Monday, November 16, 2020
/ 08:58 AM / by FBNQuest Research / Header Image Credit: VoN
One of the casualties of
the Covid-19 virus beyond the estimated 1.3 million deaths has been the holding
this year in London of Invest Africa's The Annual Debate. The event took place
on a virtual basis the week before last. In a session on Africa's said
resilience, the chair of the UK's CDC Group and the chief executive of GE
Africa both felt that the risks and the returns (other than for natural
resources) of direct investment in Africa are overstated.
Another session brought together five household
names in Africa in private equity to decide whether they should opt for "fight
or flight". It predated the announcement by Pfizer on 09 November on its vaccine
for the virus but nonetheless offered a positive overall message.
Investments in telecoms and financial services had
generally held up well with the virus. One speaker trumpeted a successful play
on a business that straddled the two (remittances).
Another noted that 70% of their holdings in Africa
were classified as essential, and therefore operated during lockdown. A third
shared the challenging view that large companies had emerged stronger from the
virus than small.
There is the general point for a firm in growth
mode that valuations become more attractive in a global recession. It was made
in the context of infrastructure investment.
We heard a heartening interview with Strive
Masiyiwa, the executive chair of Econet Wireless who was invited by Cyril
Ramaphosa, the South African president and current AU chair, to lead an effort
to coordinate the purchase of medical supplies for Africa's defense against
Covid-19. His first challenge was to boost imports of diagnostic test kits,
which have increased from 2.5 million per month in March to the current level
of 100 million
Not being a manufacturer of such supplies, Africa
is at the mercy of the rest of the world. Masiyiwa crosses that bridge,
however, by telling manufacturers of vaccines that he is buying on behalf of
their largest marketplace (the 54/55 countries of Africa).
He trumpeted success stories such as the AU's
Addis-based Africa centres for disease control and prevention, founded in 2017.
He closed with a warning that Africans should effectively cancel Christmas this
year, opining that Europeans were now paying the price for not canceling their
summer holidays on the beach.
For a catchy piece of data, we learnt that Africa
has 20% of the world's population and 4% of its deaths from Covid-19 whereas
the US has 4% of the population and 20% of the deaths.
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