African Finance Corporation set to begin operations by mid-April 2007

Notice IT services is not mentioned as one of the key sectors where it seems that if the public and private sector were aligned in individual countries, this sector would also deserve much attention as it has in Rwanda.

“The key sectors have been identified as: Agriculture, Power, Energy, Telecommunications, Financial Services, Mining and Fast Moving Consumer Goods, with Tourism mentioned as an additional area of investment”.
  

Nigerian team in South Africa to sell African Finance Corporation

27 March 2007
Central Bank of Nigeria

The Central Bank of Nigeria today visited South Africa as part of an international road show to interest business in investing in the African Finance Corporation, a private sector-driven African investment bank that will commence operations in mid-April 2007.

At an investor forum held in Sandton, Central Bank of Nigeria (CBN) Governor Prof Charles Soludo outlined the background to the institution, the business case for its existence and future prospects. The AFC, modelled on the lines of the International Finance Corporation, the private sector arm of the World Bank, is an initiative of the Federal Government of Nigeria, driven by the CBN.

Macro Accounts show solid performance and stability for Ghana

Buoyed by private remittances, Ghana saw an increase in its BOP surplus while the cedi depreciated against the major currencies. 

Private Remittances Rake In $5.78bn (www.ghanaweb.com) 

Private inward transfers through the banks and finance companies from January to December 2006 amounted to $5.78 billion, which represents a 21.5 per cent increase over those for 2005, Dr Paul Acquah, Governor of the Bank of Ghana, has announced.He said the foreign exchange market remained buoyant in 2006 with purchases and sales of foreign exchange by the banks and forex bureaux increasing by 16.6 per cent over the 2005 level to $6.8 billion.

Fitch Ratings upgrades Malawi’s long-term foreign currency issuer default rating

One of the ironies of debt relief is that it allows countries better terms on the issuance of more debt. It is vitally important for Goodall Gondwe, the Ministry of Finance and the Malawian government to continue on this path of fiscal discipline and diligent policy-making in order to be taken seriously by outside investors and perhaps more importantly, the plethora of Malawi nationals living outside their homeland waiting for the opportunity to remit serious cash flows back to the motherland.  Health, education, irrigation and infrastuctrual developments together with a mixed inflow of capital from investors and donors need to be key objectives in reaching private and public sector development on an altogether different scale than Malawi’s neighbors who at the moment, need more incentives to particpate in development projects with the small landlocked country.

Reuters South Africa – Johannesburg,South Africa
LILONGWE (Reuters) – The latest Fitch rating upgrade for Malawi will boost donor confidence and foreign investment, Finance Minister Goodall Gondwe said on Friday. “This is a signal to the rest of the world that Malawi is ready to participate in the global economy and that it has the ability and is willing to repay debt,” Gondwe told a conference. Fitch Ratings last week announced that it had upgraded the long-term foreign currency Issuer Default rating of Malawi to ‘B-’ (B minus) with a stable outlook, from ‘CCC’. “This upgrade of B- is nothing to write home about but considering our circumstances and where we are coming from this is very important because it will help build more donor confidence, increase investment and it signals our road to economic recovery,” Gondwe said. The World Bank and the International Monetary Fund cancelled $2.9 billion of Malawi debt in September last year. But Malawi remains one of the world’s poorest nations with annual per capita income of about $160, and continues to rely heavily on foreign aid despite the debt relief. External debt slid to 23 percent of GDP at the end of last year compared with 142 percent at the end of 2005. Charles Seville, associate director of Fitch’s Africa and Middle East sovereign team, told delegates to the conference that other positive developments in Malawi include a cut in the fiscal deficit and tighter controls on public spending … 

Alcatel-Lucent wins $240 million African cable deal

In January, Flag Telecom, a unit of Indian firm Reliance Communications, said it planned to build a submarine cable around the east of Africa.  On March 9, 2007, Reuters Africa reported that the French company, Alcatel-Lucent  has been awarded a $240 million contract to build a telecoms cable around East Africa. Flag Telecom had stated in January that it was willing to invest $1.5 billion in their own project while an advisor to the East African Submarine Cable System (EASSy) (now in Alcatel-Lucent’s hands), was quoted as saying that the Flag project would need to get approval from the same African governments who have just completed the EASSy agreement.  For more information on the EASSy project, go to NEPAD’s e-Africa Commission website.

Ghana looks to raise $500 million via the bond market

Just as Ghana is reaching its 50 year mark since independence and the subsequent socialist leadership of the ‘pan-Africanist’ Kwame Nkrumah, the prospects for new and continued growth remain positive.   The World Bank Group reports,”In a major new state-of-the-art move on March 1, practically all donors (covering 95% of flows to Ghana) signed an innovative commitment, the Ghana Joint Assistance Strategy – G-JAS.  Covering a four-year program, with as much as US$5.3 billion, the G-JAS partners commit to back Ghana’s national development strategy at the highest best-practice levels, harmonizing work and backing results with efficient resource utilization.”

“For 2007 the Bank is committing to more than $400 million in new finance.  The World Bank Group is also seeking to combine the tools of the whole World Bank Group, including IFC and MIGA, for innovative financing solutions to expensive infrastructure investment.”

AllAfrica.com pulled a recent article from the Public Agenda in Accra that describes Ghana’s plans for its first international sale of of bonds “to help spur a market for corporate debt” (http://allafrica.com/stories/200703050502.html).

Ghanaweb.com (http://www.Ghanaweb.com) reported today on Paul Wolfowitz and the World Bank’s engagment in Ghana as well as specific projects in cocoa processing, horticulture product storage facilities, internet service provision and municipal governance (as well as one project near and dear to my heart – mushroom farming (http://www.ghanaweb.com/GhanaHomePage/economy/artikel.php?ID=120242)) that are helping to diversify the economy that is still largely commodity/natural resource-based.

Ghana has been the recent beneficiary of increased commodity prices (i.e. gold) and debt relief that is allowing the country more favorable credit ratings (see article at allAfrica.com that mentions recent Fitch ratings) and to become a more attractive destination for investors looking for higher returns but more importantly, a much safer asset class in African countries less burdened by debt overhang and showing signs of sustained growth and sound governance.

Regionally, Cote D’Ivoire has signed a peace accord that if held by all parties involved, could see the re-emergence of the world’s largest cocoa producer and West African success story of the 1990s (http://news.bbc.co.uk/2/hi/africa/6417349.stm). 

Surveys suggest little worry among Africa’s business leaders about Chinese competition

Despite all of the rhetoric coming out of Western media outlets about the ‘colonialist’ aspirations of Chinese investments in Africa, recent surveys suggests business leaders in Kenya, Uganda and Tanzania do not feel threatened by Chinese business coming into their countries.  Of course, these countries are not overflowing with oil where China’s interests in Africa are receiving the most political attention, but the article suggests business people in sectors like agriculture and tourism see the Chinese presence as a chance to mold solid partnerships with the Asian nation that will mutually benefit both countries overall.

Another recent article found online states:(http://www.greenleft.org.au/2007/701/36384)

According to the most recent UN figures, toyal FDI holdings in Africa in 2005 were worth $96 billion, of which European firms accounted for 61%, US firms 20%, Asian firms 8% and South African firms 2%. Of the $29 billion of FDI that went into Africa in 2005, only $1.2 billion (4.1%) came from China.

Flows of Chinese capital into China will always seem threatening to those foreign policy-makers still tossing and turning at night remembering the Cold War and the ongoing fight for influence throughout the world. For the new generation of African business people that are active and thinking on their feet, these capital flows that aren’t necessarily going only into natural resources or that might now have a better chance of trickling down with more sound governance, Chinese dollars are valued the same as U.S. dollars. And as the above UN figures show, these Chinese dollars are still miniscule in comparison with U.S. and European capital stocks and flows. 

`Chinese firms no threat to East Africa`
 
2007-03-03 08:51:00
By Mwondoshah Mfanga

Kenya and Uganda businesspersons say their businesses are least likely to be affected by Chinese presence in Africa and have therefore embraced them in some of their businesses.

According to Tanzania Business Leaders Confidence Index surveys done by Steadman Group and presented by its Managing Director George Waititu yesterday, 20 per cent of businesspersons in the two East African countries showed that Chinese ventures in Africa were of little or no effect on their businesses.