A key headline in the latest IMF projections for Sub-Saharan Africa is the revision to the GDP growth projection for 2019, down from 3.8% in October 2018 to 3.5%. Drill into the detail, however, and further trends emerge. This includes a divergence in performance between resource-dependent economies, which have faced headwinds, and more diversified economies, which show a more positive growth trajectory.
International Financial Centres (IFCs) have become a vital part of development finance for Africa in recent years - according to a recent Overseas Development Institute (ODI) report, IFCs galvanised additional finance to developing countries of $1.6trn between 2007 and 2014, much of which went into Africa.
Over the past few decades, Ireland has built a solid reputation as a fund services centre of excellence, with $4.8trn of global assets under administration across approximately 14,000 individual funds being serviced by Irish Fund Administrators. Over 16,000 professionals work in the Irish fund services industry resulting in a deep and experienced talent pool.
If Africa is to boost regional and international trade, and if it is to support more tourism from within the continent and overseas, it will require significant investment in its airports.
The private equity (PE) universe – of which venture capital (VC) is technically a subset - covers businesses in every sector and almost every stage of life. While investments in established companies form the bread-and-butter of most PE portfolios, it’s in early-stage ventures that many delicacies can be found. Not only do these provide an irresistible high-risk/high-return infusion, but, more importantly, investments in early-stage companies (including but not limited to VC) are essential in building the growth of an economy – and South Africa can do with an extra helping of this right now.
Never before has the need for infrastructure felt so immediate and acute. This became apparent to me as I travelled to Nairobi, Lagos, Lusaka and Gaborone during the first three months of this year.
Despite being released only in December, the International Private Equity and Venture Capital Valuation Guidelines are already in effect, and feature some significant changes, says Heleen Goussard, Head of Unlisted Investment at investment firm, RisCura.
The last few years have witnessed a growing sophistication and assertiveness of African states in dealing with foreign investors. One particular manifestation of this can be seen in the growing trend of African states, particularly those with energy and natural resources, seeking to renegotiate existing investment contracts in order to change the economic balance of those contracts and extract further value from them, write Joseph Otoo (pictured), Senior Associate, and David Elikwu, Trainee Solicitor, Mayer Brown.
Technological innovation is having a transformational effect on the global economy, with businesses in every sector realising the importance of quality data and being agile to respond quickly to changes. The disruptive power of technology on incumbent businesses and business models varies across industries, with consumer firms hit first and, so far, hit hardest. However, this fourth industrial revolution is still in its infancy and promises to deliver even more profound shifts in ways that can’t yet be seen in the coming years.
In September 2018, the Government of Tanzania, at the Parliamentary debating stage of the Public Private Partnership (Amendment) Bill 2018 (the PPP Amendment Bill) introduced an amendment (new Section 25A) with the effect that all PPP projects relating to Tanzania’s “natural wealth and resources” would be subject to the provisions of the Natural Wealth and Resources (Permanent Sovereignty) Act 2017 (the Sovereignty Act), and the Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms) Act 2017 (the Re-Negotiation Act). The PPP Bill was passed, and is now the Public Private partnership (Amendments) Act 2018 (the PPP Amendment Act). The ‘Objects and reasons’ section of the PPP Amendment Act gives no further insight into the significance of the new Section 25A than to say that it is “…added for the purpose of making provisions for recognition and safeguarding of natural wealth and resources.” However, the amendment provide controversial among parliamentarians and commentators, as its effect is of great significance of PPP projects.
Activity in Africa’s debt capital markets remains remarkably resilient despite global trade wars, Brexit concerns and high interest rates in a resurgent United States economy which is translating into emerging market jitters. Even as concerns around African sovereign debt mount, increasing global integration and the internal capability of the continent’s debt capital markets looks set to sustain Africa’s ability to import capital and manage debt through the current global cycle.
Africa’s youthful population and growing middle class are generally considered positive investment themes for the continent, but will African pension systems be able to serve this youthful cohort when they inevitably grow old?
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