tag:blogger.com,1999:blog-6218362794660003427.comments2022-12-07T03:02:26.670-05:00Money Watch Africa | African Investments, Frontier Market FundsAfrican Investorhttp://www.blogger.com/profile/11226257627475540758noreply@blogger.comBlogger24125tag:blogger.com,1999:blog-6218362794660003427.post-88357567088663858852011-07-10T21:38:43.341-04:002011-07-10T21:38:43.341-04:00Unfortunately even the country level is too macro,...Unfortunately even the country level is too macro, and while there are specific national policies which may be appropriate to consider, ultimately the real opportunities lie within specific regions, and then within specific groups within those regions. The segmentation discussed in the McKinsey report last June was a helpful breakdown, but in countries similar to Ethiopia, Addis Ababa might as well be a different country than Dire Dawa, the 2nd main city to the East. <br /><br />That's not to argue that the consumer potential is not tremendous, but the truly effective and profitable solutions to capturing or unlocking that value is going to be granular, local and highly tailored to segments within an area, within the country, within the region, etc.Jesse Hollanderhttp://www.insoad.comnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-82656584280360014582011-06-23T13:12:10.187-04:002011-06-23T13:12:10.187-04:00Great article. Africa is an exciting but complex p...Great article. Africa is an exciting but complex place to be and its economies are beginning to show sustainable traction. Political stability and a growing respect for democracy are the key drivers.Velaphi Petsanahttps://www.blogger.com/profile/14740418694667992545noreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-23393265367539368312011-06-09T08:58:32.952-04:002011-06-09T08:58:32.952-04:00The trouble I see with Africa is that unlike the f...The trouble I see with Africa is that unlike the former communist bloc back in the 90's, you don't really see the same education levels of citizens and civil societies that existed when the Soviets pulled out of Eastern Europe or the FSU. Sure, there is a commodity play and an agricultural land play, but in addition to shallow capital markets, outside of SA, you have the difficulty of imagining that a functional, productivity-based society is on the near-term horizon. However, what you do have is a whole industry fresh with funds from the Soviet break-up, promoting the region as if it were the next big thing. <br />I'm not trying to be overly negative, I just don't see the runway or the exit strategy being remotely visible, which is an essential element in frontier investing. For example, you put a chunk of money to work, is the legal system strong enough(or will it be strong enough in the next several years) to even remotely ensure the profits will benefit shareholders. <br />It just seems to me that there is a little mismatch between the substance of the opportunity and the level of promotional activity I have observed at conferences and in print over the past several years.Tom Rossmanhttp://www.synthesisgroup.comnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-61723917462006125692011-06-05T02:13:59.043-04:002011-06-05T02:13:59.043-04:00Why not education included. Its the ground of the ...Why not education included. Its the ground of the economical growth ?<br />Good work. Thanks.marjariitta ritanorohttp://www.stockholmcollege.se/noreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-19283050155824639042011-06-04T01:48:51.281-04:002011-06-04T01:48:51.281-04:00What is key for Africa (not just SA) is the politi...What is key for Africa (not just SA) is the political arena to change. FDI has changed politics in several countries - even the communist China, so Africa will not be left behind I think. There is no logic in talking about the small size of individual countries or the large size of the continent, or the diversity of each country etc...See, there are enough examples in the world to defy the above arguments - Qatar is very small and ruled by a dynasty, yet very rich with excellent standard of living, India is very big, diverse with over 175 languages, many religions and tribes, and is democratic (which actually means, not easy to rule!), yet the economic compulsions presented to it in 1990 left no option to the political parties - whether Left, Centre or Right!<br />So, I see a great potential in Africa as a whole, but without political will, all of it is a non starter. SA's resistance to WallMart is a good example in this regard.APnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-45913428414360143392011-06-03T17:08:58.602-04:002011-06-03T17:08:58.602-04:00Thank you for this most impressive article. This p...Thank you for this most impressive article. This past week, I was researching direct foreign investments and will use this article in my dissertation. Great compliment to what I have already found. <br /><br />Perhaps of interest to you and others would be in the following paper. My topic is globalization and International Student population. However, the bottom line is Revenue/Expenses and Profit/Loss, and the impact of the current global recession.<br /><br />THE COSTS AND BENEFITS OF GLOBALIZATION IN LIGHT OF THE RECENT RECESSION IN THE AMERICAN ECONOMY<br />Adil H. Mouhammed, University of Illinois at Springfield, USAAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-45314220044451947862011-05-17T08:36:29.328-04:002011-05-17T08:36:29.328-04:00It makes perfect sense for BRIC to become BRICS.. ...It makes perfect sense for BRIC to become BRICS.. this has been on the cards for a while now and should be very positive for a number of firms in SA. Hopefully the givernment will make it easier for international investors to allocate to funds in SA with the tax changes expected in Jan 2012 so fund managers can then use this additional capital to drive the nation.Thomas O'Riordanhttp://www.emfmgroup.comnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-90626304325067212852011-05-09T04:25:00.263-04:002011-05-09T04:25:00.263-04:00Africa is too diverse to discuss under a single he...Africa is too diverse to discuss under a single heading of "Africa". Joel is 100% correct in his assertion that Africa must be examined country by country.<br /><br />Moreover, Africa has barriers to entry and barriers to trade which make intra-continental business a nightmare (we operate in 5 african jurisdictions) at present.<br /><br />Even regional groupings, like SACU, SADC etc, which are supposedly supposed to advance trade, are inherently hostile thereto and are headed by leaders that are protectionist and stuck in 1970s socialist literature (i.e. they are fundamentally opposed to free trade and capitalism). <br /><br />In this regard, see S-Africa's opposition to the Walmart deal (purchase of Massmart) as a case in point. SA desparately needs FDI but Govt (and its Trade Union "allies") appear hellbent on scuppering the deal...<br /><br />Africa is complex and infuriating but it does offer massive opportunity for those brave and skilled enough to surmount its numerous challenges.nichttps://www.blogger.com/profile/13445687221324559715noreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-15319178026195307142011-05-04T05:24:50.441-04:002011-05-04T05:24:50.441-04:00Thanks so much for this! I haven't been this m...Thanks so much for this! I haven't been this moved by a blog for a long time! You’ve got it, <br /><br />whatever that means in blogging. Anyway, You are definitely someone that has something to say that <br /><br />people need to hear. Keep up the good work. Keep on inspiring the people!<br />regards:<br /><a href="http://www.nirmanbroking.com/Commodity/CommodityHome.aspx" title="commodity market" rel="nofollow"><strong>commodity market</strong></a>commodity markethttp://www.nirmanbroking.com/Commodity/CommodityHome.aspxnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-49556280531220709792011-04-24T10:36:25.285-04:002011-04-24T10:36:25.285-04:00"Africa has to be seen from a country by coun..."Africa has to be seen from a country by country basis". That's the whole thing I have been talking about. It always makes me sick when people start talking about Africa as though it was just a country. 53 countries each with their language, culture and mentality. Ignore this at your own peril...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-20486262823782534282011-04-20T16:25:01.525-04:002011-04-20T16:25:01.525-04:00Despite the continent-wide story, opportunities ar...Despite the continent-wide story, opportunities are largely compartmentalized within countries. Efforts at regionalization remain modest and most businesses have difficulty crossing borders, for a variety of reasons. <br /><br />Larry himself said in the Feb 20th Wychick interview, posted on this blog, that "Africa has to be seen from a country by country basis".Joel Patenaudehttp://www.j2partnersinc.comnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-46978837948286691412011-04-18T12:58:03.460-04:002011-04-18T12:58:03.460-04:00Hi Joel - thank you for your comment.
We do not d...Hi Joel - thank you for your comment.<br /><br />We do not dispute that many of the markets in Africa are relatively small or have relatively little purchasing capacity. However, I would make two rebuttals - first, in this case there is an argument to be made for the opportunity as a whole. Although there are plenty of small nations in Africa (as there are plenty of small states in the US) it does not refute the point that the overall market is quite large, and growing rapidly.<br /><br />Second, again, it is useful to look at growth in many of these economies rather than their baseline size. As equity investors, we are interested in companies that can expand their businesses such that they will achieve good returns in their stock performance. Larger consumer markets are thus the more obvious opportunity, but it does not eliminate the potential for opportunities across the continent.<br /><br />I would also point out that even if Bethesda has a greater income than 24 African economies (we haven't verified this, but will accept it for the sake of argument) that still leaves over 50% of the 53 nations in Africa. A good deal of America's population (and thus consumer spending) is concentrated in a handful of states, but that does not mean that investors ignore the remainder. In fact, a quick search indicates that 11 US states have fewer residents than the figure quoted for Botswana, yet we would never say there are no opportunities for investments in Delaware or New Hampshire.Money Watch Africahttps://www.blogger.com/profile/00927018572493927123noreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-12661660364061896312011-04-18T12:32:31.913-04:002011-04-18T12:32:31.913-04:00I agree there are significant opportunities in Afr...I agree there are significant opportunities in Africa. Some perspective on the size of these opportunities, however, is useful. Here are a few quotes from a 2007 book "African Development", by Todd Moss (p. 12-13). <br /><br />"Africa may loom large in certain development circles, but it is a tiny player on the global stage. Twenty African countries each have a total population of less than 5 million people, about the size of metropolitan Washington, DC. Botswana features prominently in the development literature (including this book) but it is a small country of mostly desert and swamps with only 1.7 million people. African economies are even more minuscule relative to the global marketplace. The economies of all forty-eight African countries combined are about the same size as Chicago's. The county in which I live (Montgomery County, Maryland, next to Washington, DC) has a larger GDP than forty-six different African countries (South Africa and Nigeria are bigger). Even my town (Bethesda, population about 55,000) has an annual income greater than twenty-four African economies. These comparisons are worth recalling the next time you hear that a multinational corporation just cannot wait to pry open some untaped African market." <br /><br />We all know measurement is iffy in these informal economies and how Moss counted only 48 countries on the continent is unclear. Despite my own personal enthusiasm for Africa, which many share, I appreciate relative comparisons and find this passage enlightening.Joel Patenaudehttp://www.j2partnersinc.comnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-40273945821778677062011-04-14T19:44:41.737-04:002011-04-14T19:44:41.737-04:00Does anyone remember Tiananmen Square? Was that t...Does anyone remember Tiananmen Square? Was that the beginning or the end for China?? Go Africa!!polluxtechnicalhttp://polluxtechnical.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-38618749745724089092011-04-14T10:09:17.917-04:002011-04-14T10:09:17.917-04:00Thanks for your comment Peter!Thanks for your comment Peter!Money Watch Africahttps://www.blogger.com/profile/00927018572493927123noreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-88434930780248182692011-04-14T10:08:35.023-04:002011-04-14T10:08:35.023-04:00Geoff - can you clarify the question? From our pe...Geoff - can you clarify the question? From our perspective we look for opportunities in markets across the African continent, including Zimbabwe.Money Watch Africahttps://www.blogger.com/profile/00927018572493927123noreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-83042885850567274202011-04-14T07:26:15.717-04:002011-04-14T07:26:15.717-04:00Thanks for this review, and I look forward to your...Thanks for this review, and I look forward to your updates as well.<br /><br />My practice specializes in risk-management for African investments, and in helping investors find financing with African specialists. The risk-v-reality gap for Africa is one of the most interesting in the investment field.<br /><br />It's good to see that this gap is being specifically targeted and discussed.Peter C. Hansenhttp://www.peterhansenlaw.comnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-18794098684522228242011-04-13T14:25:26.868-04:002011-04-13T14:25:26.868-04:00Anyone got an interest in Zimbabwe specifically?Anyone got an interest in Zimbabwe specifically?Geoffnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-49908137138178962202011-04-13T13:29:30.754-04:002011-04-13T13:29:30.754-04:00Thanks Darnley. Of course, direct investment or PE...Thanks Darnley. Of course, direct investment or PE is not always realistic for small investors with limited time or capital... which is one of the reasons why Nile chose to launch a mutual fund (www.nilefunds.com).<br /><br />Appreciate the support, as always. -MWAMoney Watch Africahttps://www.blogger.com/profile/00927018572493927123noreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-29714722017241623822011-04-13T13:23:30.116-04:002011-04-13T13:23:30.116-04:00Looking forward to your posts Bob. Not only are t...Looking forward to your posts Bob. Not only are there many opportunities, thee are several ways to enter--as a portfolio investor, via private equity, or direct investment to name a few. And I agree with Kwame, the HBS conference was a good one.Unknownhttps://www.blogger.com/profile/00636664843149933682noreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-64344561192172859872011-04-13T11:16:10.979-04:002011-04-13T11:16:10.979-04:00I look forward the stream of posts! I felt a simi...I look forward the stream of posts! I felt a similar excitement when I attended the Harvard Africa Business Conference. It was refreshing to not have to convince people of the opportunities on the continent. I left the conference re-energized in pushing for the Metro Atlanta business community to engage business communities on the African continent.Kwame Som-Pimponghttp://kwsompimpong.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-77312557248089617612011-03-03T05:34:11.079-05:002011-03-03T05:34:11.079-05:00Great article
Thanks
The exciting part about Chin...Great article<br />Thanks <br />The exciting part about China is that newcomers create more opportunities for companies with similar objectivesJeff Pinkhamhttp://www.jeffpinkham.comnoreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-75563970046506913202011-02-03T20:38:27.264-05:002011-02-03T20:38:27.264-05:00Many foreign investors - multinationals and countr...Many foreign investors - multinationals and countries - were sizing up investment opportunities in both Sudans even prior to the referendum. I believe some of the investment in the North was to come from Egypt. It of course is much too early to tell what kind of new government will take shape in Egypt, or when, but has the North expressed a concern about the future of those planned investments?Dr. John Dilyardhttps://www.blogger.com/profile/06141020630153907937noreply@blogger.comtag:blogger.com,1999:blog-6218362794660003427.post-1518592227594513852011-02-03T20:30:47.509-05:002011-02-03T20:30:47.509-05:00Political risk is poorly understood, particularly ...Political risk is poorly understood, particularly with respect to emerging markets. It comes with the territory. But the danger is that those who don't recognize where political risk is highest and "pour money indiscriminately into emerging market assets" will react irrationally, increasing the probability of capital flight from places where political risk is small. The smart investor, as Larry Seruma points out, should know that South Africa and Egypt, for example, are fundamentally different. <br />Contagion is another word that is prone to misunderstanding. In my view, there are two forms of contagion that one has to be concerned about - one because of linkages in nations' financial markets, and the other because of linkages in nations' sociopolitical situations. Again, a smart investor will know the difference between the two and will not pull money out of all emerging markets (or even out of the Middle East or Africa) because they think what is happening in Egypt will infect everyone.Dr. John Dilyardhttps://www.blogger.com/profile/06141020630153907937noreply@blogger.com