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The Government of the Republic of Zambia through the Ministry of Commerce, Trade and Industry, the Zambia Development Agency and Homestrings, a UK-based investment platform will be hosting the Fifth edition of the Zambia International Investment Forum (ZIIF 2016) from the 21st to the 22nd of April 2016 at the Mulungushi International Conference Centre in Lusaka, the Capital City of Zambia.
The theme for the Forum is “Investment for Industrialisation, Wealth and Job Creation” and the Forum is expected to attract over 500 potential investors from around the world.
Read more: http://ow.ly/10BPUl
Continued low rates in developed markets and ample borrowing appetite are likely to support a rise in Eurobond issues from Sub-Saharan African sovereigns in the second half of the year. Nonetheless, new issuance from the region (excluding South Africa) dropped to $1.5 billion in the first six months of 2015, with only Cote D’Ivoire and Gabon coming to the market, which may appear disappointing following the record $9 billion in issues in 2014.
Two and a half decades is an insignificant amount of time when you look at the history of mankind, or even compare it to the life of a person who has lived a long time. From the first moment I set foot in Luanda, the capital of Angola, nearly a quarter of a century ago, I could never in my wildest dreams, have imagined what the city would look like today.
Africa Tech Trends is a fortnightly column by Tom Jackson focusing on the most important developments in Africa’s technology industry, and examining how technology is disrupting the way business is being done on the continent.
Apple re-establishes South African office
According to a recent article by TechCentral, Apple has quietly re-established a South African office. The company has not had an office in the country since 1999, but has now appointed Nicolas Rochas as country manager. Apparently it is a move designed to help the company manage its relationships with local mobile operators, which has been increasingly difficult to do remotely.
As part of a wider context, however, Apple’s physical return to South Africa is not surprising. Mobile penetration is going up, smartphone penetration is going up, tablet penetration is going up. It does seem the continent has taken on renewed importance for the company.
Also of interest is the fact that South Africa is often a jumping-off point for larger companies in Africa (see Uber, for example). Will this South African return signal the start of a larger physical Apple presence in the rest of the continent?
Kenya’s tech sector laid bare at Connected East Africa
Last week Kenya’s ICT sector leaders decamped from Nairobi to the coast for the Connected East Africa event to look at the opportunities and challenges facing the growth of technology in the country. As referred to in this column before, there are plenty of positives to be taken from the development of tech inKenya. The government is making bolder steps with automation and digitisation, and beginning to provide assistance to the start-up ecosystem too.
Yet problems remain, and delegates did not refrain from discussing them. There was no mention of the slow progress on Konza Techno City, the slowdown in the roll-out of Wi-Fi or the farce that is digital migration. Instead delegates highlighted regulations and laws that continue to hold the country back in its quest to become a continental tech hub.
Seven Seas Technologies CEO Mike Macharia said stronger laws are needed to support and protect locally-produced content, while iHub and BRCK founder Erik Hersman attacked legacy laws when it comes to duties on the importation of hardware components. Hersman said it was actually cheaper for him to assemble the BRCK mobile Wi-Fi device in the US and ship it back to Kenya. He urged the government to change this to allow Kenyans to build mobile phones, laptops and tablets in the country.
Former permanent secretary at the Ministry of ICT, Dr Bitange Ndemo, even raised the subject of corruption, saying “tenderpreneurs” were taking advantage of lax procurement regulations to help themselves, rather than the country. Plenty of work to do, it seems, if Kenya is to fulfil its technological potential.
The internet is coming, now what can we do with it?
It is almost becoming boring, but yet another report has forecast huge growth in internet penetration in an African country. In the latest annual update of its Visual Networking Index (VNI) Global Mobile Data Traffic Forecast, Cisco said South African 4G and Wi-Fi penetration will grow significantly over the coming years, while 3G will surpass 2G next year.
Cisco also predicted the average 3G speed will grow 2.1-fold by 2019, with the average 2G speed growing 1.3-fold. The average 4G smartphone in South Africa will generate 7,191MB of traffic per month by 2019, which is a lot.
Predictions such as these are being reported across the African continent, from Nigeria to Zimbabwe, and make satisfying reading. But internet access is only a means to an end. The real development for Africa, when it comes to this increased connectivity, will be in what individuals, businesses, non-profits and governments can do with that access.
The early signs are good. E-learning, e-health and e-governance are slowly taking off. What needs to improve is the quality of start-up businesses which will in turn attract investors to African shores and boost economies. The internet figures are impressive and getting better. Now Africa needs to match that growth in terms of the solutions it can run using all this data. Only then will we see if the internet can really bring an economic boom to Africa.
African budget airline Fastjet Plc said it raised gross proceeds of about 50 million pounds ($75 million) through a share issue to fund its expansion and acquire aircraft.
The London-listed company's shares slumped nearly 13 percent on Wednesday to 1 pence, the price at which each of the 5 billion new shares were placed.
The funds from the offering, which represents about 75 percent of Fastjet's enlarged share capital, will help the company add new international routes and expand in Kenya, South Africa, Uganda, Zambia and Zimbabwe, it said.
The company, which aspires to be the first pan-African low-cost carrier, also intends to use excess funds to start a programme to acquire used Airbus A319 aircraft.
EasyGroup, the investment vehicle of Haji-Ioannou, bought stock worth 5 million pounds, or 10 percent of the new shares, Fastjet's chief executive, Ed Winter, told Reuters.
Haji-Ioannou, commonly known as Stelios, founded low-cost carrier easyJet Plc in 1995 and started Fastjet in 2012 along with Winter, who was easyJet's chief operating officer.
Stelios had a stake of 10.8 percent in Fastjet before Wednesday's fundraising, which was first reported by The Times.
A spokesman for Stelios, contacted before the results of the placing were announced, declined to comment.
The fundraising also brought on board first time investors in Fastjet.
The were Prudential's M&G, UK equity fund manager Hexam Capital Partners LLP, investment manager J O Hambro Capital Management Ltd and South African investment group Old Mutual.
Fastjet also announced a proposed share consolidation to reduce its share price volatility.
No further details were given.
The company, which started flying in Tanzania in November 2012, said its plans to expand in Africa would give it up to 210 million potential customers, or a fifth of the continent's population.
To service that population, Fastjet would have to boost its aircraft fleet from the three it currently has to 34 strong by 2018, Winter said.
By then, Fastjet intends to have leased a third of its fleet and have used equal amounts of debt and equity to finance the rest of the fleet.
PHASE3 Telecom, West Africa's largest independent fibre optic infrastructure and telecommunications services provider has announced plans to commence the deployment of aerial fiber optic infrastructure from Kano in Nigeria to Gazaoua in the Republic of Niger.
The network, which will run from Kano state through Katsina state before arriving at Gazaoua will be 228 km long and is expected to be completed in the coming months.
The Republic of Niger is a landlocked country that borders seven countries; Algeria, Republic of Benin, Burkina Faso, Chad, Libya, Mali, and Nigeria.
The lack of backbone infrastructure between the Republic of Niger and its neighbours leaves Niger unable to fully enjoy the broadband advantage to its fullest. With one of the lowest internet penetration rates in West Africa, Republic of Niger will now have the opportunity to leverage on the huge bandwidth capacity which is available at the Nigerian coast in Lagos through the Phase3 telecom aerial fiber network.
This development will also widen the market for under-sea cable owners in Nigeria while enhancing broadband development in the Republic of Niger.
This project will further enhance and solidify the objectives behind the Nigeria - Niger Joint Commission (NNJC) and the partnership/relationship between the two countries.
Mr. Stanley Jegede - CEO, Phase3 Telecom, commenting on the project said the opportunities that the internet delivers are critical to the acceleration of sustainable socio-economic inclusion and growth for the Republic of Niger.
As this will open doors to new opportunities for residents to enjoy the benefits of the internet such as being able to work from the comforts of their home or study online. Businesses in this region will also be better positioned to use the internet to boost productivity, offer better service, connect with customers faster and work anywhere at reduced costs.
Today, easier and reliable access to information from anywhere drives development thus; This deployment is part of our wider West Africa roll out plan to deliver regional connectivity through a single network across the region.
It is a confirmation of our commitment to ensure that the digital divide diminishes, delivering connectivity to new urban and rural areas".
"I believe that this mile stone is a positive step towards sustainable economic development in West Africa. With the support we have received thus far from both the governments of the Republic of Niger and Nigeria; we are confident that this will mark the first phase in a long term partnership and we look forward to the dividends West Africa as a whole and in particular the Republic of Niger will benefit from the integration of this telecommunication infrastructure", Jegede concluded.
Mrs. Omobola Johnson - minister of Communication Technology for Nigeria said "Africa's true economic potential will be harnessed by increasing the level of internet connectivity we currently have. This is one of the many ways to tap into the economic and social benefits Africa has the potential to deliver.
The number of ultra-high net worth individuals (UHNWIs) – those with at least $30m in assets – in Africa will increase by 59% over the next 10 years, stronger than the 34% projected global growth.
Andrew Shirley, editor of The Wealth Report says “The 2015 edition of The Wealth Report, launched in South Africa by Knight Frank and Standard Bank Wealth and Investment, highlights the increasing influence of global and African wealth flows on prime property and investment markets”.
According to The Wealth Report 2015, it will be a case of the MINT of Mexico, Indonesia, Nigeria and Turkey trumping the BRICS of Brazil, Russia, India, China and South Africa. The average expected uplift for MINT countries is 76% over the next decade, which narrowly defeats the 72% for BRICS nations. The global average is just 34% and the average increase expected across the G8 developed nations is 28%.
Margaret Nienaber, global chief executive of Standard Bank Wealth and Investment says “the market is evolving and we are foreseeing positive future growth in key African countries like Nigeria, which has one of the strongest forecast growth rates in high-net-worth individuals over the coming decade.”
The research findings put the growth of Nigeria’s UHNWIs by 2024 at 90%, but the top spot for Africa is reserved for the Ivory Coast at 119%.
“Africa is one of the regions of the world with huge potential to grow its wealth, driven by a rising middle class and the increased success of many businesses. Importantly, reforms in many countries are being expedited, infrastructure is happening at a startling pace and foreign investors are noticing,” says Nienaber.
“The countries mentioned in this report have certainly built credibility among foreign investors and it is little surprise economic activity in the region is growing at a faster pace than anywhere else in the world,” she says.
“Johannesburg stands out as the most important African city after ranking as the 28th most important city for UHNWIs individuals and Cape Town, the 36th,” says Shirley.
According to The Wealth Report, the total number of UHNWIs rose by almost 5,200, or 3%, in 2014. While so-called investments of passion, such as art, wine and classic cars continue to attract interest, property remains the cornerstone of many investment strategies as it accounts for almost a third of all ultra-high-net-worth individuals’ portfolios.
“UHNWIs are adopting increasingly sophisticated investment strategies, and sometimes this approach involves the kind of active management previously restricted to institutions and funds,” says Shirley.
Despite concerns about the global economy, 80% of the almost 500 private bankers that participated inThe Wealth Report’s annual Attitudes Survey, expect their clients’ wealth to grow further in 2015.
While less than half the respondents said their clients were concerned about the impact of the Chinese economy dipping, family succession issues were the number one worry. The survey showed that 85% of respondents said their clients were concerned about the handover of family wealth to the next generation.
“The wealth space in Africa is going to be extremely exciting over the next decade. It is a reflection of the ongoing interest in the continent as a destination for investors and businesses and the pace of wealth generation will increase exponentially as this trend continues,” concludes Nienaber.
Egypt's government is expected to approve on Wednesday a lower tax ceiling for companies and individuals in high income brackets in order to attract investors and boost the economy, the investment minister said.
The step comes days before Egypt holds an investment conference in the Red Sea resort of Sharm el-Sheikh it hopes will attract billions of dollars and speed up an economic recovery after four years of political turmoil.
Under the planned tax reform, the ceiling on companies and individuals earning more than one million Egyptian pounds ($131,148) a year will be reduced from 25 percent to 22.5 percent for a period of ten years.
"The cabinet will agree today in a meeting on unified taxes," Investment Minister Ashraf Salman toldReuters in a telephone interview.
"The new changes will encourage investment and lead to justice in the tax system for all."
The minister said a temporary 5 percent tax on wealthy individuals earning over one million Egyptian pounds ($131,061) a year will be canceled as part of the news tax regime.
When applied in 2014, the temporary tax was supposed to last for three years.
The new tax regime will be finalised in about three weeks and is expected to be implement in the 2015-2016 fiscal year starting in July, said Salman.
President Abdel Fattah al-Sisi has cut fuel subsidies and enacted other reforms, winning praise from foreign investors and the International Monetary Fund.
He has also announced mega-projects such as a second Suez Canal and roadworks designed to create jobs and stimulate economy activity in the most populous Arab country.
The government hopes the new tax structure will boost an economy battered by political upheaval and militant violence since an uprising toppled autocrat Hosni Mubarak in 2011.
The African Union (AU) has proposed the creation of a 10 000 strong force to fight Nigerian Islamist cult Boko Haram in a plan backed by the United States.
AU's proposal for a West African force, if ratified by the United Nations (UN), would enable the regional body to launch a bigger operation than the current one where Nigeria is mainly backed by its neighbours to fight Boko Haram.
The African Union Peace and Security Council is due to discuss the text of the resolution that could then be circulated to the 15 UN Security Council members.
The United States has urged the UN Security Council to ratify the proposal.
US deputy assistant secretary of Defense for African Affairs, Amanda J. Dory said Washington, one of five veto-holding members of the UN Security Council, would back the resolution.
"The US is providing diplomatic support in terms of engagement in the UN Security Council for the awaited resolution authorizing the deployment of a Multinational Joint
Task Force by the African Union against Boko Haram," Dory said during a state visit to Cameroon.
Chad's UN ambassador Mahamat Cherif said he hoped the council would vote on a resolution by monthend.
France has been seeking to rally support for the resolution in time for a vote by early April.
The United States has been working with the Cameroonian army to provide arms to fight Boko Haram.
France is also increasing its own West African counter-insurgency force to support regional troops fighting the Islamists.
Nigeria and neighbouring Chad, Niger and Cameroon have been trying to contain the militants in the past few weeks.
The alliance has recaptured 36 towns from Boko Haram since the offensive began.
Editor's Note: This blog is part of the largerForesight Africa 2015 project that aims to help policymakers and Africa watchers stay ahead of the trends and developments impacting the continent. You can read the full report here.
Infrastructure investment, a key focus for sub-Saharan Africa (SSA) in 2015, has been rising rapidly since 2006. Access to energy, transport, water and sanitation and telecommunications is essential to economic growth and poverty alleviation. In 2010, the World Bank attributed more than half of the recent improved growth performance in the region to infrastructure.
This trend of investments is great news, but the emphasis should now shift to ensuring that this funding is strategically and effectively applied across the continent. As the world considers new and better ways of financing for development, infrastructure investments should be a vital part of that discussion. Based on an analysis conducted for a forthcoming Brookings paper  , the following are six priorities for the region in 2015 as the region moves to fill the gap in access to infrastructure:Adapting Regional and Global Coordination Mechanisms. While external financing to African infrastructure has more than tripled since 2006, what is striking is the changing composition of the sources of that financing.Figure 1: External Infrastructure Investment in SSA: By Sources, All Sectors, 1990-2012, in $ Millions (Current)
Source: Gutman, Sy, and Chattopadhyay.
As seen in Figure 1, today, traditional sources comprising of OECD developed countries and the multilaterals, the World Bank and African Development Bank (AfDB)—altogether classified as “official development finance” (ODF)—represent a still-significant but shrinking share of this funding. Meanwhile, private capital (PPI) and non-traditional bilateral sources, such as China, have grown in importance. While there is coordination among the traditional members of ODF, this collaboration has tended to exclude the growing non-traditional sources. In light of the changing environment, then, the concern is whether traditional multilateral institutions can still provide the effective coordination and collaboration necessary in infrastructure development, Can the objectives of collaboration among traditional donors set forth in the Paris Declaration in 2005 be effectively applied across a broader range of financing sources? With the BRICS Development Bank and a China Infrastructure Bank on the horizon, plus other bilateral, regional and global agencies and initiatives emerging, there is little need to create additional or new institutions but rather to adapt the existing ones to be more inclusive and collaborative with these non-traditional sources.Targeting and Extending Private Provision of Infrastructure. Substantial efforts by OECD countries and the multilaterals have been made to mobilize private capital and to develop instruments and guarantees that leverage private funding. Despite the rhetoric, however, PPI has been highly concentrated in information and communications technology (ICT) investments. As Figure 2 highlights, in fact, the number of sub-Saharan African countries receiving PPI drops from 40 to 21 when ICT commitments are excluded. The positive news is that PPI for other sectors, especially energy, has recently grown, but it has been greatly concentrated in a few countries. Agencies offering guarantees and other risk mitigation measures should ensure that these initiatives are targeted to help broaden access to private finance across sectors and countries that have not benefitted from such financing in the past.Figure 2: PPI Commitment Concentration in SSA: 2009-2012
Source: Gutman, Sy, and Chattopadhyay using World Bank PPIAF database.Addressing Urban Infrastructure. Urban infrastructure needs and related sub-national fiscal policies are clearly neglected by policymakers and development practitioners in the region. While Africa may still be a predominantly rural continent, it will continue to urbanize rapidly. Lagos and Kinshasa already have more than 12 million residents and are among the 35 most populous cities in the world. The U.N. estimates half of African population will be urban by 2035. Despite these trends, efforts directed at urban infrastructure, even by the multilaterals, as compared to the attention to regional cross-border infrastructure, are sporadic. They also involve little discussion on the decentralization of service provision and devolution of local revenue-raising. For example, indicators of transport access being monitored by the AfDB’s Infrastructure Consortium for Africa (ICA) rely on total length of paved roads per capita—which have no relevance for the serious transport issues faced by African cities. Moreover, as countries look to mobilize more domestic funding for infrastructure, the opportunities of local taxation and related service charges have not been touched. A major initiative directed at sub-national fiscal policy and urban infrastructure planning and development is needed now before urbanization overtakes countries’ ability to manage growth.Refocusing Attention on Project Implementation. As policymakers and finance sources have focused their attention to getting upstream funding for project preparation, pressing for reaching financial closure, and the bidding and awarding of contracts, there has been very little attention paid to actual project implementation and contract management. Poor project implementation poses one of the greatest risks to infrastructure investment outcomes. Examples abound where inattention to what happens during infrastructure construction has resulted in poor results at high cost. Whether it is due to the risks of corruption or uncertainties during construction, contract management has been the “orphan” of the procurement cycle—including for those projects financed by the multilateral institutions. Africa needs to ensure that the money being raised is spent well and that it takes measures to address this now.Looking Beyond Transactions. The 2010 World Bank’s comprehensive assessment of African infrastructure, Africa’s Infrastructure: A Time for Transformation, offered 10 recommendations of which only one dealt with financing needs. The other nine rightly emphasized a range of government and sectoral policy and operational efficiency measures. Of the projected $93 billion required annually to address sub-Saharan Africa’s infrastructure gap, the report estimated that $17 billion could be saved through efficiency gains from measures such as better maintenance, pricing reforms, better expenditure management and appropriate regulatory policy. Although there are reform efforts being undertaken across each of the infrastructure sectors, the bulk of the reporting and monitoring has been directed at project financing, at the specific transactions. Clearly the quality of the overall outcomes of the infrastructure efforts and their economic, social and environmental sustainability depends on paying attention to these other recommendations. To bring greater attention to these issues, ICA should monitor indices of sectoral efficiency and reform in addition to tracking finance mobilization.Developing Local Industry for Infrastructure. Infrastructure is a key sector for developing local skills and businesses. Civil engineering and the construction industry are among the basic features of local commercial enterprises that are established with the growth of infrastructure financing. For example, in road building, local firms begin by winning small contracts or local sub-contracts within larger international contracts. Subsequently, many of these firms progress to win larger internationally bid contracts in their own country, some internationally within their region, and some ultimately in other regions. This pattern is evident in World Bank procurement statistics for civil works. In regions such as Latin America, East Asia, and Europe and Central Asia, over 90 percent of internationally bid World Bank contracts in each region are won by local or regional firms. Africa is a major exception, winning less than 60 percent. As funding grows, it is important to understand what is holding back local firms and to address these issues.Figure 3: Construction Industry in Africa Lags Behind Proportion of Internationally Bid World Bank Civil Works Contracts Won by Local and Regional Firms (FY 2013)
Source: Gutman and Zhang. 
Clearly this emphasis on strategic and effective use of infrastructure investments is an agenda that goes well beyond 2015. But this is the time and opportunity to ensure that increased funding will actually result in greater access to energy, transport, water and sanitation, and telecommunications across Africa.
 Gutman, Jeffrey, Amadou Sy and Soumya Chattopadhyay. “Financing African Infrastructure: Can the World Deliver?” (Forthcoming) Washington, DC: Brookings.
 Gutman, Jeffrey and Christine Zhang. “The Emergence of Markets: Procurement and the World Economy.” (Forthcoming) Washington, DC: Brookings.
In its most recent edition of Global Economic Prospects, the World Bank has flagged the rebuilding of fiscal buffers as a sustainable solution for current economic concerns bordering around weaker export prospects, an impending rise in global interest rates, and fragile financial market sentiments. In the opinion of the multilateral institution, this would support their economic activities in the event of a growth slowdown.
Tanzania said its gross domestic product has expanded by 32 percent after it rebased its calculation to incorporate new sectors in the economy.
The state-run National Bureau of Statistics said the east African country's GDP stood at 69.8 trillion Tanzanian shillings ($41.33 billion) in 2013 after the rebasing, up from a previous estimate of 53 trillion shillings.
The rebasing of the GDP takes into account new transformations in the economy
The base year for GDP calculations was changed to 2007 from 2001.
"The rebasing of the GDP takes into account new transformations in the economy, such as the ongoing mobile phone revolution in the country," Finance Minister Saada Mkuya told a news conference.
Farming remains Tanzania's economic mainstay, while tourism, mining, communications and financial services are the other key sectors.
Tanzania has made big natural gas discoveries, with revenues expected to give a boost to the economy by 2020.
Kenya, East Africa's biggest economy, revised up its GDP by 25 percent to $53.4 billion in 2013 after rebasing, from $42.6 billion previously.
Microsoft has added Bitcoins to the payment options it is accepting on its Windows, Windows Phone and Xbox stores.
With this development, Microsoft said its customers can now use Bitcoins to add money to their Microsoft account in order to buy apps, games and other digital contents.
However, purchasing items directly using the Bitcoin is not yet possible as the cryptocurrency can only be used to add money to a Microsoft account in the U.S. from which a payment can be made.
Microsoft also warned that paying with Bitcoins may not be the smoothest paying experience. It said while most Bitcoin transactions should process immediately, users should wait up to two hours if they don’t. Furthermore, Microsoft said money added to accounts with Bitcoin cannot be refunded.
Bitcoins are getting popular across Africa. In Ghana, HumanIPO reported there is a huge demand for Bitcoins, in Nigeria, online payment company SimplePay is now accepting Bitcoins. Bitcoins are so being used to support Ebola initiatives in Sierra Leone, in Kenya, Bitcoins exchange BitX haslaunched in August while in South Africa, HumanIPO reported payment platform PayFast is now accepting Bitcoin payments from local and international buyers.
Small and medium-sized enterprises (SME) are critical for the economic and social development of nations in Africa. However, a lack of access to financing has hindered the growth and scale of SMEs in the region.
PSA Peugeot Citroen, which is striving to reduce reliance on Europe by boosting car sales in emerging markets, plans its first direct investment in Africa with an assembly plant in Morocco scheduled to start production in 2019.
On April 23rd at 15:00 GMT (BST) Homestrings will be hosting a webinar focused on Investing in Macedonia through the Homestrings Diaspora Bond. This bond was launched to enable the diaspora to play a vital role in the growth of developing economies around the globe.
“Investing in the power sector in Africa can be very lucrative and we have the success stories to prove it,” says Evan Schiff, event director of African Utility Week, taking place in Cape Town from 12-14 May. During the largest annual power and water conference and expo on the continent, a high-level Finance & Investment Forum will specifically focus on project finance, risk management, IPPs and case studies.
“$42bn a year will be required to meet Africa’s energy demand by 2040, including a private-sector financing increase of up to ten times the current levels. In order to achieve this governments and business must work together and fresh approaches will be vital,” says Schiff.
“Private equity fund raising for Africa increased by 136% in 2013 to US$3.3bn, up from US$1.4bn a year earlier. Greater private sector participation and competition has been encouraged through power sector reform and long-term power purchase agreements through the state utility or other credible off-takers. IPPs are considered a solution to persistent supply constraints. It is also exciting to see that intra-African investment is gaining momentum. African investors nearly tripled their share of FDI projects over the last decade, from 8.0% in 2003 to 22.8% in 2013 according to EY’s latest attractiveness survey.”
The Finance & Investment Forum will also have a special focus on renewables and innovative ways of financing green energy while creating sustainable jobs.
Schiff adds,“With the African Development Bank SE4LL Fund recently confirming a $777,000 preparation grant to support a 72MW solar power plant project to become the first renewable IPP in Cameroon, it shows that there are creative investment vehicles and initiatives out there for energy projects on the continent that previously were considered too marginal for project financing.”Bringing deals to point of bankability
Power Africa, US President Barack Obama’s initiative to improve access to power in sub-Saharan Africa, will be the official country partner of African Utility Week. Power Africa works with African governments, the private sector, and other partners to add more than 30,000 megawatts (MW) of cleaner, more efficient electricity generation capacity as well as increase electricity access by adding 60 million new home and business connections throughout all of sub-Saharan Africa.
The 15th African Utility Week and Clean Power Africa bring together utility professionals from across the globe to learn, share knowledge and debate the key topics that will secure the future development of Africa’s power and water industries. The event is expected to again attract more than 5000 attendees and features 250 exhibitors, 190 speakers, eight conferences, free technical workshops on the expo floor, three high-profile plenary sessions and the coveted industry awards gala dinner.
Thirty years ago, rock star Bob Geldof helped raise awareness of famine in Ethiopia. These days, the former front man for the Boomtown Rats is on the lookout for investment opportunities in the African country and elsewhere in the region.
The 63-year-old knighted by Queen Elizabeth II for humanitarian work now heads a $200 million private-equity firm called 8 Miles, one of growing number of foreign investors taking a shine to Africa.
"The potential rewards in Africa are far greater than anywhere else," Geldof told The Wall Street Journal.
A plethora of economic and demographic trends that underscore Geldof's point. According to the World Economic Forum, for example, Africa's working-age population is expected to double to 1 billion in the next 25 years, topping both China and India.
The region's economy is expected to grow by about 5 percent this year, well above the 3 percent increase economists expect for the U.S. African consumer spending is forecast to hit $1 trillion in 2020, including $200 billion for discretionary goods.
"The private equity model is suited for Africa,"Amadou Sy, director of the Brookings Institution's Africa Growth Initiative, said in an interview.
The investments should appeal to companies who might have qualms about the corporate governance practices or the regulatory environment in a particular country, Sy said. "You have a seat at the board; you can monitor the operations very closely."
Blackstone Group (BX), one of the largest U.S. private-equity firms, last year said it would form a partnership with Africa-based Dangote Industries to invest up to $5 billion over five years in energy infrastructure projects in sub-Saharan Africa.
KKR & Co. (KKR), a rival firm, last year confirmed it had invested in Ethiopian flower company Afriflora, its first deal on the continent. And The Carlyle Group closed its first fund targeting sub-Saharan Africa in 2014 after it raised $698 million, $200 million above its initial target. It has invested in Export Trading Group, a supply chain manager headquartered in Tanzania and Mozambique-based logistic business J&J Africa.
According to the African Private Equity Data Tracker, deal activity in 2014 was $8.1 billion, the second highest on record. More than $34 billion in transactions have occurred in Africa since 2007, including the $2.6 billion raised by IHS, a Nigerian cell phone tower company, in 2014. The Ebola outbreak and the decline in oil prices have hurt the region's economy this year.
U.S. companies have been slow to recognize the opportunity in Africa, although companies such as General Electric and IBM (IBM) are among those with operations there, according to a 2014 report from the U.S. Chamber of Commerce.
"The bilateral trade relationship between China and Africa amounted to $210 billion in 2013," the chamber said. "By contrast, the United States and Africa conducted just $85 billion in trade last year. That's not nothing -- but it could be a lot more!"
South Africa's biggest pension fund has paid 22 billion rand ($1.8 billion) for stakes in two solar power stations expected to add 200 megawatts of power to the national grid, it said on Wednesday.
The state-owned Public Investment Corporation (PIC) said it has taken 20 percent stakes Ilanga and Xina power stations in the Northern Cape province.
The PIC, which buys bonds in renewable energy projects, said it will also lend 600 million rand to the Ilanga project.
State-owned power utility Eskom which provides virtually all of South Africa's power, is facing a funding crunch as it races to bring new power plants online to stave off electricity shortages in Africa's most advanced economy.
The chronic energy shortages are pushing the government to seek alternative sources of electricity from Eskom's fleet of coal-powered stations that take much longer to build.
With year-round sunshine and miles of windswept coast in South Africa, investors are warming to the renewable energy potential, to ease the regular blackouts that are strangling industries from mining to manufacturing.
South Africa's Harmony Gold said it has discovered gold and copper deposits at its Kili Teke exploration site in Papua New Guinea, which could be similar to its other resources in the Pacific Island nation.
Harmony, Africa's fourth-largest bullion producer, said in a statement on Wednesday there was potential to develop its latest find into a major copper-gold deposit similar to its flagship Wafi-Golpu project and the OK Tedi or Frieda River facilities.
The Wafi-Golpu project, a joint venture with Newcrest Mining Ltd, holds 20 million ounces of gold and 9 million tonnes of copper.
Initial drilling tests at the Kili Teke project, for which Harmony hold an exclusive licence, revealed higher grade levels of the two minerals of up to 0.74 percent for copper and 0.57 grams per tonne of gold, the company said in a statement.
"New discoveries are one of the best avenues to create shareholder value," Chief executive Graham Briggs said.
Pressured by falling oil prices and a strengthening U.S. dollar, Ecuador expects to tap international capital markets again as soon as next week by selling sovereign bonds to deal with financing challenges.
The country, whose debt is rated B3 by Moody’s Investors Service, is hosting a series of investor meetings in London, Boston, Los Angeles, San Francisco and New York.
“Finance Minister Fausto Herrera is leading the meetings with foreign investors that started on Monday,” Victor Carvajal, a ministry spokesman, said on Tuesday. He declined to provide further details.
The possibility of the country tapping global investors again for funding has been flagged by the government since last year and was reflected in the country’s 2015 budget.
The transaction, according to people familiar with the matter, could provide up to $2 billion to the Andean country, but economists expect high financing costs for any new debt issue. Former finance minister Fausto Ortiz said Ecuador could place the bonds probably at a rate of about 9%.
In June 2014, Ecuador sold $2 billion of 10-year bonds yielding 7.95%, returning to international capital markets for the first time since 2008, when it defaulted on $3.2 billion in global bonds, a debt burden that President Rafael Correa at the time called illegal and illegitimate.
“Currently it is difficult to think of achieving an attractive rate. It is clear that the recovery in oil prices will take time and the government is looking for fresh money to meet its financial needs for this year and to avoid higher pressures and arrears next year,” says Juan Rivadeneira, an economist with private consulting firm Profitas.
The Correa administration has said it expects financing needs to total about $10 billion in 2015, but Mr. Ortiz said taking into account the drop in oil prices, the country more likely will require about $14 billion.
CEOs representing some of Africa’s most attractive mining companies will gather in Cape Town, South Africa, from 9 to 12 February 2015 for the annual Investing in African Mining Indaba, the world’s preferred destination for deal-making in African mining.
More than 900 mining corporates are already confirmed to attend the event.
“For more than 20 years, Africa’s mining companies have played a pivotal role in the success and growth of the Mining, in fact it is viewed as an investment barometer that generates significant media interest and business news coverage globally,” said Jonathan Moore, Managing Director of the Mining Indaba. “In bringing Africa’s top mining leaders, we showcase all of Africa’s attractive mining investment opportunities to global investors seeking to invest in new projects and regions on the continent.”
There will be more than 50 corporate mining presentations featuring CEOs and board level representatives presenting at the Mining Indaba and its complementary conference, the Investment Discovery Forum from 8 to 9 February 2015 in Cape Town.
They will be addressing the status of current and new projects, overall corporate initiatives and other key issues that investors want to hear from the captains of the African mining industry. CEOs from the following companies are just a handful of those that are confirmed to present:
• Tom Albanese, VEDANTA
• Graham Briggs, HARMONY GOLD
• Mark Bristow, RANDGOLD RESOURCES
• Alan Davies, RIO TINTO
• William Dawes, MKANGO RESOURCES
• Robert Friedland, IVANHOE MINES LTD
• Brad Gordon, ACACIA MINING
• Chris Griffiths, ANGLO AMERICAN PLATINUM
• R. Michael Jones, PLATINUM GROUP METALS LTD.
• Ben Magara, LONMIN PLC
• Bruce McFadzean, MAWSON WEST
• Christian de Saint-Rome, COPPERZONE RESOURCES
• Mike Schmidt, AFRICAN RAINBOW MINERALS (ARM)
• John Simpson, PENINSULA MINERALS LIMITED
• John Sisay, SIERRA RUTILE LIMITED
• Sylvie St-Jean, AMBATOVY
• Paul Thomson, A-CAP RESOURCES
• Srinivasan Venkatakrishnan (Venkat), ANGLOGOLD ASHANTI
• Neil Woodyer, ENDEAVOUR MINING CORPORATION
• Nikolai Zelenski, NORDGOLD
To request interviews with these CEO’s, contact Maria Palombini at email@example.com.
For more information on the many corporate mining presentations visit the respective event agendas for Mining Indaba and the Investment Discovery Forum.
The annual Investing in African Mining Indaba is the world’s preferred brand and destination in African mining. Mining Indaba remains better positioned than ever to deliver an unparalleled deal-making and discovery platform for global investors and African mining companies. The conference provides a diverse and proven platform that gives all delegates – investors, financiers, mining executives, government officials, and other industry stakeholders – exceptional access to compelling investments across the entire continent. For more information on speakers and securing your registration, visit MiningIndaba.com
SOME of Africa’s richest natural resources are its rivers and lakes, and over the years, there have been many proposed projects to harness the continent’s immense water resources.
One of the most talked-about is the Grand Inga Dam project in the DR Congo, first proposed over 50 years ago. Inga is at the mouth of the Congo river, where an immense drop in elevation plunges the water of the Congo – the world’s second largest by volume, after the Amazon – with so much force that that the hydropower potential generated is enough meet the electricity needs of the whole of sub-Saharan Africa.
In 2013, South Africa ratified a treaty with the DR Congo that would see it financing part of the 40,000MW project to the tune of $17 billion; in return South African state-owned power company, Eskom, would receive 2,500MW of the 4,800MW produced by Inga III, the project’s first phase.
Harnessing the immense hydropower of the Congo river would double Africa’s electricity generation capacity in a single stroke, but power shortages aren’t the only thing Congo could save.
From Oubangi to Lake Chad
One plan that is out of this world is to channel water from the Oubangi river – one of the Congo river’s main tributaries – to replenish the waters of Lake Chad, which have shrunk by more than 90% over the past 50 years.
At 25,000 sq.km in 1963, Lake Chad used to be Africa’s fourth largest lake. But higher evaporation rates in the arid Chad region – partly driven by climate change – and increased water withdrawals from feeder rivers for cotton and rice production have put increased demand on the lake, and it has dwindled to just 1,540 sq.km.
The idea to divert part of the Oubangi’s water into Lake Chad was first proposed in 1960s, but began to get international attention more recently. It involves creating a retention dam at Palambo, upstream from the city of Bangui, the capital of Central African Republic.
Water from the dam would flow by gravity through a navigable, 1,350 km man-made canal into the Chari-Logone river system, the main feeder of Lake Chad that supplies 95% of its water.
This arrangement would check the encroachment of the Sahara desert and act as a much-needed source of water for Sahelian communities – although Lake Chad is subject to much evapotranspiration, it is not saline, and so is one of the few sources of fresh water in the region.
Massive dam-canal system
It is also expected to generate power at the Palambo dam, as well as develop irrigation and agro-industry in the region.
But connecting the Oubangi with Lake Chad does something else, it gives a much needed infrastructure lifeline to the Central African Republic and northern DRC.
At the moment, transportation of goods from Bangui, in the heart of Africa, entails going by river barge on the Oubangi, and southward to the Congo River to enter the Atlantic Ocean.
But the water transfer from Oubangi to Lake Chad, and by extension, the Benue/Niger river system (via a canal to the Mayo Kebbi river, a tributary of the Benue) will facilitate the navigation and transportation of goods from Port Harcourt in Nigeria to central Africa, thus open up CAR and northern DRC for trade directly from Nigeria.
In 2012, Nigerian president Goodluck Jonanthan announced a feasibility study had shown the gigantic project was “feasible” and would “restore hope” to the populations living around the lake – about 30 million people depend on the Lake Chad basin for their livelihood.
But some have expressed concern that building such a massive dam-canal system would displace many communities in the area, and mixing of water from Oubangi to the Lake Chad basin could alter and destabilise the current ecology of the lake.
Crucially, it also could reduce the energy potential of the Grand Inga Dam.
Some have even questioned whether saving the lake is really worth it. The newly exposed lake bed has rich sediments deposited by the river flows into the lake, and so makes for very fertile soil - although fishing communities have been hit hard, farmers are having bountiful harvests.
Rwanda hack at the Kivu
Another big “nature hack” is proposed in Rwanda, where some 2 million people who live near Lake Kivu could face grave consequences if trapped volcanic gases rise to the surface.
Lake Kivu sits in a volcanic area between Rwanda and the DR Congo, where carbon dioxide and methane from below the earth surface seeps into the lake and lies quietly dissolved under 1,000 feet of water.
But an earthquake or a lava flow could loosen the trap and catastrophically release the gases, as happened in Cameroon in 1986, when a deadly cloud of carbon dioxide from Lake Nyos asphyxiated over 1,700 people. Under certain conditions, the newly released methane could even explode as it hits the air.
To avert danger, the Rwandan government has launched a grand engineering scheme to suck up explosive methane from depths of 1,000 feet and pipe it to a nearby power plant, generating 25MW of power.
The Rwandan government says the KivuWatt project could double the country’s electricity production and reduce its dependence on imported diesel fuel that currently powers a large share of its electricity.
Egyptian President Abdel-Fattah al-Sissi has secured a trade deal with Britain focused on developing the energy, real estate and construction sectors in the North African country.
The agreement came amid struggles to attract foreign investors and turn the country's economic fortunes around.
Political unrest since the 2011 ouster of former dictator Hosni Mubarak crumbled the country's vital tourism industry and dented the Egyptian economy.
Al-Sissi, who as army chief overthrew Egypt's elected President Mohammed Morsi, last year, has presided over a sweeping crackdown on dissent, reduced street protests, and has brought relative stability to the country.
The trade mission with Britain, which includes construction and infrastructure projects, power, water, retailing and financial services, as well as the developments around the Suez Canal, underscores al-Sisi's economic efforts in Egypt.
According to Egyptian Prime Minister Ibrahim Mahlab, the $8.5 billion mega project could boost revenues from the route connecting the Red Sea to the Mediterranean to $13 billion annually from its current $5 billion.
Egypt has grown to rely on massive influxes of aid from Gulf nations such as Saudi Arabia, Kuwait and the United Arab Emirates to keep its economy afloat.
Al-Sisis has since reformed investment laws in an attempt to improve transparency and slash Egypt's notorious red tape.
The government has so far reduced its massive fuel subsidies and plans to phase them out entirely over five years, granting limited allowances only to needy private citizens.
According to Angus Blair, chairman of Mideast business consultancy Signet, part of the attraction to Egypt is the al-Sisi administration's ability to overcome bureaucracy and boost the visibility of projects in urban centers.
The large trade mission with Britain involved more than 40 companies from the top foreign investors in Egypt, and it demonstrates London's commitment to boost increase bilateral trade and international investment.
The visiting Macedonian Prime Minister Nikola Gruevski called on the Saudi businessmen in Riyadh on Monday to invest profusely in his country for attractive dividends.