The Motherland Is The Global Economy’s “Final Frontier”
By Charlotte Young
From famine in Somalia to genocide in Sudan and bombings in Nigeria, the media puts out a very bleak image of African development. But in economic reality, this couldn’t be further from the truth. For investors in the global market, much of the real growth and opportunity is stemming from Africa.
Marketwatch reports the continent is “home to a host of fast-growing economies.” In addition the growth possibilities have the potential to provide large returns.
Plamen Monovski, chief investment officer of Renaissance Asset Managers, one of the biggest investors on the continent, relays that the images of Africa “are rooted in the past” and the “BBC effect.” “But Africa is now the last frontier left in the market. Nowhere else has the same kind of growth potential,” Monovski tells Marketwatch.
The media seems to neglect Africa’s stories of triumphant and success as it zeroes in on political unrest, poverty and hunger. But after enduring 30 years of stagnation and decolonization, Africa is growing rapidly. There are 11 African countries that now see growth rates higher that 7 percent annually, which is higher than the rates in East Asia. Nigeria, one of the largest countries in Africa, is growing at 9 percent a year, one percent below the magic percentage when economies really begin to take off. Three countries have already reached a 10 percent growth rate.
In addition, while many countries worldwide are facing labor shortages, Africa boasts of a rising labor force. With secondary school enrollment also rising, the continent will be able to see a generation of more educated youth as well.
All of the growth does not negate that there is truth in the media coverage. Governments across the continent have their share of problems, but what government doesn’t? China has continued to succeed economically without a democracy and many Asian nations also face corruptions.
African infrastructure is not always the best, which can provide a setback to companies seeking to build presence. But with investments comes financial capital to improve upon roads and broadband connections.
Those that are forward thinkers understand how important it is that Africa continues to grow. With or without personal attachments to the continent, Africa’s success is important to everyone. Its rise could help to alleviate much of the despair around the global markets and end the threat of another recession. As investors know best, there’s nothing like an emerging market. Only they are capable of the “explosive growth,” that provides the fast expansion effect desperately needed around the world.