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: How can Africa entice more long-term investors in its much-needed infrastructure projects?

Africa's infrastructure deficit is well known: it needs circa US$93 billion annually to bridge the gap and, due to limited domestic sources, the continent must rely largely on foreign capital. Presently, the perception from many investors is that Africa's infrastructure projects as exceedingly risky - long-term, risk-averse investors such as sovereign wealth funds (which have accumulated almost US$6 trillion in assets) shy away from these projects.

The authors of a new study focused on financing Africa's infrastructure deficit suggest that Africa’s success in filling its largely greenfield (and hence risky) infrastructure gap hinges upon a delicate balancing act between development banking and long-term institutional investing (the paper is from Amadou Sy and Rabah Arezki).

They note that the involvement of multilateral development banks (MDB) can assuage many of the challenges surrounding these African infrastructure projects. The MDBs bring expertise in infrastructure and flexibility in terms of investment horizon; they understand contract renegotiation and loans from these banks for the government are senior to other loans, meaning that loans by MDBs are likely better enforced and their conditions met. There is evidence that well-targeted guarantees (or subsidies) provided by MDBs along with co-financing (which limits the opportunities for politically motivated credit allocation) can lead to superior outcomes.

Fact: The current 50-star American flag was designed by an Ohio high school student for a class project. His teacher originally gave him a B–

Carlyle Group to invest in Amrod

 
  • The Carlyle Group has announced that it has agreed to acquire a majority share of Amrod, a fast-growing supplier of promotional products and clothing, serving distributors in South Africa and neighbouring countries
  • Funding will come from the Carlyle Sub-Saharan Africa Fund, and the three founders of the business will reinvest alongside Carlyle
  • Amrod has grown organically to become one of the largest promotional products suppliers in Sub-Saharan Africa

Proparco to make a €10 million (US$11.2m) equity investment in Activa Group

 
  • Activa is a life and non-life insurer with operations in Cameron, Ghana, Guinea, Liberia and Sierra Leone
  • The capital will be used to support Activa’s growth plans for Central and West Africa