ARIF NAQVI DISLIKES THE TERM 'emerging markets'. "It is condescending to call them so," he says. "They are 'Growth Markets'." To underline his thesis, he points out that two thirds of new global growth is from this group of countries. "It is this group that is fuelling the economies of the industrialised world."
He should know. Arif Naqvi is no academic number-cruncher. He is the Group Chief Executive of The Abraaj Group, which is the world's largest private equity investor in growth markets with $7.5bn in assets under management. He established the company in 2002 and has returned around $4bn to investors. He is a man who puts his money where his beliefs are and his belief that Africa is primed for great things is unshakeable. "Africa is vital to the growth of the global economy," he says, "and an essential component of growth markets."
In Naqvi's lexicon, growth markets stretch from Latin America, through sub-Saharan Africa, the Middle East and North Africa, Central Asia, South Asia to East Asia. Abraaj has 36 offices managed through six hubs, one in each region. It has made over 200 investments in 50 countries and achieved over 60 full and partial exits. Naqvi reels off an impressive set of figures to substantiate why he insists on calling the South-South axis growth markets: 19 of the 30 largest economies by 2050 will be from this group; they will account for 70% of global consumer spending growth between 2010 and 2020; they constituted 90% of urban population growth in 2012; they will provide an additional 1.4bn middle class consumers by 2020; 423 cities in this group will account for over 45% of global GDP growth between 2007 and 2025 and the value of infrastructure investment required over the next 20 years will amount to $40 trillion. While the figures may be mind-boggling, the investment opportunities they represent are mouth-watering. And Africa is right in the thick of things.
"The world has erroneously looked at Africa as a development challenge,' says Arif Naqvi. "They have perceived it as erratic, unstable, corrupt--and all the focus has been on governance."
But, he says, the new view of Africa that is emerging will replace all this negativity. "The pace of reforms taking place on this continent is faster than anywhere else on earth. It is home to half of the 10 fastest-growing economies in the world. Moreover, the emphasis on Africa's resources is misplaced--resources do not...