Atta Africa Financial Update

Executive summary: African 'finnovation'

The continent is an irregular place when it comes to high-street banking: despite recent news of a mid-sized Kenyan bank running into trouble, the country’s US$55bn GDP hosts 42 mostly profitable banking institutions. Regulatory authorities have tried and failed to consolidate the sector by raising capital requirements, resulting in virtually no M&A activity as investors responded eagerly to capital calls.

Nigeria is different, having gone from almost 90 banking institutions to 24 in just over a decade, but the sector remains a preferred target for international investors. This is in part due to its profitability, but also to the particular way in which it has evolved – and continues to evolve. Micro-finance institutions and remittance companies partner with telecoms to extend their reach; insurance providers are increasingly integrated into high-street bank branches. Dahabshiil, Africa’s largest money transfer business, is gathering momentum in mobile-money services and data collection as it builds itself up towards the much sought-after status of bank.

Sub-Saharan Africa’s 326 million non-banked adults are increasingly demanding more of the financial services sector; the next generation even more so. Creative financial products are emerging from a combination of different sectors looking at benefiting from the potential savings deposits.

An exciting space for investors and consumers alike.

Private equity into sub-Saharan Africa grows to US$12 billion

  • International private equity has become the fastest growing source of investment in sub-Saharan Africa
  • Investors tired of low returns in developed markets have increasingly looked to cash in on the rapid growth and emerging middle-class consumers in Africa
  • Investments from international private equity has grown five-fold since 2008 across sub-Saharan Africa and now amounts to around US$12 billion

Côte d’Ivoire has become the 11th member of the AFC

  • Côte d’Ivoire has become the newest member of Africa Finance Corporation (AFC), the leading international finance institution for financing infrastructure projects in Africa
  • AFC is committed to proactively financing and managing the development of key infrastructure projects which will have a positive impact on the lives of Africans all over the continent
  • To date the Corporation has invested over US$2.5 billion in projects across 24 African countries and in a wide range of sectors including power, telecommunications, transport and logistics, natural resources and heavy industries

Key commercial and political activity in Africa for private equity investors by DCE Partners, UK Private Equity advisors to Atta.