Investing In Africa

August 3, 2007 7:15 AM

What are the best ways to invest in Africa?

The only clear way seems to be with the IShares MSCI South Africa Index. I would like to put money in to other countries such as Nigeria, Malawi and Kenya. So far the only resource I have found is this list of African Stock Markets. Where can I find better resources?

posted by STHayden to work & money (10 comments total)

you can invest in African companies that trade ADRs in the US. i can't recommend specific companies (ethics restrictions), but i know a few do exist.
posted by uaudio at 7:32 AM on August 3, 2007

ADRs = American Depositary Receipts
posted by uaudio at 7:34 AM on August 3, 2007

so i can't stay away from your topic.

here is a resource that lists these ADRs. search on Sub Saharan Africa. not very promising outside of South Africa. I know that Merrill Lynch's chief investment analyst Richard Bernstein released a report last week that called for increased investment in Africa. He calls it investing's 'final frontier.' Perhaps in the future there will be more for you to choose from.

In my opinion, Africa is a ways away from equity investment. A vast majority of the continent really just needs humanitarian investment - eventually leading to investment opportunity. In my experience, equity investors generally like political stability before they get involved. South Africa is really the only place right now with that threshold level of stability.
posted by uaudio at 7:52 AM on August 3, 2007

A vast majority of the continent really just needs humanitarian investment

Seconded. You could make a donation to a charity that attempts to provide access to clean water, such as AMREF. Everything else follows from that. Not exactly an equity investment, but at least it's tax deductible.
posted by Burhanistan at 8:04 AM on August 3, 2007

If your primary motivation isn't to make a profit, then you could lend money to entrepreneurs in Africa via Kiva. You won't make a profit, but you could help some people in Africa.
posted by ssg at 8:35 AM on August 3, 2007 [1 favorite]

If profit is your motive ... that is, if you see Africa as an investment opportunity simply because it can't go underdeveloped forever and significant economic activity will come out of the continent at some point ... don't invest in African companies. Invest in companies that get paid do work in Africa, regardless of where they are from. Health care, oil and mineral services, agricultural services, etc.
posted by Cool Papa Bell at 9:23 AM on August 3, 2007

Nigeria, Malawi and Kenya

Nothing good comes from foreign capital/equity investment in Nigeria. It only serves to allow the current situation there to continue, while lining the pockets of corrupt government workers who care nothing for the people and planet that are being destroyed by the mismanagement of the oil fields (and the associated unrest). By the time all the bribes are paid and everyone skims off the top, there's not even all that much of a return for the investors.
posted by toxic at 10:05 AM on August 3, 2007

yeah. In general I want to stay away from investing in single companies. I would love some focused ETFs for Africa.

I'm currently in my 20s and I believe if I put some money in some kind of Nigerian ETF and let it sit for 40 or 50 years it would do some interesting stuff.

I could be wrong but I'm young and I'm willing to take the risk.
posted by STHayden at 10:06 AM on August 3, 2007

EZA: iShares MSCI South Africa index

Africa Mutual Funds. Site's last performance data is for 2004.

TAMF. Opening this year.
posted by ikkyu2 at 10:37 AM on August 3, 2007

@Toxic: I've had a similar view of Africa for a long time. While it has not completely changed I'm much less sure that it's exactly as you explain.

A lot of the TED talk have been about how the best way to improve Africa is to invest in it. They were talking to large companies but I believe it should apply to people as well.

Even people like Bono and his ONE campaign have had some interesting criticism coming from many Africans.

I certainly don't know the answer anymore but I do know there is tons of untaped potential in such an under developed continent.
posted by STHayden at 12:46 PM on August 3, 2007