Consumers are struggling with higher food and fuel prices across the emerging markets of Middle East and Africa as external factors such as high commodity prices and regional unrest combine with internal factors including strong domestic demand. Next month, Ramadan will heighten the upward pressure on prices in countries with large Muslim populations, which may lead governments to consider interest rate hikes to bring inflation under control
■ Algeria: A desire for stability will trump any motivation for political change in the short term
■ Angola: Moody’s and Fitch signaled that Angola’s investment climate is improving, but several threats could derail recent progress
■ Egypt: The new budget plan fails to address how Egypt will emerge from its post-revolution struggles, but cautious optimism remains for 2012
■ Ghana: Politically stable Ghana has made huge strides recently in local enterprise stimulation and resource manufacturing potential
■ Iran: The rollback of subsidies is sustaining inflation at high levels, which is hurting Iran’s economy more than sanctions
■ Iraq: Investment opportunities in Iraq are growing rapidly, but the security situation remains precarious in the medium term
■ Kenya: Economic potential is restricted by high commodity prices, which are contributing to inflation growth and a weakening currency
■ Morocco: Relative stability should hold for the short term, but fallout from the constitutional referendum should be monitored closely
■ Nigeria: The development of the healthcare sector may be a slow process, but its untapped potential is huge
■ Saudi Arabia: Pace of government transactions slows, but private consumption spike will provide opportunities for consumer-oriented companies
■ South Africa: The investment climate received a boost with the approval of Wal-Mart’s entry, but familiar challenges still threaten the economy
■ Tanzania: Massive infrastructure plan hinges on willingness of private investors to take a risk on Tanzania
■ UAE: The government is getting ready to launch a key industrial zone just as companies revisit the UAE as a long-term export base
Each month Frontier Strategy Group releases monthly market reports to its clients. These concise, executive-friendly reports highlight key developments and market trends in a particular region.
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