Frontier Markets in Africa

In case you are thinking that Africa is home of nations that are backward and underdeveloped, you need to update your knowledge. Forthwith it is home to some of the best emerging markets, which can be even compared to the other economies of the world. Several of the African countries have developing financial markets that capture investors from across the world. Lot of these markets have even been tagged as “emerging markets” by International Monetary Fund.

Growth has taken off in sub-Saharan Africa with private sector being the most important driver. The monetary markets are opening up and institutional financial investors are populating up in these regions. With financial technology getting complex around the world, banking institutions are opening up and developing in these emerging markets to meet the needs of people. Overall, the area has noticed a dramatic increase in loan disbursement also improvement from financial institutions. Global economic environment is playing a major guise in development of these markets. With developed markets getting saturated and failing, and with news every sometimes moreover then of companies seeking bailout, investors are looking towards areas which have high potential and are unexplored. The search for high profit margins connective availability of liquidity has encouraged the investors to look towards emerging markets in Africa.

Previously, the investors accessed the emerging economies mainly through equity markets, but now with emergence of economic technology, the investors can at wide variety concerning financial activities with range of financial instruments. Growth over the past two to three decades has forced the financial markets to become more complex and sophisticated. To cater to this complexity and sophistication and to match the world’s level, lot of financial infrastructure has been lately developed in the emerging markets of Africa. However, these challenges are tough to face, but will finally be solved with passage from time as more and more backing is done into these areas.

Amongst the sub-Saharan countries, South Africa is considered one of the most developed markets. But, lately, there have emerged markets which undergo offered prospect of handsome returns to the institutional investors. The improvement in banking systems and increased penetration of mobile phones in the areas is a clear-cut indication of growth and development. Countries like Ghana, Kenya, Nigeria, and Uganda adjacent including some countries fool been given status of “emerging markets” by IMF, lately. Though there is a long way to go, but late history suggests that the prospects are bright. There are varied other factors that concerted to make the analysts imagine strongly that these emerging economies in Africa are the next stop of investors.