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Nigeria, Ethiopia, Kenya Lead 2017 FDI Flow in Africa

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South Africa shares the title of largest African FDI hub with Morocco; Southern, West, East and North Africa all receive more or less equal FDI (measured in project numbers); The USA remains the single biggest country investing in Africa, while Western Europe is by far the biggest regional investor.
According to EY’s latest Africa Attractiveness report, FDI was up across the continent last year, although South Africa experienced a fall in project numbers, on the back of continued weak domestic growth.
The EY 2018 report, ‘Turning Tides’, provides an analysis of FDI investment into Africa over the past ten years.

The 2017 data shows that Africa attracted 718 FDI projects which is up 6% from the previous year. This was in line with a recovery in the continent’s economic growth, following a difficult preceding year.
The higher project numbers were driven by interest in ‘next generation’ sectors, namely manufacturing, infrastructure and power generation. Despite the rise in FDI, project numbers remain below the 10-year average of 784 projects (per annum).

The report also highlights the countries with the strongest FDI gains, with Ethiopia, Kenya and Zimbabwe experiencing a major uptick in FDI during the 2017 year. By contrast, South Africa, Egypt, Mozambique and Cote d’Ivoire experienced declines in FDI projects in the same year.

Ajen Sita, EY Africa CEO, says “2017 was in many respects a key year for the continent. We saw multiple changes in leadership across a number of countries, including South Africa, Zimbabwe and Angola. In addition, Kenya’s election was drawn out which created uncertainty at the time. Changes in leadership have in turn led to a renewed urgency to implement fresh policies as new administrations move to address slow economic growth.”    

Emerging market investment into Africa slows
2017 saw a noticeable decline in emerging market investment flows into Africa. This is a major turnaround from the previous year when Asia-Pacific investors strongly increased inbound investments. Last year, investments from this region fell 16% while intra-African FDI also fell by 14%.

The weaker intra-African flows were largely driven by a weaker appetite by both Moroccan and Kenyan investors into neighbouring countries. South Africa’s outward investment project numbers held steady as weak domestic growth saw companies continue the search for external growth opportunities across the continent.

North American (primarily the USA), and Western European FDI flows to the continent remain strong

After the USA, which remains the single largest country investing into Africa, three of the remaining top five investors are European, namely the UK, France and Germany. Of the ten largest investing countries in Africa, six are Western European.

FDI is more evenly allocated across the regions, as South Africa’s lead narrows

The report found that South Africa, Morocco, Kenya, Nigeria and Ethiopia were the dominant anchor economies within their respective regions, collectively accounting for 40% of the continent’s total FDI projects.

Overall these four major sub-regions each attract similar FDI when measured by project numbers. For the first time ever, East Africa became the single largest beneficiary of FDI with 197 projects (27% of total projects). Southern Africa, by contrast, fared lowest of the four major regions, at 162 projects (23%).

Whilst South Africa remains the continent’s leading FDI destination when measured by project numbers, for the first time ever the country’s lead is under threat with Morocco increasing its FDI projects by a sizeable 19% to share the top spot with South Africa.

“Over time and as Africa’s growth accelerates, we anticipate that South Africa’s share of inbound FDI will continue to decline, relative to the rest of the continent. This will be driven by sustained strong growth, particularly in the Eastern-hub economies, and revived growth in the West hub. It illustrates the need for South Africa to ensure its leading economic role across the continent is sustained”, says Sita.

Next steps to increasing Africa’s FDI
”There are major opportunities that the continent can benefit from after the recent leadership changes we have witnessed. These opportunities require emboldened leadership to drive renewed policy reforms and implement new initiatives which encourage inbound investment flows.

There are some outstanding examples of how this has already worked in some countries, not least Rwanda, which is able to attract FDI well ahead of other economies of similar size, and indeed, ahead of much larger economies.

By focusing on improving public sector efficiencies and finances, minimizing bureaucratic processes and partnering with the private sector on major projects, more countries can stimulate much needed FDI. In addition, they should continue to focus attention on increasing their scores on the ease of doing business and global competitiveness rankings”, Sita concludes.

SYNLAB, Others Provide Free Medicals to Indigent Nigerians

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Synlab, formerly PathCare Laboratories, in partnership with Classic FM and more than 20 other medical and non-medical care providers in Nigeria, came together for the 2018 Doctors On Air Medical Mission program which took place at the Bariga LCDA in Lagos State on Saturday, 13 October.

The residents were checked, tested, treated and where necessary, referred for further medical attention, all for free.

Doctors on Air is a weekly health program focused on preventive healthcare, it airs every Wednesday at 8am on Classic FM and 8.40am on Naija FM. One of the important tenets of DOA is to encourage the populace to Know their Numbers, by having routine check ups to keep healthy.

Whilst most people can go to SYNLAB to have these wellness checks qualitatively done, there are some people who cannot afford it. The Chief Host, Dr Pamela Ajayi, emphasised the importance of knowing your numbers through the weekly program by creating awareness around diseases, prevention and treatment.

The annual Medical Mission is designed to make medical services accessible to communities who cannot ordinarily afford private healthcare services.

The mission was set up initially to provide these services but has expanded to provide qualitative services offered by the specialist consultants who come on the program, for example the ophthalmologists provided free glasses and used latest technology for glaucoma checks, cardiologists used specialised equipment for the heart screening such as ECGs and echocardiogram, other screening done were breast, cervical and prostate cancer. Deworming for adults and children was done, along with special dental care and health talks on various topics. Doctors on Air is sponsored by SYNLAB.

It is estimated that over 10,000 Nigerians have benefited from the annual Doctors on Air Medical Mission over the past 7 years. Among the beneficiaries of the 2018 event were children, teenagers, adults and the elderly including Mama Misirat Bello and Mama Lambo Rafatu, both in their 80s.

They were full of praise for the program which offered them high quality healthcare with referral for further care afterwards, all free of charge. Mrs. Abosede Amos whose son, Daniel Amos, was examined and treated for eye defects was one happy mother who commended and praised SYNLAB and its partners for the laudable program.

The Chairman of the Bariga Local Community Development Area (LCDA), Bar Kolade Alabi, addressed members of the community at the venue encouraging them to make the most of the opportunity that the program presented.

“We had promised that if elected, we would focus on programs that are mass inclined and help the individuals in the community live better lives.”

SYNLAB and the community of Bariga LCDA took turns to acknowledge and appreciate the support and contributions  of the key sponsors of the 2018  Doctors-On-Air medical mission – Classic FM, Naija FM, Bridge Clinic, Leadway Assurance, Chike Okoli Foundation, The Eye Doctors Clinic, SKKY Dental Clinic, Paelon Memorial Hospital, Lakeshore Cancer Center, Optimal Cancer Center, Nigerian Association of Dermatologist, Medical Women’s Association of Nigeria (MWAN), Lagos State Blood Transfusion, Smile 360 Dental Services, Health Plus, Reals Pharmaceuticals, Dara Foundation, Renaissance Medical Center, Medplus Healthcare, Ultimate Eye Clinic, Metro Eyes Nigeria, Sight City, Men’s Clinic, Euracare Medical Center, Choice Dental Clinic, May and Baker, Mopheth Pharmaceuticals, Zolon Healthcare, Emzor Pharmaceuticals, JNC International, Maryland Rotary Club, Bariga LCDA, MTV Shuga in partnership with the Society for Family Health and Oceanic Health.

African Leaders Seek World Bank Support on Power

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Speaking at the World Bank meeting in Bali this month, Jim Yong Kim, the World Bank President, said that African leaders approached him and said that they need more support to provide base-load power in their countries.
He said that these African leaders are telling him it is wrong for institutions like the World Bank to tell them they cannot use fossil fuels for base-load electricity.
Speaking in Bali, Kim said that leaders across the developing world are telling him: “You’ve come to us in Africa who have put almost none of the carbon in the air and you can tell us we can’t have base-load electricity. You’re outraged by climate change, we have almost no responsibility for putting the carbon in the air and yet you’re telling us we can’t develop and have base-load energy because we can’t use a single drop of fossil fuel for our own energy needs. And I can tell you, when I hear that from our leaders, from people in industry, in places like Africa, it’s compelling to me.”
An estimated 1.1 billion people – 14% of the global population – do not have access to electricity according to the International Energy Agency. The World Bank has announced it will not fund upstream oil and gas projects from 2019 onwards, which follows a similar ban on coal financing.
Kim added at the Bali meeting: “We feel that you have to listen to the social justice arguments from people from poor countries who have not put any of the carbon in the air and want to have base-load.”
It was reported in May by Bloomberg that climate talks organised by the United Nations ended with “developing countries demanding more clarity from their richer counterparts on when a promised package of $100 billion in finance will materialise.” The piece said that “developing nations want more detail on what money is coming before signing up to the Paris rules.”
In late 2017, Standard and Poor’s released a report questioning where $100 billion would come from, citing a need for many countries to increase budgets and debt burdens to finance their pledges
The report by Standard and Poor’s said: “In our view, it is very unlikely that governments would be willing, or able, to risk deteriorating their creditworthiness by stretching their budgets and debt burdens to fund the implementation costs.”

IATA Forecasts 8.2bn Air Passengers by 2037

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The International Air Transport Association (IATA) revealed that present trends in air transport suggest passenger numbers could double to 8.2 billion in 2037.

The latest update to IATA’s 20-Year Air Passenger Forecast, shows that an increasing shift Eastwards in the center of gravity of the industry is behind the continued strong growth. Over the next two decades, the forecast anticipates a 3.5% compound annual growth rate (CAGR), leading to a doubling in passenger numbers from today’s levels.

The Association warned, however, that growth prospects for air transport, and the economic benefits driven by aviation, could be curtailed if protectionist measures are implemented by governments.

“Aviation is growing, and that is generating huge benefits for the world. A doubling of air passengers in the next 20 years could support 100 million jobs globally. There are two important things that stand out about this year’s forecast. Firstly, we are seeing a geographical reshuffling of world air traffic to the East. And secondly, we foresee a significant negative impact on the growth and benefits of aviation if tough and restrictive protectionist measures are implemented,” said Alexandre de Juniac, IATA’s Director General and CEO.

Eastward shift in aviation’s center of gravity continues

The Asia-Pacific region will drive the biggest growth with more than half the total number of new passengers over the next 20 years coming from these markets. Growth in this market is being driven by a combination of continued robust economic growth, improvements in household incomes and favorable population and demographic profiles.

  • China will displace the United States as the world’s largest aviation market (defined as traffic to, from and within the country) in the mid-2020s. The rebalancing of China’s economy towards consumption will support strong passenger demand over the long term.
  • India will take 3rd place after the US, surpassing the UK around 2024.
  • Indonesia is forecast to be a standout performer—climbing from the world’s 10th largest aviation market in 2017 to the 4th largest by 2030.
  • Thailand is expected to enter the top 10 markets in 2030, replacing Italy which drops out of the ranking.

 

Globalisation Reversed or Liberalisation Increased?

The 3.5% CAGR to 2037 assumes an unchanged policy framework over that period. Policy shifts, however, are likely over time. Should protectionism continue to expand in a “reverse globalization” scenario, aviation would continue to grow, but at a slower pace and deliver fewer economic and social benefits. Under a liberalised environment connectivity would generate significantly more jobs and GDP growth.

“Global prosperity depends on air connectivity. Aviation is sensitive to policies that either support or undermine growth. And these seem to be pointing in the wrong direction. Dampening demand for air connectivity risks high quality jobs, and economic activity dependent on global mobility. This forecast is a cautionary warning to governments. First, the industry will grow but they must clear the infrastructure bottlenecks to bring that growth to their home markets. And secondly, governments must understand that globalization has made our world more socially and economically prosperous. Inhibiting globalization with protectionism will see opportunities lost,” said de Juniac.

Scenario CAGR      Total Pax in 2037

Origin-Destination (O-D) passengers

Jobs Supported in 2037 GDP Supported in 2037 (2016 prices)
Reverse Globalization 2.4% 5.7 billion 90 million $4.6 trillion
Constant Policy 3.5% 7.0 billion 100 million $5.5 trillion
Maximum Liberalization  5.5% 10.3 billion 119 million $7.6 trillion

Source: IATA/Tourism Economics & Oxford Economics

Infrastructure and sustainability

No matter which growth scenario comes to pass, aviation faces an infrastructure crisis. Governments must work closely with the industry, to be more ambitious in developing efficient infrastructure, fit for purpose, and offering value for money.

“The world stands to benefit greatly from better connectivity. However, at this rate, airports and air traffic control will not be able to handle demand. Governments and infrastructure operators must strategically plan for the future. Decisions made now will have an impact on the value created by aviation for their regions,” said de Juniac.

The increased demand to fly creates a responsibility to expand in a sustainable manner. The aviation industry remains committed to its goals of carbon-neutral growth from 2020 onwards and cutting CO2 emissions to half 2005 levels by 2050. “Commercial aviation is one of the only global industries to take on such comprehensive environmental targets. With mandatory emissions reporting beginning on 1 January 2019 under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), this will help rally the industry to invest in more fuel efficient aircraft and sustainable aviation fuels,” said de Juniac.

Key facts
Fastest growing aviation markets in terms of annual additional O-D passengers from 2017 to 2037 (constant policies scenario):

  • China: 1 billion new passengers for a total of 1.6 billion
  • US: 481 million new passengers for a total of 1.3 billion
  • India: 414 million new passengers for a total of 572 million
  • Indonesia: 282 million new passengers for a total of 411 million
  • Thailand: 116 million new passengers for a total of 214 million

Regional growth (‘constant policies’ scenario) in 2037

  • Routes to, from and within Asia-Pacific will see an extra 2.35 billion annual passengers by 2037, for a total market size of 3.9 billion passengers. Its CAGR of 4.8% is the highest, followed by Africa and the Middle East.
  • The North American region will grow by a CAGR of 2.4% annually and in 2037 will carry a total of 1.4 billion passengers, an additional 527 million passengers.
  • Europe will grow at a CAGR of 2.0%, and will see an additional 611 million passengers. The total market will be 1.9 billion passengers.
  • Latin American markets will grow by a CAGR of 3.6%, serving a total of 731 million passengers, an additional 371 million passengers annually compared to today.
  • The Middle East will grow strongly with a CAGR of 4.4% and will see an extra 290 million passengers on routes to, from and within the region by 2037. The total market size will be 501 million

Africa will grow by a CAGR of 4.6%. By 2037, it will see an extra 199 million passengers for a total market of 334 million.

Coscharis Motors Unveils new Ford EcoSport at Abuja Motor Fair

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Coscharis Motors, exclusive distributor for Ford in Nigeria, unveiled the new EcoSport compact sports utility vehicle (SUV) at the Abuja International Motor Fair.

“We are thrilled to introduce the new Ford EcoSport to the Nigerian market,” says Abiona Babarinde, General Manager, Marketing and Corporate Communications at Coscharis Motors. “The vehicle comes with more advanced features, more refined styling, and more sophisticated technologies.”

“The EcoSport is a popular model in Nigeria,” says Babarinde. “And the new EcoSport offers customers even more style, comfort, capability, and choice – blending rugged SUV functionality with city car practicality – making it more appealing and competitive than ever.”

  • Powerful and efficient

The new EcoSport is powered by Ford’s proven range of 1.5-litre engines, linked to front-wheel drive. The 1.5 TiVCT petrol unit produces 90kW (123PS) of power matched to a peak torque output of 151Nm. It is available with a five-speed manual or six-speed automatic transmission on the EcoSport Ambiente, or in automatic guise on the Trend and Titanium.

  • Rugged and refined styling

The new EcoSport features bold, dynamic Ford SUV styling. A sculpted bonnet with a central bulge delivers a cleaner front-end appearance. Angular fog light housings complete a front three-quarter profile that was inspired by the straps of a rucksack and designed to reflect an adventurous character.

EcoSport’s rear bumper and tail light designs also are revised to deliver a cleaner, more sculpted appearance. Customers can choose from seven bold exterior colours, including Lightning Blue and Race Red.

EcoSport now also delivers a new level of interior refinement with easier-to-use controls and soft-touch materials, and a new centre console ergonomically designed for easy operation, featuring fewer buttons. New seats designs are optimised for greater front and rear occupant comfort, and deliver a more upscale feel, including partial leather on the Titanium model.

The interior features a host of smart stowage solutions, including an under-seat storage drawer located beneath the front passenger seat, along with a spacious rear luggage compartment with integrated cargo tie-down hooks.

  • Sophisticated driver assistance technology

The new EcoSport builds on the commanding SUV driving position and rewarding Ford driving dynamics to deliver an even easier and more enjoyable driving experience using advanced technologies.

 Ford’s sophisticated SYNC®3 communications and entertainment system is available on the new EcoSport. SYNC®3 is supported by the new 8-inch colour touchscreen, which can be operated with pinch and swipe gestures. On the Trend model, SYNC®3 uses a 6.5-inch colour touchscreen.

Driver assistance and safety technologies common across all three specification levels comprise ABS brakes with Emergency Brake Assist (EBA) and Electronic Stability Control (ESC). The Trend and Titanium additionally gain Hill Launch Assist (HLA) which enables smooth pull-offs on steep inclines and declines.

NMRC: Affordable Housing Expands Economic Growth

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As the continent’s largest economy, international development experts, innovators and funders increasingly believe that Nigeria is positioned to provide a market-driven solution to one of the continent’s most significant challenges and opportunities: Affordable Housing.
While Nigeria’s size, ability to scale and recalibrated post-recession economy provides the ammunition for such a task, the scale of the endeavour requires the participation of multiple public and private sector participants to collaborate and make it a reality.
According to the Nigerian Mortgage Refinancing Company’s (NMRC’s) Executive Director for Policy and Strategy, Dr. Chii Akporji, major challenges mitigating against the robust growth of the housing sector in Nigeria include:

  • A challenging macroeconomic environment with high-interest rates and inflation;
  • Cumbersome land, titling and property registration procedures and the lack of a foreclosure mechanism;
  • A dearth of long-term finance for the mortgage origination business, though the NMRC is in business to mitigate this risk;
  • A dearth of affordable housing stock;
  • Poor mortgage literacy levels.

As a key driver in the sector, the NMRC is driving several ongoing efforts to de-risk the sector in collaboration with key housing sector stakeholders such as the Central Bank of Nigeria (CBN), State Governments, Mortgage Banking Association of Nigeria (MBAN), the Federal Mortgage Bank of Nigeria (FMBN), Family Homes Fund (FHF) and major developers.
As Akporji explains, “The NMRC is a private sector-driven mortgage refinance company with the public purpose of developing the primary and secondary mortgage markets through raising long-term funds from the capital market, and leverage this to refinance qualifying mortgage portfolios of mortgage lending institutions, thereby promoting affordable home ownership through mortgages.”
In recognition of these efforts the 4th annual West Africa Property Investment Summit taking place on November 15 and 16 in Lagos will dedicate the region’s most prime real estate event to driving the conversation forward. Featuring multiple sessions and panel discussions, this year’s summit will fortify the foundation for affordable housing as a driver of economic growth.
As one of this year’s key participants and stakeholders, Dr. Akporji will be involved in critical sessions during this year’s two-day summit.
While affordable home ownership enabled through cost-effective and accessible mortgages are long-term objectives for the NMRC, she believes that their work is beginning to gain traction by utilising platforms for dialogues like the West Africa Property Investment Summit.
“WAPI is a convening platform for all stakeholders along the housing value chain, on a sub-regional level. By virtue of its reach, it remains the go to event for networking and knowledge sharing on trends and development in the real estate and construction industry on the continent.”
Arguably one of the most strident and recognisable voices in her field, Akporji also confirmed that she will be joined by NMRC’s new Managing Director/Chief Executive Kehinde Ogundimu, who will also be participating in panel sessions that revolve around affordable housing and financing during the two-day, 500 people gathering.
Also joining Akporji on the top-level session to explore one of the most complex tasks that have bedevilled policymakers will be international speakers Feyi Borrofice from the World Bank Group, USA, and the International Finance Corporation’s Ifeoma Ezeokafor (USA). A stellar panel, the three will discuss how to best mobilise private and public-sector institutional development financing for affordable housing.
While the topic is complex and layered, Akporji believes that the solutions can be addressed if we distinguish between private and the public-sector focuses and challenges, for example:
“Between subsidised/social housing and that provided by private sector developers who are business-oriented; and facilitate the institution of an enabling regulatory and investment climate for housing investment – affordable interest rate regimes, flexible and affordable titling, property registration and foreclosure mechanisms.”
Adding that for the private sector “The focus obviously will be on the bottom line but there could be a win-win partnership solution, especially with the leveraging of alternative building technologies and green construction methods to not only deliver affordable housing at scale but also positively impact the bottom line.”
Akporji points to the ongoing reforms and evolution of the roles of both the public and private sector along the housing value chain, which the NMRC, working with its partners is helping to achieve.
“State government partners are beginning to review their existing land and titling processes since they recognise its criticality to attracting investment in housing in the state and the importance of housing not only to citizens’ well-being but also for augmenting internally generated revenues. NMRC has signed MOUs with a number of these states for the adoption/passage of a draft Model Mortgage and Foreclosure Law.
“Kaduna State is the first state to pass the NMRC law and is already reaping the benefits including increased investment in the sector, enhanced ranking on the ease of doing business index, a reduced mortgage interest rate deal with a lending bank and mobilisation of development finance. Lagos state has amended an existing law alongside the MMFL following signing of an MOU with NMRC and remains the national leader in robust hosing policy, innovation and investment. Other states are the in the process of doing same, and projections are that these will begin to bear fruit following the elections early next year.”

African Dev Bank Unveils $500m Deal with African Trade Insurance Agency

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The African Development Bank (AfDB) and African Trade Insurance Agency (ATI) have announced the successful completion of a US$500 million credit insurance deal structured to cover a portion of the Bank’s portfolio of non-sovereign operations in Africa.
This transaction is expected to have an important demonstration effect to encourage similar institutions to invest more on the continent in the future.
While ATI will be the direct insurer facing the African Development Bank, the transaction involves the participation of a number of Lloyd’s & Company private reinsurers who will share the risk on African financial institutions. This vehicle will enable many insurance companies operating outside Africa to participate in the financing of development in Africa for the first time.
The deal is the second Balance Sheet Optimization transaction under the “Room to Run” initiative following the successful signing of the Synthetic Securitization transaction in September.
The insurance will cover approximately 22% of the Bank’s US$2.3 billion outstanding non-sovereign financial sector portfolio. Specifically, it will protect the Bank against the non-payment of loans made to approximately 30 African financial institutions. The portfolio spans the African continent, with exposure to financial institutions in all major regions of the continent, and is expected to release sufficient capital to create almost US$500 million of headroom for new lending.
“This transaction leverages the Bank’s own capital to achieve more development and lending as it creates new pathways for collaboration between private insurers and the Bank in the development of the African continent,” said Akinwumi Adesina, President of the African Development Bank Group. “This is a significant step towards enhancing Africa’s finance partnerships across the globe.”
Adesina added that, given Africa’s endowment as a resource-rich continent with a strong economic outlook, the Bank had adopted more efficient and effective initiatives to bridge the existing development financing gaps.
Penny Mordaunt, International Development Secretary commented, “This is a great example of how the City of London can partner with African institutions to mobilise more investment for developing countries and support the creation of the 18 million new jobs a year which Africa needs. This work is driving economic development abroad and supporting prosperity at home”.
The transaction is also expected to strengthen the development of credit insurance markets in Africa. The experience and comfort gained in transferring risks between the African Development Bank, the African Trade Insurance Agency and the Lloyd’s reinsurers is expected over time to lead to the lengthening of insurance terms and lower insurance and financing costs, leading to more trade and investment in, and among, the private sector and the African region.
“With ATI’s insurance guarantees leveraging the balance sheet of AfDB and crowding-in new investments, this innovation provides a timely solution to the scarcity of trade finance that could create enormous impact across the continent. ATI’s commitment reflects the US$35 billion worth of trade and investments that we have supported in the past decade, which, thanks to this model, can now be more easily replicated, to the ultimate benefit of Africa” said George Otieno, Chief Executive Officer of ATI. 
RFIB commented, “RFIBs Political Risk & Trade Credit team (PRTC) are delighted to have been able to assist the African Development Bank and ATI in putting together this significant insurance-backed programme that will allow the Bank to facilitate further lending, promoting further development in Africa.”
This landmark transaction between AfDB and ATI is one of several recent initiatives undertaken by the Bank under its “Room to Run” program that responds to the G20 and G7 call on the multilateral development banks (MDBs) to explore innovative ways to optimize their balance sheets to achieve the “Billions to Trillions” development agenda. Credit insurance is one of such instruments involving a specialized market with currently low penetration in Africa, but intent on playing a more active role.

Local Bourse Extends Bullish Run to 2nd Consecutive Trading Session

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nse

In yesterday’s trading session, the All Share Index advanced 69bps to settle at 33,191.45 points on account of buy interests in market bellwethers –DANGCEM (+2.1%), NESTLE (+2.2%) and FBNH (+4.3%). Similarly, market capitalisation rose by N83.5bn to N12.1tn while YTD loss moderated to -13.0%. However, activity level weakened as average volume and value traded dipped 39.3% and 110.6% to 185.1m units and N2.4bn respectively.

The top traded stocks by volume were FCMB (27.6m units), TRANSCORP (24.9m units) and GUARANTY (15.2m units) while GUARANTY (N553.9m), ZENITH (N318.8m) and NESTLE (N299.7m) led the top traded stocks by value.

Bullish Sector Performance
Performance across sectors was largely bullish as 3 of 5 indices under our coverage trended upwards. The Industrial Goods and Consumer Goods indices advanced the most, up 0.9% and 0.2% respectively on the back of gains in DANGCEM (+2.1%), NESTLE (+2.2%) and DANGFLOUR(+2.7%) while the Oil & Gas index rose by 0.1% as a result of buy interests in OANDO (+0.9%).

On the flip side, the Insurance index declined by 0.7%, following losses in NIGERINS (-7.1%) and NEM (-4.0%) while the Banking index shed 0.6% on account of sell-offs in ETI (-5.0%) and UBA (-1.2%).

Investor Sentiment Weakens
Investor sentiment as measured by market breadth (advance/decline ratio) weakened to 0.8x from 1.1x recorded in the previous trading session as 14 stocks appreciated against 18 decliners. TRANSCORP (+9.6%), HONEYFLOUR (+4.4%) and FBNH (+4.3%) were the best performing stocks while FIRSTALU (-9.1%), PZ (-7.7%) and MCNICHOLS (-7.4%) led laggards. On the back of the Q3 corporate earnings releases, we anticipate a bullish run in the equities market in the near term.

AfDB Approves $50m to Fidelity Bank for SME Support in Nigeria

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Mr. Nnamdi Okonkwo Managing Director/CEO Fidelity Bank Plc
Mr. Nnamdi Okonkwo Managing Director/CEO Fidelity Bank Plc

The African Development Bank (AfDB) has approved a US$50 million line of credit to Nigeria’s Fidelity Bank Plc to support small and medium sized and women-owned enterprises in selected transformative sectors, including close to a hundred SMEs in manufacturing, health and education.

Approved by the Bank’s Board on 10 October 2018, the facility is fully dedicated to financing micro, small and medium sized enterprises (MSMEs), with a minimum of 30 percent going to women-owned enterprises.

The loan will enhance Fidelity Bank’s liquidity and help meet the demand for medium-term funding to players in the target sectors, contributing to improved quality of lives, job and wealth creation and tax-revenue generation.

The facility complements the Government of Nigeria’s long-term development strategy, as espoused in its Vision 20:2020 agenda. Aligned with Nigeria’s Economic Recovery and Growth Plan 2017-2020 (ERPG), the funding will ultimately boost enterprise competitiveness and expand Nigeria’s economic base. The ERPG seeks to stimulate Nigeria’s economic growth, catalyse macro-economic stability, foster diversification of the economy, and enhance social inclusion as well as governance.

SMEs account for 30 percent of Fidelity Bank’s loan portfolio. The selection of the tier 2 Nigerian bank for this seven-year credit facility (with a grace period of two years) is based on its strong niche presence in the SME and mid-sized corporates space.

It is also in recognition of the bank’s credit management and strong track record with the African Development Bank. The Nigerian lender has previously received US$18 million and US$75 million lines of credit from the development finance institution in 2001 and 2013, respectively.

“Fidelity Bank is a niche player, focused on the SME space and this US$50 million credit line will contribute to strengthening its presence in its key market segments,” said Ebrima Faal, Senior Director, Nigeria Country Office at the African Development Bank. “The Nigerian financial institution also continues to meet its ongoing credit obligations under the terms of previous support received from the African Development Bank.”

The line of credit to the Nigerian financial institution is consistent with the Bank’s Ten-Year Strategy (2013–2022). It also aligns with two of its High 5 priorities – Industrialize Africa and Improve the quality of life for the people of Africa.

Founded in 1987, Fidelity Bank Plc has grown from its marginal position into a stable banking institution. Currently the 10th largest commercial bank in Nigeria by asset size, it was listed on the Nigerian Stock Exchange in May 2005. It has a broad client base of about four million customers nationwide, served from a network of over 240 branches and business offices, supported by alternative service delivery channels like ATMs, mobile and electronic banking, and agency banking channels.

Following its renewed digital banking and retail drive, Fidelity Bank was ranked 4th best bank in Nigeria in the retail market segment in the KPMG Banking Industry Customer Satisfaction Survey (BICSS) in 2017.

Dell Expands UltraSharp Monitor for Innovation, Transformation

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As a new generation floods the job market, there is increasing focus on delivering superior experiences to both employees and customers. Enabling the workforce with better technology, including the right monitors is a way to heighten employees’ experience which in turn impacts customer experience.

The proliferation of data gives rise to a demand for better visualisation tools. Research3 shows that there is growing demand for larger screen size, better support for multitasking, higher resolution monitors and a clutter-free work area to enhance the visualisation of data.

As demographics change and millennials become professionals, visually appealing monitors that help in productivity will be key to attract and retain the best talents4.

As the world’s No. 1 monitor brand, Dell is meeting the demands of the future workforce with its new range of Dell UltraSharp monitors, featuring innovative design and technology to drive productivity with ultimate screen performance and an outstanding user experience.

The new monitors are designed to cater to users in financial services and insurance, trading floor, financial analysis and accounting, media post production, programming, and engineering.

The Dell UltraSharp 49 Curved, 32 4K USB-C and 34 Curved USB-C monitors come with significant features. Picture-by-Picture allows for multi-tasking content from two different PCs. A built-in keyboard, video and mouse (KVM) help users toggle between and edit content using a single keyboard and mouse. This new portfolio of UltraSharp monitors also offers convenient USB-C connectivity that charges the connected laptop while transmitting data and video signals, all from one single cable to reduce cable clutter.

“As the world’s favourite monitor brand Dell continues its legacy of leading innovation with multiple firsts in the industry. Once again, we have pushed the boundaries of display technology to deliver the world’s first 49-inch curved dual QHD monitor. This new monitor offers an immersive panoramic experience without compromising design or functionality,” said Kirk Schell, Senior Vice President, Dell Displays & Engineering.

“This revolutionary 49-inch curved monitor is focused on enhancing the performance and productivity of desk-centric users such as financial traders, bankers, creatives and engineers. With the new UltraSharp family, we remain committed to providing the best to meet the visualisation needs of our commercial customers.”

Dell is introducing the world’s first 49-inch curved dual QHD monitor with the revolutionary ultra-wide 32:9 aspect ratio for seamless multi-screen productivity. Delivering an immersive experience, this expansive monitor is the ideal replacement for two 27-inch QHD monitors. The large onscreen space with 5120 x 1440 resolution and IPS technology allows users to view more content and see fine details with consistent colour across a wide viewing angle.

Experience outstanding screen performance in amazing detail with Ultra HD 4K resolution –  four times more detail than Full HD. VESA certified DisplayHDR™ 400 supports HDR content playback for stunning, true-to-life images. Images appear in living colour revealing details that were previously tough to see with up to 400 nits of brightness (typical) and a colour depth of 1.07 billion colours. Complementing the vivid monitor is the virtually borderless InfinityEdge for an edge-to-edge viewing experience.

Discover precise performance and an immersive experience on this 34-inch curved USB-C monitor that elevates both work and entertainment. The ultra-wide 34-inch curved screen (WQHD (3440 x1440), IPS technology) with 21:9 aspect ratio offers a large onscreen space, ideal for multitasking, and built-in dual 9W speakers to complete the experience from sight to sound.

The Dell UltraSharp 24 and 27 USB-C monitors each feature a thin side profile and small monitor base to optimise desk space, perfect for shrinking modern office spaces. The virtually borderless bezel delivers an edge-to-edge viewing experience, ideal for a seamless multi-monitor set up.

The new 24-inch (FHD) and 27-inch (QHD) monitors come with two different options, with and without USB-C connectivity, for superb screen performance in an innovative design.

“It’s amazing that Dell is so far out front on the monitor scene,” said Jon Peddie, President at Jon Peddie Research. “Dell’s expanding displays portfolio highlights the company’s vision of meeting every customer’s displays needs.”

Global Airlines Financial Monitor: September 2018

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  • The final Q2 2018 airline financial data confirm a decline in airline profitability compared to the same quarter a year ago. Industry-wide cash flows are better than a year ago, but this masks considerable regional differences.
  • Global airline share prices eased lower in September, despite a 1.0% gain in the North American sub-index and notwithstanding a small gain in global equities overall. Over the past year, North American airline shares continue to outperform the wider equities market.
  • Oil and jet fuel prices both moved solidly higher in September, driven mainly by supply concerns. Oil prices have risen by around 40% over the past year and jet fuel prices averaged more than US$90bbl in September.
  • Global (total) passenger yields (base fare only) have moved a little higher in recent months, with premium cabin yields continuing to show more resilience than those of the economy cabin and helping to offset some of the impact of rising input prices.
  • Passenger demand remained solid into the peak northern hemisphere summer period. Although freight demand has recently eased to a modest pace, yields appear to be holding up.

Nigeria Sustains Slow Progress in Human Development

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In the week, there were multiple data releases that brought our attention to key growth and development issues in Nigeria.

The International Monetary Fund (IMF) revised its 2018 growth forecast for Nigeria as well as the global economy, downwards, while a new World Bank report showed that human capital development in Nigeria lagged SSA (Sub-Saharan Africa) peers.

Meanwhile, the story was the same at home as the National Bureau of Statistics (NBS) and United Nations Development Programme (UNDP) collaborated to create the Human Development Index (HDI) for states which showed slow momentum in boosting education, health and income between 2013 and 2016.
According to Afrinvest Research, ‘we start our analysis with the revised projections of the IMF. The Fund revised its estimate for growth downwards to 1.9% for 2018 from 2.1%, citing concerns about slow growth in agriculture and political uncertainties which restrain investment.’

However, the Fund holds an optimistic view for the future as it upgraded its growth projection from an average of 2.0% to 2.4% between 2019 and 2023. The implication of this is that growth will trail population growth of 2.6% for eight consecutive years. This further indicates that Nigerians would get poorer on the average, while the prospects for strong employment growth would remain bleak.

While the specifics to this forecast are not public information, we note that the Fund’s main concerns with Nigeria are weak revenues which limit government spending and raise debt sustainability risks, and lack of structural reforms to boost the non-oil sector. This is unsurprising as we have always stated that the lack of reforms will keep growth weak and below pre-oil price shock levels of 6.0 – 7.0%. However, we are slightly more optimistic that growth will breach 2.6% as early as 2020.
On the stark development indices, the World Bank Human Capital Index (HCI) is a new measure that provides a way to assess the productivity of the next generation of workers while also serving as a call to nations to invest in the education of children.

The Bank estimates that the HCI value for Nigeria increased marginally to 0.34 in 2017 from 0.33 in 2012, showing that progress has been slow. Even worse, this value indicates that Nigeria ranks behind peers in SSA as well as among countries considered to be low middle-income in boosting productivity, thus suggesting that expected growth outcomes will be behind peers.

In summation, breaking out of the cycle of low productivity, growth and development require sustained investment in education.

Data & Tech to Transform Nigerian Retail Market

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The convergence of AI, tech, and data on Nigeria’s multi-billion dollar plus retail market – will be a strategic focus to local & international developers, investors and retailers at the 4th annual West Africa Property Investment Summit taking place on 15 and 16 November 2018 in Lagos.
Considered one of the world’s most significant and accessible investment opportunities, the opportunity in the country has long whet the appetites of the world’s capital movers; however, for many, the opportunity has been missed or misjudged to a lack of relevant, actionable and useful data.

A ROBUST RETAIL SECTOR 
One of the emerging thought leaders in the field is Ali Djire, the country head of Fraym, who believes that embracing a data-driven approach to retail will prevent further Nakumatt styled retail implosions. In a market under pressure with retailers struggling with underperforming new locations due to steep competition and a lack of critical consumer mix, access to data is increasingly transforming the fortunes of companies in the sector.
Says Djire, “The need for a data-driven approach is becoming an imperative for retailers to not only inform what products to carry on the shelf, but also to get unprecedented insights into where to locate their stores, how to price based on ability to pay, and how to respond to competition.”

RETAIL’S GROWING VALUE TO THE NIGERIAN GDP 
According to Djire, retail currently accounts for 16% of the Nigerian GDP and is viewed by many as a new frontier of growth for local and international investors.
A view which is shared by Jan Van Zyl, head of property development for leading pan-Africa real estate development fund, Novare Equity Partners.
“Nigeria is the largest economy in Africa. Therefore, you cannot brand yourself as a Sub-Saharan Fund and not have a presence in Nigeria.” Adding that the fund is also looking at options in Ghana and Cote D’Ivoire.
While the scale of the opportunity in Nigeria has attracted many entrants over the past decade, experienced investors and developers understand that the formal retail market is limited and dynamic that can grow exponentially.

$300 MILLION INVESTED 
As Van Zyl explains, “We believe that we are at the right place, at the right time, and we have invested in four shopping centres in Nigeria since 2010 with a book value in excess of $300 million.”
As one of Africa’s bullish international funds in real estate on the continent, the pan-Africa fund is in the country for the long-term. However, while the recovery over the last 12 months has been slow, Van Zyl argues that this is not a Nigerian, but an emerging market phenomenon.

RECOVERY AND ELECTIONS 
“Combined with elections in February 2019, we find that many potential new entrants are waiting on the sidelines until the uncertainty surrounding an election period has settled.  It is important to note that, such a cycle is not Nigeria specific, but is experienced in most emerging markets throughout Africa and other continents.”

However, he does note that there has been a trend of decreasing the size of future shopping centre developments in the current market, which is one way in which the market has recalibrated to cope with market relating to the recession.
For Kfir Rusin, the Managing Director of the WAPI Summit, the advent of data and new technologies are critical to quickening the somewhat slow pace of recovery in the retail sector post-recession.

THE FUTURE 
“As a pioneer in their field, Fraym’s use of Geospatial data, AI and Machine Learning technologies can provide actionable intelligence on communities down to 1 square kilometre across the country. This unique and relevant data has the potential to be transformative catalyst of growth for the retail sector.”
With such useful smart data increasingly, many large market layers are actively recalibrating their approach. As Djire reveals, “We are actively working with global investment players, development organisations, as well as local companies, to get actionable market insights. Through our data, we are seeing early signs of companies leveraging Fraym’s geospatial data platform to streamline their operations and retail strategy. We see a growing need for actionable data for companies to be able to make effective decisions.”
As Rusin says, “This year’s West Africa Property Investments (WAPI) Summit will provide a platform for the traditional retail sector to network and realise the real-world benefits of how relevant data and tech is essential to growing the formal retail sector.”
For Djire, WAPI is a platform for engagement. As he says, “WAPI is the platform where the message of a data approach in retail could gain grounds. There is a unique opportunity to engage directly with decision-makers, demystify the concept of [geospatial] data, walk them through the idea of a data approach and how it could affect their business and bottom line. More importantly, it’s an opportunity to hear from them about the ways they think about the market, their business, and their consumers, to ensure that we’re all on the same wavelength.”

Africa Finance Corp Announces $300m Loan from EXIM Bank of China

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Africa Finance Corporation (AFC), the leading infrastructure development finance institution in Africa, announces its successful acquisition of a loan facility from the Export-Import Bank of China (“CEXIM”) of a US$200m 5-year loan and a US$100m 5-year stand-by facility for general corporate purpose.
The facility from CEXIM marks AFC’s inaugural financing facility from the People’s Republic of China (PRC). This follows the Corporation’s strategic focus to build a broad coalition of investors by diversifying its fundraising activities to include all sources of institutional capital in East Asia, in addition to its existing partners in Europe & North America.
Apart from the medium-term liquidity that this proposed facility will provide, it will also further provide contingent funding support which is particularly important for liquidity risk management as well as opening up other financing and relationships with Chinese entities (both state-owned and private).
It has also been agreed that the signing of the facility agreement shall mark the first step into what will be a long and beneficial relationship with CEXIM, including AFC’s support to CEXIM’s Africa strategy, looking at their portfolio of assets and advising them on how to optimise its loan book on the continent.
Samaila Zubairu, President & CEO at AFC, commented: “In the last two decades, China has grown from a relatively small investor, to becoming one of Africa’s largest trading partners today.
“This facility is therefore not only a milestone for the Corporation and its strategy for the Far East, but also marks a natural evolution in the growing financial sophistication of China in Africa, a necessary development required to accelerate Africa’s journey towards closing the infrastructure deficit.
“Moreover, AFC welcomes CEXIM’s commitment towards its Africa strategy, and we look forward to lending our expertise on how best to deliver sustainable infrastructure investment that should catalyse industrial growth on the continent.”

Nigeria, 24 African Countries for ICE Gaming Event

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The international gaming industry has shown its support for Clarion’s vision to deliver a stellar business event for the continent, with the inaugural edition of ICE Africa (24 and 25 of October at the Sandton Convention Centre, South Africa) now at 90% capacity with leading brands including Aruze Gaming; BtoBet; Flutterwave; Gambee; GLI; Merkur Gaming; MST Channel; Neosurf; Playtech BGT Sports; Quanta; Superbet; and umAfrika Gaming Technologies supporting the historic event.

Predicted by Michael Collins, General Manager of South Africa based software firm, Betting Entertainment Technology (B.E.T) to join the ‘Premier League of international B2B gaming events’ ICE Africa has attracted delegates from a total of 91 countries including gaming professionals from 25 African countries, comprising: Botswana; Cameroon; Chad; Congo (The Democratic Republic of); eSwatini (formerly Swaziland); Egypt; Gambia; Ghana; Kenya; Lesotho; Liberia; Malawi; Mauritius; Morocco; Mozambique; Namibia; Nigeria; Rwanda; Seychelles; South Africa; Sudan; Tanzania (United Republic of); Uganda; Zambia, and Zimbabwe.
Commenting on the response, Dan Stone, Senior Marketing Manager at Clarion Gaming said “We took the decision to launch following requests from the industry based in Africa for us to produce and organise a professional showcase that the continent could be proud of.

Since making the decision to bring the ICE brand to the continent, we have been really encouraged by the hugely positive response from all parties – manufacturers, suppliers, regulators, journalists and commentators alike.  As we edge closer to the first edition of ICE Africa going live, all the metrics we look to are highly positive and we are confident of opening a new chapter in the development of African gaming.”
Delivering much more than a conventional expo, ICE Africa has been curated to bring the gaming community a plethora of engaging content covering thought leadership to training and provided by the industry’s most influential and reputable stakeholders.  Dan Stone explained: “Learning and development are at the core of the ICE Africa experience.  The advanceAFRICA stream creates time for quality brainstorming around how the future of the African market can be shaped to allow for sustainable growth of the industry.  microscopeAFRICA is a series of workshops looking at different facets of the industry and networkAFRICA a series of facilitated networking breaks, unique HIVE sessions and round-tables to forge new connections with colleagues from across the continent.  The ICE Africa conference programme will cover a wide range of topics including mobile, lottery, start-ups, investment and regulation all headed up by expert international speakers.”