The unusual products driving Africa's growth

AFRICA

Sebastian Kahlfeld, fund manager at Deutsche Asset & Wealth Management, explains why locally produced goods, are helping Sub-Saharan African countries create a new ‘emerging' middle class.

Economic growth in emerging markets mostly means a significant jump in construction output. So, a simple way to measure growth in Africa is by looking at the number of construction cranes in view. While companies based as far away as Spain and Korea benefit from this, there are also goods from lower down the value chain required in large quantities, which currently are mostly produced locally. A good example is cement, which has a domestic transport cost effectiveness of around 300km. The cement market provides a good representation of the local conditions of an economy during a major...