This Week in Africa Finance

Welcome back to your weekly essential briefing on African finance and why it's important.

Today's email:

• Sovereign Finance : Ivory Coast get BB- rating, highest in Africa.
• Industrials: Safaricom Ethiopia seeks $350 million Debt from IFC.
• Marco and Market Matters: Kingdom of Eswatini issues $217 million bond
• Sovereign Finance: Malawi secures $7.7 million grant
• Infrastructure and Project Finance: Nigeria receives $1.44 billion investment.
• Deals: Unmissable deals of the week

Sovereign Finance

Ivory Cost Achieves Highest African Credit Sovereign Rating by S&P Global Ratings.

Ivory Coast has achieved the highest African credit sovereign rating at BB by S&P Global Ratings.

Why is this important: Ivory Coast recently issued the first Eurobond in Sub-Saharan Africa since April 2022, signalling its potential as one of Africa's fastest-growing economies. Moody's also raised Ivory Coast's rating to Ba2, just two levels below investment grade, placing it on par with South Africa, showing global confidence in the government's economic reforms. Its National Development Plan (NDP) 2021–2025 has effectively led to a growth rate of 6.90% in Q3 2023 and a projected GDP growth of 7.0% in 2024.

The bottom line:  Ivory Coast is setting a positive example for other African countries to learn from. The country is consistently implementing policies to maintain macroeconomic stability and increase private investment in order to grow its economy. As a result, it has achieved a manageable debt-to-GDP ratio of 56%, which will pay off in the long run. Additionally, it is staying true to its policy goals.

Further Reading : https://www.africafinancereview.com/ivory-coasts-economic-reform-spurs-africas-highest-sovereign-rating-by-moodys/

Industrials

Safaricom Ethiopia Seeks $350 million Debt from IFC.

Safaricom Ethiopia is seeking to raise $350 million in debt from the International Finance Corporation (IFC).

Why is this important: This marks the second time that Safaricom Ethiopia has raised debt funding from the IFC. In June 2023, the telecom provider secured a $157.4 million equity investment in the Global Partnership for Ethiopia (GPE) and $100 million for the initial development and deployment of the company's mobile money product and network services. The new funding which will be used to further develop the telco's telecommunication network and mobile money services, consists of $150 from the IFC's investment account, and the mobilisation of up to $200 million from other development finance institutions (DFIs) and lenders.

The bottom line: Safaricom has a unique position with a 33% coverage of the population, and with new investment from the IFC , it can expand that coverage. According to its latest quarterly update, the company has achieved 4.3 million 90-day active customers as of December 2023. With a gross customer addition of 9.0 million since its launch in one of the largest mobile markets in Africa, Safaricom has the potential to become a dominant player.

Marco and Market Matters 

• Nigeria's inflation rate increased to 33.69 per cent in April 2024 up from 33.20 per cent in March 2024. However, the monthly rate of food price increase decreased from 3.02 per cent in March 2024 to 2.29 per cent in April 2024.
• The Bank of Ghana maintained its benchmark monetary policy rate at 29 per cent for the third consecutive meeting on May 27th, 2024.
• Sao Tome and Principe's, annual inflation rate reached an eight-month high of 19.2 per cent in April 2024, up from 18.9 per cent in the previous month.
• The Government of the Kingdom of Eswatini issued a $217 million 'Protea Bond' through Absa Bank Limited on the Johannesburg Stock Exchange’s (JSE).

Sovereign Finance.

• Malawi has received $7.7 million from the Africa Development Fund Board (ADFB) to support its economic program in the agriculture sector and address the impacts of climate change.
• Rwanda secures $164.6 million in vital financing from the IMF Read More

Infrastructure and Project Finance

• Nigeria has received a $1.44 billion investment from the African Development Bank to support its energy, power, transport, water, and sanitation infrastructure projects.
• US infrastructure investment manager Everstrong Capital and Kenya's Highways Authority have signed a $3.6 billion agreement to build a 440 km highway between Nairobi and the port city of Mombasa.

Trade Finance

• African Development Bank (AfDB) and Banque Centrale Populaire (BCP)sign $70million Trade Finance Agreement Read More

Banking Essentials

• Egypt-based EFG Hermes a leading financial partner in MENA markets has acquired an undisclosed minority stake in the Danish digital wealth manager Kenzi Wealth. 

Deal Flow 

M & A 

• South Africa-based mobility startup Ratality has been acquired by Canadian-based Busbud to expand its business offering.
• Santam, a South Africa-based insurer, has acquired Kandua, an online marketplace company for home services.
• Philip Morris International (PMI) the American multinational tobacco company has acquired a 14.7 % minority indirect stake in Egypt-based Eastern Company, the country's largest cigarette manufacturer.

Technology, Media and Telecoms .

• Egypt-based logistics startup OneOrder has secured $16 million in Series A funding to expand its operations.
• South Africa-based anti-fraud management startup Orca Fund has raised $500k in a pre-seed funding round.

Private Credit

• Tanzania-based glass manufacturer Kioo has secured $60 million in debt fro the The International Finance Corporation (IFC) and Standard Bank of South Africa to fund its expansion plans.The International Finance Corporation (IFC) will provide up to $45 million, while Standard Bank of South Africa will provide the remaining $15 million.
• Francophone Africa-focused logistics startup Maad has secured a $3.2 million investment, consisting of both debt and equity. The equity investment was led by Ventures Platform, and includes Reflect Ventures, Seedstars International Ventures, Oui Capital, Launch Africa, Voltron Capital, and Alumni Ventures. The debt financing was provided by Proparco and local banks.
• Abu Dhabi-based alternative investment manager Shorooq Partners with an investment focus in North Africa and the Middle East has completed the first close of its $100 million second private credit fund, with Korea’s IMM Investment Global (IMMG), joining as a minority partner.

GP/LPs Activities

• SPE Capital is set to acquire a minority share in Morocco-based consumer goods company Dislog for 450 million dirhams ($45.2 million).
• Injaro Investment Advisors, a Ghanaian private equity firm, has acquired Outdoor Holding Limited (OHL) through its Injaro Ghana Venture Capital Fund (IGVCF). OHL holds a majority equity in DDP Outdoor.
• Inua Capital, the Uganda SME Impact Fund, has made an investment in Equator Chocolate, a manufacturer of premium and high-quality chocolate. The company aims to establish a strong global presence in the near future.
• AFC Capital Partners, a 100% owned subsidiary of Africa Finance Corporation, has secured an equity investment of $50 million in its Infrastructure Climate Resilient Fund from The European Investment Bank. The Fund, with a target size of $750 million, will focus on climate-resilient infrastructure investments across the continent.

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