Emerging Market Africa

Angola like Brazil?

2011-01-10T19:13:00.000-08:00

The Economy of Angola is one of the fastest-growing economies in the world,[3] and the Economist said that for 2001 to 2010, Annual average GDP growth for Angola was 11.1 percent, with an average growth GDP growth of 20 percent between 2005 and 2007, whereas China was10.5 (01-10), Wikipedia.

Angola is experiencing an unprecedented economic boom. In May 2008, the Organization of Petroleum Exporting countries (OPEC) confirmed Angola's oil production at 1.9 million barrels per day and this number is expected to reach 2.2 million in 2011. The growth in this industry has had substantial spillover effects, spurring investment in the financial services, construction, and agriculture sectors. According to the International Monetary Fund (IMF), Angola's GDP grew by over 20% in 2007 making it Africa's fastest growing economy and the fourth fastest in the world. New businesses are registering every day, fostered by an environment of peace and stability in the country and a new private investment law that has expanded incentives for investors. Although a majority of U.S. companies remain focused on the oil and gas sector, non-oil sectors have also seen an increased presence of U.S. companies. Coca-Cola operations continue to expand throughout the country; Barloworld markets Caterpillar machinery; the Boeing company completed a major sale of aircrafts to TAAG, the national airline; Microsoft is represented and many; other U.S. products and services are now found in Angola. As the fourth fastest growing economy in the world, without a doubt, the time to invest in Angola is now!

Facts

Angola is one of the fasted growing economies in the world. It has estimated reserves of 10 billion barrels of oil, and is the fourth largest producer of diamonds in the world; has million hectares of arable land; many valuable minerals and one of Africa's largest water reserves.

This country was once the world's fourth largest coffee producer, a major iron ore producer and an exporter off high-quality marble , food and sisal. Now, following the advent of peace, the GoA plans to restore Angola to its former position in the global economy. Inflation has been extremely stable in recent years, and continues it's downward trend while the exchange rate has stabilized.

Oil is the country's major product and source of foreign currency.

Angola is a source of top quality gemstones.

The Lundas region is one of the most important diamond-producing areas in the world.

The country's subsoil contains 35 of the 45 most important minerals in the world trade.

Angola's fishing industry is in the process of being re-established.

Ministry of Hotel and Tourism plans to build 40-50 new hotels in Angola before 2010 when Angola hosts the African Soccer tournament.

Thanks to its extensive river systems and varied environment, Angola has enormous potential for production of tropical and subtropical crops. Angola has great hydro electrical potential for the production of tropical and subtropical crops. Angola has great hydro electrical potential with its large fast-flowing rivers. Certain regions of Angola have ideal climatic conditions for productions of high quality coffee. The unexploited forests cover 43% of Angolan territory, with particular valuable timber species in Cabinda. The extensive river system facilities transport. (http://www.us-angola.org/investinangola.html)

Angola is looks just like Brazil, I traded Brazil in 93-95, Aly khan Satchu, CEO of Rich Management

The Case For Investing In Africa

2011-01-02T00:50:00.000-08:00

Mombasa, Kenya

The continent is now growing much more rapidly than the OECD nations. It may well be on the cusp of a reversal of fortunes. This post is written Paul Collier, of Forbes

McKinsey Quarterly

Most international businesses are still not very aware of Africa's investment opportunities. Information costs are high: Africa is fragmented into many different countries, and even in aggregate the continent is a fairly small economy. For several decades, investor ignorance did not matter: With few exceptions Africa's economies were too badly run for there to be many opportunities for firms of integrity. But there has been a sea change--Africa is on the move. There will be ups and downs, but investors from the countries of the Organisation for Economic Co-operation and Development (OECD) who remain set in their ways may be missing a giant business opportunity if they fail to pay attention to the changes afoot.

The situation in Africa quietly began to change during the period 1995-2005. Profound macroeconomic reforms tamed inflation and opened economies to international trade. More patchily, the regulatory environment facing international business also improved. Public ratings, such as the World Bank's Doing Business surveys, enabled African governments to benchmark their performance and began to put pressure on those that were recalcitrant. As the global commodity boom built to its 2008 crescendo, many African countries were well positioned to harness the spike in their export revenues for growth beyond the resource extraction sector itself.

Sankara Hotel, Nairobi.

That upturn in national growth rates was mirrored in the increased profitability of companies operating in Africa. Indeed, three distinct sources of data indicate that returns on investment are higher there than in other regions. One was a comprehensive study of the publicly traded companies operating in Africa for the period 2002-07, mostly in the manufacturing and services sectors. It found that these companies' average return on capital was around two-thirds higher than that of comparable companies in China, India, Indonesia and Vietnam. Another source, on the foreign direct investment of U.S. companies, showed that they were getting a higher return on their African investments than on those in other regions. Finally, analysis of a series of surveys of several thousand manufacturing firms around the developing world found that, at the margin, capital investment had a higher return in Africa.

This was the scene in the years leading up to the global crisis. Although its origins had nothing to do with the continent, the crisis did not bypass Africa. Its effect was to collapse commodity prices--for example, the price of oil initially tumbled by more than $100 a barrel. More subtly, the international appetite for risk collapsed, and since Africa is still generally viewed as the riskiest region, investors got scared; for example, international banks curtailed letters of credit to African exporters far more drastically than to those in other regions.

These effects were severe. However, with a few exceptions--inevitable in a region with so many countries--Africa weathered the economic storms well. Led by its two largest economies, South Africa and Nigeria, most countries had built prudent fiscal positions: In a remarkable break with its past, Nigeria had freed itself from debt and built up over $70 billion of foreign exchange reserves. Further, the adverse impact of the crisis through commodity prices lasted less than a year for Africa. Globally, commodity prices rapidly bounced back and seem to have stabilized around levels markedly higher than those in the decades before the boom, underwritten by growing Asian economies and their corresponding need for commodities; What do you think?

A Diamond in the Ruff

2010-12-28T18:51:00.000-08:00

Did you know that in Africa there is a country with a lower unemployment rate than that in the USA?

In the USA it is only getting worse; 9.5% in 2009 and 9.8% in 2010 but in

Botswana, the rate stands at 7.5%. Thanks to the highest average economic growth rate in the world, averaging about 9.2% per year from 1966 to 1999, Botswana has created sustainable jobs for her people in a way you can’t imagine.

In 2003, unemployment in Botswana stood at over 40% v 7.5% now.

Year	Unemployment rate	Rank	Percent Change	Date of Information
2003	40.00 %	11		2001 est.
2004	40.00 %	12	0.00 %	2001 est.
2005	23.80 %	157	-40.50 %	2004 est.
2006	23.80 %	166	0.00 %	2004
2007	23.80 %	169	0.00 %	2004
2008	7.50 %	94	-68.49 %	2007 est.
2009	7.50 %	96	0.00 %	2007 est.
2010	7.50 %	70	0.00 %	2007 est.

According to an international corruption watchdog, Transparency International , Botswana is the least corrupt countries in Africa.

From the early 1980s, the country has been the world's largest producer of gem diamonds coupled with a significant portion of GDP being produced by agriculture (4%) and livestock farming.

Botswana has exploitable deposits in platinum, gold, and silver as well. Exploration for petroleum and natural gas deposits has been underway in western Botswana.

Since 2003, Botswana has been in the process of diversifying its economy, from mineral-dependent to sustainable development. Foreign direct investment is heavily incentivized in non-mining sectors of the economy, including light manufacturing, tourism, financial services, and pharmaceuticals

Emerging Market Mauritius

2010-12-26T23:18:00.000-08:00

Since independence in 1968, Mauritius has developed from a low-income, agriculturally based economy to a middle-income diversified economy with growing industrial, financial, and tourist sectors. For most of the period, annual growth has been in the order

of 5% to 6%. This remarkable achievement has been reflected in more equitable income distribution, increased life expectancy, lowered infant mortality, and a much-improved infrastructure. Sugarcane is grown on about 90% of the cultivated land area and accounts for 25% of export earnings. The government's development strategy centers on expanding local financial institutions and building a domestic information telecommunications industry. Mauritius has attracted more than 9,000 offshore entities, many aimed at commerce in India and South Africa, and investment in the banking sector alone has reached over $1 billion. Mauritius, with its strong textile sector, has been well poised to take advantage of the Africa Growth and Opportunity Act (AGOA).

Mauritius has attracted US$10.98 billion in foreign direct investment inflows. Top sectors attracting FDI inflows from Mauritius (from January 2000 to December, 2005) are electrical equipment, telecommunications, fuels, cement & gypsum products and services sector (financial & non-financial)

(Wikipedia)

Personally I like to evaluate a country’s welfare using the life expectancy at birth because you can’t say you are successful at the same time some people can’t get to enjoy their 30^th birthday (life expectancy of drug crime infested cities).

In Mauritius however, life expectancy at birth stands at 71.4 years vis-à-vis the world’s 67.2 years.

In 2007 when the USA sub-prime mortgage crisis began to fall like a house of cards, these islands grew her economy by a stupendous 19.8%.

As of 2009 the gross domestic product of Mauritius stood at USD 9.156 billion while per capita income was USD 12 400 which is way bigger than that of well established emerging markets like Brazil (10 200), Turkey (11 200). 2009 estimates

Kenya At A Tipping Point

2010-12-21T18:32:00.000-08:00

Kenya may be at a “tipping point”, the theme of the third Kenya Economic Update which has a special focus on the transformative impact of Information and Communications Technology (ICT) and Mobile money. Over the last decade, ICT has outperformed

all others sectors growing at an average of 20 percent per year. The benefits of ICT are starting to be felt in other sectors, and have contributed to the conditions for Kenya to reach this tipping point. Kenya has entered the new decade with renewed and stronger than expected growth. The passing of the new constitution, continued strong macroeconomic Policies and a favorable regional environment have created a new positive economic momentum. Kenya may again be positioned to experience high growth. Over the last three decades Kenya has Experienced only two short episodes when economic growth exceeded five percent and was sustained

For at least three consecutive years: 1986-88 and 2004-2007. Is Kenya again at the verge of experiencing? Another growth spurt? Will it last longer and go deeper than the previous two episodes?
(Executive Summary of World Bank' s Economic Update on Kenya)

Download the full report@ Kenya Economic Update

The Next Eleven

2010-12-20T18:25:00.000-08:00

The Next Eleven (or N-11) are eleven countries—Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam—identified by

Goldman Sachs investment bank as having a high potential of becoming the world's largest economies in the 21st century along with the BRICs Wikipedia

Africa is represented by two countries;

i. Nigeria

– Improved political stability in the oil-producing nation has gone a long way in growing the economy and diversifying it from oil- dependent which was a problem caused by the former military regime

-High rate of population growth creating a massive consumer market (150 million)

-According to the Oil and Gas Journal, Nigeria had an estimated 37.2 billion barrels of proven oil reserves and 185 trillion cubic feet (Tcf) of proven natural gas reserves as of January 2010, what more can I say?

ii. Egypt

-Egypt has arguably the most stable economy in the Middle East and North Africa enjoying continuous growth, averaging 4%–5% in the past 25 years

-Under comprehensive economic reforms initiated in 1991, Egypt has relaxed many price controls, reduced subsidies, reduced inflation, cut taxes, and partially liberalized trade and investment.

-Being located between Africa, Middle East and Europe, Egypt has grown into a commercial hub for the region

A Game Changer in West Africa

2010-12-19T18:56:00.000-08:00

Ghana’ s economy is expected to grow more than 13% in 2011 versus 5.4% in 2010 mainly because the country just started exporting oil that is estimated to be 3 billion

barrels worth USD 264.06 billion according to NYMEX West Texas Intermediate Crude Oil futures for January delivery of USD 88.02/barrel. The economy of Ghana is valued at around USD 30 billion.

With one of the strongest economies in Africa, Ghana is positioning itself to earn USD 1 Billion in revenues and hopefully improve the living standards of her people.

Ghana also earns foreign exchange by exporting Gold, timber, cocoa, diamond, bauxite, and manganese

With these fundamental, the West African nation attracted USD 1.68 billion net flows in terms of Foreign Direct Investments with half going into the oil sector. I guess this is why Barack Obama chose to visit this country as his first African visit.

Please do comment.

From IBSA to BRICS to BASIC

2010-12-16T19:08:00.000-08:00

It all started with trilateral trade agreements among India, Brazil and South Africa. Then South Africa was silently featured among Brazil, Russia, India and China but eventually they included it among the acronyms, BASIC; Brazil, South Africa, India and China.

With over 80 minerals lying in the ground, South Africa has developed from an agrarian into a modern industrial state diversifying their economy from overreliance of the resources space. Now their gross domestic product is fueled by many sources;

i. Finance, real estate and business services – 21%

ii. Manufacturing – 15%

iii. wholesale, retail, motor trade and accommodation – 11%

iv. Government expenditure – 10%

v. mining and quarrying- 5% among others

South Africa recorded a trade surplus of USD 544 million in December 2009, according to the South African Revenue Service (SARS) which is 0.19% or a gross domestic product of USD 282 billion (mind you the country was strongly affected by the global financial crises which slowed down the economy which has been growing very much in the last 18 years.

Economists expect the real benefit of the world cup to trickle down in the years to come in terms of growth fueled by the heavy investment in hard and soft infrastructure and from the simple fact that the world cup was like a 30 day ad campaign with the audience being 6.5 billion souls.

Africa Arising

2010-12-16T06:33:00.000-08:00

Ke Nako! Remember that? If not, that was the slogan for the 2010 FIFA world cup meaning it’ s time and indeed it is time for Africa to realize it’ s full potential.

Africa is the home of the poorest people on this planet yet it carries the most immense wealth by all definitions; But we have failed to realize full potential due to a number of reasons e.g. >400 years of slavery, >100 years of colonialism and the present modern day slavery (neocolonialism), corruption among others.

Afro pessimism has been the product of all the above injustices but the tables now have turned, mainly due to;

1. Improved democracy and governance in many states.

2. The Western economies and eastern have heavily increased their investments in Africa as opposed the usual dead aid.

3. Brain Gain due to lack of jobs in more developed nations.

4. Improved Infrastructure and Information Flow in Africa.

5. Economic crises in the developed countries forcing investors to seek juicier returns in emerging markets.

6. Increased global population spurring demand for African commodities.

7. A burgeoning middleclass