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AFRICA MACRO on the exchange; 33 from the Ivory Coast, two from Burkina Faso and one each from Benin, Niger, Senegal and Togo. There are no listings from Guinea Bissau and Mali. The largest capitalized issue is the Pan-African bank Ecobank, headquartered in Togo with a market value of around $855mm.

ANALYSIS AND STRATEGY

genocide plagued Rwanda and Burundi, the Democratic Republic of the Congo appeared to be disintegrating, Somalia descended into chaos and anarchy, many economies were dominated by inefficient loss making public companies, infrastructure was dismal and foreign investment was hindered by lack of an independent judiciary, red tape, a heavy handed bureaucracy, high inflation, an inadequate banking system and foreign exchange controls. The cost of investing clearly outweighed the possible benefits and few investors outside of the oil and mining sectors, where high returns were achieved, were willing to take a chance on investing in Africa. Some of these ills unfortunately persist. There are still too many dictators and heavy handed leaders in Africa, poverty is still widespread, the infrastructure is still poor and unemployment is high.

The Central African Economic and Monetary Union (CEMAC) consists of Cameroon, the Central African Republic, Chad, Equatorial Guinea, Gabon and the Republic of the Congo. It shares a common central bank, Banque des Etats de l’Afrique Centrale (Bank of Central African States), which is located in Yaounde, Cameroon. Members of the CEMAC use a joint currency, the Central African CFA Franc. It is fixed to the Euro at an exchange rate of 655.957 per Euro and is fully convertible into the euro; again with convertibility guaranteed by the French Treasury. As with the West African CFA Franc, the countries using the currency have an unlimited overdraft facility with the Bank of France that allows them to avoid shortrun balance of payments difficulties. Rules and regulations regarding payments and the transfer of capital are similar to those of the West African Monetary Union. Although the Central African and the Western African CFA francs are pegged at the same level to the Euro, they are not interchangeable and are not legal tender in the other CFA zone. There is a fledgling stock exchange commission for the Central African zone, but there is no regional stock market. There are exchanges in Douala, Cameroon and Libreville, Gabon, but they are small and relatively illiquid with few listings. Investment Outlook For many years, international investors wrote off Africa as unviable for investment. It was often seen as a continent that was politically unstable and ruled by cruel dictators who butchered their citizens and severely restricted political discourse and human rights. Corruption and nepotism was pervasive and foreign aid was not productively channeled to lift the meager standard of living. Poverty was widespread, AIDS was eliminating large segments of the population, brutal civil wars decimated the social fabric of Liberia and Sierra Leone, Joab’s Technologies and Research, Natu Court Flat B.

Despite these drawbacks, however, there are, as noted earlier, many indicators that suggest Africa is on the move and is shrugging off its previous lethargy. While some countries remain mired in political problems, such as Zimbabwe, others have some of the fastest rates of economic growth in the world. Today, there are more democratic nations than there used to be, and, as recent events in North Africa suggest the Arab countries of Africa are moving towards more open political systems. Growth is robust in many African nations and in some cases is close to the levels of China and India. A middle class is beginning to emerge which is seeking to mimic the lifestyles of their counterparts in Europe, America and Asia. Many who left the continent for education and to find work are returning with their skills and money to open new businesses and to help build a stronger economy. High oil and metal prices have increased exports and attracted foreign investment. Airports and ports are improving. Cell phones have made communication easier. Foreign exchange controls have been eased and the bureaucracy has become less heavy handed. Africa is beginning to take off and many investors are noticing as the benefits of investing in Africa are beginning to outweigh the risks. At a time when growth is stalling in America, Europe, and some of the major emerging markets are slowing down; it is time to take a serious look at Africa. It is no longer a place to be dismissed by potential investors. To ignore Africa is to ignore one of the fastest growing and most dynamic parts of the world.

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Equity Research in Africa, Like an Electric Train Africa is picking up, a True Emerging Market  

Economic analysis of Africa as a whole, as well as of particular countries and sectors, with special regard to their potential as investment...

Equity Research in Africa, Like an Electric Train Africa is picking up, a True Emerging Market  

Economic analysis of Africa as a whole, as well as of particular countries and sectors, with special regard to their potential as investment...

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