Africa's largest FX & Treasury Fintech's new acquisition, Adenia's exits to SPE Capital, Ethiopia telco bids gets interesting.

Welcome to the month of May. April ended with a round of business, economic, and finance activities to be noted. Now let's get into the highlights and top stories from the week.

But 2 things first :

1) ) The bidding dance for Ethiopia’s telecoms licenses :

It has been a busy week in Ethiopia's telco space with bidding going on for two licenses and a 45% stake in Ethio Telecom up for sale. The Ethiopia finance ministry has confirmed they received bids from Kenya’s Safaricom and South Africa’s MTN.

Why is this important: Ethiopia is Africa’s last man standing in terms of telecom liberalisation with a population of 112 million. This represents an attractive investment opportunity for telecom operators considering how popular mobile money transfer services are and the strength of the pre-paid mobile segment. The Africa telco market continues to be the envy of the world in terms of growth and mobile adoption.

2) CBN take on First Bank’s Board of Directors

The Central Bank of Nigeria took a bold step to remove the board of the bank and its holding entity due to poor corporate governance practices, non-performing insider performing loans, bad credit decisions, and two leadership challenges that threatened the stability of the bank. The sacking of the board on Thursday was done "in order to preserve the stability of the bank, so as to protect minority shareholders and depositors," said the regulator.

Why is this important: First Bank is a first-generation bank in the Nigerian banking industry with 31 million loyal customers spanning generations. Its significant size accounts for 22% of the industry’s NIBSS instant payment processing with shareholder funds of N618 billion and a deposit base of N4.2 trillion. By any measure, this represents a bank with a systematic and reputational presence that cannot be ignored or lost in consumer confidence, especially in these challenging times.

Private Equity :

  • Goodwell Investment an impact investment firm has launched a €50 million multi-sector private equity fund ‘Goodwell V’ to invest capital from private investors, family offices, and foundations into fast-growing and scalable small to medium-sized companies in Africa. The fund will be a feeder for its new institutional fund expected to launch in the second half of 2021

  • Côte d’Ivoire-based Adenia, a leading private equity investment firm has completed the sale of its 100% equity stake in Ademat a leading power security solution provider to various industries, including telecommunications, financial services, manufacturing, healthcare, and hospitality in Côte d’Ivoire to SPE Capital an Africa and  Middle East-focused private equity firm.

  • Egypt-based Misr Capital a subsidiary of Banque Misr and Elevate Private Equity have launched a $380 million healthcare investment platform ‘Nile Misr Healthcare’. The platform's aim is to actively acquire strong investment potential in Egypt and Sub-Saharan Africa in the healthcare vertical including pharmaceuticals, diagnostic facilities, hospitals, medical education, and digital services.

Venture Capital Deals:

  • Two South Africa legal-tech startups BriefCo and Legal Lens have secured equity funding from South Africa Imvelo Ventures. The entities have merged together to form Cycad Group which will use the new investment to grow their product offering.

  • Keyna-based Kidato an online ed-tech focused on K-12 students in Africa has raised a $1.4 million seed investment from a group of local and global investors including Learn Start Capital, Launch Africa Ventures Fund, Century Oak Capital, and Graph Ventures. The investment will fund Kidato expansion plan to offer an innovative alternative to the expensive private school system.

  • Botswana-based AlphaDirect an insurtech startup has raised $600k in pre-series A bridge funding. The investment round led by Launch Africa Ventures and Century Oak Capital will fund the company’s expansion plans to offer its ‘value-for-money business and personal insurance products to the Botswana market and expand into South Africa and  Zambia.

  • Ugandan-based Ensibuuko a fintech startup has raised a $1 million investment to fund its ambitious target to increase financial inclusion by offering infrastructure and digital financial services targeted at rural banking customers in Sub-Saharan Africa.

M & A Activities:

  • South Africa and JSE listed Bidvest, a leading trading, distribution, and freight management company has signed an agreement with National Aviation Services (NAS),  Colossal Africa, and a consortium consisting of the current team to acquire BidAir Services a provider of quality handling services to over 28 major airlines

  • Kenya-based artificial intelligence (AI) and machine learning platform WayaWaya has acquired Ajua. The company enables borderless banking and payments across apps and social media for an undisclosed amount. The acquisition will position Ajua to seamlessly offer automated responses by enhancing the customer experience journey using their smart AI and machine learning capability.

  • South Africa-based Revego Africa Limited (Revego) has acquired a 12% equity in the 50MW Bokpoort Concentrated Solar Power (CSP) for $14million (R204 million) from Metier, one of South Africa’s leading private equity firms, which manages the Lereko Metier Sustainable Capital fund. The Northern Cape asset is an independently run power producer with Saudi Arabian-based ACWA Power International acting as the operational partner.

  • Kenya-based AZA Finance the largest fintech provider of treasury and FX service to frontier markets has acquired South Africa’s Exchange4Free a cross-border payment specialist. AZA Finance recently raised a $35 million combined Series B debt and equity funding to expand its operations in the Middle East and North Africa. The acquisition will enable AZA Finance to more than double its transaction volumes to $2.5 billion in 2021.

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Company Performance :

  • Uganda’s Absa Bank has seen its net profit drop by approximately 50% from Shs 78bn in 2019 to Shs40bn in 2020 due to the significant impact of the Covid-19 pandemic on the financial industry.

  • Ghana’s Fidelity Bank has reported a 19% increase in profit before tax of GHC 382 million in 2020 from the GHC 322 million in 2019.

Economic Updates :

  • The Central Bank of Egypt has left its key overnight deposit rate unchanged at 8.25% on April 28th, 2021, as expected. The country’s discount rate was left at 8.75% and the overnight lending rate at 9.25%.

  • Kenya’s foreign exchange reserves have increased marginally by $71 million in the week of April 22 due to export receipts reported by the Central Bank of Kenya (CBK)

  • Botswana’s benchmark interest rate remains unchanged at 3.75% as reported by the Central Bank of Botswana’s April 2021 meeting.

The week ahead

  • 3rd May-Kenya GDP Growth Rate YoY Q4

  • 5th May-Tunisia Inflation Rate Update

  • 6th May-Ethiopia Inflation Rate update

  • 7th May Egypt Foreign Exchange Reserves APR

  • 10th May-Senegal Inflation Rate Update

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