The FT includes an article this afternoon that is headlined:
I have to say I am not surprised: anyone who ever expected anything else had to be wildly optimistic. It is however worth noting the reasons given, which it reports to be:
Since 2011 there has been considerable interest from international investors in Africa. The prospect of high returns – matched by high risk – has brought more than $16bn in capital to the region from specialist private equity funds. [However] the majority of financing is going to sectors in Africa that have limited or no positive effects on economic growth. For example, the extractive sector received $4.8bn, or 21 per cent, and the consumer sector $3.2bn, or 14 per cent, of all funds but do not stimulate structural economic change. Similarly, the telecommunications sector received $5.7bn, or 25 per cent, of all funds despite already being well-funded, making incremental gains for growth small. By contrast manufacturing, a sector that is key to job creation and structural change in the economy, received a mere $0.6bn, or 3 per cent, of investments.
To summarise then, private equity is looking to free-ride off investment already made or to extract rents. No surprise there then.