Despite the current tragedy and turmoil in Kenya, much is being written of Africa as the final emerging market frontier.  While we have been covering Africa for some time, 24/7 Wall Street offered an interesting look at African investing recently.  The focus is primarily on ETFs, but the comments about investing in Africa seem on the mark:

“…As investors look for emerging markets in 2008 and beyond, they may start to look for emerging markets that have yet to emerge from that deep emerging market status. The last spot on the planet that has yet to be turned into a series of countries with something resembling stable market economies and somewhat stable governments is AFRICA.  Africa is perhaps the hardest place in the world to invest in, although there are a whole host of US-listed companies which generate much of their operations in Africa. The problem is that these often appear on investor boycott lists and are hard for an investor to get direct information on. Africa is a bad neighborhood when you consider strife around the entire continent. Even staunch humanitarians would say so.

The good news is that there are actually some ETF’s and funds that investors can purchase to invest directly into African markets and US or Foreign companies that operate in African markets…

…So why don’t investors just buy direct stocks on exchanges of more established countries to get direct exposure? Once again, Africa is a very dangerous neighborhood. Crime and corruption is rampant in many African nations, political turmoil may be the understatement of the decade, they have things called civil wars there, many markets do not even have legitimate stock exchanges, many countries are mere regions recognized only by map-makers, and many companies only benefit from oil, gold and metals, or diamonds. Mark Mobius of Templeton Funds used to say “invest when there is blood in the streets.” In Africa, blood in the streets seems to still be the norm.

Investors are always looking for the next new hot emerging market, or at better yet a hot new region to invest their money into for the long-haul to outperform developed nations. If you have been around Asia you know a lot of the growth has already happened. Eastern Europe already has countries in or in the process of joining the E.U. Russia has grown enough that Czar Putin was just named Time’s Man of the Year. The Middle East is boom town right now with development and with near-$100 oil. South America is chugging right along. Unless Greenland or Antarctica suddenly get waves of human population in need of infrastructure, Africa appears to be one of the last frontiers….”