Commercial News from Africa

Key commercial and political activity in Africa for private equity investors by DCE Partners, UK Private Equity advisors to Atta.

Construction begins on power Africa project. Construction is set to begin on the first projects coordinated through Power Africa, a multibillion-dollar Obama administration initiative that seeks to double access to electricity in sub-Saharan Africa within five years, and in some cases accelerate reforms in the governments of the nations involved. More than two-thirds of the 800 million people in sub-Saharan Africa have no access to electricity. The effort initially focuses on six countries: Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania.   The goal is to add 10 gigawatts of electricity generation capacity, which should increase electricity access by at least 20 million households.

All eyes on Africa's potential US$1 trillion agriculture sector. African agribusiness is set for a huge leap, according to a World Bank report. Currently worth about US$313 billion, the sector already provides jobs for 70% of the poorest people on the continent. A World Bank report published in March last year suggests Africa could dominate world agriculture exports. The report, Growing Africa: Unlocking the Potential of Agribusiness, projects that African agribusiness could be worth US$1 trillion by 2030. It is the latest in a string of positive reports about the continent's socioeconomic development prospects, despite political instability in a handful of countries. Africa has more than 50% of the world's fertile and unused land.  

Why private equity investments in Africa are up 136%. The US$3.3 billion in private equity funding raised last year for African ventures is the highest annual amount since 2007 and represents a 136 percent increase since 2012, according to a recent report from Ernst & Young. One of the reasons is the fast-growing middle class in many countries on the continent. More than a third of SSA countries expect to see economic growth greater than 7 percent at some point in the next few years, and the big players are starting to notice. Though the landscape is still dominated by smaller domestic investors, large global PE firms are more and more looking at the market to capitalise on investment opportunities available on the continent.

Rwanda and Ghana close to bilateral trade deal. Trade and investments between Rwanda and Ghana could be boosted thanks to a new trade agreement signed between Rwanda's private sector and the Ghanaian chamber of commerce in Accra. The deal outlines scaling up business investments and joint partnerships in sectors such as mining, tourism, agro-processing, real estate and textile manufacturing and seeks to eliminate trade barriers between the two countries..