Atta Africa Financial Update

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

Executive summary:
Despite significant economic tremors, China will continue to invest US$60 billion in Africa over the next three years. In fact, China’s ambassador to Ethiopia La Yifan recently told Reuters that the Continent may be set to benefit as Chinese investors look for opportunities outside their own market.

Chinese President Xi Jinping originally announced its multi-billion dollar commitment to Africa at the 6th Forum on China-Africa Cooperation held last December in Johannesburg. The investment will focus on poverty reduction and public health to infrastructure and industrialization.

China is Africa’s largest trading partner. Although the reliability of figures is tenuous, the Chinese Ministry of Commerce announced that the net annual flow of Chinese direct investment into Africa increased eight-fold between 2005 and 2014, to US$3.2 billion.

The Chinese economy grew 6.9 percent in 2015, its slowest pace in a quarter of a century.

Fact: Comedian Eddie Izzard has raised over R30 million (US$1.95m) for Sports Relief by running a total of 27 marathons in 27 days in honour of Nelson Mandela’s 27 years in prison; the effort included a double marathon on the final day

Rwanda could go for IMF precautionary loan

  • Rwanda is considering tapping into the precautionary loan given by the International Monetary Fund to reduce the country’s exposure to financial turbulence
  • While the details of the negotiations are yet to be made public, the loan is expected to help boost the country’s international reserves
  • Reserves have come under intense pressure in recent months due to the twin challenges of a strengthening US dollar and lower export revenues due to a decline in international commodity prices
  • Rwanda’s growth in 2015 was slightly stronger at 6.9 per cent than the expected 6.5 per cent though it is lower than the 7 per cent registered in 2015


Rwanda signs deal with AfDB for construction of Ruzizi III hydropower plant

  • The African Development Bank in conjunction with the Government of Rwanda has signed a US$25m agreement that will see the construction of the Ruzizi III regional hydropower plant come to birth
  • Ruzizi III hydropower plant which is shared by Rwanda, Burundi, and the Democratic Republic of Congo is anticipated to generate more than 147MW of electricity, the electricity will hence be shared equally amongst the three participating countries with Rwanda getting at least 50MW of electricity