Atta Africa Financial Update


Executive summary
Blame for delay in establishing a new commodity exchange in Uganda has landed on the elections.

The East Africa Exchange has postponed setting up operations in Uganda as a result of to the country’s recent General Election. Unfortunately for some, this delay will lock out smallholder farmers from access to structured agricultural and financial markets.

The regional commodity exchange had planned to extend its operations to Uganda at the same time as Kenya as it seeks to consolidate its operations in the East African Community.

The Ugandan commodity value chain is driven by traders and village agents who are known to reduce farmers’ profit margins to increase their own.

The Kampala middlemen transport maize and sell it at US$0.21 per kg, while the same maize is traded at US$0.32 per kg.

To reverse this trend, Ugandan authorities and the Rwanda-based EAX officials started negotiations but when Uganda went into elections, the talks were shelved.

EAX manages warehouses, warehouse receipt systems, grain cleaning and collateral management services and also deploys a Nasdaq electronic trading platform. Ugandan authorities are pushing for a partnership where the two parties would share revenues.

Uganda is the only country of the original Northern Corridor states where EAX has not set up its operations.

Fact: Africa has approximately 30% of the earth’s remaining mineral resources.

Private equity deals in East Africa now valued at US$152 million

  • The value of private equity deals in East Africa rose to US$152 million last year, tripling from US$52 million in 2014, with investors searching for better yields amid global market volatility and slowing economic growth
  • The rise in the value of deals in Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan and Ethiopia is attributed to new capital inflows from private foreign equity and fund companies seeking the benefits of a diversified institutional portfolio that the region offers. This was despite currency depreciation and high interest rates

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