Atta Africa Financial Update

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

Executive summary: Japan confirms its position as a major investor in Africa.

Resource-poor but infrastructure and technology-rich Japan has reiterated its commitment to investing in Africa. The country’s nuclear incidents in 2011 exacerbated its reliance on natural resources, incentivising the government to promote agreement with African countries, largely welcoming of Japanese expertise and trade.

The Tokyo International Conference on African Development (TICAD) was held in Nairobi last week, where Japan’s Prime Minister Shinzo Abe promised a further US$30 billion in both public and private support for infrastructure development, education and healthcare. 67% of Japan’s last US$32 billion pledge in 2013 has already been deployed in various projects; this latest assurance of new capital will enhance Japan’s focus on energy infrastructure totalling 2,200 megawatts across the continent as well as training for thousands of teachers and medical experts.

Fact: In Mozambique, overhead power lines have to be at least 12m (39ft) high to permit safe passage of giraffes

China Railway has been awarded US$1.85 billion rail contract in Nigeria

  • China’s state-owned railway construction firm has been awarded a US$1.85 billion contract to build a light railway line in Kano State, north west Nigeria
  • The contract is for four lines, totalling 74 km (46 miles) and capable of carrying trains travelling at a top speed of 100 km per hour
  • The company said it expected the first and second phases of construction to each last for two years, but did not give details of when work was expected to start if approved

Plastic money use surges 150% after RBZ measures

  • The use of plastic money has increased by 152 percent since the Reserve Bank of Zimbabwe announced measures to encourage the use of credit and debit cards as a means of reducing pressure on physical cash transactions amid a biting bank note shortage in the country
  • The RBZ also announced plans to introduce a token currency, backed by a US$200 million African Export Import Bank facility, which will start circulating towards the end of 2016

Ghana’s IMF report expected today

  • The International Monetary Fund is expected to announce today whether it will release to the country the fourth tranche of the extended credit facility of US$115 million
  • The country’s fiscal outlook for the rest of 2016 was high on the agenda as the top brass of the Fund went to board yesterday to review the country’s US$918 million assistance programme
  • Ghana, which exports cocoa, gold and oil, signed the three-year aid deal in April last year to bring down budget deficit, inflation and a high public debt