COVID-19: Adventis on why it’s time to increase Africa exposure

In the midst of global economic uncertainties brought about by the Covid-19 pandemic, investment management firm Adventis remains optimistic about the investment prospects and returns in Africa. Joseph Rohm, the Managing Director and Fund Manager at Adventis, recently shared insights on why now could be the ideal time for global investors to increase their exposure to the African continent. Despite the challenges posed by the pandemic, Rohm believes that Africa's response to the crisis has been swift and proactive, setting the stage for potential growth and resilience in the region. One key factor contributing to Africa's resilience, according to Rohm, is the continent's strong GDP growth before the pandemic hit. With an average GDP growth rate of over 4%, Africa was one of the fastest-growing regions globally. While there are projections of negative growth for the region in the current year, Rohm points to a strong rebound expected in the following year. Rohm highlighted that corporate sectors in Africa have shown resilience, with sectors like telcos and financials posting strong results in the first quarter. For instance, Mauritius Commercial Bank reported earnings growth of over 20% in the same period. Despite expected slowdowns, Rohm remains confident in the overall resilience of African corporations. When discussing the impact of the pandemic on Africa, Rohm acknowledged that it is still early to gauge the full extent of the damage. He noted disparities in reported cases across different African countries, with some regions like Mauritius reporting zero cases while others, like North Africa and South Africa, experiencing a rise in cases. The continent's young population may be playing a role in the reported number of cases, a factor that Adventis continues to monitor closely. Regarding specific investment opportunities in Africa, Rohm highlighted countries like Ghana, East Africa (including Rwanda and Kenya), Nigeria, Egypt, Botswana, and Namibia as attractive markets for their equity and fixed income portfolios. While acknowledging South Africa's economic challenges and weaknesses in policymaking, Rohm emphasized that Adventis focuses its investments primarily outside of South Africa. He called for a robust response from the South African government to stimulate the country's economy and drive growth. In conclusion, Adventis sees promise and potential in various African markets and urges global investors to consider increasing their exposure to the continent.