Wednesday, July 25, 2007

New York Times Article: Africans Are Wary but Hopeful, Poll Shows

An article in today’s New York Times (7.25.07), “Africans Are Wary But Hopeful, Poll Shows” reveals hope and confidence in a continent plagued with HIV infections, corrupt governments, and swathes of poverty. The poll revealed:

It found that in the main, Africans are satisfied with their national governments, and a majority of respondents in 7 of the 10 countries said their economic situation was at least somewhat good. But many said they faced a wide array of difficult and sometimes life-threatening problems, from illegal drug trafficking to political corruption, from the lack of clean water to inadequate schools for their children, from ethnic and political violence to deadly disease.

Face-to-face interviews were conducted in April and May with 8,471 adults in Ethiopia, Ghana, Ivory Coast, Kenya, Mali, Nigeria, Senegal, South Africa, Tanzania and Uganda. The survey sampled nationwide adult populations, except in South Africa, where the sample was completely urban, and Ivory Coast, where it was disproportionately urban and tended to be in areas sympathetic to the government. The margins of sampling error were plus or minus either three or four percentage points.

The results showed that the struggle for democracy and good governing in Africa is more like a patchwork of gains and setbacks than a steady tide of progress across a continent that has suffered some of the worst instances of misrule. While all of the countries polled are nominally democracies, half of them have suffered serious rollbacks of multiparty representational government in recent years. A majority in each country said corrupt political leaders were a big problem.

The Author has always had an interest in Africa. Africa, is, first and foremost, the cradle of the human species. He would someday like to travel in Africa.


Two ETFs (exchange-traded funds) allow individual investors to invest in Africa. GAF, managed by State Street Global Advisors , seeks to closely match the returns and characteristics of the total return performance of the S&P®/Citigroup® BMI Middle East & Africa Index (ticker: STBMMEU).

Another fund is EZA, which is a South African ETF. EZA has had huge returns over the last four years. GAF is a relatively new fund. It should be noted, however, that GAF is heavily weighted in South African stocks, has large holdings in Israel, Morocco, Jordan, and Egypt, and has little holdings elsewhere in Africa.

Much of the gains in Africa have come in raw materials, copper, zinc, other basic materials. Also, South Africa has large holdings in diamonds, the “soulless stone”. Investors might wish to consider that diamonds, and the cartels and criminal enterprises that traffic in them, have a mixed legacy. In the Author’s opinion, diamonds make good cutting tools. Period.


IMPORTANT DISCLAIMER: This blog is offered for informational purposes only. Sources of information provided are believed to be reliable, but are not guaranteed to be complete or without error. Opinions and suggestions are provided with the understanding that readers acting on information contained herein assume all risks involved. The author may or may not buy or sell securities discussed in this newsletter.


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