Sign in
Become a MarketWatch member today
Matthew Lynn's London Eye Archives | Email alerts
Sept. 21, 2011, 12:01 a.m. EDT
By Matthew Lynn
LONDON (MarketWatch) "” There isn't much for investors to get excited about right now.
The euro is collapsing and may take the global markets down with it. The dollar is in long-term decline and can't hang on to its status as a global reserve currency much longer.
A 3-D re-release of Walt Disney's "The Lion King" reigned over the weekend box office, easily out-grossing several new releases for the top spot.
China is still growing fast and so are the other BRIC nations. But it may well face a couple of big recessions before it becomes a fully developed modern economy, just as the United States and most European nations did on their path to modernization.
Gold and commodities have plenty of progress to make still "” but let's be honest, no one can seriously think they look cheap right now.
But as the crew of the Starship Enterprise might put it, there may be just one final frontier out there "” sub-Saharan Africa.
While everyone has been getting excited about the potential in the BRIC nations, Africa has been quietly emerging as a real growth story. It is home to a host of fast-growing economies, each of which have the potential to generate the kind of mega returns that only economies making a one-time transformation from relative poverty to relative prosperity can deliver.
If it happens, Africa may even be the place where the growth story that kicks off the next bull market gets started.
Our images of Africa are still rooted in the past. "The BBC effect is still there," said Plamen Monovski, the chief investment officer of Renaissance Asset Managers, one of the big investors in the region. "It shapes what people think of Africa. But Africa is now the last frontier left in the market. Nowhere else has the same kind of growth potential."
True enough. It isn't just the BBC. Most television networks in most countries focus on the bad news. There is little shortage of that in Africa. From piracy and famine in Somalia to refugees in Ethiopia to political catastrophes in Zimbabwe, the continent is seldom short on poverty, starvation and warfare.
Then again, so was much of Europe while the industrial revolution was getting going in Britain. The news from much of the rest of the continent gets far less attention. It is less dramatic, but also far more encouraging.
After three decades of relative stagnation following decolonization by the European powers, much of Africa is now getting going again. Eleven African countries are now growing by more than 7% annually, more than in East Asia. Many are poised to break through the 10% annual growth rate where economies really lift off. Three are already growing at more than 10% a year, and Nigeria, one of the largest African countries, with 9% annual growth right now, may soon join them.
The markers for the future are all just as encouraging. Secondary school enrolment is now at 29% across sub-Saharan Africa, compared with around 3% in the 1960s. That is comparable to Mexico or Turkey in the 1970s, as those two countries prepared for economic lift-off. Not only will young people be better educated, there will be more of them as well. Africa is one of the few places in the world with a rising labor force. Even Asia is facing steep demographic decline.
True, there are plenty of obstacles.
U.S. stock investors look for Europe fix
Political process in Europe has eroded confidence in the region's ability to solve its sovereign debt...
IMF tries to coax markets off ledge
Global economic policy-makers, gathered for the annual meeting of the International Monetary Fund, try to...
Sovereign-debt "?spiral' seen imperiling Europe
UBS CEO Gruebel resigns in wake of rogue trades
Copper, coal: crystal balls for the global economy
Copper and coal can be great tools for predicting economic prospects and right now they're offering a...
IMF tries to coax markets off ledge
U.S. stock investors look for Europe fix
NASA's defunct satellite returns over the Pacific
Obama: Education key to strong economy
California bank failure 73rd U.S. closure for 2011
Putin to return to Russian presidency in 2012: WSJ
UBS CEO Gruebel resigns in wake of rogue trades
The day Steve Jobs saved Apple
Sovereign-debt "?spiral' seen imperiling Europe
UBS Chief Executive Oswald Gruebel resigns
Russia's Putin to run for president: reports
BREAKING
Russia's Putin to run for president: reports
BREAKING
UBS names Sergio Ermotti as interim CEO
BREAKING
UBS Chief Executive Oswald Gruebel resigns
U.S. stocks gain; Dow suffers worst week since "?08
The week's top 10 videos on MarketWatch
Top gas sippers: An overdue look at economy
Asia watching for China PMI numbers, Japanese data
U.S. stock investors look for Europe fix
Pfizer, Cal-Maine among stocks to watch
Campaign 2012
Read Full Article »