African index launched

HedgeFunds ReviewAn index ranking each of Africa's 53 countries in terms of investment potential has been launched. The Star of Africa is a weighted index based on governance, social capital and Africa's electricity, water (supply, sanitation and irrigation), internet and telecommunications sectors.The index, complied by African Rainbow Consulting, is designed to help investors and entrepreneurs establish which countries offer significant risk or opportunity for successful long-term investment.Topping the index is Nigeria. Despite its poor governance score, the country offers significant scope for improvement in access to water, electricity and ITC infrastructure.Ethiopia ranks second, based on its potential for better countrywide access to water and electricity.Somalia, Eritrea and Chad are the least attractive investment opportunities mainly due to low scores on the governance and social capital scales.The index is based on five key indices. The energy index calculates the potential market size in each country in terms of megawatt hours. It gives information about the potential market size in terms of megawatt hours. It is based on the product of the number of people without access to electricity and the energy poverty line of 50 kg of oil equivalent.The water index outlines the potential for improving access to sanitation and clean water, weighted by population size. It provides information on the potential for improving access to sanitation and clean water supply, weighted by size of population, and the potential for irrigation, weighted by area of potentially irrigable land. The overall water index consists of an equal weighting of the three sub-indicators for sanitation, water supply and irrigation.The internet and telecommunications index maps potential markets for mobile telephone and internet use, PC ownership, factoring in market competitiveness.The social capital index which gives insight into the population's health (40%), education levels (40%) and demographics (20%). A country's social capital can make or break commercial success. The Star of Africa Index uses the term ‘social capital' to represent basic health and welfare in an effort to measure the health of the population, its educational level and discover how motivated the state is to provide adequate healthcare and education, among other factors.The governance index rescales the aggregate of the world governance indicators, covering issues such as corruption, violence, rule of law and ease of doing business. The world governance indicators draw on 35 different data sources and cover 212 countries and territories. Data sources include public surveys as well as expert opinions.African Rainbow Consulting research has revealed that an estimated 497 million people need access to electricity, 47% of Africa's energy use is sourced from biomass, much of which is inefficient and environmentally destructive; 600 million potential customers are waiting for access to improved sanitation; over 36 million hectares in Africa are suitable for irrigation, but are not actually irrigated and 628 million Africans do not have mobile telephone subscriptions with only 6% of Africans using the internet.It believes these facts offer investors opportunities in Africa. Such data is captured and used by the index to help investors target opportunities.African Rainbow Consulting provides intelligence briefings on doing business and investing in Africa. The company focuses its analysis on key sectors that are crucial to long-term, sustainable development: telecommunications and internet, irrigation and sanitation and electricity generation. The organisation was founded to provide investors and businesses with interests in Africa with well-researched information on the 53 countries making up the continent. It is independent of any political party or financial institution.Reports are compiled based on desk research and regular field visits to each region in Africa. African Rainbow's network of contributors includes staff from African universities, government departments, international organisations, non-governmental organisations and others. Services offered include country briefings, country reports, personal briefing sessions, sector focus reports and bespoke consultancy.