A Positive View on Africa pre-Pfizer


Monday, November 16, 2020 / 08:58 AM / by FBNQuest Research / Header Image Credit: VoN

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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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