Some hedge funds, brokerages and offshore investors believe that the time is ripe to "buy Africa". It is certainly the case that price-earnings ratios for many African stockmarkets were above their sectoral equivalents in mature markets in 2007, but the ongoing fallout from the subprime mortgage crisis in the US should act as a reminder that what goes up eventually comes down.

The markets can turn very quickly-and very substantially. In Africa 1.01: Unlocking Investment Potential, published before subprime realism had begun to set in, emerging-market investment bank Renaissance Capital concludes that the continent "has probably turned the corner on its relative economic decline," thanks to "a supportive global backdrop for commodity exporters", hugely improved national balance sheets and "a political commitment to better economic policies".

The binding constraint on most African economies has now shifted, it says, from a lack of foreign exchange and high cost of capital to "chronic infrastructure bottlenecks, reflecting the surge in GDP growth after years of investment neglect". Renaissance argues that "a bet on the sustainability of Africa's recovery" is that sufficient funding and political will exist to overcome this key constraint, although it admits that infrastructural improvements will need to be "ongoing for some time". On the basis of this conclusion, Renaissance suggests three main investment targets for those seeking to cash in on frontier market opportunities in Africa.

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