Last month, I read two articles which I thoroughly enjoyed. Funnily enough they were both related to the renowned US investment bank Goldman Sachs. The first was the in the New York Times on the much publicized resignation of South African-born Greg Smith. Such was the sting of the piece on the day that it wiped out a whopping $2 billion off the company’s stock valuation. The second article was in the South African Mail &amp; Guardian, where Goldman Sachs Asset Management chairman, Jim O’Neill, shared his views on South Africa’s BRICS membership and Africa as an investment destination. As Smith’s public resignation prompted a global reaction, I focus here on Jim O’Neill and his views on Africa.
My source of enjoyment, as wrong as it may sound, came from O’Neill’s candid assessment of Africa and why investors are reluctant to pour capital into the continent. As O’Neill puts it—investors are intrigued by the continent but, at the same time, are scared of it. He identified key issues that investors find a concern, which in turn keeps them at bay—some of these issues I have raised in this column as impediments to Africa’s development. Some might call me an unpatriotic son of the continent—so be it. I believe that it is important to bring these issues to the fore in order to address them and to ensure that Africa achieves economic freedom in our life time, to borrow from South Africa’s African National Congress Youth League (ANCYL).
To summarize the article, O’Neill, vis-à-vis Goldman Sachs Asset Management, is bearish on South Africa and Africa as whole. I must admit I was taken aback by this view, given all the focus on Africa at the moment. Africa is set to be the second-fastest growing region behind Asia driven by a commodity boom, a rapidly growing consumer base and prudent macroeconomic policies. Furthermore, investors are scouring for yield in emerging markets in light of poor returns on offer in developed markets.
What was most interesting was O’Neill’s assessment of South Africa. He accused South Africa of having a sense of entitlement and of being “talkers and not doers”. This was not the first time I had heard this and unfortunately I have come to concur. However South Africa is not alone in this regard. The rest of Africa unfortunately suffers from this curse.
Given the continent’s colonial history I get the impression that we feel a sense of entitlement from our colonizers. This is not in any way to say that colonization was right, or to undermine the ills inflicted on the continent through colonization. It is quite the opposite. It is to say: we have been dealt the cards we have been dealt, but now that we have freedom, how do we take our destiny into our own hands and uplift the lives of our people.
This philosophy is widely recognized in motivational literature. In my view, there is no reason why this philosophy cannot be applied at community, state, national and regional levels. Playing the victim does not help anyone, let alone alleviate poverty. If anything self-victimization only hinders our development and keeps the continent from its rightful place in the global economy.
Once leaders and politicians drop this mentality, we can then address Africa’s pressing issues. These issues include: political instability, corruption, unemployment, poor education among others. Only when a resolution is reached will the likes of Goldman Sachs Asset Management change their view of the continent being a risky investment destination.
In my humble opinion, Africa will continue to attract only a fraction of readily available capital looking for a home. The continent needs to ensure political stability, root out corruption, respect the rule of law and invest in social and economic infrastructure. Unless tackled head on by African governments, investors will continue being intrigued—but scared.

Tag: Atusaye Mughogho

FORBES AFRICA SOCIAL MEDIA

Intriguing, But Scary