Weekly Africa Newsbriefs 22 January

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    Leriba Africa Newsbrief

     

     Week commencing 22 January 2018

     

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    Egypt

     

    Financing for wind parks secured

    Three companies, Japan’s Marubeni Corporation and Abu Dhabi Future Energy, also known as Masdar, and local company ElSewedy Electric, have teamed up to invest up to $900m in the country’s wind park projects. ElSewedy will be involved in building wind parks with the capacity to produce more than 700MW. Marubeni – the main financier – signed a memorandum of understanding with Masdar and ElSewedy for the development of the project, expected to cost $1.2m per megawatt. A start-up date for the project has yet to be confirmed.

    Bloomberg 18 January

     

    Rwanda

    Volkswagen to invest in assembly plant and mobility solution

    German car manufacturer Volkswagen is investing $20m to set up Volkswagen Mobility Solutions, an assembly and mobility solution plant expected to begin production in the second quarter of 2018. The investment forms the first phase of the firm’s entry into Rwanda. Besides establishing the assembly and retail plant, funds will also go towards training and rolling out a mobile solutions platform. The plant will have a production capacity of 5,000 cars and is set to create employment for up to 1,000 Rwandans in its first phase.

    The New Times 18 January

     

    Nigeria

    Shoreline in deal to boost oil output

    Local oil producer Shoreline Group plans to almost double its crude output after agreeing to a $530m finance deal with global energy and commodity trader Vitol Group and local lenders. Shoreline seeks to boost production to between 80,000 and 100,000 barrels a day from 55,000bpd. Besides Vitol, Farallon Capital Management Ecobank, Fidelity Bank, Union Bank and First City Monument Bank will also provide the financing. The funds will be used to refinance existing debt and provide working capital to expand production.

    Bloomberg 18 January

     

    Ghana

    ExxonMobil signs petroleum agreement with government

    Ghana’s energy department and Ghana National Petroleum Corporation (GNPC) have signed a petroleum agreement with ExxonMobil for the exploration and production rights for the Deepwater Cape Three Point block. The agreement, which is subject to parliamentary approval, gives ExxonMobil an 80% interest in the project and GNPC 15%. The firm will work with the government to identify a local company to potentially hold an interest of up to 5%. Exploration activities, including the acquisition of seismic data and analysis, are expected to start later this year.

    Ghana Business News 19 January

     

    Kenya

    Hong Kong phone maker to enter local market

    Smartphone manufacturer Nuu Mobiles is eyeing the East African market as part of its strategy to expand in Africa. The tech firm will enter the market with the introduction of its Android smartphones, priced between $146 and $485.

    Business Daily 16 January

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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 22 January

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Weekly newsbriefs

Weekly Africa Newsbriefs 22 January

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

Leriba Africa Newsbrief

 

 Week commencing 22 January 2018

 

beach-375069_1280

 

 

 

 

 

 

 

 

 

 

Egypt

 

Financing for wind parks secured

Three companies, Japan’s Marubeni Corporation and Abu Dhabi Future Energy, also known as Masdar, and local company ElSewedy Electric, have teamed up to invest up to $900m in the country’s wind park projects. ElSewedy will be involved in building wind parks with the capacity to produce more than 700MW. Marubeni – the main financier – signed a memorandum of understanding with Masdar and ElSewedy for the development of the project, expected to cost $1.2m per megawatt. A start-up date for the project has yet to be confirmed.

Bloomberg 18 January

 

Rwanda

Volkswagen to invest in assembly plant and mobility solution

German car manufacturer Volkswagen is investing $20m to set up Volkswagen Mobility Solutions, an assembly and mobility solution plant expected to begin production in the second quarter of 2018. The investment forms the first phase of the firm’s entry into Rwanda. Besides establishing the assembly and retail plant, funds will also go towards training and rolling out a mobile solutions platform. The plant will have a production capacity of 5,000 cars and is set to create employment for up to 1,000 Rwandans in its first phase.

The New Times 18 January

 

Nigeria

Shoreline in deal to boost oil output

Local oil producer Shoreline Group plans to almost double its crude output after agreeing to a $530m finance deal with global energy and commodity trader Vitol Group and local lenders. Shoreline seeks to boost production to between 80,000 and 100,000 barrels a day from 55,000bpd. Besides Vitol, Farallon Capital Management Ecobank, Fidelity Bank, Union Bank and First City Monument Bank will also provide the financing. The funds will be used to refinance existing debt and provide working capital to expand production.

Bloomberg 18 January

 

Ghana

ExxonMobil signs petroleum agreement with government

Ghana’s energy department and Ghana National Petroleum Corporation (GNPC) have signed a petroleum agreement with ExxonMobil for the exploration and production rights for the Deepwater Cape Three Point block. The agreement, which is subject to parliamentary approval, gives ExxonMobil an 80% interest in the project and GNPC 15%. The firm will work with the government to identify a local company to potentially hold an interest of up to 5%. Exploration activities, including the acquisition of seismic data and analysis, are expected to start later this year.

Ghana Business News 19 January

 

Kenya

Hong Kong phone maker to enter local market

Smartphone manufacturer Nuu Mobiles is eyeing the East African market as part of its strategy to expand in Africa. The tech firm will enter the market with the introduction of its Android smartphones, priced between $146 and $485.

Business Daily 16 January