Was pleased to read Wednesday’s Globe & Mail article which discussed Merrill Lynch’s recent report that Africa could be the “final frontier” of the world’s emerging markets. While I may quibble with such general statements as “the continent may be on the cusp of an “unprecedented stage of economic development”, I do agree that population growth, young demographics, measured & balanced government policies in certain countries, and an abundance of natural resource wealth (including 8 per cent of the world’s proven oil reserves, not to mention significant deposits of gold, silver, platinum, and other prized commodities) definitely makes Africa a part of the world on which to keep watch. There are also a number of world-class companies operating in very difficult markets that the rest of the world has not yet recognized, but will soon. The wireless telephony company, MTN, is but one example.

“It might not be the first place that jumps to mind but one Wall Street strategist says Africa, an often overlooked continent packed with potential and pitfalls, could prove to be the “final frontier” of the world’s emerging markets. According to Merrill Lynch chief investment strategist Richard Bernstein, Africa presents investors with both “tremendous potential” and “tremendous risk.” In the next decade, he believes it should above all provide them with opportunity. …

Investors who choose to invest in Africa should be aware of significant risks, Mr. Bernstein said. “Wars, civil wars, and general violence have been declining during this period of prosperity, but Africa is still one of the world’s most dangerous and violent places.”

In his mind, government corruption, underdeveloped legal and financial infrastructure, low levels of education and health care, including the AIDS/HIV epidemic, and poor distribution of income are some of the elements that could hinder Africa’s development in the coming years.

“Africa struggles with a host of political issues, such as government corruption and standards for the rule of law that need to be improved,” Mr. Bernstein said. “The bear case on these political issues is that much of the oil and commodity revenue of the current boom will be wasted on ill-conceived projects or stolen outright.”