Admittedly, I am conflicted about the title of this post. I am not sure if what is taking place on the African continent can be characterized as a Renaissance or an Emergence. Whatever it is, there is no denying the fact there are some good things happening there. You need not look any further than countries like Botswana, Angola, Ghana, Rwanda, and even Nigeria, to see evidence of this. I remember telling a group of friends, back in 2004, that the greatest economic opportunities of the 21st Century will be found on the African continent. Of course, I was met with great skepticism but that was understandable especially when you consider the fact that I used the superlative "greatest". I am not the type of person who usually uses hyperbole and superlatives. Africa's problem has always been, and continues to be, that of poor governance. The majority of the countries on the continent have been beset by a crop of leaders who, for one reason or another, just can't get it right. Not withstanding the corruption and the meddling by former colonial masters, Africa's problems have always been essentially one of poor leadership.
So where are the opportunities in all this? Well we can start by meeting the needs of it's more than 500 million people. You see, the needs of the people are growing and this is due largely to the influence of countries like China (and India and Brazil to a lesser extent) which has made no secret of it's plans to cement relationships with African countries in order to secure the commodities it needs in order to sustain growth. The result is that the participating African governments have found a new market for their natural resources and a willing, and politically indifferent, partner in their development initiatives. This of course is one obvious and undeniable reason for the kind of growth we are seeing in some African countries. A second, and far less obvious yet many times more important, reason is the renewed sense of being and belonging that has emerged in African Cultural and Economic discourse. In fact, the common refrain is that "if nations like China and India can emerge from Economic obscurity and lead the world in various industries then why can't we?" Even corrupt leaders and Warlords are now realizing that the real power and wealth, that they crave so much,are no longer to be found in Jungle Warfare or by ruling over dilapidated cities and pillaging a demoralized citizenry but in the board rooms and among the shareholders of fast growing African conglomerates. The bottom line is that Africans want what the rest of the world has and they now have, at least by the level of discourse, the will to get it. They want modern telecommunications, Infrastructure, Financial Services, Health Care and Education. To get a better picture of what the opportunities are like, just think of America in 1918 or China in 1981. The fact is that the amount and quality of the Infrastructure, telecommunications etc that exist there today are so few and of such a poor quality that it will take decades to build out and as one or two countries get it right it will spread throughout the continent like a virus. Just look at Rwanda and neighboring Congo. Rwanda's thrust into Telecoms and the Internet has transformed that country, from what it was as recently as 1994,to a leader in the ICT industry in Africa. Rwanda's success has sparked a similar drive in the Congo especially along the border shared by both countries. So? do you see the opportunities?
Early Days Yet
Of course it is not easy for the normal everyday investor to take advantage of these opportunities. After all, we haven't the resources or expertise to Joint Venture with an African government or to start up a Private Equity Fund. But there are tons of Funds and Funds of Funds, of varying qualities, available to retail investors who want to be a part of the African Emergence. We should note, however, that this is no panacea. There are still serious problems there and it will take a long tome to solve them, but as far as opportunities go,the age old principle of creating wealth/making money by meeting a need or solving a problem holds strong and firm in Africa where the needs and the problems are numerous.
P.S: Here is an excellent video of a TED talk (I love TED) about Africa's opportunities. It was presented in 2007, that's 3 years after I made my "Greatest Opportunity" claim.