Private equity in Africa is fast-growing and investing in a variety of sectors. Kem Ihenacho and Linzi Mutter, Partners at Latham & Watkins, look at challenges that investors face.
The best investment opportunities reside in places where others aren’t looking. In practical terms, this translates into mid- and small-cap value stocks offering an excellent hunting ground for great long-term investments. This leads us to recommend three under-researched companies, namely Afrimat, Sasfin and ELB Group.
The 6th Forum on China-Africa Cooperation (FOCAC) will be held in South Africa in 2015. This will be the first FOCAC meeting since President Xi Jinping assumed office in 2013. Given China’s priorities and agenda in past FOCAC meetings and the heightened importance the Xi administration has attached to Africa, expectations are that China will boost its financing commitment and development priorities in Africa at the 6th FOCAC meeting. The outcome will guide China’s Africa policy for the following three years.
The fallout in South African money market funds from the collapse of African Bank is a timely reminder that these investments are not completely risk free. Small capital losses have sparked big runs on money market funds in other markets. Investors should be sure to put as much emphasis on return of capital as they do on return on capital, regardless of asset class.
Ethiopia must change strategy to maintain its economic growth, according to Toddy Thairu,Senior Advisor, Tax Services at KPMG.
In a bold move, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) voted to devalue the naira as well as tighten monetary policy instruments following its meeting on Tuesday, November 25. All 11 members of the MPC voted to devalue the official naira exchange rate from a mid-point of N155/$ to N168/$ (i.e. by 8.4%), while the corridor was adjusted from ±3% to ±5%.
It is no secret that the South African economy is growing at rates well below its potential. What is perhaps less well understood is that there are some quick wins which could kick-start the economy, yielding swift results. And from that position, it would be far easier to take the economy to a more elevated position, leading to more meaningful job creation.
Innovation and growth are top of mind for African CEOs. More than 30% of them see product and service innovation as the key driver of short-term growth, ahead of increasing market share in new and existing markets and M&A; initiatives.
Perceptions of Africa as an investment destination are changing rapidly and parts of Africa are increasingly considered very attractive for foreign direct investment.
Accion, a global nonprofit organization, has invested in Umati Capital, a Kenya-based lending company that provides invoice discounting and other forms of working capital financing to small and medium-sized enterprises (SME) in East Africa.
The positive phrase Africa Rising is now almost as common as the negative images we used to see about Africa throughout most of the previous several decades. Civil wars, coups d'état, natural disasters and famines seemed to be the only news about sub-Saharan Africa but now the narrative is changing towards the land of opportunity.
