Mugabe: Bad For Business... A Potential Goldmine For Shrewd Investors

Zimbabwe is in the headlines again today. As usual the mainstream hacks are focussing on the country’s political crisis. We’re looking beyond that though, because this country holds some of the most exciting profit opportunities in Africa.

Our favourite is revealed below.

Right now, Zimbabwe ought to be booming. It’s got everything it needs to profit from the commodities super-cycle. It used to be a major agricultural exporter; and it’s sitting on the world’s second-biggest platinum reserves after South Africa. It also has one of the most highly-skilled workforces in all of Africa.

If political and economic stability returned... the country would be ripe for a huge turnaround.

So it makes sense to have a bit of exposure to Zimbabwe in your portfolio.

"Hold up," I hear you gawp... "invest my hard earned money in Zimbabwe"?

Well, no. You see, here at Profit Hunter we’ve uncovered a clever way to benefit from this story without the risk of direct investment.

Let me explain.

Why you should get INTO Africa

I know what you're probably thinking: Africa is a third world continent. It's war-torn... ravaged by disease and corruption... this is the last place I want to invest...

Well that’s what the mainstream might think, but the truth is that the Africa of the early 21st century is a continent that’s growing-up fast in economic terms, with plenty of potential for the smart investor prepared to dig that bit deeper for their profits...

So forget Zimbabwe for a moment, and consider this...

African economies grew by an average of 4.9% annually between 2001 and 2006. Africa as a whole grew by 5.7% in 2007 and that figure is expected to reach 6.5 this year.

The figures for sub-Saharan Africa are even more impressive: GDP in that region grew by 6.1% in 2007 and could reach a scorching 6.8% this year - the strongest performance in decades...

The continent's mineral wealth is legendary. Africa produces half the world's platinum and diamonds, 46% of the world's chromium and 29% of its gold. It also holds 10% of the world’s proven oil reserves and 8% of gas reserves.

Foreign direct investment in the continent is rising strongly. Africa is at the heart of the expansion plans for the world's largest mining companies...

For investors, this is without doubt one of the most exciting growth stories of recent times - there are hundreds of opportunities to make big profits here - I can't believe the overwhelming majority of investors remain blind to Africa’s potential! As you can see, Zimbabwe is a very small piece of the puzzle here.

And when change happens... you could be positioned to profit

Here at Profit Hunter, we’ve got great exposure to the African story, including in Zimbabwe, through our pan-African conglomerate play.

Its key subsidiary has made investments telecommunications, fund transfer and printing companies in Zimbabwe, as well as in two hotels in the town of Beira in neighbouring Mozambique.

Beira was once a major port and a lot of landlocked Zimbabwe’s trade used to flow through it. The country’s economic collapse hasn’t been good for Beira... and it hasn’t been good for our play’s subsidiary either...

But Mugabe is now 84 years old. Change of some sort probably isn’t too far off. And when it does happen, we are already positioned to take advantage of it.

We can afford to wait it out with this one...

Now if Mugabe’s mischief were limited to Zimbabwe, we’d probably be a lot less interested in the current electoral fiasco in the country. But Mugabe has been a major source of instability in the region for over a decade now.

In 1996, he sent Zimbabwean troops into the Congo to support the tottering regime of Marxist buffoon, Laurent Kabila. He helped spark a war that involved nine African countries and led to more than 4 million deaths. Kabila was eventually assassinated by his own supporters who had had enough of his duplicity...

But the venture was enormously profitable for Mugabe and his cronies. They took control of the enormously rich copper mines in southern Congo.

Zimbabwe’s involvement in the Congo war was led by Mugabe’s chief henchman, Emerson Mnangagwa - formerly head of the intelligence service and now Zimbabwe’s Housing Minister. Mnangagwa made a fortune through illegal mining and arms dealing during his Congo adventure and has been named on several UN reports.

That leaves him open to facing charges before international tribunals if there was ever a change of government in Zimbabwe.

The thought probably doesn’t appeal to him... particularly since he is seen as a likely successor to Mugabe.

Like most of Mugabe’s cronies, he’s got everything to lose and nothing to gain from a change of regime. So, they’re fighting tooth and nail to stay in power.

Mnangagwa is one of a group of Mugabe cronies now sitting on the country’s Joint Operational Command (JOC) — the committee responsible for ensuring Mugabe’s re-election at all costs... a sort of domestic Committee for Terror. If today’s announcement from the opposition that they will quit the election race is anything to go by, they’ve obviously done something right.

Massive investment opportunities right across the region

In the meantime, the rest of Southern Africa is bracing itself for the fall-out.

This region is one of the most exciting investment stories around today. But today the South African rand fell on the announcement that the MDC is withdrawing from the election — it’s now down 15% this year...

I haven’t the faintest idea on what’s going to happen next in Zimbabwe.

What is obvious though, is that things in this country are rapidly coming to a head.

We’re keeping a close eye on it, not just because we’re fascinated by the politics of it, but because a resolution of the Zimbabwe crisis — one way or the other — could open up massive investment opportunities right across the region.

Regards

Manraaj Singh
Editor
Profit Hunter P.S. If you enjoyed this article then we encourage you to sign up for Profit Hunter. Track down exciting opportunities in the worlds’ emerging markets and always stay ahead of the curve.

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