IF YOU don’t have a strategy, congratulations . . . you are through to the final round to become the UK’s next Chancellor of the Exchequer. Even if you fail, don’t worry because it means as a runner-up you automatically become Prime Minister!
On a serious note, for ordinary people, (i.e. anybody whose job does not involve managing the financial affairs of a country or has responsibility for millions of livelihoods) there is no shame in not having the foggiest idea of what to do because, if truth be told, even the British government itself doesn’t have a strategy – if it did, there would not be a recession in the first place.
So, let’s face it, the UK economy is facing grim prospects. Even the Bank of England on the 3rd of November 2022 said the recession will be deepest and longest running in 100 years.And in this very same environment, many people of African origin often complain that the Chinese are taking over Africa. What is often missing from such conversations is how us, asAfricans could help ourselves by employing an intelligent investment strategy.
Such a strategy in this case, would be employed in two parts. The first part is: What to invest in? For that, the answer is quite simple: Invest in sectors producing high demand goods in high growth sectors.
What to invest in?
Clearly, Africa is a land of opportunity and right now – with the emerging commodities boom – is an even better time to look at the investment opportunities that we as the diaspora could be taking advantage of right now.
Now, some people, want to invest in small projects that they can do by themselves. Those kinds of projects, to be fair, are, broadly speaking, not in competition with foreign investors. So, are not the subject of this article.
Today’s article is about serious, business proposals of investment-standard. Such serious investments are within reach of ordinary people – not just multi-national corporations. And the beauty of what we are discussing today is that, if you drop dead tomorrow, the investment does not die with you.
By default, therefore, the kind of investment projects I will address in this article are designed to give you a return as part of both additional income in the present and well into retirement.
And if you are interested in the detail of that, read on!
Agreeing the nature of the problem
Before we proceed, however, we need to agree on some basic assessment of where we are, and the nature of the problembecause if we can’t agree on what the problem is, we are unlikely to agree on what the solution(s) will be. There are three main trends which, hopefully, everyone recognises:
The UK economy is headed for a very deep recession which will last until 2024. In fact, while it has not been mentioned in British media reports, the economy is already in recession. Unemployment is also set to double. And considering the under-reporting of inflation throughout this year (2022), I will not be surprised if the unemployment forecasts are revised upwards.
Furthermore, because of the deep structural problems facing the UK, this particular recession will bring with it some very serious turbulence. The overwhelmingly large combination ofissues currently facing the UK include: loss of international trade – UK exports have 25 percent due to Brexit; inflationcaused by excessive money-printing (Quantitative Easing)since the 2008 financial crisis and further accelerated during the pandemic; inflation has been predicted by Goldman Sachs to hit 22,4 percent next year.
The other factors include the sanctions on Russia which have seriously damaged the UK (and other Western economies) by creating a squeeze in energy supply, resulting in both market disruption and price distortion – hence the doubling (and in some cases tripling) of energy bills; an uncertain politicalclimate in which changes of leadership causes wild swings government policies of which have been widely reported.
The falling pound is particularly troubling, because the interest rate rise as at November 3, 2022 would have, under normal circumstances, strengthened the pound. This is the normal relationship between interest rates and exchange rates. The fact that Sterling actually fell today means a major lack of investor confidence in the British economy.
Since the UK is a “Net Importer”; if imports are becoming more expensive due to a weak pound, a fall in living standards (for every single person!) is the guaranteed eventual outcome.
Externally, global geopolitical forces are shifting. This has created a climate in which the creation of wealth is likely to favour the production of commodities (actual “real things” such as medicines, gold, food, energy and many other products that have a universal, worldwide demand. The UK has zero comparative advantage in the production of these real things.
The medium-term to long-term trajectory will therefore be adistinct shift of: growth and global power, on the world stage – away from economies such as the UK. For example, the UK’s economic powerhouse is the City of London, which is largelybuilt on the back of trade in financial services. Many of these financial services are highly profitable – which is why financial services professionals make so much money. However, they are also quite obscure and few ordinary people use, let alone understand them. And as the balance of trade moves to the producers of “real things” (commodities) so doeswealth, growth and global power.
Africa is the next big thing. And in order to win in this fast-emerging future economy, any serious businesses operating in this new African economy that is rapidly taking shape right now, must therefore: be future-focused, pursue a high-growth strategy, be led by a professional management team, make a large investment in order to compete at a global level and be scalable through intelligent use of the latest technology for that industry.
How to Invest?
I am pleased to be hosting the Africa Investment Strategy & Networking Event-2022 at Chart Hills Golf Club, on Saturday 3rd of December 2022. The event has been specifically createdfor anyone who has ever seriously thought of investing in South Africa, Malawi, Zambia or Zimbabwe. The investment sectors targeted are commodities with a universal demand – including medicines, gold, food and energy among others.
Most importantly, you will hear from UK-based keynote speakers; and CEOs of high growth companies, who are on the ground in Africa and are experts in their field. The purpose of having them is specifically to help you benefit from their expertise to find out how ordinary people – particularly those in the UK – can participate in this emerging economic giant that is Africa.
Written by Crosby Pamberi who is a the CEO of Heritage Pay and ZimGoldfields.com.