How will the current economic turmoil in developed markets such as the U.S. and Europe affect Africa? Charles Robertson, global chief economist at Renaissance Capital, had the following to say in an email to investors and the media:
“Just a short note explaining our thinking and what it means for emerging markets in Africa.
“First, it suggests that overheating risks in Kenya may dissipate. Second, it suggests Nigeria may need to consider a weaker oil price as it prepares its 2012 budget (though we hope weakness in developed markets will be short-lived and oil may rise again in 2012). South Africa may well be favoured by global investors as a safe haven with large domestic pension funds helping to support the market.
“If global investors want sustainable growth – they must invest in Africa over the longer term. Already companies like Walmart are correctly judging that they cannot grow their business in this weak U.S. environment and are buying into the African growth story.”