Most of this issue is devoted to the goings-on in Africa’s capital markets with a special focus on what until fairly recently has been esoteric territory – the bond market.
Our cover story looks at the steady, if not spectacular, growth of sovereign bonds which have been largely welcomed in investor circles. We revisit the turbulent world of Nigeria’s capital market and try to make sense of the drama behind the ouster of Arunma Oteh, the erstwhile director-general of the Securities and Exchange Commission. An interview with the fairly newly established CEO of the Nigeria Stock Exchange, Oscar Onyema, rounds up the section.
Still on the subject of bonds, we report on the historic bond issue by an Africa-focused oil company. It would appear that there is a cadre of investors out there eagerly looking for opportunities to invest in viable projects and that listing on the London, New York or Hong Kong exchanges is a decided advantage. Hopefully, over the years ahead, listing on the South African, Nairobi or Lagos exchanges will carry equal weight.
We continue our coverage of the increasingly exciting investment modalities that the special conditions in Africa seem to generate. Renaissance Capital’s latest pan-African investment conference in Lagos came out very strongly in favour of Africa against all comers. It is of course essential that the investment tap remains open if the continent is to use the current momentum to sling shoot into the next phase of growth.
Continuing the theme of investment, we publish the thoughts of Thierry Tanoh, the outgoing IFC’s vice-president for Africa, Latin America, the Caribbean and Western Europe. He says that the mindset of the Africa team within the organisation has changed dramatically and where once resignation reigned, today, everything is considered possible. He is succeeding Arnold Ekpe as CEO of Ecobank.
Investment tailored for SMEs
Of particular interest to many of our readers will be the feature on how a UK-based private equity firm has tailor made an investment model particularly to suit the needs of the continent’s SMEs. SMEs are the principal source of jobs and wealth creation but, to date, they only contribute to around 20% of growth as opposed to over 60% in more advanced economies. In Africa, the major stumbling block remains access to finance but with the type of approach we feature, that is funnelling foreign investment through local fund managers, that particular hindrance may be reduced.
Talking of local fund managers, the major issue in this regard is often their lack of track record and their limited managerial capacity in terms of helping their portfolio companies attain the next level of development. This lack of expertise, and the woeful absence of role models to emulate also means that trading on the stock markets tends to remain basic and shuts out many brokers from the international arena.
We were therefore pleased to have located a company in England, with its financial roots in Libya, that has taken the matter of financial trading and fund management education very seriously. The principals want to replicate their model in other African countries and in the process create a new and more effective cadre of financial experts.
On the banking front, we focus on Nigeria’s UBA, which has rebounded strongly this year after a difficult 2011. The CEO, Phillips Oduoza, tells us why the bank registered a loss in 2011 and how it has managed to turn this around in dramatic fashion. In the process, the group has emerged stronger and fitter.
We turn our attention further south and report on the interesting confrontation between the chairman of Nedbank, Reuel Khoza, and the government over his remarks about the course the country’s economy is taking. Should big business ‘interfere’ with government or keep its lips sealed? The debate is still raging.
We also pay a visit to Mozambique’s banking sector, which is still comparatively underdeveloped but catching up rapidly with some of its Southern African neighbours.
Finally, we round up the issue with a photo spread of our annual awards, which this time were held in Arusha, Tanzania, under the shadow of the fabulous Mt. Kilimanjaro.