Economy Archives - African Financial & Economic Data

27 Jul

MallforAfrica and DHL launch MarketPlaceAfrica.com, a global e-commerce site

MallforAfrica and DHL are giving African merchants a global stage. This week the online retailer and delivery giant launch MarketPlaceAfrica.com: an e-commerce site for select African artisans to sell wares to buyers in any of DHL’s 220 delivery countries. The site will prioritize fashion items — clothing, bags, jewelry, footwear and personal care — and crafts, such as pictures and carvings.

MallforAfrica is vetting sellers for MarketPlace Africa online and through the Africa Made Product Standards association (AMPS), to verify made-in-Africa status and merchandise quality.

“We’re starting off in Nigeria and then we’ll open in Kenya, Rwanda and the rest of Africa, utilizing DHL’s massive network,” MallforAfrica CEO Chris Folayan told TechCrunch about where the goods will be sourced. “People all around the world can buy from African artisans online, that’s the goal,” said Folayan.

Current listed designer products include handbags from Chinwe Ezenwa and Tash women’s outfits by Tasha Goodwin.

16 Jul

New private equity fund commitments to boost growth of African companies

African companies will benefit from several new private equity fund commitments and investment partnerships announced during June 2018, according to Africa Private Equity News, an industry information service. These funds focus on a variety of sectors – including agriculture, renewable energy and technology – and will help businesses on the continent accelerate their growth.

South African private equity firm Agile Capital has launched a third fund of R1 billion (about $75 million) and is aggressively targeting fresh investments. While Agile’s existing portfolio is concentrated on the services, manufacturing, automotive and infrastructure sectors, the firm’s criteria for investment doesn’t exclude other industries. “We favour acquiring a controlling stake in any sustainable company poised for growth,” says CEO Tshego Sefolo.

Specialist forestry investor Criterion Africa Partners has announced the first close of its Africa Sustainable Forestry Fund II, with several institutional investors – including the UK’s CDC Group, Dutch development bank FMO and the European Investment Bank – making commitments of $81 million. The fund has a total target of $150 million, and invests across the forestry value chain.

Renewable energy continues to be a popular theme for investors, and Climate Fund Managers was therefore able to attract additional capital of $75 million to its blended finance facility, Climate Investor One (CIO), bringing the total third-close fund size to $535 million. The CIO, launched in partnership between FMO and South Africa’s Sanlam Infraworks, provides funding for renewable energy projects in the wind, solar and run-of-river hydro sectors in developing countries across Africa, Asia and Latin America. The three new investors are IMAS Foundation (a sister foundation to the INGKA Foundation – the owner of INGKA Group, which in turn owns the majority of IKEA’s department stores globally); Swedfund, the development finance institution of Sweden; and the Nordic Development Fund.

Gulf Capital, the Abu Dhabi-based alternative asset manager, revealed that Egypt is one of its target geographies for over $350 million it plans to invest in private equity over the next two years. “We are encouraged by what’s happening in Egypt. Egypt is growing above 5%, they devalued the currency, restructured the economy, introduced new investment laws, and foreign reserves are [at an] all-time high. If you look at the IPO market, it is 10 to 15 times oversubscribed,” the firm’s CEO Karim El Solh, told Gulf News.

Read more here: How We Made It in Africa

06 Jul

Africa’s Largest Data Center Firm Plans $73 Million Investment

Teraco Data Environments Pty Ltd. plans to invest about 1 billion rand ($73 million) as Africa’s largest data-center operator expands infrastructure to meet rising demand.

The closely-held business will have spent 4.5 billion rand on building data-services centers in South Africa when the current investment cycle ends in 2019, Chief Financial Officer Jan Hnizdo said in an interview Tuesday. Funding has come from a debt facility provided by Barclays Africa Group Ltd., also known as Absa, which is lending as much as 1.8 billion rand.

Teraco is investing to meet higher demand for data services in Africa as internet access improves and businesses adopt cloud-based technology. Internet giants such as Netflix Inc. and Facebook Inc. are seeking to reach more remote parts of the continent, while Amazon.com Inc.’s Web Services and Microsoft Corp.’s Azure need data storage

Teraco’s operations in Johannesburg are used by more than 200 African telecommunications providers and are able to provide 12,000 interconnections.

05 Jul

How resilient is the Kenyan economy?

The FT has a great special report on investing in Kenya. Highlights include pieces on devolution, President Uhuru Kenyatta’s “Big Four” legacy projects (including an ambitious plan to build 500,000 new homes), and the promises of the tech sector.

Meanwhile, nominal GDP growth is projected to remain respectable, despite sky-high corruption and generalized administrative failures in both the county-level and national governments.

And here is an excerpt from one of the pieces:

A 2016 report from New World Wealth, an independent South Africa-based research group, found that 8,500 of Kenya’s roughly 48m people controlled more than two-thirds of the country’s wealth.

Highly recommended.

14 Jun

Barclays Africa to join the Nigerian Stock Exchange as a broker

Barclays Africa plans to join the Nigerian Stock Exchange as a broker in July and is exploring opportunities in three other African countries, in a move to create access for foreign investors looking to tap into markets on the continent.

Garth Klintworth, head of markets for Barclays Africa Group, on Thursday said its subsidiary Absa Nigeria had acquired a securities licence in Nigeria, part of a wider plan to increase it presence in west Africa’s biggest economy.

Nigeria’s stock exchange, the third largest in Africa, has in the last few years said it was reviewing applications from leading global investment banks to join its trading floor to increase foreign investment in one of the world’s least tapped emerging markets.

Zimbabwe launches a second state-owned airline

The first one is so indebted its planes are impounded when they land abroad. Will the second be any better?

HAVING one loss-making state-owned airline is bad enough. What, then, of a government that wants two?

Earlier this year Zimbabweans were startled to learn that the government had concluded a secret $70m deal to buy four second-hand Boeing jets from Malaysia to form the core of a new national airline, Zimbabwe Airways. This venture is supposed to compete with Air Zimbabwe, the flag carrier, which ran up huge debts thanks to poor management and ex-President Robert Mugabe’s habit of commandeering its planes so his wife could shop abroad.

The government hopes to stimulate tourism and business by reopening long-haul routes that are closed to Air Zimbabwe, whose planes can be impounded as soon as they land on foreign runways. It suspended flights to London’s Gatwick airport in 2011, for instance, after one of its planes was seized over an unpaid debt. It has since been banned from European skies because of concerns over the safety of its creaking planes.

Critics questioned the secrecy and the price paid for the new planes. The government had claimed for months that the new airline was a private initiative, funded by Zimbabwean investors living abroad. Joram Gumbo, the transport minister, told local newspapers it had been necessary to lie because “if they had been exposed as government of Zimbabwe planes, they would have been taken by the creditors who were claiming for money.” He also revealed that “the man in charge of Zimbabwe Airways” is Mr Mugabe’s son-in-law.

Officials see the new airline as a panacea for the economy. That seems unlikely. It will be pitted against rivals offering reliable connecting services via their hubs in South Africa, Kenya, Ethiopia and the United Arab Emirates. Airlines based in those countries have the upper hand on numerous fronts, among them economies of scale, network synergies and more frequent flights. Zimbabwe Airways will have only one advantage: the ability to fly between Harare, the capital, and destinations in Europe and Asia without boring stopovers. Yet there is probably not nearly enough direct traffic to fill its planes.

Africa’s fintech industry has scored another big-ticket investment win

The streak of big-ticket investment in African fintech companies shows no signs of stopping.

Cellulant, the digital payments solutions company operating in 11 African countries has raised $47.5 million in its Series C round—one of the largest for a solely Africa-focused venture-funded company. The round was led by The Rise Fund, an impact investment fund run by TPG Growth, the US-based private equity group, with participation from Endeavor Catalyst, Satya Capital, Velocity Capital & Progression Africa.

First founded in Nigeria and Kenya in 2004, Cellulant has since expanded to nine other African countries and around 12% of Africa’s mobile consumers can make payments using its solutions. Its reach is down to partnerships with over 90 banks and several mobile payments platforms across the continent. The company says it will be expanding to two more countries following the investment.

The deal marks Rise Fund’s first investment in Africa since raising $2 billion last October. The fund’s backers include Andra AP-fonden, the Swedish pension fund and the Washington State Investment Board. It also lists music star Bono and billionaire Richard Branson on its board.

The investment in Cellulant is the latest endorsement of the key role African fintech companies are playing in bridging the crucial payments and financial inclusion gaps on the continent. Over the past three years, the sector has garnered momentum and has become the most attractive for investors on the continent.

Almost a third of funding raised by African startups in 2017 was in the fintech sector as investors bet on consumers turning to more formal financial services in a region where just 17% of the population have banking accounts. Venture funding for African startups jumped by 51% to $195 million in 2017.

Fintech was the biggest attraction for investors with 45 startups raising one-third of total funding. The success of mobile money technology like M-Pesa in Kenya and across East Africa has long shown the potential for other underserved markets. M-Pesa’s success is likely also behind for the increasing presence of mobile networks in the African financial sector and the convergence of the two sectors.

Read the full story at Quartz Africa

21 May

African fintech and agribusiness companies attract interest from investors

African private equity and venture capital deal-making in April were dominated by investments in technology companies, particularly fintech and business-to-business platforms, together with encouraging activity in the agribusiness & food sector. This according to data provided by Africa Private Equity News, an industry information service.

Fintech investments were mostly in mobile-enabled banking and financial services companies. These include: French development-finance institution Proparco’s US$3m backing of JUMO, which helps customers to access loans and savings products in East and West Africa; and a $70m round, led by US-based Trinity Ventures, into credit provider Branch International. Digital payments network MFS Africa also raised $4.5m in funding, led by LUN Partners Group, thereby becoming one of the first fintech players on the continent to receive funding from a China-based venture capital firm.

Business-to-business solutions remains an attractive theme, with TLcom Capital announcing two investments in the space – a $5m injection in Nigeria-based mobile marketing company Terragon, and a $3.5m series-A round for Kenyan consumer-feedback platform mSurvey, which plans to use the capital to scale and expand into more countries. Asoko Insight, a provider of data on African companies, attracted $3.6m in additional funding from its early shareholders and some new ones, while South Africa-based Giraffe – which enables businesses to recruit high volumes of medium-skilled staff – closed a second round of investment, supported by FirstRand’s Vumela Fund, with participation from Omidyar Network, the Brozin family’s Forever Young Capital and Catapult Trust.

The continent’s rapidly-growing food market could be worth more than $1tn annually by 2030 as imports are substituted with high-value locally-produced food, according to the Alliance for a Green Revolution in Africa. With 60% of the world’s unused arable land, Africa’s potential in the broader agribusiness sector is also enormous.

The sector continues to attract interest from private equity firms such as DOB Equity, which last month backed Rwanda-based grain trader Sarura Commodities. Furthermore, Agri-Vie and Norfund announced a $7m co-investment in Marginpar Flower Group Holdings, which has floriculture interests in Kenya and Ethiopia. In addition, South African-based The Beverage Company, in which Ethos Private Equity and Nedbank Private Equity owns a stake, signed an agreement to acquire 100% of SoftBev, the sole licensed bottler for Pepsi and its related brands in South Africa, from Bowler Metcalf and the original founders.

Read the full story at How We Made It in Africa

02 May

African fintech and agribusiness companies attract interest from investors

African private equity and venture capital deal-making in April were dominated by investments in technology companies, particularly fintech and business-to-business platforms, together with encouraging activity in the agribusiness & food sector.

Fintech investments were mostly in mobile-enabled banking and financial services companies. These include: French development-finance institution Proparco’s US$3m backing of JUMO, which helps customers to access loans and savings products in East and West Africa; and a $70m round, led by US-based Trinity Ventures, into credit provider Branch International. Digital payments network MFS Africa also raised $4.5m in funding, led by LUN Partners Group, thereby becoming one of the first fintech players on the continent to receive funding from a China-based venture capital firm.

Business-to-business solutions remains an attractive theme, with TLcom Capital announcing two investments in the space – a $5m injection in Nigeria-based mobile marketing company Terragon, and a $3.5m series-A round for Kenyan consumer-feedback platform mSurvey, which plans to use the capital to scale and expand into more countries. Asoko Insight, a provider of data on African companies, attracted $3.6m in additional funding from its early shareholders and some new ones, while South Africa-based Giraffe – which enables businesses to recruit high volumes of medium-skilled staff – closed a second round of investment, supported by FirstRand’s Vumela Fund, with participation from Omidyar Network, the Brozin family’s Forever Young Capital and Catapult Trust.

The continent’s rapidly-growing food market could be worth more than $1tn annually by 2030 as imports are substituted with high-value locally-produced food, according to the Alliance for a Green Revolution in Africa. With 60% of the world’s unused arable land, Africa’s potential in the broader agribusiness sector is also enormous.

The sector continues to attract interest from private equity firms such as DOB Equity, which last month backed Rwanda-based grain trader Sarura Commodities. Furthermore, Agri-Vie and Norfund announced a $7m co-investment in Marginpar Flower Group Holdings, which has floriculture interests in Kenya and Ethiopia. In addition, South African-based The Beverage Company, in which Ethos Private Equity and Nedbank Private Equity owns a stake, signed an agreement to acquire 100% of SoftBev, the sole licensed bottler for Pepsi and its related brands in South Africa, from Bowler Metcalf and the original founders.

Read more here: How We Made It in Africa

06 Apr

The resurgence of Sudan: From zero to…

Sudan has for long been the skunk in Africa. The International Criminal Court issued two arrest warrants against its president, Omar Al-Bashir: five counts of crimes against humanity, two counts of war crimes and three counts of genocide. Sudan was also involved, for all practical purposes, in a civil war in Darfur. In 2011, South Sudan voted to secede from Sudan. This was an economic disaster for Sudan as the rich oil fields were in South Sudan. The country has long been struggling, given amongst others, the economic sanctions the USA imposed against it.

According to Trading Economics, Sudan has the sixth-largest GDP in Africa, in spite of US and EU sanctions and embargoes. It has a population of approximately 40 million people. While it has a somewhat subdued GDP growth rate of only 3.5% (relative to some of its neighbours), what is worrying is its inflation rate of 52.4%. It also has an unemployment rate of 13.3%. Its balance of trade is close to negative US$1bn in January 2018.

This article addresses the very recent past of the developments regarding a perceived renewal of interest in Sudan as an investment destination. It will be addressed against the backdrop of the interest shown by China and the USA.

Sudan and the USA
The United States recently lifted a number of sanctions on Sudan, motivated by the perception that Sudan had begun addressing concerns about terrorism and human rights abuses against civilians in its Darfur region. The lifting of sanctions rescinds measures imposed in 1997 related to terrorism concerns and other steps put in place in 2006 in connection with the conflict in Darfur. The sanctions were temporarily eased in January just before President Barack Obama left office, with his administration citing the same progress the Trump administration noted. In July 2017, President Trump extended the review for three months, angering the Sudanese, who stopped some lower-level meetings with USA officials in retaliation, but maintained contacts between senior officials (Morello, 2017).

Lifting the sanctions and ending an economic embargo came after the Trump administration removed Sudan from the list of countries whose citizens are subject to travel restrictions. Other sanctions, however, are still in place for the time being, including those against individuals with arrest warrants related to atrocities committed during the conflict in Darfur. Sudan is also still on the list of state sponsors of terrorism (Morello, 2017).

Read more at How We Made It in Africa