This Week in Africa Finance

Today's email:

• Fixed Income: WAEMU Countries raise $239.8 million in Fixed Income
• FDI: Ethiopia nears $3.5 billion FDI goal.
• Marco and Market Matters: South Africa keeps interest rate.
• Infrastructure and Project Finance: Asian Infrastructure Investment Bank to invest $1 billion in Africa.
• Deals: Unmissable deals of the week.
• GP/LP Activities: Amethis Fund III €25 million and more.

Fixed Income

West African Economic and Monetary Union (UEMOA) Countries Raise $239.8 million from Bond Markets.

The West African Economic and Monetary Union (UEMOA) countries have raised $239.8 million in fixed-income transactions.

Why does this matter: Agence UMOA-Titres is the regional agency that handles fixed-income issuance and management of government securities in the WAEMU area, which includes French-speaking African countries such as Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo. These countries issue securities ranging from 182 to 364 Treasury bills, with Ivory Coast exceeding offers beyond its target raise of CFA50 billion in recent issues that achieved $239.8 million from May 27 to May 31, 2024. Ivory Coast expects to return to the market this week to raise CFA65 billion, while Burkina Faso is seeking to raise CFA30 billion.

The bottom line: This impressive fixed income raise demonstrates the growing importance of these transactions in the region's financial landscape. It has also become an essential source of budget financing for these countries in the current sovereign financing climate. The trend is expected to continue as African countries explore innovative ways to leverage local financial markets to meet their needs, especially as they increase infrastructure spending to boost their economies.

Foreign Direct Investment

Ethiopia On Track to Achieve $3.5 Billion in Foreign Direct Investment(FDI).

Ethiopia received $3 billion in foreign direct investment (FDI) in the first ten months of the current fiscal year.

Why does this matter: Ethiopia is implementing policies like encouraging foreign banks to invest and operate local operations and making significant infrastructure investments, including road construction and industrial park development, to create a business-friendly economy. However, the country has faced challenges, such as missing a $33 million coupon payment on its $1 billion Eurobond last year, which led to an extension by the Paris Club. Despite this, it is fast approaching it's approaching its $3.5 billion target in FDI inflows, with China remaining the largest contributor to GDP,

The bottom line: In light of the above, Ethiopia's business-friendly reforms, like establishing a securities exchange body and allowing foreign financial market operators to participate in the economy, are beginning to yield results. The government must continue implementing its economic reforms to achieve its targeted GDP growth of 6.2% and FDI goal this year.

Marco and Market Matters 

• Nigeria's PMI rose to 52.1 in May 2024, up from 51.1 in the prior April
• The South African Reserve Bank kept its key repo rate at 8.25% on May 30th, 2024

Sovereign Finance.

• Ghana has finally secured an agreement with its bilateral creditors to restructure $5.4 billion of debt, leading to the IMF disbursement of $360 million under the bailout program, which will provide much-needed liquidity.

Infrastructure and Project Finance

• Morocco plans to fund its infrastructure spending through derivatives trading on its stock market.
• The Asian Infrastructure Investment Bank (AIIB) plans to invest $1 billion in Africa to support infrastructure growth.

Banking Essentials  

• The government of Algeria plans to establish a bank in China to promote its exports to the Asian country following the launch of two banks in Mauritania and Senegal last year.

Deal Flow 

M & A.

• UAE-based AD Ports Group and East Harbour Terminals Ltd have acquired a 95% stake in Tanzania International Container Terminal Services Ltd for $39.5 million.

Technology, Media and Telecoms.

• OneOrder, the Egypt-based logistics solution provider for the hospitality industry, raised $16 million in equity and debt in a Series A round led by Delivery Hero Ventures, Norrsken22 and A15.
• Senegal-based LAfricaMobile, a cloud communication and mobile marketing solutions provider, has secured €4.3M in Series A funding.

Agribusiness

• Morocco-based ag-tech YoLa Fresh has secured a $7 million pre-Series A funding round. The round was led by Al Mada Ventures and participated in by Algebra Ventures, E3 Capital, Janngo Capital, and the Dutch entrepreneurial development bank FMO.

GP/LPs Activities

• British International Investment, the UK’s development finance institution, has committed $30 million to Helios Towers’ $850 million public bond offering.
• IDF Capital, through its Alitheia IDF Fund (AIF), has invested $2.8 million in Alma Clinics, a nurse-led tech-enabled private primary healthcare clinic chain.
• Adenia Partners, a Kenya-based private markets investment firm, has sold its holdings in Cresta Paints, a Ghana-based company, to Uhuru Investment Partners, a middle-market private equity firm.
• Amethis, the pan-African fund providing private equity, has secured a €25 million investment from the European Investment Bank (EIB) for its Amethis Fund III.
• Sech Capital, the South Africa-based black and female-founded growth capital impact firm, has appointed Nina Verder as principal and operator-investor.
• The global non-profit firm Accion has appointed Karthik Venkataraman as its chief operating officer.
• Mediterrania Capital Partners, the African SME private equity firm, has announced Maty Ndiaye as the Managing Director for the West Africa region.
• Spear Capital, a private equity fund based in Norway, has invested in Zimbabwe-based Efood.

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