Nigeria Sovereign Wealth Fund grows income by 343%, Uganda's HMH Rainbow new IFC funding.

Another interesting week in the world of business, economics, and finance in Africa, these are the key highlights. If you are reading this newsletter for the first time please subscribe to get these weekly updates and more. If you have already subscribed why not forward it to a friend or colleague.

2 things to note :

1) Nigeria Sovereign Wealth Fund grows income by 343 %

The Nigeria Sovereign Investment Authority (NSIA) the manager of the Nigeria wealth fund has reported an impressive 343 % increase in its total comprehensive income of N160 billion compared to its previous year of N160.06 billion. It also achieved a 33% increase in net asset value of N772.75 billion from the previous year of N579.54 billion.

Why is this important: High volatility in global markets and economic constraints due to the impact of COVID-10 typified the 2020 fiscal year, with the impact still being felt by African economies. In spite of these challenges, the NISA has successfully made good returns with strategic investments in high-growth sectors like infrastructure, Nigeria's first derivative clearing house, and has launched the NSIA’s Nigeria Innovation Fund to support and fund technology startups in Nigeria.

2) Sub-Saharan Africa has the highest cost of sending remittances back home.

According to the new "Migration and Development Brief", sending $200 in remittances to Sub-Saharan Africa cost on average 8.5% in Q3 2020 compared to 9% in the previous year, which is the highest average cost compared to other regions. The most expensive corridors are in the southern African region: Uganda to Tanzania, South Africa to Botswana, and South Africa to Angola. While the less expensive remittance corridors are in West Africa: Côte d’Ivoire to Mali and Senegal to Mali.

Why is this important: The unbanked segment of the economy remains the largest recipient of the remittance payments in Sub-Saharan Africa, but payments are still received using traditional channels and in cash. With many players in the Africa remittance space, there is an opportunity for technology solutions ranging from anti-money laundering checks to KYC solutions aimed at reducing the average cost to 3 % in line with the right regulatory framework.

Private Equity Updates  :

  • Uganda-based leading producer of fresh and frozen chicken HMH Rainbow has secured a proposed investment from the International Finance Corporation (IFC). The investment comprises a convertible C Loan of up to $5 million and an IDA Private Sector Window (PSW) loan of up to $2 million. 

  • EXEO Capital a Pan-Africa private equity firm has invested in South-based Maia Group a holding company focused on consumer health businesses through its food and agribusiness fund, Agri-View Fund II.

  • The International Finance Corporation (IFC) has made an equity investment of R150 million( $10 million) in Eris's South African Student Accommodation Impact Investments Proprietary Limited platform.

  • Acre Impact Capital an investment manager focused on infrastructure in emerging markets has secured new investment to narrow a US$100bn financing gap in Africa from The Rockefeller Foundation and GuarantCo, which is part of the Private Infrastructure Development Group (PIDG).

Venture Capital Deals:

  • Cameroon-based fintech Maviance has raised $3 million in funding from Pan Africa digital payment hub MFS Africa to increase its presence in Cameroon and expand to other countries in central Africa.

  • South Africa-based ed-tech iXperience has secured a $2.5 million Series A funding from Kalon Venture Partners and Caleo Partners to grow its team and scale its product offering globally.  

  • Egypt’s leading venture capital fund Algebra Ventures is planning to make its investment in West and East Africa once it raises its second fund which has a target size of $90 million.

M & A Activities:

  • A consortium of South Africa’s Reatile Group and Africa Infrastructure Investment Managers (AIIM) have teamed up to acquire a 30% stake in a pipeline in Mozambique from Sasol South Africa for ZAR5.14bn( €300.8m).

  • South Africa-based Kasada Capital Management has acquired Namibia-based 414-key Safari Hotel and Conference Centre with an investment of N$100m(US$8M) for the Hotel renovation and development.

  • South Africa-based pharmacist Clicks plans to acquire 25 in-store pharmacies, drug stocks, and staff from Pick N Pay.

  • Coca-Cola Beverages Africa has acquired Maluti Mountain Breweries’ interest in the soft drinks business and has now formed a new entity called Coca-Cola Beverages Lesotho following the reorganisation. 

  • Nigeria-based leading Commerical $ Industrial (C&I) solar power supplier Starsight Energy has acquired a 50% stake in the East Africa operations of Solar Group.

  • South Africa-based Everite a building materials company has been fully acquired by a private equity consortium comprising of Lonsa Group and Legacy Africa with Everite’s management from Group five.

Liquidity Actions:

  • Kenya’s Treasury bond issue was oversubscribed by 4.7% with the government attaining its target. Investors offered Sh20.93 billion, which was slightly above the targeted Sh20 billion.

  • UK’s development finance institution and impact investor CDC Group has announced a $100 million debt commitment to ETG, an agricultural conglomerate connecting smallholder farmers.

  • Ivory Coast Eurobonds average yields grew by 6bps to close at 5.25%.

Economic Updates:

  • Botswana's annual inflation rose sharply to 5.6 % in April of 2021, reaching its highest level since September of 2013.

  • Namibia’s annual inflation rate rose to 3.9 % in April of 2021 from 3.1% in the previous month. It was the highest inflation rate since June of 2019

  • Angola's annual inflation rate rose to 24.82 % in April of 2021 from 24.77 % in the previous month, mainly due to the kwanza’s depreciation

  • Ghana's inflation rate fell to 8.5 % in April of 2021 from 10.3 % in the previous month. It was the lowest inflation rate since March of 2020

The Week Ahead:

  • 17th May - Nigeria’s Food Inflation and Inflation Rate YoY APR and Kenya’s GDP Growth Rate

  • 18th May - Ivory Coast’s Inflation Rate YoY APR

  • 19th May - Mozambique and Zambia’s Interest Rate Decision

  • 20th May - Morocco’s Inflation Rate YoY APR

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