Atta Financial Update

Executive summary: China’s involvement in Africa through investment, infrastructure and financing is bigger than previous studies have suggested, according to a new report.

According to the report by consulting firm McKinsey, China’s financial flows to Africa are around 15% larger than official figures suggest when non-traditional flows are included.

McKinsey’s report – ‘Dance of the lions and dragons: How are Africa and China engaging, and how will the partnership evolve?’ – suggests China is also a large and fast-growing source of aid and the largest source of construction financing for the continent. According to the report, these contributions have supported many of Africa’s most ambitious infrastructure developments in recent years.

Analysis is conducted across five dimensions: trade, investment stock, investment growth, infrastructure financing, and aid - China is in the top four partners for Africa in all these dimensions. No other country matches this depth and breadth of engagement.

The Forum on China-Africa Cooperation said last year that China planned to double a special development fund for Africa to US$10bn and expand financial support for small firms on the continent. The China-Africa Development Fund hit its initial target of pooling US$5bn for equity investments in Africa towards the end of 2015.

Fact: The area of Australia owned by British people is larger than Britain.

Kibo Capital backs Blowpast

  • Africa-focused private equity fund manager Kibo Capital Partners is backing Blowplast, a plastic packaging company based in Kenya
  • Financial terms of the deal were not disclosed
  • The company two main businesses: Blowpast, which produces plastic packaging for a variety of industries in East Africa; and Thermopak, which manufactures food grade disposable plastic packaging products such as glasses and plates
  • The transaction is the fourth for Kibo’s second fund, which at last count totaled US$63 million in commitments

Mobisol acquires Kenya’s Lumeter

  • Mobisol, the provider of off-grid solar home systems in Africa which was backed by Investec Asset Management in October last year, is making a deal of its own and acquiring Lumeter
  • Lumeter, the pay-as-you-go software company based in Nairobi
  • Mobisol sells its products under a three-year payment plan, with entry-level systems costing approximately the same as its typical customer would spend on kerosene, candles, batteries and mobile phone charging services

Fairfax Africa in AFGRI and Nova Pioneer debt deals

  • Fairfax Africa announced two Africa-related private debt deals last week totaling US$43 million for AGFRI, an agricultural food services and processing company in South Africa and Nova Pioneer, an independent school network with schools in South Africa and Kenya
  • Fairfax Africa is the US$500 million investment subsidiary of Canadian life insurer Fairfax Financial
  • In both cases, the capital has been earmarked to support each firm’s expansion goals
  • The deals cap an active 6 months of investment for Fairfax, which announced it was raising US$500 million for public and private investment opportunities on the continent - last week, the firm announced plans to take a 35% stake in Atlas Mara, an African banking platform with interests in seven African countries