For growth-oriented investors, Africa offers multiple opportunities for higher rates of long-term return.
One of the key drivers of investment opportunity in Africa is the continent’s compelling demographic dividend: Africa has the youngest population in the world. Africa’s young population translates to a larger, cheaper, healthier, and more dynamic workforce; a growing consumption market; and a broader current and potential tax base.
Africa currently has a population of 1.1B and the continent’s population is forecasted to reach 1.8B by 2050 – An increase of 64%. By 2050, 20% of the world’s population will live in Africa.
Seruma cautioned against viewing Africa as a monolith. Africa is a continent of 55 countries, with diverse opportunities, varying degrees of risks, and different drivers of opportunity. Therefore, Africa is best understood on a country-by-country basis rather than as a continent.
According to Seruma, Nile Funds has a great interest in Nigeria, Africa’s largest country by population. Nigeria is also Africa’s largest economy. By 2040, Nigeria’s population is forecasted to reach 400M, larger than that of the United States. Nile Funds forecasts that Nigeria can sustain annual GDP growth rates of around 6% for decades. Nigeria’s vast economic potential creates investment opportunities similar to those available in the BRIC (Brazil, Russia, India, and China) nations a decade or so ago.
Larry Seruma has over 20 years of experience in portfolio management, investment research, and quantitative investment strategies. In 2004, Mr. Seruma founded Nile Capital Management, where he began his tenure as Portfolio Manager for the Nile Master Fund, a global long/short equity hedge fund. In 2005, the Nile Fund was integrated into Proxima Alfa Investments (USA) LLC (formerly VegaPlus Capital Partners), a subsidiary of Banco Bilbao Vizcaya Argentaria, and Mr. Seruma was named one of the firm’s Managing Directors. Currently, Nile Capital Management serves as the Advisor for the Nile Africa Funds, which seek opportunities for investment across the Africa continent.
Prior to founding Nile Capital Management, Mr. Seruma was a Principal at Barclays Global Investors (BGI), a division of Barclays Capital. He was a member of the Active Strategies Group there and also a member of BGI’s Investment Process Committee. Early in his career, Mr. Seruma was an Options Market Maker in the Exchange pits at the Chicago Board Options Exchange (CBOE). Mr. Seruma has authored several articles on investments in Africa and other emerging/frontier markets, and has been featured in many leading financial publications. He is also the author of www.moneywatchafrica.com, a financial blog focused on understanding African investment opportunities, and serves on the Board for the Segal Family Foundation, which focuses on improving the quality of life in Sub-Saharan Africa. Larry Seruma received an MBA in Analytic Finance and Statistics from the Booth School of Business, The University of Chicago, in 1996.
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