The new frontier

While the credit markets have created massive upheaval in the US economy, there are still plenty of investments that will pay off handsomely elsewhere. Africa is poised to take off. Sure, scoff at the idea, but that’s exactly why it’s a great investment. Twenty five years ago, no one thought anything of East Asia and now China and Japan are integral to the world economy.

More and more, it seems to me that the people willing to take risks and dive into foreign ideas and places before everyone else are the ones that make the really significant amounts of money. Both Bill Gates and Steve Jobs dove into personal computers before they were anything more than hobby kits. Real estate agents in Dubai (selling to people in the UK) have been making a killing because they’ve jumped on a massively growing market that few people truly understand.

Also, because Africa is significantly less involved in the world credit markets, they’ve been less affected by the global recession so far.

On the other hand, a recent post on World Bank African Chief Economist Shanta Devarajan’s site suggests that there may be other immediate problems that would stiffle immediate growth in African markets. On his site today, a guest poster noted these five concerns:

1. Weakened local investor confidence in equities and bonds on African Stock Exchanges

2. Return to ultraconservative lending practices

3. Losses arising from central bank reserve management practices

4. Renewed debate on the role of governments in the financial system

5. Weakened balance sheets resulting from a downturn in the real economy.