Lonrho Column


Your Friend in Africa

As an African hotel company focused on operating hotels in Africa’s high growth economies, I’m sometimes asked where the best investment opportunities are on the continent. There is no disputing that a number of African countries currently generate greater GDP growth than most economies on the planet. What’s more difficult to decipher, is which economy’s growth is actually dependent on increasing commodity prices – fragile and potentially unsustainable growth. 

At Lonrho Hotels, we’re always looking for new ways to identify those economies that are experiencing sustainable growth. The analysis of data – GDP, inflation, unemployment, estimated household incomes etc, all provide some sense of current growth, but actually offer very little insight into a country’s future growth – growth that you can actually profit from as a new entrant. Additionally, population distorts the GDP comparisons dramatically. Equatorial Guinea comes out on top in Africa with an impressive GDP per capita of $19,300, but with a population believed to be less than 700,000, Equatorial Guinea is a small market and as analysis of previous years indicates, the growth is heavily influenced by changes in the global oil markets.

A more intuitive indicator of which countries are enjoying sustained growth in Africa and thus a growing consumer market, could be measured by how widespread the use of technology is. In particular, participation on social media platforms such as Twitter and Facebook. When we recently looked at the countries with the highest Facebook usage, we were surprised by how similar that list was, compared with our list of countries, where we have established or intend to establish Lansmore and easyHotels.

It’s no coincidence that some of the biggest Facebook markets in Africa – DRC, Nigeria and Ghana – we also regard as amongst the most attractive investment markets. Contrasting country economies by those that have a large number of social media participants, could well be a useful means by which to identify sustainable economic growth.

Ewan Cameron – CEO: Lonrho Hotels

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