Africa’s growth is catching up to the rest of the emerging markets and the industrialized world, and it is expected to surpass their growth rate in the longer run, says Larry Seruma, Chief Investment Officer and Managing Principal of Nile Capital Management. Seruma identifies three key themes in African growth that guide his investment strategy:
1. Natural Resources: Global industrialization — especially from Asia — relies on African natural resources. “Africa is going to continue to supply the rest of the world with natural resources. As a result, many companies in Africa that supply natural resources or provide services for natural resource companies stand to benefit,” Seruma said.
2. African Consumer Growth: Africa contains about 1 billion people, a population that grows faster, is younger and has a higher potential for productivity than developed markets’. “You are going to see huge growth in demand for goods and services as opposed to more developed countries, where entitlement and demographics put a heavy burden on the rest of the population,” Seruma said.
3. African Infrastructure Development: African industrialization necessitates all the physical infrastructure that is vital in a thriving industrial geography. “There is more and more demand for physical infrastructure services like water or electricity, and also digital infrastructure such as communications. So we are finding opportunities in industries all the way from cement to software or mobile network operators — all that infrastructure spending is going to be a key driver for the next 20 years,” Seruma said.
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