Weekly Africa Newsbrief

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    Leriba Africa Newsbrief

     

     

     Week commencing 16 March 2015

     

    Telecellogo 

     

     

     

     

     

     

     

    South Africa

     

    Glaxo sells another chunk of its Aspen stake

    GlaxoSmithKline has sold half its stake in Aspen Pharmacare, the South African drugs manufacturuer, for $853m, at a discount of nearly 10% to the market price. The move is part of GSK’s policy of selling non-core assets as it refocuses its business and leave GSK with a 6.2% stake in Aspen. GSK says the disposal gives it flexibility to invest in new opportunities in the wake of a $20bn-plus asset swap transaction with Novartis.

    Business Day (South Africa) 13 March

     

    Zimbabwe

     

    Government shuts down Telecel Zimbabwe

    Zimbabwe’s third largest mobile phone company has been closed down for not having a licence. Telecel Zimbabwe, a subsidiary of Orascom Telecom that has 2.5-million subscribers, has been embroiled in a bitter dispute over the disposal of a 40% stake in the company worth US$20m. The Postal and Regulatory Authority of Zimbabwe first wrote to Telecel in January, warning that the company would be shut down for failing to comply with the country’s laws on ownership, which require that foreign-owned companies cede a majority shareholding to locals. Daily Nation (Kenya) March 12

     

    State to take control of diamond mines including Rio’s Murowa mine

    All diamond mining operations in Zimbabwe would be consolidated into one firm in which the state will hold a 50% stake, Zimbabwe Mines Minister Walter Chidhakwa said last week, giving miners until today (16 March) to accept the proposal. President Robert Mugabe’s government has stakes of varying degrees in all firms operating in the Marange fields on the eastern border with Mozambique, but the new proposal could see Rio Tinto’s Murowa Diamonds, located in Zvishavane, coming under government control. All Africa 12 March

     

    Nigeria

     

    Keystone sells stake in Orient Bank

    Nigeria’s Keystone Bank has fully divested from Orient Bank, its Ugandan subsidiary. Its 80% stake has been sold to minority shareholders as part of a consortium led by 8Miles LLP, an Africa- focused private equity fund. The Central Bank of Nigerina has already been approved the transaction. The Guardian (Nigeria) 8 March

     

    Nigerian power plant up for privatisation

    Nigeria’s Akwa Ibom State government is considering privatising the Ibom Power Plant in in Ikot Abasi, says Senas Ukpana, the special adviser on investment and industrialisation to the state government. He told Nigerian journalists this was in line with global practice and that it was in line with government policy. Ukpana also chairs the State Investment Corporation. This Day Live (Nigeria) 10 March

     

    Kenya

     

    Flame Tree buys food processing group

    Flame Tree Group, the water tanks and fast-moving consumer goods manufacturer recently listed on the Nairobi Securities Exchange, has acquired Chirag Kenya brands, which produces spices, snacks and honeycomb biscuits. The value of the deal, which still needs regulatory approval, was not disclosed. The Star (Kenya) 13 March

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Opportunity

   
A rapidly growing and urbanising middle class set to experience a consumption boom; the world’s greatest resources of as-yet-untapped agricultural land, oil, gas and countless other commodities; and a growing number of entrenched, stable democracies with increasingly sophisticated democratic institutions. Africa is the last major region in the world to offer the prospect of take-off phase economic growth, delivering world-beating returns to investors.
5.6%
GDP growth rate in the decade to 2013 average in Africa; 7% expected in the next decade
7
of the 10 fastest growing economies in the world over the next decade will be African
4
of the 10 most improved economies for doing business are in Africa
   
Urbanisation Natural Resources
The population of Africa’s cities will triple by 2050 with over one billion people living in cities by 2040. Lagos is the largest with over 12,4 million people. Urbanisation presents opportunities for tertiary sectors like retail, telecommunications, banking and logistics. Major recent discoveries in oil, iron ore, natural gas, and other key commodities are set to provide major economic stimulus. Urbanisation in Africa and the rest of the world will drive demand for natural resources which Africa is uniquely positioned to satisfy with both new and old discoveries.
   
   

Risk

     
90%
of African countries score below 50 in Transparency International's corruption perception index
16
African countries use International Financial Reporting Standards, others inconsistent
45
African countries have media sectors that are considered not free
   
The continent remains a difficult place to do business. The regulatory and legal structures common in much of the world are only nascent in many African countries. In rapidly changing economies, reputations are only starting to develop and information on performance histories difficult to obtain. Weak media sectors often mean that critical information relevant to potential exposures is never publicly  disseminated. Data are scarce making traditional investment analysis difficult if not impossible. The incentives facing local partners are opaque and may well be antithetical to outside investors’ interests. As in any rapidly changing environment, opportunists are aiming to exploit potential investors. Just as the opportunities in Africa are clear, the stories of investments gone wrong are sobering.
   

Solved

   
Leriba is a specialist consultancy with a unique combination of financial and political research skills. We help analyse opportunities and examine current investments for unforeseen political and financial risks. We recognise the investment
 
opportunities in Africa but we are pragmatic about the challenges. Our insights provide actionable information which directly pay off through better investment decisions.
PEOPLE OUR VALUES COUNTRIES INDUSTRIES 
Our directors have decades of experience in Africa. We work with a network of associates across the continent with support staff in London and Johannesburg
 
First and foremost we aim to make a positive contribution to our clients and to the societies in which we operate. Clients can have full confidence in our ethics, professionalism and discretion. Our staff are governed by a strict code of conduct and many are members of professional societies
 
Unlike some other consultancies, our analysts live and work in Africa and have built up substantial networks and insight. We are able to work in any of Africa’s 54 countries.
 
We have worked in a wide range of industries, including:
 
Banking, oil & gas, mining, telecoms, IT, retail, logistics, agriculture, insurance, fund management, FMCG, hotels & tourism, energy and infrastructure 
       
       

Weekly Africa Newsbrief

Snapshots

Weekly Africa Newsbrief

To receive this brief in your email every Monday, please subscribe here.

Leriba Africa Newsbrief

 

 

 Week commencing 16 March 2015

 

Telecellogo 

 

 

 

 

 

 

 

South Africa

 

Glaxo sells another chunk of its Aspen stake

GlaxoSmithKline has sold half its stake in Aspen Pharmacare, the South African drugs manufacturuer, for $853m, at a discount of nearly 10% to the market price. The move is part of GSK’s policy of selling non-core assets as it refocuses its business and leave GSK with a 6.2% stake in Aspen. GSK says the disposal gives it flexibility to invest in new opportunities in the wake of a $20bn-plus asset swap transaction with Novartis.

Business Day (South Africa) 13 March

 

Zimbabwe

 

Government shuts down Telecel Zimbabwe

Zimbabwe’s third largest mobile phone company has been closed down for not having a licence. Telecel Zimbabwe, a subsidiary of Orascom Telecom that has 2.5-million subscribers, has been embroiled in a bitter dispute over the disposal of a 40% stake in the company worth US$20m. The Postal and Regulatory Authority of Zimbabwe first wrote to Telecel in January, warning that the company would be shut down for failing to comply with the country’s laws on ownership, which require that foreign-owned companies cede a majority shareholding to locals. Daily Nation (Kenya) March 12

 

State to take control of diamond mines including Rio’s Murowa mine

All diamond mining operations in Zimbabwe would be consolidated into one firm in which the state will hold a 50% stake, Zimbabwe Mines Minister Walter Chidhakwa said last week, giving miners until today (16 March) to accept the proposal. President Robert Mugabe’s government has stakes of varying degrees in all firms operating in the Marange fields on the eastern border with Mozambique, but the new proposal could see Rio Tinto’s Murowa Diamonds, located in Zvishavane, coming under government control. All Africa 12 March

 

Nigeria

 

Keystone sells stake in Orient Bank

Nigeria’s Keystone Bank has fully divested from Orient Bank, its Ugandan subsidiary. Its 80% stake has been sold to minority shareholders as part of a consortium led by 8Miles LLP, an Africa- focused private equity fund. The Central Bank of Nigerina has already been approved the transaction. The Guardian (Nigeria) 8 March

 

Nigerian power plant up for privatisation

Nigeria’s Akwa Ibom State government is considering privatising the Ibom Power Plant in in Ikot Abasi, says Senas Ukpana, the special adviser on investment and industrialisation to the state government. He told Nigerian journalists this was in line with global practice and that it was in line with government policy. Ukpana also chairs the State Investment Corporation. This Day Live (Nigeria) 10 March

 

Kenya

 

Flame Tree buys food processing group

Flame Tree Group, the water tanks and fast-moving consumer goods manufacturer recently listed on the Nairobi Securities Exchange, has acquired Chirag Kenya brands, which produces spices, snacks and honeycomb biscuits. The value of the deal, which still needs regulatory approval, was not disclosed. The Star (Kenya) 13 March