Fight poverty: Invest in Africa (this is not a paid announcement)

From The Herald, a story about investments firm providing investment opportunities in African companies. One firm is attempting to find a niche in agricultural import market in the United Kingdom, concentrating on chiles and other herbs from Malawi. Their hope is to eliminate the costly middle men, who drive up the price nearly 10,000 percent between farm and international market, a move the not only slashes profits for farmers, but places African agriculture products out of reach of the average shopper.

The good news.

Fund managers Chris Derksen and Roelof Horne say major advances in sovereign governance are propelling faster economic growth and improving the business environment. The estimated average growth of the African continent (excluding South Africa) reached 5.8% in 2006, up from 4.9% in 2005. Half the countries in Africa grew their GDP per capita by more than 3% per annum (real) in 2006. Established stock markets now exist in more than 21 African countries, including Malawi.

However, there is always risk.

But the managers admit: "Most African capital markets are still in the frontier market stage of development - young, small and illiquid, even by emerging market standards ... The obvious risks are exchange rate volatility, political risk, country-specific risk, cyclicality and tradeability. Given these risks, it is important to realise that one can achieve significant diversification by investing on a pan-African basis.

"The African markets are characterised by a low correlation with each other and to other emerging and developed markets."

For those who want to be in the know, it's best to start by checking out this site: Investing in Africa.