The former Goldman Sachs economist Jim O’Neill will forever be associated with the term BRIC, which he coined as an acronym for Brazil, Russia, India and China (now commonly bracketed with South Africa to make BRICS). The term caught on and has been common parlance for a decade now. And now O’Neill, though no longer with Goldman, has a new one: the MINT countries.
Mint? This term refers to Mexico, Indonesia, Nigeria and Turkey, and O’Neill’s premise is that these will be the next economic powerhouses. They are bound by a few key themes: young populations, useful geographical placement, and (Turkey excepted) by being commodity producers.
Personally I have mixed feelings about the MINTs, and also think that any use of this idea as an investment theme ought to take into account just what’s happened to the BRICS in recent years. But we’ll come back to that.
First, the good news. Mexico and Nigeria have some of the best prospects in all emerging markets. Nigeria, in particular, is thought to be in an economic sweet spot and has gathered increasing attention from world investors over the last year. It is about to undergo a GDP re-basing – a reassessment of the country’s GDP – and when that happens, it may well
prove to be the biggest economy in Africa, bigger even than South Africa.
Capital, for example, estimates that Nigeria’s economy was worth $405 billion in 2013, compared to $355 billion for South Africa. On top of that, Renaissance points out, it will become 20% of the
MSCI MSCI +% frontier index, is undergoing a period of reform with some considerable ability in the public sector (notably the finance minister and central bank governor), and even without reform has grown by 7% a year since 2000. There are considerable challenges, from corruption to theft of natural resources, but Nigeria is a high-population market of growing wealth and opportunity.
Source: Forbes
Chris Wright
