Foreign investors eye African consumers

It was an unlikely move greeted with a good measure of disbelief. When the world’s biggest retail company, the US-based Walmart, announced in September 2010 a plan to buy South Africa’s Massmart — also a retail company — for a staggering $4.2 bn, eyebrows were raised. Foreign investors in Africa usually put their money in the riches that lie beneath its soil, where the profits are higher. In fact, the steady growth of foreign direct investment (FDI) flows to the continent during most of the past decade has mostly been concentrated in extractive sectors, especially oil (see Africa Renewal, January 2005).