Africa needs investor friendly policies: World Pensions Council - CNBC Africa

Africa needs investor friendly policies: World Pensions Council

Special Report

by Trust Matsilele 0

The World Pensions Council says Africa needs investor friendly policies. PHOTOS: Financewand

A number of African economies have in the recent past been seen to renege on property rights and this is argued to have contributed to depleting foreign direct investments.

(READ MORE: Africa’s FDIs surge by 5.7% with S.Africa topping the list)

World Pensions Council’s managing director Nicolas Firzli told CNBC Africa at the just ended World Bank and IMF annual meetings that legal security was one of the pillars that Africa could use to attract disinterested investors.

“African policy makers need to walk the extra mile to reassure foreign investors of the safety of their investments and ensuring that the playing field is even,” he said.

“Property rights have to be sacred and investors should be able to see legal stability and legal security.”

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Firzli added that in some African jurisdictions, there was no oversight on how government interacted with the private sectors and that affected investor behaviour and attitude when it comes to investing in the region.

“If you are a pension investor and wants to invest in African highway or utility very often at local, provincial or national level, that African government is your landlord but is also your core investor, regulator and client,” said Firzli.

(READ MORE: Africa’s growth driven by FDIs)

He also added that the government was also the arbitrator of last resort of you have a conflict with him 10 or 15 years later which jeopardised likely investments and an even playing field.

Firzli said the infrastructure asset class was a fairly new investment space for pension funds.

“Infrastructure is referred to as a new asset class with its key characteristic as being highly illiquid,” said Firzli.

“Historically pension funds have invested traditionally in stocks, equity, bonds and to a lesser extend in real estate and private equity.” 

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