Africa continues to rise in the midst of a global economic downturn
Although some sectors in Sub-Saharan Africa have slowed due to the global economic downturn; overall, the economies of most countries on the continent have continued to grow at rates superior to the rest of the world.  Gross domestic product growth rates in AMMF’s target countries held strong averaging 7-8% per year for the last 10 years. In 2008, East Africa’s growth slowed more gradually than in other regions, remaining over 4%.  2009 data will be available shortly. AMMF’s target countries enjoy increasingly robust domestic markets powered by a rising middle class and they are not dependent on major commodity exports (Mahajan; Africa Rising).

Africa’s entrepreneurs know how to overcome challenges
Out of the debilitating poverty and extreme challenges facing young men and women in sub-Saharan Africa, a class of determined entrepreneurs has emerged.  These entrepreneurs know how to adapt to changing conditions, recognize opportunity and leverage relationships.  They know the value of hard earned money, and how quickly it can erode if mismanaged.  The popular press often paints a sometimes justified view of a hopeless Africa.  The other side of the story is the gigantic hope generated by entrepreneurs who create jobs for the poor, meet the product and service needs of a growing middle class and ultimately restore dignity.  In the midst of the global economic downturn, unlisted, mid-size African companies have shown remarkable resilience, often growing at rates only dreamed about in developed markets. 

Sub-Saharan Africa continues to improve as an investment destination
Although the risks should not be underestimated for investors in mid-size African companies, we have many reasons to believe a select group of sub-Saharan African countries will “mainstream” into the global economy within 10 years, particularly Tanzania and Uganda.  Governments are increasingly being held accountable to better governance, improved investment policies and more discipline business law.  As mature markets in the developed world struggle to achieve growth, more and more investors will look to funds like AMMF to access companies poised for double digit growth far into the next decade.

AMMF is positioned to succeed in the Sub-Saharan Africa environment
AMMF’s fund managers’ track record of SME investing in Africa enables AMMF to identify and manage the best quality local enterprises in the most naturally-competitive sectors. The fund managers’ familiarity with the many local impediments to success enables them to anticipate and mitigate the risks peculiar to this type of direct investing. First priority is placed on maximizing financial returns and growing the wealth of the enterprises and investors. A near-equal emphasis will be placed on optimizing the developmental or “social” impact of the investees’ activities in their communities and markets.

The investment landscape shows positive signs
An International Monetary Fund (IMF) report released in 2008 compares several sub-Saharan African (SSA) nations to the “Asian Tigers” of the Pacific Rim in the 1980’s, before they experienced rapid growth. Several countries in Africa are experiencing the foundational factors necessary to make them a rewarding investment destination:

• Increasing political stability and higher standards for good governance
• Policy changes that encourage private investments and place a strategic priority on SMEs
• Continued economic growth driven by plenty of domestic demand

In addition to the IMF report’s comparisons to the "Asian Tigers", AMMF’s target countries enjoy several other advantages, including:

• Good cell phone penetration (especially in rural areas)
• Innovations such as mobile banking
• Broadband access, as of 2009, established in Tanzania as a hub for all of East Africa
• The potential for franchising successful business pilots

In sum, the factors of strategically chosen countries and sectors, top quality available SMEs and management, fund managers with the relevant experience, and the timing make this a highly attractive opportunity for impact investors who seek participation in Africa’s rising economic tide.

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