Explorer Brown: More Adventures in Africa

Explorer Brown here.  I’m so all over this Africa investing theme it’s ridiculous.  I’m on this like The Backyardigans is on every TV in my house.

I wrote an article about Wal-Mart’s ($WMT) foray into Africa for CNNMoney last month, complete with some intel on several Africa-focused ETFs.  Today we get a follow up article at Bloomberg about how Africa basically has 1 billion consumers just waiting to be catered to.

The story is loaded with interesting stats for African investing adventurers like myself, including:

Africa’s population reached 1 billion last year and after economic growth averaging 4.9 percent from 2000 to 2008 the number of families with an income of more than $20,000 a year has exceeded India’s, according to a report by McKinsey & Co.

and…

Consumer spending in Africa rose at a compound rate of 16 percent between 2005 and 2008, driven by economic and population growth and migration to cities, New York-based McKinsey said in its June report… the number of consumers earning more than $1,000 a year will rise by 221 million within five years.

and also…

Sub-Saharan Africa’s economy will expand 5.5 percent next year, 2 1/2 times faster than developed countries, according to the International Monetary Fund.

I’m really feeling this Africa story as The Final Investing Frontier.  Mad risk involved, but the rewards could be bananas.

The risks here are obvious so position sizing and time horizons are key – but the rewards could be bananas if the African story is for real this time.  A big if, but still…

Sources:

Africa’s 1 Billion Consumers Draw Giant Wal-Mart (Bloomberg)

Wal-Mart Bets On Africa, Should You?  (CNNMoney)