Tag Archive for: African Economic Development

Andrew Stegmann

New African Wealth Report Reveals The Richest Cities on the Continent

New World Wealth and AfrAsia Bank have published the latest African Wealth Report, showing the levels of wealth of various African nations at the end of 2018.

According to the report, South Africa is still the richest country in Africa, with the high net worth (HNWI) population of 39,200 people holding the most wealth at $649 billion.

This is double that of the second wealthiest African nation, Egypt, where the HNWI population of 16,700 people holds $303 billion.

Egypt is followed by Nigeria ($225 billion), Morocco ($114 billion) and Kenya ($93 billion).

Total wealth held on the continent amounts to US$2.2 trillion. Around US$920 billion (42%) of this is held by HNWIs, New World Wealth said.

While South Africa ranks at the top of the list, on a per capita basis ($11,450), it is only the second wealthiest nation – following behind Mauritius, where wealth per capita sits at $31,000.

Africa’s richest cities

South African cities ranks as the top richest cities on the continent, with Johannesburg and Cape Town holding the most HNWI wealth among the major cities covered, taking the first and second spots, respectively.

Total wealth held in Johannesburg amounts to US$248 billion, while total wealth held by Cape Town amounting to US$133 billion.

Most of Johannesburg’s wealth is concentrated in Sandton, New World Wealth said, which is home to the JSE (the largest stock market in Africa) and to the head offices of most of Africa’s largest banks and corporates.

Cape Town, meanwhile, is home to Africa’s most exclusive and expensive suburbs such as Clifton, Bishopscourt, Camps Bay and Bantry Bay. It is also a hotspot for wealthy second home owners from around the world. Major sectors there include: real estate, financial services (fund management), retail and tourism.

Also in the top five from South Africa is Durban and Umhlanga (combined), which holds total HNWI wealth of US$54 billion.

This figure includes wealth held in Durban, Umhlanga, La Lucia and Ballito. Notably, Umhlanga and Ballito are two of the fastest growing areas in SA, in terms of wealth growth over the past 10 years, the group said.

Among other African countries, Cairo (Egypt), Lagos (Nigeria) and Nairobi (Kenya) stand out as wealthy cities, sitting on par with South Africa’s popular HNWI areas.

Total wealth held in Cairo amounts to US$129 billion – and the city is home to more billionaires than any other African city (four billionaires live there, compared to just two in Johannesburg).

In Lagos, total wealth held in the city amounts to US$96 billion. This is the largest city in Africa, in terms of population and GDP (but not in terms of wealth).

The richest cities in Africa.

The richest areas in South Africa.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Andrew Stegmann

HSEVEN Launches Africa Startup Acceleration Program, With Up To €1.5 Million Investment Per Business

HSEVEN, Africa’s largest accelerator is launching “HSEVEN DISRUPT AFRICA”, an ambitious startup acceleration program designed for entrepreneurs of the Moroccan and African diaspora.

The 6-month program will provide a seed investment of €150,000 plus an eventual investment of €500,000 to €1.5 million.

HSEVEN DISRUPT AFRICA is designed to support exceptional entrepreneurs building high-impact startups, and targets seed and early stage startups with 2 to 5 founders that are eager to impact Africa through innovative services, products and business models.

The program will start with a global call for applications, followed by an international selection roadshow in New York, Montréal, San Francisco, Shanghai, Dubaï, Londres, Amsterdam, Paris, Casablanca.

The selected startups will benefit from a seed investment of €150,000 at the beginning of the program for 5 to 7% equity, then an eventual investment of €500,000 to €1.5 million at the end of the program. These investments will be granted through a partnership with the venture capital firm Azur Partners. The program will also benefit from funding of the Dutch Good Growth Fund (DGGF) and the Innov-Invest program of the Caisse Centrale de Garantie (CCG) with the support of the World Bank.

The startups will be given strategic advice and expertise, access to key networks and capital through our partners Azur Partners, Fabernovel, Strategy&, PricewaterhouseCoopers (PwC), l’École Centrale, Amazon Web Services and the top 50 Venture Capital firms interested by Africa. They will also benefit from tailored mentoring with +350 Moroccan and international mentors. For more information, visit: www.hseven.co

The startups will be located at HSEVEN’s 12,000 ft² campus in the heart of the Marina of Casablanca. The call for applications is now open and 10 startups will be selected to take part in the program.

“We will bring the best Moroccan, African, and African-at-heart entrepreneurs from all over the world to build impactful world-class African startups” said Amine Al-Hazzaz, Founder & CEO of HSEVEN.

To read more about HSEVEN, click here. For applications for the startup program, click here.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Andrew Stegmann

Africa Eyes $1 Trillion in Private Equity Deals

Fund managers say ready to deploy up to US$1 trillion for investment in the continent.

The African continent is set for a major shift in Private Equity investment trends after a major announcement was made in Nairobi this week.

During the 16th annual African Private Equity and Venture Capital Association (AVCA) conference, fund managers from around the globe, mainly the US and European markets said they are ready to deploy up to US$1 trillion for investment in the continent.

This is through PE funds, a move that now places the continent at a strategic position to tap into the funds for investments in various areas.

If tapped by local investment firms, the pool of funds could more than double the number and value of deals reported in the last six years, with regions such as East Africa, West Africa and Sothern Africa reaping big.

“It is a plus for Africa,” said Baba Alokolaro, Managing Partner at Nigerian law firm- TNP (The New Practice),“From what we have seen, investors are taking Africa more serious than they had in the past,”

Alokolaro who led a team of experts from TNP to the Nairobi event said the continent should angle itself for more deals this year, singling out Kenya as one of the countries set to benefit in East Africa.

“We expect to see a lot of deals going forward. In East Africa, Kenya will remain a top investment destination,” he said.

AVCA latest data shows the value of reported African PE deals between 2013-2018 was US$25.7 billion, on a total number of 1,022 deals. During the period, total value of African PE fundraising closed at US$17.8 billion.

The highest value in the six years was recorded in 2014 (US$7.8 billion) which went down to US$2.5 billion in 2015, the lowest during the period under review.

Last year, the value dropped to US$3.5 billion from US$3.9 billion in 2017, reflecting reduced investment activities by both fund managers and investment funds.

West Africa leads in both the number and value of deals reported during the period, where it accounted for 26 per cent(volume) and 25 per cent-share of total deals.

East Africa took a sizable share commanding 18 per cent of PE deals by volume , but lower on value which accounted for eight per cent of the US$25.7 billion.

The Nairobi announcement hence places the continent at a strategic position to revitalize the markets.

AVCA Chief Executive Michelle Essome has since expressed confidence over growth of the PE market in the continent.

“We are positive the PE market will continue growing presenting a unique asset class for Africa. The growth will enable companies to expand, create employment and improve lives in the continent,” Essome said told journalists in Nairobi.

AVCA Chairperson Tokunboh Ishmael said: “Our hope is that companies will grow to an extent where they will expand and increase intra-regional trade.”

According to Tokunboh, who is also the Co-founder & MD of Alitheia Identity, growth in investments will strengthen the continent, giving Africa a stronger bargaining capacity in the global scene.

East Africa

Kenya has continued to dominate the region’s PE space as investment firms hunt for deals in different sectors.

According to official industry data, the East Africa’s economic power house accounted for 59 per cent and 58 per cent of the value and volume of deals reported in the region respectively, between 2013 and 2018.

Uganda took 19 per cent of the volume of PEs and 11 per cent of the total value. Tanzania accounted for nine per cent on both the volume and value of deals reported in the region.

Ethiopia took an 11 per cent share of PE deals by value and seven per cent by volume, Rwanda six per cent (volume) and three per cent (value) while Djibouti had a seven per cent share of PE deals by value and one per cent (volume) of the total deals.

194 PE deals were reported during the six year period(2013-2018) valued at US$2.4 billion, of which US$6 million worth of the deals were median deal size.

“The average growth rate in East Africa was almost six per cent from 2010 to 2018, with Djibouti, Ethiopia, Rwanda and Tanzania recording above-average growth rate,” AVCA says in its latest report.

East Africa Venture Capital Association (EAVCA) data shows disclosed value for deals almost doubled to US$834.3 million last year, compared with US$446.78 million in 2017.

Ethiopia has the potential to be a key market for PE investment, AVCA has since noted, given the size of its population (at 108 million) , the second most populous on the continent.

This year’s event saw more than 500 top fund managers and strategic investors from across the globe meet in Nairobi to deliberate on industry challenges and investment opportunities, mainly in Africa.

The fund managers collectively manage more than $1.5 trillion (Sh151.3 trillion) in assets.

During the forum, the Kenyan government called on investors to put funds in projects that will help the realization of President Uhuru Kenyatta’s Big Four Agenda of Food Security, Universal Health Care, Affordable Housing and Growth of the Manufacturing sector.

“We welcome you to take advantage of the investment opportunities in the country, mainly in the Big Four and other sectors,” Kenya’s Cabinet Secretary for Industry, Trade and Cooperatives CS Peter Munya said.

The government has since assured investors of protection for their investments in the country.

Top areas of investment

Sectors commanding huge numbers in PE investments in the continent include consumer staples (15 per cent), consumer discretionary(14 per cent),industrial(13 per cent),IT(11 per cent),real estate(nine per cent), Health Care(7%),utilities (6%),communication services(6%) materials(5%) and energy(3%).

“There is a lot to expect in the PE market with East Africa expected to remain bullish,” said Edward Muriu, Team Leader at MMC Africa, a leading advisor in the capital markets space.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: Markus Spiske [1], [2].

Andrew Stegmann

Climate Financing in Africa Accelerates Alongside Urbanization

When daily power cuts became the “new normal” in Zambia during a 2015 drought, farms, companies, schools, and households experienced anything but business as usual. Zambia’s energy is drawn primarily from hydro power, so when a dry spell plagues the nation, its economy—alongside the potential for long-term socio-economic development—dries up, too.

Although low rainfall that year was especially punishing, Zambia’s energy crisis has been a problem for over a decade because of the nation’s reliance on hydropower. In theory, diversification was possible: since the Zambian sun shines almost 65 percent of daylight hours, solar power was an attractive option. But scalability and affordability had posed challenges.

Scaling Solar, a World Bank Group program that helps developing countries procure grid-tied, private solar power, offers Zambia a solution. The program includes technical advice for large-scale adoption of solar technology and a set of pre-negotiated, template documents aimed at increasing transparency and reducing risks and costs for governments and developers. Financing, guarantees, and insurance to boost confidence about projects in new and challenging markets are also options.

Scaling Solar made it possible for Zambia to achieve some of the lowest solar tariffs in the region. The program has since expanded to Senegal, and mandates have also been signed in Ethiopia and Madagascar. Spreading renewables-based solutions across the continent is important because although Africa is responsible for only 4 percent of global greenhouse emissions, 65 percent of Africans are in some way impacted directly by climate change.

Identifying solutions to help Africans adapt and become more resilient to climate change is one of the objectives of the One Planet Summit taking place on March 14 in Nairobi. The event highlights Africa’s situation as a continent facing climate-related challenges and opportunities, and it will convene African leaders, entrepreneurs, donors, international organizations, and other stakeholders. It is co-hosted by the World Bank Group.

Shining a Light on African Sustainability

The One Planet Summit is built around the idea that resources and solutions for renewable energy already exist in Africa—but there is a need to accelerate financing and mainstream development as the region struggles with rapid urbanization and other challenges presented by global warming.

The figures are daunting. More than 470 million people live in sub-Saharan Africa’s cities, and this is expected to double over the next 25 years. By 2050, the region is expected to house 20 percent of the world’s urban residents. Climate change is a leading factor contributing to the trend toward urbanization, as extreme temperatures and unpredictable rainfall affect income from agriculture.

As urbanization continues, so does the demand for resources and impact on the environment. Currently, cities consume over two-thirds of the world’s energy and account for more than 70 percent of global carbon emissions. The concentration of people, industry, and infrastructure leaves cities especially vulnerable to climate change–and also uniquely placed to combat it.

Nairobi, the city hosting the One Planet Summit, is a good example of how climate-related challenges can open the doors for climate-smart investment. Although 70 percent of Nairobi’s installed electricity capacity comes from renewable sources, there are opportunities to attract investment in other sectors. IFC analysis found that Nairobi has a $8.5 billion climate investment opportunity leading up to 2030. The biggest investment opportunity—$5 billion—lies in electric vehicles, followed by public transport ($1.6 billion), green buildings ($1.1 billion), water ($360 million), renewable energy ($240 million), and waste ($140 million).

Together, these investment opportunities result from strong policy frameworks such as Nairobi’s Integrated Urban Development Master Plan. The plan focuses on sustainable transport, water and wastewater, power, municipal solid waste, and telecommunications. As with Scaling Solar, these initiatives—along with others that will be proposed and examined at the One Planet Summit—approach long-term climate and development challenges with a determination that sustainability, not crisis, will become the “new normal.”

To find out more about the One Planet Summit, click here.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], Karsten Würth [2].