Weekly Africa Newsbriefs 17 July

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    Leriba Africa Newsbrief

     

     Week commencing 17 July 2017

     

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    Nigeria

    IOCs’ $13.6bn oil assets up for grabs in two years

    International oil companies are expected to relinquish interest in oil blocks worth more than $13bn which are expected to expire between 2017 and 2019. About 17 Niger Delta onshore oil mining leases belonging to the Shell Petroleum Development Company of Nigeria will expire in the next two years. If the companies do not renew the licences, it opens opportunities for indigenous investors to buy the assets and boost the Nigerian participation in the nation’s petroleum industry. Three oil companies have divested from 24 leases in the past three years, giving indigenous oil firms the chance to invest $10bn to acquire the assets.

    The Guardian Nigeria 13 July

     

    Dangote invests $4.6bn in Nigeria farming

    Dangote Group, controlled by Aliko Dangote, Africa’s richest man, plans to invest $3.8bn in sugar and rice and $800m in dairy production in the next three years as the company seeks to expand and deal with a shortage of dollars in its home market of Nigeria. The conglomerate plans to increase its production of sugar to 1.5-million tonnes a year by 2020 from 100,000Mt, and is seeking to add 1Mt of rice. The company is also planning to have 50,000 cattle producing 500-million litres of milk a year by 2019.

    Bloomberg 11 July

     

    Pan Africa

    Phatisa raises Kanu stake to 85%

    Pan-African private equity firm Phatisa has agreed to buy JSE-listed Torre Industries’ remaining interest in Kanu Equipment. The transaction increases Phatisa’s shareholding to 85%, with the balance being held by Kanu’s management. Financial terms of the deal were not disclosed. The deal is being transacted through Phatisa’s $246m African Agriculture Fund. The fund originally backed Kanu in June 2016, spending approximately $15m to acquire a 40% stake in the pan-African agricultural and construction equipment distributor.

    Africa Capital Digest 9 July

     

    Tanzania

    Tigo, Bharti Airtel to sell 25% of their shares

    Tigo and Bharti Airtel are putting the final touches on plans to sell a quarter of their shares through an initial public offering. The firms have submitted their prospectuses and seek to list domestically. Figures from the Tanzania Communications Regulatory Authority rank Tigo and Airtel as the second-and third-largest telecoms, with a market share of 29% and 26% respectively. Tigo recorded 11,7-million subscribers in 2016, with Airtel a close second with 10,5-million.

    Corporate Digest 10 July

     

    Morocco

    Automotive and aeronautic sectors secure 17 deals

    Seventeen agreements on investment projects totaling $250m were signed in Rabat for the implementation of industrial ecosystems launched in the automotive and aeronautical sectors. The investment agreements are expected to generate turnover of around $800m and create 14,230 direct jobs.

    Morocco World News 7 July

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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 17 July

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Weekly newsbriefs

Weekly Africa Newsbriefs 17 July

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

Leriba Africa Newsbrief

 

 Week commencing 17 July 2017

 

oil-rig-2069280_1280

 

 

 

 

 

 

 

 

 

 

 

Nigeria

IOCs’ $13.6bn oil assets up for grabs in two years

International oil companies are expected to relinquish interest in oil blocks worth more than $13bn which are expected to expire between 2017 and 2019. About 17 Niger Delta onshore oil mining leases belonging to the Shell Petroleum Development Company of Nigeria will expire in the next two years. If the companies do not renew the licences, it opens opportunities for indigenous investors to buy the assets and boost the Nigerian participation in the nation’s petroleum industry. Three oil companies have divested from 24 leases in the past three years, giving indigenous oil firms the chance to invest $10bn to acquire the assets.

The Guardian Nigeria 13 July

 

Dangote invests $4.6bn in Nigeria farming

Dangote Group, controlled by Aliko Dangote, Africa’s richest man, plans to invest $3.8bn in sugar and rice and $800m in dairy production in the next three years as the company seeks to expand and deal with a shortage of dollars in its home market of Nigeria. The conglomerate plans to increase its production of sugar to 1.5-million tonnes a year by 2020 from 100,000Mt, and is seeking to add 1Mt of rice. The company is also planning to have 50,000 cattle producing 500-million litres of milk a year by 2019.

Bloomberg 11 July

 

Pan Africa

Phatisa raises Kanu stake to 85%

Pan-African private equity firm Phatisa has agreed to buy JSE-listed Torre Industries’ remaining interest in Kanu Equipment. The transaction increases Phatisa’s shareholding to 85%, with the balance being held by Kanu’s management. Financial terms of the deal were not disclosed. The deal is being transacted through Phatisa’s $246m African Agriculture Fund. The fund originally backed Kanu in June 2016, spending approximately $15m to acquire a 40% stake in the pan-African agricultural and construction equipment distributor.

Africa Capital Digest 9 July

 

Tanzania

Tigo, Bharti Airtel to sell 25% of their shares

Tigo and Bharti Airtel are putting the final touches on plans to sell a quarter of their shares through an initial public offering. The firms have submitted their prospectuses and seek to list domestically. Figures from the Tanzania Communications Regulatory Authority rank Tigo and Airtel as the second-and third-largest telecoms, with a market share of 29% and 26% respectively. Tigo recorded 11,7-million subscribers in 2016, with Airtel a close second with 10,5-million.

Corporate Digest 10 July

 

Morocco

Automotive and aeronautic sectors secure 17 deals

Seventeen agreements on investment projects totaling $250m were signed in Rabat for the implementation of industrial ecosystems launched in the automotive and aeronautical sectors. The investment agreements are expected to generate turnover of around $800m and create 14,230 direct jobs.

Morocco World News 7 July