A significant yet seldom highlighted World Bank statistic is that half
of African countries (27 in total) are now classified as middle-income
countries. Private equity has enabled businesses in Africa to grow by
servicing rapidly gentrifying populations and is providing returns for
investors that outstrip public markets. Among the most promising sectors
is financial services, which has long been popular with the region’s
private equity houses, particularly as technological innovations, such
as mobile payments, have made financial services products more
accessible for the remotest of communities and as banking reforms in
many markets have led to consolidation. Other sectors that are
attractive for private equity investments include consumer industries,
infrastructure, telecoms, agriculture and forestry, and industrial
goods.
Africa set to gain US$3bn infrastructure fund. Africa’s
largest development lender, the African Development Bank, plans to
launch a US$3bn infrastructure fund this month, aiming to raise money
from regional and non-African pension funds, insurance groups, sovereign
wealth funds and institutional investors. The fund, to be known as
Africa50, will help the continent in delivering vital infrastructure
through a new global partnership platform, according to the proposal by
the African Development Bank. Africa needs about US$95bn a year to close
an infrastructure gap in electricity, roads, railway and port. Current
investment is running at about US$45bn. The AfDB, which will invest
US$500m, aims to approve the fund this month during its annual meeting
in Rwanda.
Ethiopia receives first sovereign Standard & Poor’s rating.
Ethiopia has received its first sovereign credit rating from the top
global agencies. Moody's assigned a B1 issuer ratings to the Government
of Ethiopia. Ethiopia is one of the world’s fastest growing economies,
averaging growth of more than 10 per cent per year over the last decade
and attracting the likes of clothing giant H&M and private equity
groups.
Rebasing the Nigerian Economy. Nigeria, Africa’s top
oil producer and the most populous country in sub-Saharan Africa, with
an estimated 170 million people, has overtaken South Africa as the
largest economy after a rebasing calculation almost doubled its gross
domestic product to more than US$500bn. Nigeria’s market has been
growing as an investment destination owing to the size of its consumer
and growing capital markets. GDP growth averaged at 6% over the last 10
years despite global economic and local market challenges. Most
governments overhaul GDP calculations every few years to reflect changes
in output, but Nigeria had not done so since 1990, thus sectors such as
Telecom Media and Technology (TMT) i.e. e-commerce and mobile phones,
strong financial services, growing labour market and its prolific
creative sectors such as “Nollywood” films now worth 1.4 % of GDP had to
be factored in to give an up to date picture. This is in addition to
the revenue generated from the petroleum industry which accounts for 95 %
of Nigeria’s export earnings and 85% of total government revenue.
Private equity fund - a first for Tanzania. Locals
have been urged to invest more in Tanzania as the country launches the
Mkoba Private Equity Fund – the first ever private equity fund in the
country. The Sh480 billion (US$300 million) fund aims to provide growth
capital to portfolio companies not on the radar of most funds. The fund
will focus on Ethiopia, Tanzania, Rwanda, Mozambique, DRC, South Africa,
Cote d’Ivoire, Liberia and Sierra Leone, targeting equity investments
ranging from US$1.0 to US$15 million.
Biggest oil discovery yet in Kwanza basin off Angola.
Cobalt International Energy has discovered significant quantities of oil
offshore Angola, calling the find the biggest so far in the promising
pre-salt layer in the Kwanza Basin. Oil drillers hope discoveries under a
deep submerged salt crust off Angola known as pre-salt may match the
prolific finds beneath similar deposits off Brazil on the other side of
the Atlantic in recent years. Analysts say Angola, Africa's No. 2 oil
producer, could double its oil reserves, which are currently estimated
at just under 13 billion barrels, if pre-salt drilling proves
successful. Cobalt estimates the well may hold between 400 million and
700 million barrels of oil.
Kenya and Nigeria sign trade agreement. Kenya and
Nigeria have signed three agreements and four memoranda of understanding
aimed at promoting trade between the two countries. The agreements were
on trade and agricultural cooperation which lay the foundation for
business people from Kenya and Nigeria to interact and promote business
and make provisions for the two countries to work together in boosting
their agriculture respectively. MoUs signed were on cooperation in
police service, five year multiple visa for prominent businesspersons,
cooperation in control of the possession and trafficking in narcotics
drugs and psychotropic substances, and one MoU between Nigerian
Association of Chamber of Commerce Industry, Mines and Agriculture and
the Kenya National Chamber of Commerce and Industry which was signed at a
business forum attended by Kenyan and Nigerian business people.
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