The greatest economic crisis since the Great Depression may be the investment opportunity of a lifetime in one of the world's most dangerous places – Africa.
CNBC's Erin Burnett travels to a continent rich in natural resources to find out why some investors believe the rewards are worth the risks.
"Dollars and Danger: Africa, The Final Investing Frontier" - see upcoming show times.
Africa is home to more gold, cobalt and diamonds than anywhere else in the world and sells more oil to America and China than the Middle East.
Libya sits on the mother lode of black crude – the biggest oil reserves in Africa. It’s the light sweet crude America’s refineries crave.
The riches of Africa come with risks from civil wars to armed gangs and pirates. Africa may be the most dangerous place for business.
This is the largest copper mine in Africa in the Democratic Republic of the Congo. The DRC is loaded with minerals like copper but more people have died in the country’s seemingly never-ending civil war than in any conflict since World War II. Some estimate the death toll at more than 5.5 million people.
Violence is a part of life in Nigeria. You cannot travel throughout the country for business without security.
Attacks on Nigeria’s oil and gas pipelines surged more than 30% last year and Nigeria lost $24 billion dollar to oil theft and sabotage in just nine months.
Crime and corruption are problems that not only deter investors, but hold Africa back. In Nigeria, corruption is flaunted. Nigeria wants to change its reputation for corruption. It’s new Economic and Financial Crimes Commission has already indicted more than 20 former governors but it remains an uphill battle.
Part of the reason? Poverty. Rotimi Oyekan, Commissioner of Finance in Lagos, Nigeria, is trying to deal with the problem.: "The average income for Nigeria is less than a dollar a day. Corruption is innate…it will be in any society where there are no opportunities."
Corruption and instability are also spreading to formerly “safe” countries – like Kenya. The feared Mungiki Gang, which engages in extortion, is also known for beheading or skinning victims. The attacks threaten Kenya’s hopes for economic growth.
Kenya tourism revenue dropped 30% in 2008 during when the country went through both a political and economic crisis leaving the nation hoping it’s most famous relative, President Barak Obama, will save the day. “Roots of Obama” tours go for up to $2,400 for a 4-day side trip to his father’s village, Kogelo.
Why, when hopes for a more prosperous Africa have been dashed so many times before, do so many investors believe it’s different this time?
Chicago-based real estate investor Quintin Primo says his gut tells him “Africa is finally ready” for big time development and “it’s the classic global emerging market.”
What kind of returns does he expect in Africa? Primo: “A typical equity investment in a real estate project here would project returns of 40 to 50%.”
Obinna Ekezie grew up in Nigeria and attended college in America, playing basketball for the University of Maryland and the NBA.
He gave it all up to come home to Lagos. Now, he’s using his own money to launch Zeep, the first online travel company focused on the African travel market. He hopes it will be Nigeria’s Orbitz.
Dambisa Moyo grew up in Zambia and studies at Harvard and Oxford. After a career that included 8 years at Goldman Sachs she wrote the bestseller “Dead Aid: Why Aid is Not Working & How There is Another Way for Africa.”
The book earned her a spot on the Time’s list of the World’s 100 Most Influential People.
Moyo: “Fundamentally the problem with the aid model is that it is not creating jobs across the African continent.”
In Nigeria, Adenike Ogunlesi believes basic financial knowledge can make a bigger difference than aid can for the hundreds of millions of Africans who live on less than a dollar a day. Ogunlesi founded children’s clothing company Ruff ‘n’ Tumble more than a decade ago. Today, it has revenues of over a million dollars a year.
Ogunlesi believes in teaching people how to be entrepreneurs and recites a familiar saying: “Teach a man to fish and he can feed his whole family but give him a fish and you only feed him for a day.”
Delta, the world’s largest airline, is expanding in Africa in the face of the global economic crisis. Delta may be the first U.S. airline to fly direct to Africa since Pan Am.
The single biggest infrastructure project in Africa belongs to an American company….NYSE listed Aecom. The engineering and construction firm is overseeing the building of Libya’s roads from scratch.
Lions and giraffes are the big attractions of African tourism. Tourism is one of the top moneymakers for many African countries. In South Africa, the Ministry of Tourism reports revenues have surged more than 20% during the global economic crisis.
Libya has big plans for roads, railways and deep-water harbors on the Mediterranean. The country has more than a thousand miles of Mediterranean coastline basically untouched by resorts. Libyan leader Moanmar Qadaffi wants to change that. His goal is 12 million tourists a year by 2015.
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