The Prepaid Economy: African Edition

According to Quisenberry, chief investment officer of Caravan Capital Management and manager of the Emerging Frontiers Fund, frontier markets — especially those in Africa — are where great investors need to be. Of course, frontier markets can be found in all geographic regions of the world, not just Africa, and Quisenberry made a compelling case for frontier markets in general, though he highlighted Africa’s economic strength in particular.

Prior to the global recession of 2007–2008, real GDP growth in frontier market countries (including those in Africa) was averaging 6% per year, versus 2–4% in developed countries.

Quisenberry used data from the International Monetary Fund’s World Economic Outlook report to show that real GDP growth in frontier and emerging markets was not only less affected by the global recession — real GDP growth declined from 6% in 2007 to 4% in 2009 — it also rebounded more quickly than in developed countries.

The IMF forecasts that real GDP growth in African frontier markets will be 6% per year for the next five years, versus 4–5% in other frontier and emerging markets.