The perception about African economies appears to be changing as investors are increasingly taking an interest in participating in Africa’s capital markets through the use of Depositary Receipts (DRs).
An analysis of a series of surveys of several manufacturing firms around the developing world shows that at the margin, capital investment had a higher return in Africa. Nigeria, for example, has a debt-to-GDP ratio of only about 21 per cent, compared with countries like Italy and Japan whose debt-to-GDP ratio is more than 100 per cent. According to a World Bank report, foreign investors get a higher return on their African investments than those in other regions.