Africa is a fast-growing emerging market. Better still, the recessionary effects that gripped the continent may have been more mild than previously believed. Exchange traded funds (ETFs) aimed at the continent could be in a prime position to prosper.
The International Monetary Fund (IMF) now projects Africa’s economy will expand 4.3% this year, up from the previously forecast 4%. Next year could be even better – it’s expected to grow 5.3% then, reports Mike Cohen for Bloomberg. The IMF also expects sub-Saharan Africa’s economy will expand 4.3% this year and 5.5% the next. [Africa ETFs: Recovery Coming Slowly.]
The IMF raised its forecast as a result of higher commodity prices and government stimulus programs that helped mitigate the effects of the global recession.
In Tanzania, higher gold demand in 2010 is expected to lead the mining sector’s revival and the chairman of Tanzania Chamber of Minerals and Energy, Mr. Ami Mpungwe, said that they project the industry to contribute more than $1 billion to the Tanzanian economy this year, according to TheCitizen Newspaper. Tanzania is Africa’s third largest gold producer, and it also has reserves of uranium, nickel and coal.
For more information on Africa, visit our Africa category.
- iShares MSCI South Africa Index Fund (NYSEArca: EZA)
- SPDR S&P Emerging Middle East & Africa (NYSEArca: GAF)
- Market Vectors Africa ETF (NYSEArca: AFK)
Max Chen contributed to this article.