The following appeared in the November issue of Business Diary Botswana:

Despite the IMF’s recent projection that Botswana’s economy will contract 10.3% this year, the lender expects a 4.1% uptick next year such that emergency funding would not be required. Back in June the country tapped a $1.5bn “budget support loan” from the African Development Bank–the largest such facility ever granted by the Bank–in order to finance part of a budget deficit then estimated at around 13.5% of GDP, and since revised to 14%. The IMF cited a renewal of demand for diamonds as a central facet of its optimistic forecast. Furthermore, it predicted, GDP growth across sub-Saharan Africa will rise to approximately 4% next year and 5% in 2011, up from 1.1% in 2009. “We think it should be possible for sub-Saharan Africa to recover quicker this time around and have a ‘V-shaped recovery,’”

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The following appeared in the August edition of Business Diary Botswana. Right now I find myself fascinated by the role that securitization and a mature credit derivatives market will ultimately play in frontier economies; as J.P. Morgan once penned, “credit derivatives allow even the most illiquid credit exposures to be transferred to the most efficient holders of that risk.” Despite its perils (notably the lack of respect issuers had for the potential correlation on mortgage defaults), it is my belief that the underlying concept supporting derivatives is a sound one if handled correctly. As wealth continues to flow to developing markets in the coming decades, so too will the management of risk continue to mature.

Back in late March, not long after the S&P registered its ominous 666 low, an understandably seething writer in The New York Times charged that above all, the “key promise” of

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In a speech given to mining investors while in Johannesburg earlier this year, Frontier Advisory CEO Dr. Martyn Davies reiterated the case for frontier, and specifically, Africa-centric investment:

“If you believe in the long-term urbanization success story of China and India, you buy Africa, because that’s where the commodities are going to come from,” Davies told the audience.

Endowed with 30% of the world’s minerals, the African continent is experiencing continued attention and capital from Chinese and Indian firms which, according to McKinsey’s sub-Saharan Africa principal Dr. Heinz Pley, will concurrently provide growth to those economies as well as those in Africa itself:

“The Chinese have a long way to go to reach the personal income levels that Europeans and Japanese had. There is a lot of room left for growth in China and there is India in the wings and actually also Africa, in the long-term, will create significant

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Back in June, The Banker, a London-based publication of Financial Times, included Nigeria’s Union Bank in its “Top 1000 world banks 2009″ list as one of 13 Nigerian Banks in the sub-Saharan Africa that showed “solidity, resilience and growth during the period under review.” Moreover, it wrote, “Nigerian banks continued to amass Tier 1 capital in calendar year 2008, making them even stronger than last year, when compared with the traditionally dominant South African banks”. This past week, Fitch Global Rating again awarded the Bank a B+ Issuer Default Rating (“IDR”) which measures the “perceived level of support that the Bank would receive from the sovereign by virtue of its well established domestic franchise.” Per the report, Union Bank, one of Nigeria’s largest by total assets, has grown its “relatively diversified” deposit base by 58% FY08, and

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According to Silk Invest, much of the reason that “institutional investors started coming back [late last week] into the [Casablanca All Share Index] after a few weeks spent on the sidelines” was due to the announcement recently made by Central Bank governor Abdellatif Jouahri, who reiterated that the country’s banking sector hasd not been affected by the financial crisis given the sector’s limited exposure to foreign markets, and moreover that the banking system’s “resilience” is a “result of an ongoing reforms process.”  Moroccan credit growth increased 23% in 2008, and 17% this year to May.

Four banks lead the fray in Morocco: domestic players Attijariwafa Bank and BMCE (Banque Marocaine du Commerce Exterieur) Bank, as well as BMCI and Crédit du Maroc (subsidiaries of France’s BNP Group and Crédit Agricole, respectively).  Only the first two, however, are discussed as having continent-wide

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The following appeared in June’s Business Diary Botswana:

Private equity (PE) has long been considered a viable way to achieve risk-adjusted returns that exceed those possible in the public equity markets (though per University of Chicago scholar Steven Kaplan, during the three decades ending in 2005, the average private equity firm’s annual return was no better than that of Standard & Poor’s 500 stock index). Accordingly, institutional investors include private equity (or even funds of funds) in order to concurrently achieve optimal diversification and risk premia. And while such “limited partnership interests” demand that investors lock-in their contributions for an appreciable time period, such that general partners can commit to any number of strategies, in recent years the once highly illiquid asset class has given way to a vibrant secondary market available for sellers of private equity assets, which in turn has spread risk and further fueled

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Stephen Blank has an interesting new article on Forbes in which he assesses the economic damage being caused by Russia's inability to effectively reduce legal nihilism and corruption, both of which are dragging on the country's attempt to recover from the crisis.  Sticking out like a sore thumb is of course the second trial of Mikhail Khdorkovsky, which will be in full session during the first state visit of President Barack Obama.  Blank describes the Khodorkovsky trial as a "palpable judicial farce," and if President Dmitry Medvedev is unable to take action to solve the situation it will "confirm the widespread belief that he is merely a tool of his predecessor, a placeholder until Putin resumes the presidency."

When he was a candidate to lead Russia, Dmitry Medvedev denounced the country's "legal nihilism." Now, as president, he has often spoken

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Chinenye Anyanwu, managing director and CEO of Dependable Securities Limited, a Nigerian boutique brokerage focused on small and mid-caps, lauded the Nigerian stock market’s recent rally, which came roughly a month after Bloomberg anointed it the “world’s worst market”, after it had fallen 37% YTD, the steepest quarterly decline in more than a decade and the worst of 89 benchmark indexes tracked (significantly underperforming its emerging/frontier markets peers).  Sub-Saharan Africa’s second-biggest share index closed Thursday at 25,294.10, and despite a nearly 2% drop on Friday, is still up substantially from the year low figure of 19,814.92 recorded mid April.

“In the first place, we should not have had the kind of meltdown we had because there was nothing fundamentally wrong with the market. The fundamentals of the quoted companies are strong and so people merely reacted because of what was happening in the advanced countries,” Anyanwu argued.

Yet volumes

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Interesting piece on the challenges facing Middle East telecoms in light of a recent study that forecasts average revenue per user (ARPU) in sub-Saharan Africa and South Asia–regions where future market share lies–to drop by half by 2013.

For Middle East mobile telecom firms such as Zain, Qtel, STC and Etisalat, most of their recent growth has come from emerging markets with high population and relatively low rates of penetration, such as sub-Saharan Africa and South Asia. But these operators are now challenged to boost profitability, as average revenue per user (ARPU) levels in such markets have been dramatically decreasing, because of increasing competition, price reductions, and a second wave of customers who are predominantly lower-income.

Much like uber-competition among German banks turned out to be a bad thing, one wonders if consolidation in the Arab telecom market will ultimately not only be inevitable, but also beneficial.

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The Financial Times reported an upbeat story by Dr. Ayo Salami who maintains a market cap-weighted index of African Companies (sub-Saharan Africa excluding South Africa). Although the index was down 40% last year companies in the index grew their earnings per share by 32%.br /br /Dr. Salami sees continuing growth in consumer demand and recommends companies like brewers, cement and food staples.div class="blogger-post-footer"img width='1' height='1' src='http://res1.blogblog.com/tracker/3742382075154765669-4711166475363405566?l=danfonds.blogspot.com'//div