Commercial News from Africa

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

Outside South Africa, private equity is still a relatively new subset of the financial mechanisms available for promoting and facilitating investment across Africa, and as such the challenges still include offering enough added value to encourage family firms to open up to external financing, and finding local talent with the skills to see a project from start to finish. On the face of it, the numbers suggest raising capital is no longer the biggest challenge in Sub-Saharan Africa. The continent drew US$1.65 billion of private equity investment in 2013, with east Africa - teetering on the brink of an oil and gas boom - seeing the biggest rise in deal activity according to data from the Emerging Markets Private Equity Association shows. Rather, the bigger objective is how to invest that cash successfully.

Intel to invest in African start-ups to spur app development. Intel is planning to intensify its engagement in Africa by investing in local start-ups to encourage development of local applications and software. Intel suggests that impressive growth of the internet economy in Africa is the major reason for Intel’s deeper involvement in locally developed software and applications. The company is planning to make strategic investments in start-ups with potential for world-wide engagement.

Landlocked traders wary of Kenya Rail Tax. Kenya's decision to maintain a 1.5 per cent railway development levy on all exports through Kenya has created uneasiness among Rwandan traders. The Kenya Revenue Authority (KRA) maintained the levy despite last year's directive from the East African Community Council of Ministers instructing Kenya to abolish the tax. Presently, the Kenya is in negotiations with the regional shipping body over the new proposed increase in tariff on loading and discharging of some imports, which is causing a lot of uneasiness among traders.

Namibia highly ranked for mining investment in Africa.  In a recent survey by the Canadian-based research organization, Namibia has been ranked the second most favourable investment destination for mining and exploration activities on the African continent. The companies participating in the survey reported exploration spending of US$6.2 billion (about N$62 billion) in 2012 and US$5.4 billion (about N$54 billion) in 2011. The survey indicates that Namibia's improved ratings were attributed to uncertainty concerning disputed land claims, availability of labour and skills and uncertainty concerning the administration, interpretation or enforcement of existing regulations.