Sunday, June 12, 2017 10:32 AM / Africa Investment Notes by Pedestal Africa
Where is the upside for Inter- Africa Trade?
After averaging about 5.0% from 2010 to 2014 and declining to 3.2% in 2015, Sub-Saharan Africa’s (SSA) GDP growth descended abruptly to a mere 1.3% last year, its lowest level in over two decades. Our panelists had long anticipated the worsening of the economic situation, cutting their regional economic growth estimates almost uninterruptedly from early 2015. It came as no surprise that the end of the commodities super cycle in mid-2014, and the consequent crash in commodities prices, substantially aected many of the largest Sub-Saharan African economies which depend heavily on commodity exports, such as Angola, Nigeria and South Africa. Also, many countries in Eastern and Southern Africa experienced a severe drought caused by the El Niño weather phenomenon, which prompted a decline in agricultural production and cutbacks in hydroelectric generation, particularly in Ethiopia, Mozambique and Uganda.
Private equity set to boom in Africa
Private equity activity in Africa will inject billions of US dollars of sustainable investment over the next five years with deals growing from a low base equivalent to 0.18 per cent of Africa’s GDP in 2016, the report says. According to the research - 'A growth engine: Trends and outcomes of private equity in Africa' - every 0.01 per cent increase will mean $200 million more investment and could easily reach $1.1 billion over the next five years. The report reveals a number of interesting trends about investment in Africa. Private equity investors in Africa tend to be distinct from other parts of the world, holding investments for longer than in developed markets and using less debt and improve corporate strategy and governance. Furthermore, they invest more in growth and job-creation, often scaling small businesses to a size viable for trade buyers.
Entrepreneurship: Transforming Africa economy
African countries are progressively realizing that entrepreneurship is the key to reducing youth unemployment and including young people in economic activities. Innovation and creativity are riding on the wings of mobile devices and the Internet, disrupting the status quo. Governments, multilateral agencies, and donors are creating enabling environments to foster entrepreneurship throughout the continent. Although some African countries already had interventions aimed at encouraging young people to start and run their own businesses rather than seek white collar jobs, the Arab Spring was a wake-up call for African governments to do more.
Kenya set to gain from China’s $148 billion budget for Silk Road
Kenya hopes to get significant funding from China for major infrastructure projects which are part of the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiative.The hopes of Kenya and other nations were raised when Chinese President Xi Jinping announced that his country will cobble together a massive budget of Sh15 trillion for the world’s most ambitious infrastructure project. At the opening ceremony attended by President Uhuru Kenyatta and 28 other Heads of State and Government, President Xi said besides the Sh15 trillion, China had also set aside Sh100 billion for a South-South Cooperation fund and another Sh100 billion for cooperation projects in countries on the new silk road. By the time the project is complete, it is expected that China would have spent at least $4 trillion dollars to revive the ancient Silk Road that linked Asia, Europe and Asia.
Vodacom SA to acquire Vodafone’s 35% stake in Kenya’s Safaricomr bond
Vodacom Group, the South African telecoms giant, has announced that they will spend $2.6 billion (R34,6 billion) to buy out their parent company’s (Vodafone) 34.94% stake in Kenyan operator Safaricom. The deal will see Vodacom attain a foothold in the Kenyan telecoms market.
Vodacom Group Chief Executive Officer Shameel Joosub, announced the transaction, which is subject to regulatory and shareholder approvals, in a statement to the press.
New $274 million Kotoka Terminal Three to open next year (Ghana)
The new flagship US$274 million Terminal 3 at the Kotoka International Airport (KIA) is expected to be completed and opened for use by the first quarter of next year, Aviation Minister, Cecilia Dapaah, told journalists during a tour of on-going projects at the Kotoka International Airport in Accra. “Basically, the total project cost for now is supposed to be around US$274m and is expected that by the end of this year we should do 85percent of the project and the first quarter of next year, it should be opened.
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