Africa’s rapid economic growth is fast yielding positive dividends as investments in various sectors continue to rise. This week, a series of diverse acquisitions deals have been announced across the continent in both the private and public sectors.
Acquisitions were drawn mostly from Eastern and Southern Africa with companies in Tanzania and Kenya, as well as South Africa leading the train. Equity lenders, including banks and private equity firms continue to pursue potentials across the continent’s top economies, thus have been dominating the investment space recently.
Public investment however rolled out of the western region, with Nigeria and Senegal announcing government-led deals aimed at boosting socio-economic development.
Private Sector
Kenyan-based private equity firm, Catalyst Principal Partners acquired majority stake in Tanzanian heavy equipment rental and logistics firm, EFFCO. Although details of the deal were not disclosed, the Eastern African-focused investment company usually invests between $5 million to $20 million into deals with an average investment period of 4 to 6 years. This acquisition is Catalyst’s fourth since raising a $125million private equity fund focused on investing in East Africa.
South African lender, Nedbank also acquired an “initial stake” of 36.4 percent in Mozambique lender, Banco Unico. The purchase will bolster Nedbank’s franchise in Southern African Development Community (SADC) and East Africa. The acquisition is expected to be completed by the end of this month.
Metropolitan International (MI), a division of the JSE-listed life Insurer, MMI Holdings bought an undisclosed share of Kenyan Insurance firm, Cannon Assurance for R300 million ($27.3 million). Funds for the acquisition will come from the R500 million ($45.5 million) MMI has reserved for African acquisitions and this will quicken the company’s African expansion strategy and bolster its presence in East Africa.
Public Sector
Senegal secured pledges worth $7.8 billion at a donor conference of public and private investors in Paris, generating capital to fund its developmental plan, Emerging Senegal, a 10-year strategy with a cost implication of about $21 billion.
Although the French speaking county’s target for a developmental plan of four years was $6.10 billion, its ability to exceed that amount by $1.7 billion indicates an improved level of confidence from foreign investors in its economic opportunities.
France, Europe’s second largest economy, this week, revealed plans to invest €400 million ($548 million) in establishing a new state-owned mining company called Compagnie National des Mines de France (CMF), with sub-Saharan Africa being looked at for significant investment.
An annual budget of $150 million will be spread out over five to seven years while exploration and exploiting activities at the mine will focus on rare metals like lithium, germanium, tungsten, antimony and rare earths inside France and around the globe including former colonies in Africa, Central Asia and South America
South Africa’s investment in Africa hit R36 billion ($3.3bn) last year with foreign assets owned by indigenous companies contributing to the country’s stream of income.
According to Pravin Gordhan, South Africa’s Finance Minister, South Africa has become the second biggest developing country investor on the continent after China, the world’s second biggest economy. He also recommended the launch of what he called new “Foreign Member Funds,” which he believes will strengthen South Africa’s position as the hub for African fund management and will make simpler the foreign exposure guidelines
Nigerian Sovereign Investment Authority (NSIA), managers of the country’s Sovereign Wealth Fund (SWF), has announced plans to invest $10m in the state-owned Mortgage Refinancing Company (MRC).
The planned investment is about 20 per cent of the initial total capital of the firm, adding that the investment was made as a core equity provider of the mortgage financier.
