Nigeria’s multi-lateral development investment corporation, Africa Finance Corporation (AFC) has revealed its plan to raise its investment stakes in Kenya. It plans to invest about $150 million in the country along with the capability of bringing in other investors.
Africa Finance Corporation is already investing in Kenya, issuing a $50 million convertible loan to Athi River Mining (ARM).
In an interview with Business Daily newspaper, AFC Chief Executive, Andrew Alli, said AFC sees great opportunity in areas such as infrastructure development in Kenya, with Power being a major opportunity for investment.
“Renewable energy is the main thing because Kenya has a lot of potential for geothermal and wind power where AFC has a lot of expertise. We are also interested in areas such as the Lamu port project, the road and rails, the pipeline for petroleum gas as well as industrial companies we can work with,” Alli said.
He affirms that AFC sees Kenya as a good launch pad for investing in the region.
“East Africa is a well integrated community and Kenya is a good hub with a relatively well-developed infrastructure and business environment.”
AFC is a multi-lateral development investment corporation established in 2007 to foster investment in natural resources, infrastructure and energy across Africa. The firm serves as investment vehicle in seven countries. It was set up as a Nigerian initiative with a pan-African vision.
Although the finance company is initiated in Nigeria, it plans to invest in other African countries in order to improve the presence of African investors in other African countries.
“If a country like Nigeria grows by say one per cent its neighbors will grow by a quarter of a percentage point. In fact, only 10 per cent of Africa’s trade in general is with other African countries. In Kenya for instance, it is only recently that Uganda became the biggest trading partner — it has been the United Kingdom, which remains the number two. But Britain is in Europe and Uganda is next door,” Alli asserted.
“So promoting intra-Africa investment and intra-Africa growth is important and I think the authorities that set up AFC saw this,” he added.
So far, AFC has invested over half a billion dollars in 11 different countries across Africa but it has operations in about 20 countries with large investments in Nigeria in the oil, gas and transportation sectors.
AFC’s work in other African countries includes partnering with governments like in Cape Verde wind project, a power project in Ghana and a toll road in South Africa. It also has a presence in Cote d’Ivoire, Ghana, Zambia with an exposure of more than $100 million and recently it invested $50 million in ARM , Kenya.
“Kenya is an open economy, which welcomes foreign investors. This is important as you can move foreign currency in and out with relative ease,” Alli posits
On investment consideration in Kenya, Alli commended the management of the economy, which he says has been good. He noted that though there was obviously an upset last year when inflation went up and currency fell but the Central Bank and authorities took steps to recover that.
They have shown a willingness to act decisively to maintain macro-economic stability, he said.
On whether his company will be faced by the presence of other investors like Europe and China who are already established in the Kenyan infrastructure industry, Alli said that the big part is for the country to manage the process so as to ensure it reaps benefits in the end. What the Chinese do is that it provides competition and we have all been taught that competition is a good thing.
He said AFC would not be deterred by the coming elections in Kenya but plan to stay for the long haul.