Weekly Africa Newsbriefs 11 September

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    Leriba Africa Newsbrief

     

     Week commencing 11 September 2017

     



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    Morocco

    Moroccan investment bank offers $100m for Sound Energy pipeline

    British oil & gas company Sound Energy has received a funding offer of between $60m and $100m for its Tendrara gas export pipeline in eastern Morocco from the Advisory & Finance Group Investment Bank (AFG). AFG is interested in financing, constructing and operating a new pipeline linking the Tendrara deposit to the Maghreb-Europe pipeline. The pipeline will connect Tendrara to regional infrastructure, effectively opening up the export route to the rest of Morocco and southern Europe.

    Morocco World News 4 September

     

    Kenya

    ARM to sell loss-making fertiliser unit to Swiss company

    ARM Cement, formerly Athi River Mining, has signed a deal to sell its loss-making fertiliser and minerals unit to Swiss industrial firm Omya. The cement maker has several subsidiaries that deal in fertiliser blending, processing of industrial minerals and chemicals, and building products such as silicate liquid. These will all be sold to Omya in an undisclosed transaction expected to fetch the distressed company at least $52.5m.

    Business Daily 8 September

     

    IFC invests in mobile tech firm

    The International Finance Corporation is investing up to $6m in mobile tech firm Africa’s Talking. The funds are earmarked for the company’s expansion in Africa. The IFC’s stake following its investment is still under negotiation. Africa’s Talking, which is headquartered in Nairobi, also operates in Uganda, Rwanda, Tanzania, Malawi, Nigeria and Ethiopia.

    Business Daily 7 September

     

    Guinea

    China to offer loan to secure aluminium ore

    China has agreed to loan Guinea $20bn over almost 20 years in exchange for concessions on bauxite, an ore of aluminium. The projects guaranteed by the loan include China Power Investment Corp’s planned alumina refinery and Aluminium Corp of China’s bauxite mine, along with an additional bauxite project by the China Henan International Cooperation Group. The money will be spent on infrastructure development, including the upgrade of roads in the capital of Guinea and highways, the extension of the port of Conakry, an electric transmission line and the building of a university.

    Mining Weekly 7 September

     

    Burkina Faso

    Amethis acquires minority stake in Sodigaz

    Amethis Finance has announced the acquisition of a minority stake in Sodigaz Group, a liquified petroleum gas distributor. The transaction was concluded via Amethis West Africa, its investment vehicle dedicated to West Africa. Since its creation 40 years ago, Sodigaz has succeeded in building a market share of over 60%, thanks to its network of nearly 2,000 resellers.

    AVCA 4 September

     

    Mozambique

    AgDevCo backs rehabilitated banana plantation

    Agricultural investment firm AgDevCo is teaming up with Nika – a group of experienced Mozambican investors – to invest $1.5m in Citrum SA to develop an export-focused banana operation. The partnership aims to rehabilitate a banana plantation with the intention of increasing the hectarage and yields. Production will be sold at local market as well as exported to South Africa. Over 140 workers will be employed by the farm. The funding will finance capital expenditure and operational costs related to the development plan.

    Markets Insider 4 September 

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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 Newsbriefs 11 September

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Snapshots
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Weekly newsbriefs

Weekly Africa Newsbriefs 11 September

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

Leriba Africa Newsbrief

 

 Week commencing 11 September 2017

 



industrial-820238_1280

 

 

 

 

 

 

 

 

 

 

 

Morocco

Moroccan investment bank offers $100m for Sound Energy pipeline

British oil & gas company Sound Energy has received a funding offer of between $60m and $100m for its Tendrara gas export pipeline in eastern Morocco from the Advisory & Finance Group Investment Bank (AFG). AFG is interested in financing, constructing and operating a new pipeline linking the Tendrara deposit to the Maghreb-Europe pipeline. The pipeline will connect Tendrara to regional infrastructure, effectively opening up the export route to the rest of Morocco and southern Europe.

Morocco World News 4 September

 

Kenya

ARM to sell loss-making fertiliser unit to Swiss company

ARM Cement, formerly Athi River Mining, has signed a deal to sell its loss-making fertiliser and minerals unit to Swiss industrial firm Omya. The cement maker has several subsidiaries that deal in fertiliser blending, processing of industrial minerals and chemicals, and building products such as silicate liquid. These will all be sold to Omya in an undisclosed transaction expected to fetch the distressed company at least $52.5m.

Business Daily 8 September

 

IFC invests in mobile tech firm

The International Finance Corporation is investing up to $6m in mobile tech firm Africa’s Talking. The funds are earmarked for the company’s expansion in Africa. The IFC’s stake following its investment is still under negotiation. Africa’s Talking, which is headquartered in Nairobi, also operates in Uganda, Rwanda, Tanzania, Malawi, Nigeria and Ethiopia.

Business Daily 7 September

 

Guinea

China to offer loan to secure aluminium ore

China has agreed to loan Guinea $20bn over almost 20 years in exchange for concessions on bauxite, an ore of aluminium. The projects guaranteed by the loan include China Power Investment Corp’s planned alumina refinery and Aluminium Corp of China’s bauxite mine, along with an additional bauxite project by the China Henan International Cooperation Group. The money will be spent on infrastructure development, including the upgrade of roads in the capital of Guinea and highways, the extension of the port of Conakry, an electric transmission line and the building of a university.

Mining Weekly 7 September

 

Burkina Faso

Amethis acquires minority stake in Sodigaz

Amethis Finance has announced the acquisition of a minority stake in Sodigaz Group, a liquified petroleum gas distributor. The transaction was concluded via Amethis West Africa, its investment vehicle dedicated to West Africa. Since its creation 40 years ago, Sodigaz has succeeded in building a market share of over 60%, thanks to its network of nearly 2,000 resellers.

AVCA 4 September

 

Mozambique

AgDevCo backs rehabilitated banana plantation

Agricultural investment firm AgDevCo is teaming up with Nika – a group of experienced Mozambican investors – to invest $1.5m in Citrum SA to develop an export-focused banana operation. The partnership aims to rehabilitate a banana plantation with the intention of increasing the hectarage and yields. Production will be sold at local market as well as exported to South Africa. Over 140 workers will be employed by the farm. The funding will finance capital expenditure and operational costs related to the development plan.

Markets Insider 4 September