Subscriber Jonathan Auerbach, who travels the Third World in search of ground-floor investment opportunities, has sent us an interesting dispatch concerning, of all places, Africa. Here is his man-bites-dog story:
I returned this weekend from over two weeks in Africa and by the way I have been going to Africa regularly for 15 years and on any day (just like your hometown USA) you will run into fund managers, poets, bankers, visionaries, politicians, street people, traders, educators, and some just plain rogues. But here in Africa, categorically, they all have an energetic commitment, and most importantly, skin in the game, and they are compelled to understand the abundant enigma of this continent…if you have stayed with me so far, do not go, the best is yet to come. I’ve returned with a new African vision and no I am not going to repeat my mantra of the burgeoning growth of empowered people and private institutions.
What I have asked myself after this visit and what I want you to consider is why since South Africa reinvented itself under Mandela in the early 90s have we continued to view SA as something different from the rest of sub-Saharan Africa. Was it their lack of a recent kleptocratic colonial legacy? Was it their continuing exchange controls that mitigated active investment in their neighbors? Was it their ‘European’ connectivity with a highly automated electronic securities markets and dual listings in NY or London? Or was it just their perceived wealth at the top of the pyramid?
Forget all of this because our firm going forward is going to analyze and deal with SA as an integrated market in Africa. Why? Because on this trip I met a number of CEOs from major SA companies and the facts and their plans militate for rampant investment and development within the region. There used to be plenty of lip service that was easy to disregard when you looked them in the eye, but not today as we heard the plans from the likes of Anglogold Ashanti, NamPak, and Steinhoff. The most dramatic statement of the day came from Whitey Basson, CEO of Shoprite (perhaps the most active of all SA companies in regional investment). Whitey announced a month ago that they would open 14 new supermarkets in Nigeria (they currently have one). I asked him why and he said, “Because eventually Nigeria will be a larger market for us than South Africa.” I asked if I could quote him and he said sure…just think about the impact of that statement.
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