Weekly Africa Newsbriefs 3 April

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    Leriba Africa Newsbrief

     

     Week commencing 3 April 2018

     


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    Nigeria

    Milost ends $1bn deal with bank after threats

    Milost Global has ended talks to provide $1bn to Unity Bank following threats that it will be run out of the country should the deal continue. The threats appear to stem from a “politically connected individual”, and negative articles started appearing in the media. The New York-based private-equity firm had agreed to provide debt and equity on the understanding that Unity would delist in Nigeria to have its stock traded in the US, in a deal that would ultimately see it acquire a 60% stake in the Lagos-based bank.

    Bloomberg 27 March

     

    Zimbabwe

    Local agricultural firm inks $500m deal in China

    A Zimbabwean business conglomerate has secured $500m worth of deals in agriculture, mining and transport to aid Zimbabwe’s economic transformation. A $400m deal was signed with China’s Lovol which produces heavy machinery for agriculture and mining, while a $40m revolving facility was secured with Good Agro Rising for the supply of chemicals for tobacco and other export-oriented crops, and a further $80m deal was signed for the supply of irrigation. Representatives from China will be in Zimbabwe soon to assess specific irrigation requirements and technology applicable to Zimbabwe.

     The Herald Zimbabwe 3 April

     

    Rwanda

    Funding deal boosts off-grid power

    Private sector-lead projects geared at boosting access to power will now find it easier to secure funding, thanks to a new deal signed between Development Bank of Rwanda (BRD) and commercial banks. The multimillion-dollar agreement seeks to enable banks to finance off-grid power initiatives. It is part of the R48.94m Renewable Energy Fund project, financed by the Scaling-Up Renewable Energy Programme, a multi-donor trust fund managed by the World Bank. About 445,000 households will be connected to renewable energy solutions over the next seven years. The project is expected to increase access to electricity by more than 19%.

    The New Times 28 March

     

    Kenya

    Local drug maker gets $10m growth loan

    The International Finance Corporation (IFC) is set to lend $10m to Kikuyu-based pharmaceutical manufacturer Universal Corporation. The proposed IFC investment will help the company finance a major investment programme to upgrade its facilities, increase its product range and strengthen its operations.

    Business Daily 2 April

     

    Dubai firm to build clothing factory

    A Dubai-based textiles company, United Aryan, plans to build a clothing factory that could employ up to 10,000 workers at Olkaria geothermal fields in Naivasha to take advantage of lower electricity costs. Construction is expected to be begin in the next two years. The factory, estimated to cost $100m, will produce products for sale not only in Kenya, but across other markets such as the US and Europe.

    Business Daily 1 April

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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 3 April

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Weekly newsbriefs

Weekly Africa Newsbriefs 3 April

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

Leriba Africa Newsbrief

 

 Week commencing 3 April 2018

 


agree-1238964_1280

 

 

 

 

 

 

 

 

 

 

Nigeria

Milost ends $1bn deal with bank after threats

Milost Global has ended talks to provide $1bn to Unity Bank following threats that it will be run out of the country should the deal continue. The threats appear to stem from a “politically connected individual”, and negative articles started appearing in the media. The New York-based private-equity firm had agreed to provide debt and equity on the understanding that Unity would delist in Nigeria to have its stock traded in the US, in a deal that would ultimately see it acquire a 60% stake in the Lagos-based bank.

Bloomberg 27 March

 

Zimbabwe

Local agricultural firm inks $500m deal in China

A Zimbabwean business conglomerate has secured $500m worth of deals in agriculture, mining and transport to aid Zimbabwe’s economic transformation. A $400m deal was signed with China’s Lovol which produces heavy machinery for agriculture and mining, while a $40m revolving facility was secured with Good Agro Rising for the supply of chemicals for tobacco and other export-oriented crops, and a further $80m deal was signed for the supply of irrigation. Representatives from China will be in Zimbabwe soon to assess specific irrigation requirements and technology applicable to Zimbabwe.

 The Herald Zimbabwe 3 April

 

Rwanda

Funding deal boosts off-grid power

Private sector-lead projects geared at boosting access to power will now find it easier to secure funding, thanks to a new deal signed between Development Bank of Rwanda (BRD) and commercial banks. The multimillion-dollar agreement seeks to enable banks to finance off-grid power initiatives. It is part of the R48.94m Renewable Energy Fund project, financed by the Scaling-Up Renewable Energy Programme, a multi-donor trust fund managed by the World Bank. About 445,000 households will be connected to renewable energy solutions over the next seven years. The project is expected to increase access to electricity by more than 19%.

The New Times 28 March

 

Kenya

Local drug maker gets $10m growth loan

The International Finance Corporation (IFC) is set to lend $10m to Kikuyu-based pharmaceutical manufacturer Universal Corporation. The proposed IFC investment will help the company finance a major investment programme to upgrade its facilities, increase its product range and strengthen its operations.

Business Daily 2 April

 

Dubai firm to build clothing factory

A Dubai-based textiles company, United Aryan, plans to build a clothing factory that could employ up to 10,000 workers at Olkaria geothermal fields in Naivasha to take advantage of lower electricity costs. Construction is expected to be begin in the next two years. The factory, estimated to cost $100m, will produce products for sale not only in Kenya, but across other markets such as the US and Europe.

Business Daily 1 April