Atta Africa Financial Update

How the money flows to Africa.

In a recent study, Brookings Africa scholars explore the different types of external financial flows and their prevalence in sub-Saharan Africa, and discuss what those trends suggest about and for the region.

The good news: external financial flows to sub-Saharan Africa have increased significantly over the past two decades. In fact, the volume of external flows reached about US$120 billion in recent years, up from US$20 billion in 1990. More interestingly, the composition of external flows has also changed a lot: most of the increase in external flows to sub-Saharan Africa can be attributed to the increase in private capital flows, which are now higher than Official Development Assistance (ODAs). The share of ODA fell from 62 percent of total external flows in 1990 to 22 percent in last year.

Some of the key dynamics from the data include: francophone countries both in the WAEMU and the CEMAC are not able to attract the same level of private capital flows as other sub-Saharan African countries; remittances are high for middle-income countries

Even resource-rich countries, which are able to attract large volumes of private capital flows, fare relatively poorly when external financing flows are scaled to the size of their economies. In addition, these countries, although they raise more domestic government revenues than other countries, do so mostly because they benefit from fiscal revenues linked to volatile commodity prices.

AfDB 2015 economic outlook gives East Africa the best growth prospects

  • East Africa will record the fastest growth on the continent in 2015 and 2016 according to the African Economic Outlook
  • The outlook classified the continent into five regions; Central, North, South and West Africa
  • Thirteen countries were placed in East Africa, including the five that make up the East Africa Community bloc
  • East Africa's growth in 2015 will be 5.6 per cent, according to the outlook, and increase to 6.7 per cent in 2016

Namibian electricity prices rising

  • NamPower managing diretcor, Paulinus Shilamba told members of the mining industry last week that electricity was in short supply in the country
  • The import agreement with ZESA of Zimbabwe has been reduced from 150 MW to 80 MW Shilamba said
  • The supplemental agreement with Eskom of 200 MW was extended in April but said this was awaiting approval from the South African government
  • The 115 MW agreement with Aggreko of Mozambique will expire in August this year - he also said the 300 MW off peak agreements with Eskom will expire in April next year
  • Adding to the demand is the surge in power demand in the north of the country leading to NamPower to invest US$700 million in upgrading the transmission backbone supplying the region
  • Namibia relies on power imports of up to 80% during dry seasons

Air Zimbabwe seeks US$1 billion for recapitalisation

  • THE government is seeking strategic partners for the struggling national airline, Air Zimbabwe, which requires at least US$1 billion to buy new aircraft and service its debt
  • Mpofu painted a dire picture of Air Zimbabwe finances, saying the company was generating revenue of US$2.65 million per month against operational expenditure of US$5.94 million a month
  • The airline, which once ceased operations between 2011 and 2012 due to viability problems, requires US$770 million to procure new aircraft and US$298 million to service both its domestic and foreign debts

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