In addition to its Frontier Markets Blog, Silk Invest, managers of both the African Lions and Arab Falcons funds, now offers a ‘Silk Invest Updates’ blog complete with pertinent market commentary. A recent posting nicely sums up the mantra behind frontier investing at the moment:

“It is pretty obvious that the fundamentals of many African and MENA [Middle East and North African] economies are now the things that Europe and the U.S. only can dream of having right now; low levels of debt and/or high levels of reserves. Add to this a vibrant population growth and the prospect of an improvement of lifestyle for this growing population which could lead to even more economic growth.”

A month or so ago the firm posted the following graph (“African External Debt, USD terms and as a % of GDP” from 2000-2009) which highlights the continent’s debt story. Compare and contrast with any developed market of your choice.

africa debt