SCB: investment in Africa vital to meeting SDG deadlines
Following a report conducted by Standard Chartered Bank (SCB) the organisation found that currency only 3% of the world’s top 300 investment firms are investing their AUM into Africa. This lack of investment is expected to put the chances of meeting the 2030 SDG deadlines at risk. However, positively 93% of those who are investing in Africa Plan to increase their investments in the future.
Investment shortfalls and challenges
Elsewhere in the report, SCB identified that 64% of the firms’ AUM is invested in developed markets (Europe and North America) while only 3% is invested in Africa, 2% in the Middle East and 5% in South America.
SCB details that the risks posed by investing in emerging markets was flagged as a high risk by two thirds, while 42% believe the same for developed markets.
In addition to being identified as high risk, 53% believe that returns from investments in Africa are low/extremely low, with 59% identifying that they are put off from investing due to a lack of in-house specialist teams.
However, those that are already investing in after are in contrast optimistic about the region. With 93% commenting that they are likely to increase investments in the future, as well as 54% of African investors highlighting that their investments performed as well as - or better than - their developed market investments in the last three years.
“There is still an investment gap in Africa to realise the SDG’s and this creates an opportunity for us to make a difference where it matters the most. “A significant surge in private-sector investment – alongside public investment and commitments – will be required to bridge the gap and hit the SDG targets over the next ten years. Right now COVID-19 has made the imperative to act even stronger in the region. There is no single answer to The $50 Trillion Question, but it is evident that investors need to expand their focus beyond developed markets. Africa, and emerging markets generally, offers investors a unique opportunity: strong returns combined with the chance to have a significant, positive impact in the long term,” commented Sunil Kaushal, Regional CEO, Africa & Middle East, Standard Chartered.