“I think investors are looking at holistic factors. Firstly, before any company makes an investment, they look at returns as well as the risks that comes with it,” Tryphosa Ramano, President of the Association for Black Securities and Investment Professionals (ABSIP) told CNBC Africa on Tuesday.
She explained that the type of risks which investors look at include governance, legislation and stability. Also, investors have different types of risk appetites. For instance, some may even have a higher political tolerance than others.
“It is important to note that all countries have their own risks, including developed countries,” Ramano added.
Another important factor is that each African country grows at a different rate.
“You have some countries producing growth rates of more than five per cent,” she added.
For instance, the telecommunications industry in Rwanda is so advanced that they already operate mostly on fourth generation (4G) mobile phone communication technology whereas the majority of South Africa still runs on 3G.
“We have some countries much further ahead while others are lagging behind,” said Ramano.
Despite the various growth rates, each country also comes with its own unique set of regulations and political landscape.
“Certain sectors are highly regulated, like telecommunications while other sectors are not regulated at all such as the manufacturing of cement,” she explained.
While these factors may seem like they deter investors from financing African projects, statistics show that Africa is experiencing a huge growth rate compared to the developed world.
“Africa is definitely open for business,” added Ramano.