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: 55% of payment transactions in the UK are made digitally, whereas emerging nations predominantly still use cash 90% of the time.

A shift towards digital financial services, notably through mobile platforms, will yield real economic benefits for emerging economies as suggested by a recent McKinsey Institute report - Africa’s GDP could grow by 7.4% by 2025 through digital financial services with countries such as Nigeria and Ethiopia seeing up to 12% growth from the sector.

The most recent example of Africa’s thirst for such digitalisation comes from Tanzania: not only did the country see a 25% rise in mobile phone subscribers in 2015 – taking penetration to over 80% - but its telecoms sector has recently become the world’s first achieving full mobile money interoperability. This means mobile phone subscribers can now transfer money across multiple networks.

McKinsey estimates that mobile payments lower the cost of providing financial services by as much as 80%, Tanzania is on track to fully exploit this potential.

Fact: Costco has not changed the price of its $1.50 hot dog & 'soda' combo since the 1980's. (The quality of the hot dog may well be what is balancing this equation.)

Mobisol completes its equity raising with Investec

 
  • Investec Asset Management has acquired a significant shareholding in Mobisol
  • Investec will partner with existing shareholder DEG (Deutsche Investitions und Entwicklungsgesellschaft) with the aim of accelerating the company’s growth in its existing markets and to support its expansion into new markets in Africa
  • The company is a well-established player in Tanzania and Rwanda; Mobisol is now entering the Kenyan market
  • Mobisol is a Berlin-headquartered company that offers low-income African households quality solar home systems that are a clean, safe and affordable alternative to fossil fuels

Favourable economic outlook for Ghana is conditional

 
  • The IMF's director for Africa has indicated that the favourable economic growth for the country from next year will be based on sticking to some critical fiscal policies
  • Economic growth for Ghana has slowed from 4 percent in 2015 to about 2.5 percent for the second quarter of 2016 according to the Ghana Statistical Service