Cynthia Steer, chief research strategist at the pensions consulting firm Rogerscasey, has returned to her office in Darien, Connecticut, “galvanised” from a two-week intelligence-gathering trip to sub-Saharan Africa. One of the first calls she received after landing back in the United States was from a client who wanted to know about the political unrest in Kenya. “He asked if it was a good time to invest in Nairobi’s stock exchange,” she said. “In all honesty, I could not say no.”

It is easy to dismiss war zones as no-go areas for investment purposes, but judging by the experiences of many fund managers, the perception of risk is often at odds with reality.“Given the choice between investing in Africa – conflict or no conflict – and a basket of Western banks, Africa would win every time,” Steer said. “As an investor, you know exactly what you are getting in the region: No artifice, just superior growth at inexpensive prices.”According to the International Monetary Fund, economic growth in sub-Saharan Africa will top 7 per cent in 2008, with oil-rich markets like Nigeria set to grow much faster. An estimated $5 billion of private equity is looking for a home in the region, along with hedge fund money and mutual fund flows.

Short-term political unrest is understandably negative for the Kenyan economy and stock market, but the long-term investment potential for this and other sub-Saharan markets, is promising. The strength of Nigeria is not just based on its considerable natural resources. Successive governments have embraced market orientated reforms and proved good fiscal managers while inflation is low and the currency has been allowed to appreciate gradually.

Businesses in which Africa has lagged behind the rest of the world, like banking and telecommunications, can also provide interesting opportunities. One lesson that might be useful to investors is Pakistan. While the crisis in Kenya was unfolding, investors were running scared from political turbulence in Pakistan. The assassination of the former prime minister Benazir Bhutto in December sent share prices into a tailspin. Had investors kept faith, they would have been able to claw back some losses. Since the start of the year, the Karachi Stock Exchange has gained 5 per cent.

If Pakistan and Kenya are considered high risk, then Iraq should be off any sane investor's radar screen. In fact there is only one open-ended fund that invests in the country. But investing in Iraq is no picnic. Corruption is rife and stock market liquidity poor. For these reasons, England favours the banking sector, which is relatively well regulated by Iraq standards. Two of his largest holdings are Bank of Baghdad and Commercial Bank of Iraq. Possibly less risky are his holdings in Western companies that do business in Iraq. They include Western Zagros, a spinoff from Western Oil and Petrel Resources, a Canadian company that is domiciled in Dublin.