Yesterday, while watching markets collapse and commentary on American, European, Japanese and African channels, two consistent themes emerged. From the perspective of the West, comparisons to the financial crisis of 2008 were irresistible and a consensus – though vague and fleeting in nature – emerged over the place of Africa, with the suggestion that many investors could seek growth there as equities in America and Europe declined. From Africa, we heard concern, the idea being that risk averse investors abroad will see the continent in broad brush generalizations (with no distinction or differentiation within the international ‘emerging market’ category) and too challenging to navigate in coming days. Both views reflect the transition phase that Africa is undergoing which we have assessed as simultaneously too pessimistic and too optimistic. While the process will be uneven – with winners varying across regional, national, and sector lines, we are confident that 2011 is not 2008 and that Africa will receive a net gain from the ongoing decline. Here are 9 reasons why:
• The Africa Narrative Has Evolved.
• Demographic Pressures.
• The Changing Europe-Africa Risk To Reward Pyramid.
• Nation-State Competition.
• Capital Market Expansion.
• The Rise of Islamic Banking.
• Growing U.S. Multi-National Corporate Penetration and Dependence.
• ‘Volatility’ Now Means ‘Northern Africa’ not Sub-Saharan.
• African Leaders Have Their Own Development Agenda.
To read the full August 5, 2011, Client Comment, “9 Reasons Why 2011 Isn’t 2008″ subscribe to Africa PreBrief (http://www.africaprebrief.com/pages/company-watch-capital-markets.php)