When I graduated from college in 2007, I moved to Beijing hoping to find exciting opportunities within emerging markets. In my off-hand discussions with American expatriates, family friends, and my own observations, I got the feeling I had arrived in China 20 years too late. The major cities such as Beijing and Shanghai were already booming, and while there were opportunities in the lesser-known cities in the interior of China, I didn’t have the language skills or stomach to move there.
When I returned to the United States, I started looking for job opportunities in frontier markets like Africa. As a naive 23-year old, I assumed there were only three sectors that I could work in: commodities, teaching English, or international development. Since I knew nothing about extractive industries and had already taught English in China, I targeted not-for-profit organizations. I interned for the Clinton Foundation in Boston for a year and was subsequently offered employment working in West Africa.
Managing a $10 million HIV medication donation in 10 West African countries, all the ignorant misconceptions I had about the continent quickly evaporated. My Internet connection in Senegal was better than in my former office in South Boston. Our partners at government organizations were highly educated and had left high paying jobs in Europe and the US because they genuinely wanted to improve health outcomes in their countries. And finally, there were real, exciting business opportunities. Ecobank, a pan-African bank with over 10 million customers and $20 billion in assets under management (AUM), was building a new modern international headquarters by the beach in Togo while I was living there.
To build on my newfound interest in African business, I decided to do a Masters in Business Administration in London. I chose London because it is an international city with strong links to the African continent. For example, two of the largest private equity funds investing in Africa, each with over $1 billion AUM, are based in the city. The London Stock Exchange, which represents over $60 billion in market capitalization for African companies, has the second largest exposure to the African market after the Johannesburg Stock Exchange.
By getting involved in the Africa Club at London Business School and organizing the 2015 Africa Business Summit, I have had to opportunity to engage with some of Africa’s top business leaders and investors. In preparation for this year’s event I have spoken to Arnold Ekpe, Chairman of Atlas Mara, Robbie Brozin, one of the Founders of Nandos, along with a number of other investors and entrepreneurs on the continent. The excitement about investing in Africa is about more than strong macro-economic conditions and demographics. It’s about a new generation of investors and entrepreneurs who see challenges as opportunities, and who are generating the returns and growth figures to justify their viewpoint.
I am excited about Africa’s prospects. If you are too and would like to learn more, find out how to buy your ticket to this year’s London Business School Africa Business Summit by visiting www.lbsabs.org.
About the author:
Isaac Gross is a member of the 2015 MBA class at London Business School. Before coming to London Business School, Isaac worked for the Clinton Health Access Initiative in West Africa and the USA. In Africa, Isaac managed a $10 million HIV medication donation, which provided lifesaving medication to over 50,000 people. He also advised governments on cost reduction strategies. In one instance, he helped Ivory Coast save over $3 million by convincing policy makers to update their HIV treatment protocols and buy medication from low-cost generic manufacturers. Isaac is at London Business School because he wants to transition from public health to development finance. He is on the Execu|Searchtive committees of the Africa and Net Impact Clubs at London Business School and enjoys playing golf, tennis and rugby. Isaac graduated from Brown University in 2007 with a Bachelors in Science in Psychology.
The Importance of African Development (Originally Posted: 08/20/2014)
I recently came across a Vice documentary that left me in shock. As many of you know, the Ebola outbreak has had no problem instilling worldwide fear. Of the estimated 2,000 cases, 1,000 proved to be fatal. The virus is believed to have originated much in the same way as HIV: through the consumption of bushmeat.
Bushmeat is defined as any wild African animal that is hunted for human consumption. The most popularly traded variations of bushmeat include monkeys, bats, and rodents. Because the process of raising beef, chicken, and pork can prove to be expensive, bushmeat provides Africans with an alternative protein source. In addition, African males are able to earn a decent living through hunting in an area that doesn't present much opportunity for employment.
Vice followed this dangerous trade. Because the consumption of bushmeat is so popular, many Liberian citizens have ignored trade bands and have become conspiracy theorists, accusing the government of inventing an Ebola myth to tax the meat. Many are unaware that the real risk comes through the process of preparation. If the flesh has been properly cleaned and boiled, there is virtually no risk of extracting disease. As the Vice reporter watches an African woman chop and prepare a wild rodent, she literally nicks herself with her knife. This is what Vice was trying to prove. If the rodent were carrying a deadly disease, she would have been instantly infected right there on camera.
The world needs to shift its emphasis from providing West/Central Africa with sufficient medical care to strengthening the overall economic stability of the region. Consumption of bushmeat only begins to drop when families become wealthy enough to switch to more cultivated sources of protein. Education is also an important factor not only for raising awareness of risks, but to add value to the job market. The incentive to hunt as one of the only reliable sources for income needs to be drastically reduced. Developed nations should be providing assistance to these regions similarly to the way that the US has committed to developing Iraq's government.
We're lucky that this is JUST Ebola. Who knows when we're going to uncover a monster that threatens to wipe out all of humanity.
You can watch the full documentary here:
//www.youtube.com/embed/XasTcDsDfMg
appropriate username you have
Opportunities in Africa (Originally Posted: 12/14/2010)
Will Africa be the next emerging markets home run? The continent has thrown up some impressive GDP growth over the past decade, with its collective countries growing by an average of 4.9% per year since 2000. And it was one of only two continents (Asia being the other) to post positive growth in 2009. It's by no means a low-risk play, but the dark continent looks like it could pay off handsomely over the next decade.
The two main Africa-focused ETFs have done well over the past year. The MENA Frontier Countries ETF (NASDAQ:PMNA) is up 14% over the trailing 12 months. The fund is heavily concentrated in Northern Africa, primarily Morocco and Egypt. The more widely invested Market Vectors Africa ETF (NYSE:AFK) is up 25% for the year.
Africa is no longer a pure resource play, either. Telecommunications, retail, and even financial services are moving to the fore. Natural resources made up less than a quarter of the continent's growth over the past 10 years. It's burgeoning consumer sector is projected to produce $1.4 trillion in annual spending by 2020. And then there's all that arable land, at a time when agricultural products are at all time highs.
I don't know about you guys, but I'm sold. I'm less comfortable with the emerging markets in Asia these days, and I always thought Africa would be a great play if they ever got their shit together. Like I said earlier, there is still a lot of risk, the place is far from stable, but I see a great deal of upside from here.
If anyone is already invested in Africa, I'd love to hear about how it's gone for you so far. I'll probably layer into the investment with the Market Vectors ETF, and then go on the hunt for individual plays from there. I'm also interested to hear if anyone thinks it's too early, or that an African investment strategy is just plain crazy. Let me know what you think. Has Africa's day finally arrived?