Magazine article The Spectator

Not So Dark Continent

Magazine article The Spectator

Not So Dark Continent

Article excerpt

In Bond Street tube station an ad catches my eye every morning: '140 million people, 9th largest market in the world, 42 billion tonnes of bitumen, 3rd largest movie industry in the world, Africa's fastest growing telecommunications market. Nigeria . . . it's more than what you think it is.' The effect is slightly ruined by the grammar of that final slogan, but the message gets across: anyone in the business or investment world who has written Nigeria off as nothing more than a nohope nation of clever but fraudulent letterwriters is making a mistake. The same could be said of much of the rest of Africa. It's not hard to find misery: start in Zimbabwe with Robert Mugabe's 82nd birthday party taking place in a country where average life expectancy is now only 34; move on to the Aids crisis in South Africa, the drought that hit northern Kenya last year, the war in Sudan and the child soldiers of Uganda. Yet there is a great deal more to the continent than these stories of woe.

Almost all African countries are seeing positive economic growth (six out of 53 are not) and the continent as a whole is growing at around 5 per cent a year -- not exactly China, but not bad. In fact, says David Lenigas, chairman and chief executive of Lonrho, 'there's money all over Africa': a fast-growing middle class, a core of excellent companies forced by circumstance to be efficient, rapidly improving infrastructure, a massive resource base and huge opportunities for those prepared to look below the headlines. At the most basic level, you can put a lot of recent growth in Africa down to aid, says Lenigas: 'go to the poorest village in Africa . . . it might look like a dustbowl and the kids might not be in the best of health, but they are all going to school.' Huge spending on health and education, courtesy of foreign donors, has finally begun to kick in, and a new generation of literate and ambitious children is reaching working age. But the thing making the most difference right now is resource money. Think of any commodity and you can be sure of three things: China needs a lot of it, there's a global shortage of it, and there's an African country with huge reserves of it. No wonder Chinese president Hu Jintao and his colleagues visited 48 African states in the past 12 months.

All this makes it look like the right time to be investing in Africa -- or perhaps even rebuilding a pan-African conglomerate.

That's exactly what Lenigas intends to do.

Most of us connect the name of Lonrho with the late Tiny Rowland, whose personal empire it once was. At its peak, Rowland's Lonrho had 800 businesses operating in everything from textiles and tea estates to Nairobi's famous Norfolk Hotel, and at the end of the 1980s it was making profits of £270 million a year. But by the time Lenigas took over what is now Lonrho Africa Plc last year, it was reduced to an Aim listing, a modest cash pile, a hotel in Mozambique (the Cardoso) and a shareholder list that still included several hundred irate survivors from Tiny's ultraloyal 'Barmy Army'.

An ebullient Australian, Lenigas has a history as a dealmaker, and Lonrho is not the first Aim-listed company operating in emerging markets that he has been involved with. Since January last year, with the old Lonrho on his mind, he's been making an awful lot of deals. …

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