Why Africa Offers Long Term Investment Growth

A new generation of political and business leaders focused on growth and creating environments where business and economies can flourish has emerged in Africa

T. Rowe Price 12 November, 2014 | 12:03PM

Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, Oliver Bell, manager of the T. Rowe Price Frontier Markets Equity Fund, discusses the longer term drivers for Africa’s fledgling economies as part of Morningstar's Guide to Emerging Market Investing.

Africa has made huge economic strides in recent years as economies and capital markets have liberalised. The impressive reforms many countries have undertaken over the last two decades have resulted in smaller public and private deficits, more prudent use of commodity windfalls, lower inflation, lower levels of debt and higher international reserves. The region now offers access to one of fastest-growing areas of the global economy. Most tellingly, foreign investment is pouring into the region, with China contributing $100 billion from 2005 to 2010, one-third of its entire foreign direct investment during that period.

The uncertain political environment within the region has long been used as a reason to limit investment. However, we have seen greater political stability in recent years from a number of countries. Between 2011 and the end of 2013, 50 of the 54 countries in Africa conducted a democratic election. Within the region, we are also increasingly seeing a new generation of political and business leaders focused on growth and creating environments where business and economies can flourish. Policies are now being increasingly targeted to encourage growth, while foreign investment is being harnessed to help build sustainable conditions for this growth.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

T. Rowe Price  T. Rowe Price is a global investment management firm dedicated to helping clients achieve long term success.

Audience Confirmation


By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies