|
|
Like this article? PLEASE +1 it! |
|
Go to Africa, Young Investor
Written by: Paul KedroskyArticle Overview: While frontier markets in Africa are not yet the new Brazil, let alone the new South Korea, there are ample reasons to be optimistic about the economic resurgence in many African countries.
![]() |
Free Download - Sorry, You Can’t Be My Online Friend By Paul Kedrosky |
Go to Africa, Young Investor
While frontier markets in Africa are not yet the new Brazil, let alone the new South Korea, there are ample reasons to be optimistic about the economic resurgence in many African countries.
Consider:africa-map
* The number of armed conflicts in Africa has dropped from 20 in 1999 to 5 today. Granted, that's non-zero, and the human losses in the remaining fighting is horrific and unacceptable, but there is significant and largely unheralded change.
* Real GDP growth in sub-Saharan Africa (SSA) averaged 4.1% from 1997-2002, and has since risen to 6.6%
* Real incomes are rising, with GDP per capita hitting 4.6% in SSA in 2007.
* Africa has lower inflation, higher FX reserves, and more FDI than did Asian emerging markets in 1980 -- and that worked out okay.
* We're seeing bond duration extension, with government bond yield curves now stretching out to 10- and 15-years in some countries, which is a boon to project financing.
The obvious question, of course: How do you track and invest in African markets? The fast answer is, it isn't yet as easy as it should be. Yes, there are some frontier markets ETFs, including the just-launched Claymore/BNY Mellon Frontier Markets ETF, or the SSGA Emerging Middle East and Africa ETF, but they all skew heavily toward Eastern Europe and the Middle East, allocating precious little to continental Africa (outside South Africa, which hardly qualifies as a frontier market).
Nevertheless, there is a race into frontier markets in general this year, and into Africa in particular. Multiple frontier market ETFs and related funds will be showing up soon from PowerShares, Van Eck, and others. It will be worth watching.
Further reading:
African opportunities are being overlooked, Financial Times, June 11, 2008
The Frontier/Middle East ETF Boomlet, Morningstar, June 12, 2008
Claymore wins race to the frontier, IndexUniverse, June 12, 2008
Article Tags: africa map, african markets, bny mellon, bond duration, boomlet, conflicts in africa, continental africa, economic resurgence, financial times, frontier markets, gdp growth, gdp per capita, human losses, morningstar, new brazil, real gdp, real incomes, ssga, van eck, yield curves
|
About the Author: Paul Kedrosky RSS for Paul's articles - Visit Paul's website Dr. Kedrosky is currently the Executive Director of the William J. von Liebig Center in San Diego, California. Using an innovative seed capital program, the Center catalyzes the commercialization of technologies from the internationally-ranked University of California, San Diego. Dr. Kedrosky is also a venture investor with Ventures West, Canada's largest institutional venture capital firm, where he is most active in consumer technologies and software. He is currently on the board of Marqui Corporation, a marketing automation software company. Click here to visit Paul's website Go to Africa Young Investor Day in Life of a VCBacked CEO The Myth of the Management Myth Calculating CarbonLevered Earnings Bernie Madoff A Cynics Take Frauds within Frauds |
Related Forum Posts
Share this article with your friends. Fund someone's dream.
Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.
Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!
How do you keep it together on a daily basis?
How to Write Your Articles for Better SEO
Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.



