Monday, July 30, 2007
Africa Fact du Jour
Marginal Revolution and my buddy, Pablo Halkyard, provide the Africa fact du jour.
The entire market capitalization of the continent is $800 billion, of which $600 billion is from the South African market. As the Economist puts it, China could buy every single public company in Africa with its foreign exchange reserves [and still have more reserves than India does]. Amazing, but keep in mind that Africa is growing at 5% since 2001 (yet another fact that gets distorted by the usual stories), compared to a global average of 4.2%. Expect this anomaly to not last longer than 5 years, by which time I expect investments to start pouring in Africa barring any significant blow-up. The other underlying assumption, of course, is that other African exchanges (Lagos, Accra, Nairobi etc) will begin to become at least half as competitive as the Johannesburg market.
The entire market capitalization of the continent is $800 billion, of which $600 billion is from the South African market. As the Economist puts it, China could buy every single public company in Africa with its foreign exchange reserves [and still have more reserves than India does]. Amazing, but keep in mind that Africa is growing at 5% since 2001 (yet another fact that gets distorted by the usual stories), compared to a global average of 4.2%. Expect this anomaly to not last longer than 5 years, by which time I expect investments to start pouring in Africa barring any significant blow-up. The other underlying assumption, of course, is that other African exchanges (Lagos, Accra, Nairobi etc) will begin to become at least half as competitive as the Johannesburg market.
