligent way to go, you’d be considering investing in mining over the next three years, because there are definitely cheap assets, but where we’re most excited as sort of consumer focused areas are finance, insurance, retail, food, logistics, transportation, we’re really excited about that, and I think where we’re positioning ourselves as Invest Africa is connecting dynamic capital with dynamic opportunities, and the big opportunity is the following: The rewards are there, Africa is booming, you can make a lot of money, but the perception of risk still remains and we think that’s the opportunity. We think the risk is actually very low relative to the reward. Unlike Russia and China where there is, you know, less reward and a lot more risk, and so we tell the story internationally to investors; come and have a look; come and meet the people; come and understand what’s happening and you’ll understand the risk is a lot lower than you think.

SIKI MGABADELI: Will that be country dependant? I mean let’s talk about the approach that African countries, African governments have towards investors. Are we a welcoming continent?

Robert Hersov: Country by country, it does depend. But what’s happening is it’s trending in the right direction. So there are countries that are putting in very good investment and regulatory and investment environment. I mean Rwanda is the great example. Rwanda is a better place to do business than Italy, without a doubt. Rwanda is the Switzerland of Africa. You can open a company in six hours, you can pay your taxes online. The government ministers, if they say they are going to meet you at ten o’clock, they’re there at ten o’clock. And those best practices are flowing to other countries. Other countries are going, “wow”. If Rwanda can do it, we can do it. Investors like Rwanda, we have more resources, more things to invest in. If we just implement those practices, the money will come here, and that’s the right way.

SIKI MGABADELI: Now, South Africa always in the past seen, well, since 1994 at least, as the gateway to Africa, anyone who wants to travel and invest in Sub-Saharan Africa sets up base here. Is that still the case, given our electricity shortages, for example, and I suppose also things like the inability to open up a business in six hours because we have so much red tape.

Robert Hersov: Unfortunately, South Africa’s no longer the gateway into Africa. You know the other African countries have realised that and have taken advantage of that, so I’m passionate about South Africa, I’m heavily invested here, I will continue to invest and I do think this country is on a solid footing and heading in the right direction with some challenges on the way, but you know, we can easily get it right here, we’re a vibrant democracy, we have intelligent people, we can make small changes, it can make a big difference.

SIKI MGABADELI: That was Robert Hersov who is Founder and CEO of Invest Africa.

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