UBS Hunts for Hidden Billionaires as It Expands in Africa UBS AG (UBSN), the Swiss bank seeking to boost profit from wealth management, said it plans to expand in Africa as economic growth rates surpassing 5 percent boost demand for banking services from the continent's rich. "Wealth management is key to the Africa franchise," Sean Bennett, the Johannesburg-based managing director of UBS in sub-Saharan Africa, said yesterday in an interview. "That's what we lead with. We want to increase our physical presence before year-end and then do more in the next few years," he said. – Bloomberg
Dominant Social Theme: Africa is an incredibly rich place, but it hasn't been discovered yet.
Free-Market Analysis: If you read The Daily Bell you know we've written a lot about the coming African Miracle. Just search for Daily Bell and "Africa" or "African Miracle."
We were fairly sure of our analysis but articles like this in Bloomberg tend to confirm our suspicious. Africa is being groomed as the next China. Just as China became the next Japan.
The idea is to use central banking to create a boom in the country in question. The boom allows the country to purchase US Treasuries that in turn funnels cash to the US buying public that is directed by various means to purchase goods and services from the producing country.
This allows the nation in question to build an incredible Western-style infrastructure quickly. In first China and then Japan, infrastucture is modernized, factories are built and cities are expanded within the context of the Western paradigm.
The result is two-fold. The countries can be touted as miracles of capitalism and their people can be further introduced to the kind of corporatism and internationalsm that is gradually creeping around the globe.
The trouble with this sort of approach is that eventually it leaves the host country bankrupt but exhausted. From the point of view of those bankers organizing this sort of thing, the positives outweigh the negatives, however. The US and its military industrial complex are funded and the host country has been effectively Westernized and corporatized.
This happened in Japan and is now happening in China. It is apparently scheduled to happen in Africa as well, though Africa is a continent rather than a country. However, it is likely that certain countries will be selected out to become "Miracles."
We've theorized that Kenya, Nigeria, South Africa and The Ivory Coast are among them. But perhaps the net that is cast will be wide still. Here's more from the article:
UBS has 80 people in South Africa and offers investment banking, equities research, debt capital markets services and asset management across the continent. The lender globally wants its wealth-management units to contribute half of pretax profit by 2015, compared with 32 percent a decade earlier, and is targeting African entrepreneurs and high-networth individuals who have at least $3 million to invest, Bennett said. "When countries grow at 7 percent, that's a lot of people starting to make serious money," Bennett said.
UBS has "hardly touched the tip of the iceberg" when it comes to banking Africa's wealthiest, he said. While UBS competes with rivals such as Citigroup Inc. and Standard Chartered Plc (STAN) in Africa, the Zurich-based bank focuses on managing funds that have been transferred outside the continent, reducing competition with domestic lenders, he said. Nigerian growth is expected at 7.2 percent this year, according to the International Monetary Fund, while the organization said in April that Ivory Coast and Mozambique will both expand 8 percent next year, the fastest pace in the region.
The industries contributing most to wealth creation in Africa include resources, retail and consumer products, and telecommunications, Bennett said. "An example would be all the shopping malls going up in Nigeria. If you can get it right, there's a lot of money to be made." Africa may have as many as 200 "hidden" billionaires operating in the unofficial economy who will seek to legitimize their wealth in the future, investor Mark Mobius said in September. Aliko Dangote, Africa's richest man, is benefiting from the continent's economic growth, adding $6 billion to his wealth this year, taking him to $20.6 billion, according to the Bloomberg Billionaires Index.
Of course, if you've been to Kenya where most people seem to subsist (in the cities anyway) on a dollar or two a day, all of this is pretty funny in a melancholy way. Africa is NOT going to be the next "miracle" anymore than China once the bust sets in. Does anyone consider Greece or Spain miracles right now?
The larger issue here is one of dominant social themes and their efficacy. For years we've pointed out that Internet information is making elite promotions increasingly difficult. How can you promote when the Internet itself is explaining to a bright and numerate readership just what is actually going on? This is the audience these promotions are trying to reach, but in the modern era, they've already been educated by the alternative media.
It really is a conundrum and the inevitability of these promotions and a lack of alternatives leads us to believe that those generating them simply have no idea what else to do. They are the product of generations of work from what we can tell and no one anticipated that they would be explained and exposed.
So what is to be next as these promotions, one after the other, founder and fail? It is obvious that more violent measures are being considered but we get the feeling that those who want to substitute violence for globalist suasion are facing pushback. Even austerity seems to be running into trouble now, at least from a rhetorical standpoint.
We often hypothesize that even the most rabid of globalists will have to take a step back as a result of what we call the Internet Reformation and its various exposures. We think we detect tiny signs that this indeed may possible. But is it? What else, after all, is the alternative?