Standard Bank of South Africa global investment marketing director Dylan Evans says during the current volatility, the investment case for Africa has never been so pertinent.
He says: “Whilst the MSCI Emerging Market Index has fallen 12.3 per cent since 20th July, the day the global sell-off began, African markets, excluding South Africa, have risen on average by 1.28 per cent. Morocco was up 8.3 per cent, BRVM, West Africa’s regional bourse rose 6.3 per cent, Nigeria increased by 5 per cent and Namibia rose 3.3 per cent.
“Over the last 10 years the foundations for Africa’s future growth have been laid. Most African nations are now stable, most have reduced their debt to manageable proportions or in many cases, eliminated it entirely and most have seen their inflation and interest rates fall to levels which are in line with emerging markets in general.
Evans says as a result, Africa has been growing faster than the OECD average since 2001 and African equity markets have been outperforming developed market equities.
He adds: “Even so, few international investors seem to have noticed this and that helps explain why African markets can go up at a time when other markets are stumbling. Africa is unquestionably an excellent way to diversify an international portfolio. Despite prevalent misconceptions about Africa, an investment in African equities can actually help reduce portfolio volatility.”