“That’s a really good thing, it’s a first tick box as an investor I look at because it represents a rising tide. This five-stage model is driven by demographics,” David Murrin, the CEO of Emergent Asset Management and author of "Breaking the Code of History” told CNBC Africa.
“You’ve got to look at each of the individual countries within that region, where they are on their economic cycle and which business areas they need to develop and grow. Then you look at their whole resourcing policy and how they sell or develop resources, look at their rule of law.”
Geopolitics is the study of the effects of geography, both human and physical, on international politics and international relations.
Murrin’s Five Stages of Empire is a geopolitical model of the growth and decline of civilisations. He believes it can provide a way to both understand history and accurately assess current and future geopolitical environments.
The model is made up of five stages: regionalisation, ascension to empire, maturity, overextension and decline and legacy. Murrin maintains that this model can assist institutional and private investors who are looking to invest in Africa.
“Africa is in a middle regionalisation phase and it’s started to bifurcate North and South, just below the sub-Saharan belt. Along those borders you have less resources with things like climate change and you have conflict zones erupting because population densities can’t be supported by the resources available,” he explained.
“All of these civil wars you see in Libya, Egypt and Syria are part of the end of the Islamic Middle East’s evolution. That whole band is conflict-ridden and if you’re an investor going into North Africa, you need to pick your destination very carefully.”
Despite the challenges and perceptions that Africa faces, Murrin insists that the region, particularly sub-Sahara, has tremendous potential.
“The whole sub-Saharan region, it’s not going to build an empire but it’s certainly going through the stages that lead to that growth dynamic. I do think as an investment zone, there’s huge opportunity. I think it’s far better than Latin America, certainly than Asia where there are other challenges,” he said.
“You’ve got to be careful about the timing of everything you buy whether its bonds or equities but generically, do I think this is a multi-decade, growth environment - absolutely. I think Africa is the premier destination for investment globally.”