Atta Africa Financial Update

Executive summary: Today we look back on a country that has been hailed as one of the continent’s great successes. Four years ago, we shared that the EU was suspending aid to Rwanda – it later recovered from this shortfall and put financial donations to developmentally effective use: healthcare.

An ill or vulnerable population is not productive, people cannot work effectively or study to improve their social mobility. The Rwandan government made healthcare a priority and became one of the few countries to meet Millennium Development Goals regarding deaths from child birth, curbing infectious diseases and infant mortality. 91% of the land-locked country’s population is covered by the government supported Mutuelles de Santé, a health insurance plan, far more than other developing countries with similar levels of foreign aid receivership.

Last week, Rwandan capitalised on this momentum through the launch of the world’s first commercial drone blood delivery programme. Although a small country, Rwanda’s “Thousand Hills” make any urgent blood delivery to provincial hospitals a 3 to 4 hour journey by road – more during the rainy season. Zipline, an American company, catapults drones carrying 1.5kg packages and able to drop off vital emergency blood supplies within half an hour to most rural clinics around the country. Critically, the business is commercial, which will encourage substantial private capital to pursue investment in this space.

Drones will not replace conventional infrastructure, Rwandans still need more and better roads. But innovation is often the product of scarcity, and in the words of Alan Kay: “The best way to predict the future is to invent it”.

Cauris exits two financial services companies in West Africa

 
  • Cauris Management has announced the successful exit from Atlantic Business International and Bridge Bank Group Côte d’Ivoire
  • Atlantic Business International is a financial services partnership between West Africa’s Atlantic Financial Group and Morocco’s Banque Centrale Populaire and ABI is selling its stake to Banque Centrale Populaire
  • Cauris has also sold Bridge Bank Group Côte d’Ivoire to the Teyliom Group, earning a 3.1x return on its investment
  • These two exits are the latest in a long line of disposals for Cauris which has, since it launched in 1996, realized almost 50 investments and 38 exits via its three funds

South Africa-led consortium plans to invest Sh193 billion (US$2 billion) in Lapsset

 
  • A consortium of international investors led by the Development Bank of South Africa is ready to invest Sh193 billion (US$1.9 billion) in the Lamu Port South Sudan Ethiopia transport corridor (Lapsset) project
  • DBSA is wholly owned by the South African government, and has arranged funding for projects in transport, energy, water and ICT sectors
  • The Lamu Port at Manda Bay consists of 32 deep sea berths, with the first three already under construction with a target completion date of 2018

Ghana issues its maiden domestic USq$94 million dollar bond?

 
  • The 2-year bond issued last week was highly subscribed to an amount of US$94.64 million at a coupon rate of 6 percent, which is consistent with the initial price range of between 5.5 percent and 6.5 percent
  • The proceeds of this bond will form part of the sinking fund (established by government to repurchase or redeem specified debt) to buy back some of the high coupon instruments on the local and international capital market as part of our liability management strategy