Email of the day (2)
Comment of the Day

June 10 2010

Commentary by David Fuller

Email of the day (2)

On the effects of life expectancy on GTI demographics assumptions for Africa
"Just going through the GTI Quarterly, which you posted on Wednesday. While in general agreement, there is this table on page 3, comparing Sub-Saharan Africa as a whole - an artificial entity with often thinly traded stock markets, which nevertheless experiences growth in many areas - with other emerging markets. Quote: "The most important statistic is that the median age in SSA is 19." Yes, but. The table doesn't include that the median life expectancy in quite e number of SSA countries is in the forties, due to AIDS and often poor healthcare. In other words, many of those nineteen-year-olds will not be consumers for another forty or sixty years, but sadly not even for the next ten, ensuring that the median age remains low. Students and teachers are often among the most affected. I don't know the figures for other continents, but in this one respect GTI might be comparing apples with pears."

David Fuller's view Thank you so much for this important, on location (Tanzania) assessment which can only make a huge difference in terms of demographic considerations.

Despite the occasionally strong cyclical performance, I personally have never been tempted to invest in Sub-Saharan Africa. There are three main reasons: 1) I would have trouble getting relevant data; 2) in the global beauty contest I see safer and more liquid markets with proven growth trends; 3) thinly traded markets are heavily influenced by a handful of institutional investors who can drive them up on weight of capital and back down again even more quickly.

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