Whilst the private sector has spent the last six years reducing costs, improving efficiencies and boosting their competitiveness, Government has been making little headway in cutting its own costs. In the early years of the Unity Government, budgets were set on a cash receipt basis with no recourse to borrowing. Since 2013 however there has been a growing issuance of treasury bills initially as a means to repay private sector debts, but then to cover the historical debts of the Reserve Bank and latterly ZAMCO. With rapidly declining tax receipts and no simultaneous spending cuts, Government have been issuing treasury bills to the banks in order to fund itself and pay civil service salaries. The net result is that as at April, treasury bills now represent 30% of total bank deposits (source: RBZ) having been below 10% only one year ago.
For investors looking at African fixed income opportunities, Angola might not be on the investment radar. The fixed income market in the Africa's second largest crude exporter remains at an early stage of development with only a handful of instruments trading. AGF looks closely to identify investment opportunities and risks
West Africa’s Regional Stock Exchange, the Bourse Régionale des Valeurs Mobilières de l’Afrique de l’Ouest (BRVM) came to New York in May this year to attract US investors on the market, promote investment in countries of the West African Economic and Monetary Union (WAEMU) and ensure maximum visibility for the BRVM and regional businesses on the world stage. AGF had a unique opportunity to meet with Edoh Kossi Amenounve, BRVM’s Chief Executive Officer, to discuss BRVM’s performance, its strategic plan and why the Exchange is initiating dialogue with US frontier funds.
For a very long time Nigeria has been the dominant stock market in Sub-Saharan Africa excluding South Africa. This was mostly because of its sheer size and depth of the market. However as limitations on USD expatriation reduce investor appetite for Nigeria, more and more investors are lured to Kenya, a country that never had the luxury of easy oil revenues. Nigeria’s total market capitalization is still much bigger. However, with international investors refusing to trade in Nigeria until its currency is devalued it may be only a matter of time before Kenya will become the most traded Sub-Saharan Africa market after South Africa.
Since 2000, five new sovereign nations have been created, the most recent being South Sudan (2011). The country has, however, enjoyed effective autonomy from Sudan since 2005. The plight of the country since independence has been tragic: civil war broke out in late-2013, resulting in the deaths of tens of thousands of people and the displacement of at least two million. There was much optimism when South Sudan gained its independence. Africa had gained a new oil-producing nation at a time when prices were much higher than those currently prevailing. In 2011, South Sudan was producing 350,000 barrels per day. The onset of civil war has lowered this figure to the current paltry level of 150,000. Furthermore, the collapse in oil prices since July 2014 has shaken government finances to the core. Roughly 95% of tax receipts are derived from oil. The government’s dire financial problem is also compounded by the type of oil that South Sudan produces, namely Dar Blend. This oil grade normally sells at a discount of $6-$12 per barrel to Brent. This meant South Sudan sold its oil at a loss whenever Brent crude traded below $35 per barrel. How was this possible? Under an agreement between the governments of South Sudan and Sudan, the latter received Dar Blend at $24.1 per barrel for transporting the oil across her territory to the Red Sea for export. The charge consisted of two components: 1) a transit fee of $9.1 per barrel, and 2) a Transitional Financial Arrangement (TFA) of $15 per barrel as compensation for the loss of resources in the former part of the country that became South Sudan.
Zambia’s agriculture sector takes aim at exciting new growth markets as resilient farmers, innovative funding models combine to provide a strong underpin, writes Leon Kotze, Head of Agri Business for Stanbic Bank, a member of the Standard Bank Group
Type Zambia into google and one of the first news stories that comes up is about people hanging off the edge of a massive waterfall in Zambia. The waterfall in question is the Victoria Falls, where calm pools at the top allow people to sit in the water and literally hang over the edge of a massive drop. With the general mood of investors in the emerging markets and in Africa sometime it feels that hanging in a pool a tiny space away from a massive drop is exactly where markets are, despite the drops we have already seen.
Côte d’Ivoire is one of the most stable economies in the Francophone egion, but the infrastructure-investment story has not so far proved easy to buy. Anna Lyudvig investigates why infrastructure funds face a number of challenges in the country and what needs to change to boost investment
Ethiopia’s private equity market is relatively small by African standards, but has strong macro drivers that signal significant potential for future growth, writes Dorothy Kelso of AVCA
Jacques Verreynne of NKC African Economic says that the country has for many years been on an unsustainable path
The East African region continues to attract private equity (PE) investors and while Kenya remains the primary target for PE capital, Tanzania is also seeing as increasingly popular investment destination, writes Anna Lyudvig
As the African continent continues to attract global interest, Mauritius is rising to become the natural gateway for investing in Africa, writes Shaffick Hamuth, Economist and former Senior Investment Advisor of the Board of Investment, Mauritius.
The Zimbabwean economy and its people have often been referred to as resilient, steadfast and even innovative. In local parlance, this innovation is often referred to as “making a plan” - an idiom which encapsulates a continual socio-economic process of adaptation to survive or even grow under tough economic conditions.
Egypt has witnessed speedy economic recovery since 2013. Last year, its financial market was declared as the fastest growing in the world. As the country continues to attract foreign capital, Anna Lyudvig explores opportunities in the Egyptian stock market, outlining how to find good bets and address risks