Commercial News from Africa

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

Foreign investment in Africa this year will be the continents highest as growth accelerates towards levels not experienced since the global financial crisis - this, according to the annual economic review of the region published by the African Development Bank, the UN and the OECD. The group painted a positive forecast for the continent in their flagship report, suggesting Africa was showing resilience to regional and global headwinds and attracting investors. Investment flows, which include equity and bond investments, are expected to rise to nearly US$24.1bn this year, surpassing the peak set in 2006. This is stark contrast to 2001-03, when Africa was registering negative portfolio flows as investors withdrew money.

British billionaire David Sainsbury launches African investment company. British retail billionaire Lord David Sainsbury has reportedly set up an investment vehicle to invest solely in East African businesses. Msingi (the Swahili word for 'foundation') will invest in East African startups that have high growth potential. The company will focus on the establishment of new companies in key sectors such as agriculture and technology, as well assist entrepreneurs and new business owners in business planning and development. The new company will also operate an enterprise incubator which will provide venture capital to select businesses. David Sainsbury, who inherited a stake in Sainsbury’s – one of the U.K’s largest supermarket chains, has a net worth that Forbes estimates at $2.2 billion.

African Development Bank raises funding as China increases role. The African Development Bank is stepping up plans to finance power and rail projects as China boosts lending on the continent by half. The Tunis-based lender is set to endorse this week the Africa50 Fund, which is targeting US$10 billion of equity from an initial capital of US$3 billion, to finance infrastructure projects. Central bank governors and finance ministers across the continent will meet from today at the bank’s annual conference in Rwanda’s capital, Kigali, to back the plan.    African nations have a funding shortfall of US$50 billion a year to ease energy shortages and transport bottlenecks, according to the World Bank. The AfDB’s spending on the continent is dwarfed by China, which invested more than US$13 billion in infrastructure in 2012, as the world’s second-largest economy boosts its reliance on Africa’s oil, coal and other commodities.

South African solar projects.  A leading private power generation company in Africa has celebrated completion of two of its renewable energy projects in South Africa. Solar Power facilities are both located in the Northern Cape and have been generating clean energy to the national grid following connection in late last year. The facilities are part of the Government of South Africa's Renewable Energy IPP Procurement Program and are among the very first large scale renewable power plants to be built in the country.

Railway transport revamp plans very well received. The Tanzanian government has announced plans to revitalise the ailing railway transport sector with an injection of new locomotives and coaches and upgrading of the existing rickety lines. The Minister for Transport unveiled the measures when he presented budget estimates of his ministry in Parliament. 13 new locomotives, 22 passenger coaches, 274 cargo wagons, 34 brakes and 24 gravel-carrier wagons will be procured and eight coaches will be constructed.