28 Apr

Unpacking Kenya as an investment destination

Kenya is one of the more pleasant countries to visit in Africa. It offers a mix of third-world buzz and opportunity along with first-world luxuries such as shopping malls, quality internet access, enough infrastructure to get things done and, more recently, craft beer.

Add to that Nairobi’s near-perfect climate (you know it is good when you’re undecided on whether to pack a business suit or not… it is just too warm for a suit, but tolerable nonetheless). It is not surprising then that so many NGOs and organisations, such as the UN, have a strong presence in Nairobi. It always interests me that there are so many large embassies in Africa: How many high-level political discussions are there between Austria and Kenya, for instance, or Iran and Kenya, or Canada and Kenya? I suppose if, as a Ukrainian, you get altitude sickness while climbing Mount Kenya, it will be comforting to know that the embassy in Nairobi has people who speak your language and can bring you some flowers before you fly out.

Regulation weighs on market

The stock market has been under considerable pressure since the beginning of 2015. It is not surprising then that Kenya was screening well on valuation. The Kenyan banks have come under pressure after the president passed a law capping the interest rates that banks can charge. Cellphone giant Safaricom is being investigated for market dominance and both the listed brewer and the listed tobacco businesses have been hurt by higher taxes as government needs revenue. With that in mind, we set off to see if conditions are likely to improve.

The Kenyan economic situation is worrying – the current account deficit is wide, the fiscal deficit is wide, there is a drought risk (agriculture accounts for 30% of the economy) and there are elections later in the year. In addition, the interest rate caps mean that lending has slowed, which will put the brakes on economic growth. All this means that there is risk to the currency. However, the shilling, which the Kenyan authorities insist is not managed, has been remarkably stable at around 100 KES/USD over the last 18 months.

 

Read more here: Unpacking Kenya as an investment destination

25 Apr

WorldRemit Africa revenue to double by 2020 on mobile money, says Founder & CEO Ismail Ahmed

WorldRemit Ltd., a British money-transfer operator founded by Somali entrepreneur Ismail Ahmed, sees revenue from transactions involving Africans doubling by 2020 as more people on the continent access mobile-payment platforms and expatriates send cash home.

The seven-year-old company, in which Facebook Inc.-backer Accel Partners LP invested $40 million in 2014, will this year open a regional office in South Africa, its largest market on the continent in terms of money-transfer value, founder and Chief Executive Officer Ismail Ahmed said in an interview. Another site will start operating in Kenya, where the London-based business sees Africa’s highest number of individual transactions.

“In the next two years we should be doubling our volume every year,” Ahmed said in Kenya’s capital, Nairobi.

Read more: WorldRemit Africa Revenue to Double by 2020 on Mobile Money – Bloomberg

24 Apr

Burkina Faso Sees Cotton Output Rising 20% in 2017-18 Season

Burkina Faso, Africa’s top cotton grower, sees output rising by as much as 20 percent to 820,000 metric tons in the 2017-18 season which starts this month, an industry official said.

The target is “realistic and achievable” if rains are favorable and well distributed over the season and if parasites are kept under control, Georges Yameogo, general secretary of the nation’s cotton association, told reporters on Saturday in the capital, Ouagadougou.

The price for the new season was set at 245 CFA Francs ($0.40) a kilogram, up from 235 francs in the previous season, he said. The costs of fertilizers, insecticides and seeds remain unchanged, he said.

Burkina Faso harvested 683,000 tons of cotton in the 2016-17 season, Yameogo said. That’s below the target of 700,000 tons because of a lack of rains in September, he said. But it’s still 17 percent higher than the 586,000 tons harvested in 2015-2016, he said.

Read more: BloombergMarkets

24 Apr

Ghana to subsidise fertiliser for cocoa farmers and halt free supplies

ACCRA (Reuters) – Ghana’s cocoa industry regulator will stop supplying free fertiliser to the country’s cocoa farmers and instead subsidise the products in an effort to create a fairer market, a spokesman for Cocobod said on Friday.

The policy change is one of a series the New Patriotic Party government that won power at an election in December could implement in an effort to liberalise the sector and boost production.

Ghana, the world’s second-largest exporter of cocoa behind neighbouring Ivory Coast, is on track to exceed its 800,000 tonne target for the 2016/17 season.

For years farmers said the distribution of free fertiliser was unreliable, unfair and products went disproportionately to supporters of the previous National Democratic Congress government, a charge Cocobod denied.

At the same time, cocoa experts said the reliance on free products distorted the market by encouraging farmers to wait for government supply rather than budgeting to buy their own.

“The farmers complained that not all of them were getting the quantities that they needed when it was free,” Cocobod spokesman Noah Kwasi Amenyah told Reuters.

The price will be 80 cedis ($19) per 50kg bag, rather than the regular price of 151 cedis, he said, giving no further details.

Cocoa experts including non-governmental organisations say that Cocobod’s new executive is receptive to a policy document they have submitted that aims to stimulate an industry that is one of Ghana’s top earners of foreign exchange and accounts for about 7 percent of gross domestic product.

Read more: Reuters Africa

 

21 Apr

World Bank Cuts Sub-Saharan Africa’s 2017 Growth Forecast

The World Bank cut its growth projection for sub-Saharan Africa this year because of weak expansion in the region’s three biggest economies.

The area’s gross domestic product will expand 2.6 percent in 2017, the bank said in an emailed copy of its Africa Pulse report Wednesday. That compares with a January projection of 2.9 percent and matches the International Monetary Fund’s prediction released this week.

“The region’s three largest economies — Angola, Nigeria, and South Africa — are projected to post only a modest rebound in growth following a sharp slowdown in 2016,” it said. “Investment growth will recover only gradually amid tight foreign-exchange liquidity conditions in major oil exporters and low investor confidence in South Africa.”

The economy of South Africa, which vies with Nigeria’s to be the region’s biggest, expanded 0.3 percent last year, the slowest pace since a 2009 recession, due to a slump in commodity prices, weak demand for the country’s exports and a continuation of the worst drought since records started more than a century ago. Nigeria suffered its first economic contraction in 25 years in 2016 due to a drop in oil exports and foreign-currency shortages that raised inflation to a decade high.

Growth this year will be “better than the 1.3 percent in 2016, the lowest in two decades, but we are not out of the woods yet,” World Bank Africa Chief Economist Albert Zeufack told reporters in a video conference from Washington on Wednesday. “Africa is still growing at negative per-capita rates.”

Country Forecasts

The bank cut South Africa’s GDP growth forecast for this year to 0.6 percent from 1.1 percent earlier, and raised Nigeria’s to 1.2 percent from 1 percent.

Pravin Gordhan’s ouster as South Africa’s finance minister in a cabinet reshuffle prompted S&P Global Ratings and Fitch Ratings Ltd. to cut the nation’s credit rating to sub-investment grade. Moody’s Investors Service put its assessment of the nation’s debt, which is two levels above junk, on review for a downgrade on April 3.

Read more: World Bank Cuts Sub-Saharan Africa’s 2017 Growth Forecast

 

 

 

 

20 Apr

Private equity in Africa steps up a gear in 2016: African Private Equity and Venture Capital Association (AVCA)

Private equity investment in Africa continues to go from strength to strength, evidenced by a new report from the African Private Equity and Venture Capital Association (AVCA). AVCA’s 2016 Annual African Private Equity (PE) Data Tracker shows a marked increase in the total deal value during 2016.

Overall, there were 145 PE deals reported in Africa over the course of the year, amounting to US$3.8bn – versus US$2.5bn in 2015 – highlighting the robust nature of Africa’s investment landscape amidst global headwinds and worldwide political shifts.

In terms of deal size, several large transactions in the energy and utilities sectors in 2016 contributed to the notable rise in total deal value compared with the previous year. The total value of deals above US$250mn was also significantly larger than in 2015.

African PE funds registered a final close total of US$2.3bn in 2016, which although lower than the previous year, supports an upward trend over the past 5 years.

West Africa continues to be the focus for PE investments by region, holding a 27% share of both number of deals and deal value between 2011 and 2016.

The 2017 outlook is positive, with strong indications of sustained confidence in the African PE industry. With political stability returning to North Africa, it is expected that there will be a growing appetite for investment in the region, along with under-served markets such as Central Africa.

Commenting on the report, Cyril Odu, Chief Executive Officer at African Capital Alliance, noted: “As the effects of rapid urbanization, a resilient and adapting middle class and accelerating consumption patterns begin to take shape, increasing investor interest will continue to boost deal flow and intensify capital injections. As the 2016 Annual PE Data Tracker shows, private investment in Africa is developing at an exciting rate.”

Enitan Obasanjo-Adeleye, Director and Head of Research at AVCA, added: “Africa’s PE potential is coming to fruition as illustrated here through another year of strong results. This is no flash in the pan; we now have seen strong and sustained PE investment in Africa over the past 10 years and AVCA will continue to play its role as a major enabler and champion for PE investment in Africa as the region becomes more widely recognized as the world’s most exciting and attractive frontier investment destination”.

The report has been published as AVCA prepares for its 14th annual global conference, which returns to francophone Africa for the first time in ten years as part of AVCA’s mission to showcase investment opportunities across the continent.

13 Apr

South African Stocks Poised for Long-Term Gains Despite Zuma’s Maneuverings: Ryan Hoover, Portfolio Manager, Africa Capital Group

Late last month, South Africa’s increasingly unpopular president, Jacob Zuma, unceremoniously sacked his well-regarded Finance Minister, Pravin Gordhan, and other dissident cabinet officials in a transparent power grab – replacing them with long-time loyalists.

Gordhan and Zuma had clashed repeatedly over the latter’s links to the politically-influential Gupta family and the management of state-owned enterprises.

Gordhan’s ouster not only leaves the Treasury without a proven hand at the tiller, it removes one of the government’s strongest proponents of transparency.

Predictably, the news triggered a 4% plunge in the value of the rand versus the dollar. And has already resulted in South Africa’s credit rating being downgraded.

So, while the headlines are dour for the moment, we remain bullish on South African stocks over the long-term.

The Johannesburg Stock Exchange (JSE) has seen it all over the past thirty years.

Read more: Africa Capital Group LLC South African Stocks Poised for Long-Term Gains Despite Zuma’s Maneuverings – Africa Capital Group LLC

11 Apr

9th Africa Carbon Forum, Cotonou, Benin, 28 – 30 June 2017

Collaborative climate action for sustainable development in Africa

COTONOU, Benin, April 10, 2017

Come to Cotonou for the 9th Africa Carbon Forum to engage in promoting climate action in Africa.

The 9th Africa Carbon Forum (ACF) will focus on how engagement between State and non-State actors can be further strengthened in the key sectors for Africa (energy, agriculture and human settlements), including the role of future carbon markets to achieve enhanced climate action, towards the goals of sustainable development.

The event will cover:

  •          Practical examples of policies, initiatives and actions in Africa;
  •          Barriers and enabling measures for engaging climate action in key sectors;
  •          Financial instruments and regulatory frameworks;
  •          Advancing the implementation of climate action and more.

With a comprehensive programme of plenary sessions, workshops, a ministerial section, side events and exhibits, this is a one of a kind event in the region.

The ACF is a great opportunity for financiers, policymakers and project developers to share experiences, network and build capacity.

Over the past decade the ACF has provided a unique platform for Africa to engage on climate change issues in the region. The Forum brings together key stakeholders from the public sector and other non-Party actors from Africa and beyond. It witnesses the participation of key multilateral and bilateral development institutions and experts to discuss urgent actions needed on the ground and share experience and build capacity for implementation of actions.

Meet us in Cotonou to learn, share and connect at ACF 2017. Registration is open at www.AfricaCarbonForum.com.

Distributed by APO on behalf of The United Nations Framework Convention on Climate Change (UNFCCC).

10 Apr

Ministry of Labour and United Nations Launch “Opening Doors: Building Careers Together” Joint Human Resource Initiative

The launch was presided over by officials from the Ministry of Labour, Public Service, and Human Resource Development, including Honourable Minister Gathoth Gatkuoth Hothnyang, Honourable Deputy Minister David Yau Yau, and Honourable Undersecretary Mary Hillary Wani Pitia

The Ministry of Labour, Public Service and Human Resource Development and the United Nations jointly launched the new “Opening Doors: Building Careers Together” initiative, which aims to educate and sensitize South Sudanese nationals on employment in the United Nations system, at the Ministry of Labour on Thursday.

The launch was presided over by officials from the Ministry of Labour, Public Service, and Human Resource Development, including Honourable Minister Gathoth Gatkuoth Hothnyang, Honourable Deputy Minister David Yau Yau, and Honourable Undersecretary Mary Hillary Wani Pitia. Joining the government representation was Undersecretary of the Ministry of Humanitarian Affairs and Disaster Management Honourable Gat Kouth Peter Kulang and Undersecretary of the Ministry of Youth, Culture and Sports Honourable Agum Riig Maban.

“The collaboration that we are having now with the UN family agencies aiming to sensitize and educate our jobseekers on the UN and other NGO job market is greatly welcome. The activities that will be carried out will enhance the chances of employment for our job seekers and with time they will be able to take over the labour market in the country and contribute effectively to the development of the economy,” said Hon. Minister Gathoth Gatkuoth Hothnyang in his remarks.

The United Nations was represented by the Humanitarian and Resident Coordinator a.i. Dr. Abdulmumini Usman, Country Representative for the World Health Organization. Country Representatives and members of the Inter-Agency Human Resource Network were in attendance from UNMISS, UNV, WFP, UNICEF, UNFPA, UNDP, FAO, UNWOMEN, UNEP, IOM, UNOCHA, UNMAS, and UNHCR.

“To be successful in our mandates, the United Nations, agencies, funds and programmes, all need the unique expertise, perspective, and skills that South Sudanese national staff bring to the table. We are also aware that our systems can sometimes appear to be complex or unclear, especially from the outside looking in. We want this new initiative to be a resource for all interested in making their mark – and this goes beyond simple job and volunteer vacancies. We want the public to know that the UN is not operating in a closed-door environment, and we are here to help everyone, at all levels, understand how they can join us,” said Dr. Usman, delivering remarks on behalf of Deputy Special Representative of the Secretary General and UN Resident and Humanitarian Coordinator Mr. Eugene Owusu.

A series of radio and public outreach activities, including a career fair scheduled for Thursday, May 25th in Juba, were also announced at the launch event.

The United Nations Human Resources Inter-Agency Network is supporting the Ministry of Labour, Public Service and Human Resource Development to lead the “Opening Doors: Building Careers Together” initiative.

Distributed by APO on behalf of United Nations Development Programme (UNDP).

06 Apr

Things are not looking great for US – Africa relations under Trump

With US president Donald Trump closing in on his first 100 days in office there are early indications of what shape his Africa policy might take. They are not encouraging.

Since being sworn in the President has had the US’s overseas development activities in its sights. In February Mr Trump announced he was seeking a 37% cut to State Department and USAID budgets, threatening critical funding for international aid agencies.

Other initiatives to be targeted include the repealing of a measure to force oil and mining companies to publish payments to foreign governments and scaling back efforts to curb the conflict minerals trade.

The brunt of all this will be felt in Africa, which remains a major aid recipient. The administration’s pursuit of these changes at a time the UN is warning of the worst humanitarian crisis since 1945, and famine looming in Somalia, South Sudan, and parts of Nigeria, only reinforces the impression that Africa is not a priority.

The current mood is perhaps best captured by the news that a planned Africa trade conference at the University of Southern California recently had to be cancelled as none of the participants from the continent were granted visas.

More: Why Africa