A sales representative at a mobile phone store in Kenya’s capital Nairobi Photo: Corbis
Africa’s ICT sector is booming, but prohibitive taxes on mobiles could put a brake on its growth
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Patrons drink beer at a Maputo nightspot in Mozambique Photo: Corbis
Surging demand is fast turning Africa into a major growth region for the world’s biggest brewing companies
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Photo: Corbis Bartenders at a hotel in Lagos, Nigeria
Buoyed by strong growth in Africa’s tourism sector, a number of the world’s largest hotel chains are investing heavily in expanding their geographical footprints on the continent
More . . .- Bob Collymore - Chief Executive Officer, Safaricom
“We started to focus on data and what data can do for ordinary Kenyans – and we believe in the same way as we democratised voice for Kenya, we are about to democratise data for Kenyans”
- The call from home
Encouraged by greater economic and political stability, African professionals living and working abroad are seeking out investment opportunities across the continent
- Lessons learned
With unprecedented investment into the development of Africa’s palm oil industry, governments in the region are trying to avoid past environmental mistakes made in Asia
- Africa Calling
Liberalised market conditions and improving telecom infrastructure are making a number of African countries viable destinations for companies looking to outsource parts of their business operations
- Spending power
With an increasingly visible middle class reshaping the sub-Saharan African investment landscape, the region is attracting unprecedented interest from private equity investors
- Resource deals return to Africa
African resource companies saw a dramatic increase in dealmaking in 2010, as commodity demand returned and perception of sovereign risk on the continent improved relative to developed markets
- Healthy returns
Sub-Saharan Africa’s healthcare sector is increasingly luring in investors, as the growing consumer story offers opportunities to carve out business models that enable companies to meet basic needs while generating substantial profits
- Structuring local solutions
With patchy liquidity continuing to persist in the sub-Saharan African Eurobond market, some investors are branching into local currency bonds
- Leapfrogging Technology
While many mobile operators are mulling strategies for rolling out third generation networks in Africa, some within the industry are asking whether LTE might offer a chance to leapfrog 3G entirely
- Charting a new course
The introduction of new shipping lines and increased container capacity serving Africa reflects the shift East in the continent’s trade relations and a gradual return to pre-crisis appetite
- The illusion of strategy
The large scale of Indian corporate forays into Africa masks a relatively small and parochial diplomatic approach from New Delhi. However, the impact of the new wave of investors should not be dismissed
- “Wild West” seeks cowboys
South Sudan is likely to become Africa’s newest country in a January referendum, but the differing approaches between development bodies and the private sector towards its many challenges are becoming clear
- Dfid means business
The UK’s development agency, Dfid, is to reorient itself to be better able to promote private sector development in low-income countries, and will drastically reform its investment arm, CDC Group
- The rise of formal retail
Growing levels of urbanisation and an expanding middle class in many African economies hint at the massive potential for formal retail. However the difficulties associated with doing business on the continent may still deter leading groups
- US oil rules favour frontier investors
The regulatory response to the Deepwater Horizon disaster has not been as strict as many feared. However, international oil companies may be pushed towards frontier opportunities
- Manoranjan Mohapatra, Chief Executive, Comviva
“Once small application vendors get encouraged to take the plunge, they will then demand more local content – and the ecosystem will emerge and develop. To put it differently, if you build highways, people will buy cars”
- A bad deal?
The proposed privatisation of Nigeria’s former telecommunications monopoly may have little to offer for investors
- QE2 pushes gold higher
Bullion has been bolstered by a second round of US quantitative easing and a beleaguered dollar, continuing its rally of 27 percent this year
- Financing Development
Bond markets provide a competetive source of funding for sub-Saharan Africa’s infrastructure needs, but fears over political instability and fluctuating commodity prices are concerns for potential investors
- Boosting African Trade
Africa’s increasingly vibrant economies and stronger ties with other developing regions are increasing demand for trade finance in the region
- Nedbank offers HSBC little in pan-African prospects
Emerging market players have put South Africa’s banks under the spotlight . However, HSBC’s approach to Nedbank would seem to offer little more than access to the South African market and would barely increase the bank’s pan-African footprint
- Walmart eyes African growth with Massmart bid
Walmart’s offer for South African retailer Massmart indicates interest not only in Africa’s largest economy but in fast-paced consumer growth across the continent
- Ensuring a graceful exit
Kosmos Energy’s recent high profile failed exit in Ghana has brought to the fore the political risks that still haunt private equity investing in Africa, prompting investors to rethink their exit risk management strategies
- From Voice to Data
The virtual absence of fixed networks in sub-Saharan Africa means that mass market broadband usage in the region will depend heavily on the long-awaited global shift towards convergence of voice, data and mobile technology
- A creative spark for Arabic media
ICT and media companies are attempting to build a creative community and spark an upsurge in the production of Arabic content
- Calls for regulation follow cocoa squeeze
The purchase of almost the entire cocoa stock registered with NYSE Liffe by a hedge fund helped drive a spike in prices this summer and is indicative of a lack of transparency in the London exchange
- TIA leaders report: Banking 2010
Over the course of the past quarter, This is Africa has been speaking with senior figures in the banking industry across the continent, as well as to some of the sector’s leading analysts and investors. No two banks are the same, but across almost all TIA’s conversations, three key themes emerged:
- Mobile money goes mainstream
When Vodafone launched the M-Pesa mobile money transfer service through its subsidiary Safaricom in Kenya in February 2007, few could have predicted its success. Originally developed with funding by the UK’s Department for International Development, it has quickly outgrown its development roots. By April of this year the service had 9.5m active users and accounted for approximately $330m worth of person-to-person transactions.
- Indian demand fuels African cashew trade
West Africa is developing into an increasingly significant producer and processor of cashew nuts, feeding into lucrative markets in India
- Nurturing innovation
The Nile Exchange is one of a number of initiatives designed to provide a boost to Egypt’s small- and medium-sized enterprises but these are just a small step on the difficult path towards creating a culture of entrepreneurship in the region
- Regional integration There is a renewed sense of optimism surrounding regional integration in Africa, as the continent’s governments increasingly turn to the private sector as the main driver of economic growth
- Strength in numbers Comesa’s proposal for a common investment area could act as a spur to cross-border investment
- Reforming Senegal’s customs A public-private partnership has vastly improved the customs clearing procedures at Dakar port
- The rebirth of the East African Community A new report from brewer SAB Miller, “The East African Community: Why this time is different,” gives a cautiously optimistic assessment of the East African Community’s prospects in building a coherent regional economic and political framework at the second attempt.
- African operators seek new frontiers Much of Africa’s mobile revolution has been concentrated in a few countries, but with increasing levels of competition, operators are looking to expand into non-traditional markets in order to secure future growth
- Signposting the route to private investment Attracting private investment back into African infrastructure will be critical if the continent is to open up bottlenecks and catalyse development
- The Engine Room While small enterprises are the lifeblood of African economies, they often struggle for financing. but are things changing?
- A golden opportunity Africa's low level of connectivity to international air routes risks putting a brake on ambitions to boost Southern Africa's tourist industry on the back of this year's World Cup
- Alive and kicking The African microfinance industry appears to be in good health despite worries that the financial crisis would hit it hard, but concerns over management quality and legislative hurdles remain
- Bharti closes on Zain India’s largest mobile operator is on the verge of fulfilling its ambition of establishing a major presence in Africa. Success would transform the company into an emerging market multinational; a development that could have far-reaching implications
- Passport to growth Advances in biometric identification technology could be used by African governments to improve social and political inclusion and spur economic development on the continent
- Investing against the flow Private equity is proving a popular vehicle for private and public investors in Africa as it demonstrates development benefits and high returns
- Upwardly mobile Continued growth in the continent’s mobile subscriber base and an expected shift towards more sophisticated devices in the coming years could make Africa the next frontier in the global mobile handset market
- Unlocking Africa’s broadband potential The arrival of fibre-optic cables on Africa’s shores provides an opportunity for operators to open up broadband markets across the continent, although these undersea cables are only one part of the access puzzle
- A boost for bonds Indications that liquidity and demand will return for African sovereign issuance bode well for new players looking to boost their financing options
- Adapting to an uncertain future Commodity producers hit by volatile prices are looking for effective hedging tools to mitigate the risks.
- Sustainability concerns for Kenyan tea The frenzy over high tea prices in East Africa could be disguising more long term, structural shifts in production of the commodity, as climate change and local environmental degradation weakens crops
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