Tag Archives | investment
After almost two decades of civil war, Mozambique is rapidly emerging as one of the fastest growing economies in Africa. Economic growth is expected to average around 8 percent over the next few years, inflation is slowing from 8 percent in 2012 to an estimated 6 percent by 2016, and current account deficits are declining as a proportion of gross domestic product (GDP) to around 4.8 percent by 2016.
From Cairo to the Cape, major new infrastructure projects are now being planned, developed and delivered with the promise of unlocking stranded natural resources, enhancing prosperity and improving the lives of the continent’s billion citizens.
Given South Africa’s heavy reliance on energy-intensive industries such as mining and manufacturing, it should come as no surprise that the country now boasts Africa’s most comprehensive and transparent energy policy. Ensuring a secure source of power is central to the country’s growth. South Africa currently uses some 40 percent of the total electricity consumed on the continent and outside of a few peak periods where power is imported from the Democratic Republic of Congo (DRC) – the country is largely self-sufficient in power generation. With steadily climbing economic and demographic growth rates, it is clear that the country will require continuous capacity increases to keep pace with projected growth.
Africa Brief: Angola: investment in its minerals, $1bn Eurobond issue, Nigeria, South Sudan and more
Angola, the world’s fifth-largest diamond producer, had cut mine taxes and would spend billions of dollars to attract investment into mineral deposits. The new law is very clear with lots of security for investors, which gives them certainty, transparency and guaranteed mining rights. Angola wanted to diversify its earnings away from the crude oil and diamonds that made up almost all its. Companies with ties to Israel’s LR Group had projects to mine Angola’s estimated 400 million tons of phosphorus and make fertiliser. Australian-listed Minbos Resources had an equal share of the Cabinda Phosphate Project with Petril Projects, a subsidiary of LR Group, and planned to start production in 2015.
A new index of institutional-quality private equity funds in Africa posted an 11.2% annualised return for the 10 years ending 30 September 2012.
This is the first quarterly report of a new African private equity and venture capital index, a collaboration between the African Venture Capital Association (AVCA) and Cambridge Associates.
The wind of change has hit the African continent and economic recovery is on its way. Many institutional investors have woken up to the African call to realise the potential of this continent.
Kofi Annan, former Secretary General of the United Nations, pointed out that although the Africa-wide growth rate of 5.5% was impressive, more had to be done as the poor quality of leadership in Africa risks hampering the continent’s rapid economic growth. Following the World Economic Forum Africa Regional Summit which took place in South Africa in May 2011, world leaders went back to their respective countries with a new frame of mind.
Investing in Mauritius offers a safe and business-friendly location for the investor community and, with its cosmopolitan and bilingual heritage, it is the ideal stepping-stone for investment …
South Africa, Nigeria and Ghana have over the years been the largest recipients of Foreign Direct Investments (FDI) within the African continent as they jointly accounted for about 50% of the FDI inflow into Africa in 2011.
In the second half of 2012, South Africa experienced a sharp decline of 43.6% in FDI compared to the same period in 2011. Despite the sharp decline in the FDI inflow to South Africa, total FDI to Africa increased by 5% indicating increasing flow of FDIs to the other African countries.
The focus of BRICS nations on agriculture and food security has a long history and from the very first BRIC summit in 2009, these countries have made pronouncements on their plans to enhance the agricultural sector. Separate meetings have taken place between BRICS leaders and Ministers in the Agricultural and Agrarian Development portfolios over the years…
KPMG recently hosted a roundtable discussion, lead by its Global Chairman, Michael Andrew, ahead of the Fifth BRICS Summit taking place in Durban this week. This Summit is expected to include a substantial focus on Africa – looking at how the BRICS high growth markets are converging in Africa through investments and partnerships, aiming to leverage the continent’s vast natural resource and mineral reserves for their own continued development.
A panel of experts explore the challenges & opportunities associated with investing in Ghana.
Ghana is one of Africa’s fastest growing economies. Well-endowed with natural resources, agriculture accounts for approximately a quarter of GDP and employs more than half the country’s work-force.
Gold, cocoa and timber exports are the major sources of foreign exchange. Imports such as capital equipment, petroleum and food products are sourced mainly from China and the US.
Home to 43-million people, Tanzania ranks amongst the poorest countries in the world.
The country is reliant on agriculture which accounts for more than 25% of GDP, 85% of exports and employs 80% of the countries workforce.
Tanzania is endowed with vast natural resources and is the only country in the world where Tanzanite is found. The country is also the third-largest producer of gold on the continent which it exports to China, India and Japan.
The 22nd World Economic Forum (WEF) took place in Addis Ababa, Ethiopia themed ‘Shaping Africa’s Transformation’.
The Forum hosted over 700 delegates from around the world who discussed the world who discussed and debated some of the issues required to drive Africa’s growth agenda.
It highlighted the fact that there are huge opportunities for great investment returns in Africa and there was a specific focus on integrating and expanding Africa’s capital markets.
South Africa remains the most targeted country for investment in Sub-Saharan Africa. The value of merger and acquisition investments in Sub-Saharan Africa increased by 18% in 2012, even though globally mergers and acquisitions deals decreased by 7%.
Majority of the M & A were in the materials, energy and power sectors. The Royal Bank of Canada and Golddman Sachs made the two largest investments. South Africa was the most active nation in the equity capital markets in 2012.
Accra, Lusaka and Luanda have been identified as the African cities with the highest potential for growth over the next 5 years. The growth rates were developed taking into account historical and projected future data.
These factors include economic data, governance levels, infrastructure and ease of doing business. Accra’s high growth rate is a result of its growth in gross domestic product per capita and growth in household consumption, ease of doing business and strong regulatory environment.
Accra, Ghana’s booming capital, was identified as having the highest growth potential of any city on the continent, according to the MasterCard African cities growth index, launched in Johannesburg on January 29th. The index was produced by Prof George Angelopulo of the University of SA and Prof George Roger of the University of Cape Town on behalf of MasterCard.
Fraud and corruption will always be at the forefront of the minds of those looking to invest in Africa. In this regard, the recently published KPMG Africa fraud Barometer for 2011 reported some telling statistics about reported fraud on the continent. The Barometer was developed “to form a bigger picture of fraud prevalence on the African continent”, incorporating data from available news articles on Africa and other designated databases. The Barometer compares fraud reports from the six months ended June 2011 to the six months ended December 2011.
The April 2012 World Economic Outlook report published by the International Monetary Fund presented a sturdy but cautiously optimistic future for the various African economies. Sub-Saharan Africa particularly recorded a strong 5 percent growth in 2011 and was one of the regions least affected by the global financial crisis. With the exception of South Africa, limited financial ties to Europe helped shield the region from the financial havoc that tore through Western economies in late 2011.
Many JSE companies are seeing Africa as the new frontier and an important source of long-term growth, especially those companies doing business in mature markets. The International Monetary Fund forecast the region to grow at 5.5% both this year and next. By comparison, South Africa’s economic growth rate is forecast at just 2.7%.
Many international and local companies have introduced products responding to changing consumer needs and consumer preferences shifting to more sustainable behaviour – these include products targeting new and growing industry sectors, products with a ‘green’ element and products responding to new and increasing risks.
SA’s private equity sector last year shrugged off the global economic uncertainty with funds under management topping a record R115bn, including uncommitted funds of more than R34bn, KPMG said yesterday.
While the sector attracted investors seeking exposure to emerging markets, an executive at KPMG said other sub-Saharan African markets besides SA were drawing global private equity funds to regional opportunities.
Road and rail infrastructure development projects are highly advantageous for the future of the domestic economy …
In a world that is looking for alternative investment destinations, Africa is well-positioned as an emerging market and represents a wealth of opportunity for investment and growth. The world is eager to do business in Africa. However, in order for the continent to secure its place in the global economy, properly developed infrastructure that can support business development across the continent, needs to be established first. Infrastructure challenges are a deterrent to investment.
NOT a single rand was raised in this country for investment in early-stage or venture capital-type investments last year. These are the investments that spawn new technologies out of which, if they are successful, new industries are grown and thousands of new jobs created. So why is there such a truly astonishing lack of investment? Speaking at the launch of the KPMG/ South African Venture Capital Association annual Private Equity Industry Performance Survey, KPMG director Warren Watkins told a meagre audience it wasn’t so much a lack of ideas and effort, since there is a more than adequate supply of these, but rather the comparative absence of incentives similar to those applied in other countries.
The 22nd World Economic Forum (WEF) took place in Addis Ababa, Ethiopia themed ‘Shaping Africa’s Transformation’. The Forum hosted over 700 delegates from around the world who discussed and debated some of the issues required to drive Africa’s growth agenda.
With the ongoing financial turmoil in traditional investment markets such as the United States and Europe, investment and expansion into Africa was at the top of the forum’s agenda. The forum highlighted the fact that there are huge opportunities for great investment returns in Africa and there was a specific focus on integrating and expanding Africa’s capital markets.
KPMG’s Africa Conversation series is dedicated to developments in Africa and the implications for the continent’s economy. The Conversations facilitate interaction and knowledge-sharing between KPMG experts, clients, and businesses operating in various economic sectors across the continent.
Topics are selected to reflect the most important and topical opportunities and challenges in Africa, and are discussed by a panel of experts in each field. Sharing our knowledge through this platform is one more way that KPMG adds value to businesses that are active in, or aiming to become active in, Africa.
This episode of the Africa Conversation Series, sees the panel of industry experts putting the spotlight on Africa’s growing relationship with China. What are prospects looking like moving forward, in terms of being able, to leverage off the opportunities that this relationship brings with it and at what cost? It certainly is a sensitive issue right now, following the South African governments failure to grant a visa to the Dalai Lama. With many asking whether the price we are paying for this relationship is actually worth it and whether we are managing this relationship in the best way possiple…
World Bank Chief Economist for Africa, Shanta Devarajan, recently wrote that sub-Saharan Africa in 2011 has unprecedented opportunity for transformation, and sustained growth, and helping to ensure the right energy solutions are available to help achieve this prospect will simultaneously be good for climate protection and local development as well. Still at the threshold of a renewable energy revolution, what are some of the challenges this environment presents and what are some of the opportunities for investors? This is just some of what is discussed in this episode of the KPMG Africa Conversation Series.
In this episode of the Africa Conversation Series, the panel of industry experts discuss the challenges that infrastructure poses of the progression and economic growth of Africa. The constraints to growth posed by inadequate infrastructure – whether it be road, rail, power, or ICT – is all too familiar. There is persistant talk of need to be physically building Africa. In this episode we hear a discussion on the pace of transformation and the strides that have been take in the area of infrastructure in Africa.