News - Afrikan Heroes

Investment in Tourism Sector Shields African Economies from Global Slowdown

March 11, 2020

Michael Armstrong, ICAEW's regional director for the Middle East, Asia and Africa

African economies are most likely to be lightly disrupted by the global economic slowdown occasioned by a potpourri of issues ranging from fallouts of United States trade war with China, the crude oil price bottom out and the Covid-19 virus pandemic. Though the severity of the impact of coronavirus on China’s growth prospects will hold major implications for Africa given the continent’s close ties to China, the broader impact will also be exacerbated if efforts to contain the outbreak prove inadequate, thus extending both the reach and duration of the shock. This is according to the Institute of Chartered Accountants in England and Wales’ (ICAEW) latest report, Economic Update: Africa Q1 2020.

The accountancy body provides GDP growth forecasts for various regions, including East Africa which is set to grow by 6%, West and Central Africa at 3.1%, Franc Zone at 4.9%, and Southern Africa at 1.3%. The report, commissioned by ICAEW and produced by Oxford Economics, underscores the role of economic diversity in weathering the storm of an impending global recession.

According to the report, Africa’s medium-term tourism prospects remain promising, supported by improvements in infrastructure, better air transport connectivity and easing visa regulations. Regional powerhouses South Africa and Angola continue to weigh on Southern Africa’s prospects: the region’s growth remains sluggish at 1.3% in 2020, with risks firmly stacked to the downside. Power outages are taking a toll on the South African economy, and fiscal pressures mean the country could well lose its investment-grade credit rating. Angola’s real GDP, meanwhile, looks to have contracted for a fourth straight year in 2019.

Speaking during the launch of the latest report, Michael Armstrong, ICAEW’s regional director for the Middle East, Asia and Africa, said: “Uncertainty around global developments remains especially elevated as we head into the new decade. The easing of trade tensions between the US and China lowers downside global GDP and trade growth risks. However, new challenges have surfaced. Mounting geopolitical tensions, especially relating to the stand-off between the US and Iran, have soured investor sentiment and provided a temporary boost to global oil prices.” said Mr. Armstrong. “Africa’s medium-term tourism prospects remain promising, supported by improvements in infrastructure, better air transport connectivity and easing visa regulations,” he added.

East Africa remains the development hotspot of the continent, with growth projected to be at by 6 per cent in 2020. Although regional growth is now clearly decelerating, East Africa still boasts some of the fastest growing economies globally. Rwanda, for instance, recorded growth of 10.9% year-on-year during 2019 Q1-Q3, with public investment stimulating industry and rising consumption supporting the blossoming services sector.

Certain West African countries also warrant mention in this regard, especially the likes of Côte d’Ivoire and Senegal. Unfortunately, the sluggish performance of the Nigerian economy continues to weigh heavily on West and Central Africa’s prospects, with regional growth seen rising only marginally to 3.1% in 2020. Low oil prices raise the risk of additional foreign exchange restrictions being imposed. Such restrictions, along with the protectionist policies pursued by Abuja (most recently illustrated by a decision to shut Nigeria’s land-based borders), prevent economic activity from gaining more traction.

Although political and security risks remain elevated in that region, North Africa’s growth is projected to pick up more strongly, rising from 3.1% in 2019 to 3.7% in 2020. The Egyptian economy continues to expand at an impressive pace, and growth in Morocco and Tunisia is projected to rebound in 2020 following lacklustre agricultural performances in both countries last year. Tunisia, in particular, faced significant challenges, with growth estimated at a mere 1.3% in 2019. Aside from a marked slowdown in agricultural growth, frequent protests and weaker external demand contributed to a slump in industrial activity. This was, however, partly offset by a strong rebound in tourist arrivals.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

$10k Up For Grabs in Ecobank Fintech Challenge for New Ideas

March 8, 2020

The Pan African Bank, Ecobank Transnational International Group has announced that it will offer $10,000 for winners of its upcoming Ecobank Fintech Challenge. The Challenge which opened in February for applications to African fintechs, will award $10 000 to a fintech for a winning solution that can assist the bank, while the first runner-up will get $7000 and the second runner-up $5000 in cash prizes. The challenge aims to help support fintechs that are ready to scale and provides them with support and access to Ecobank’s 33 African markets so they can grow to become pan-African fintech success stories.

The Ecobank Fintech Challenge offers fintechs the opportunity to integrate with the bank’s offerings and also also offers fintechs the opportunity to potentially integrate with Ecobank’s existing digital offerings. Applications for the Challenge closes on on 12 April 2020 as interested fintechs should submit details of their product as well as a demo to the challenge. These products must address one or more of a specific set of pain points, namely: Customer experience: Ecobank is looking for products that offer solutions and innovations in the following areas: digital customer onboarding, those that improve customer experience at branches, those that improve customer experience online, digitisation of the customer journey.

To win the Challenge, the Bank is looking for innovative solutions that help improve lending to SMEs. It is also looking for ecosystem aggregation which gives the Bank the opportunity to work with innovators offering solutions on SME/Merchants onboarding on payment integration, niche merchant aggregation and those solutions that provide easy access to non-smart phone users. Equally high on the Bank’s radar are digital solutions that help improve performance of sales force as well as solutions that enable agents to offer more services, and fintechs to help solve problems around offline mobile-to-mobile payments (dead zones).

In addition, the bank is willing to consider any other solution that fintechs believe will help revolutionise the banking sector in Africa. Finalists will be selected to participate in the Ecobank Fintech Innovation Fair, while all finalists will be inducted into the Ecobank Fintech Fellowship, which will provide fellows an opportunity to explore deals, integration and commercial partnership with the Ecobank Group.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

South African Firm Launches Fund to Invest in African Tech

South Africa’s technology solutions firm Ayo has raised the bar in efforts aimed at encouraging techie startups across Africa with the launching of a $12.7 million (R200 Million) fund to bridge the skills and innovative gap in Africa. The Johannesburg Stock Exchange listed Ayo Technology Solutions which currently is at the center of a controversy around a $274 million (R4.3-billion) transaction from South Africa’s Public Investment Corporation (PIC), made the announcement before the weekend insisting that there is nothing untoward about the PIC transaction.

The fund which it dubbed Technology Innovation Fund was announced by Ayo’s Chairman Wallace Mgoqi and Ayo Technology and Innovation Fund’s head of talent Snow Mokgalabone who maintained that the Fund would be an annual amount and that it would be allocated to qualifying companies, organizations and entrepreneurs to help scale their businesses. Ayo’s Technology Innovation Fund would have R200m to annually invest in equity stakes in startups. The Fund will make equity investments in those businesses it identifies for funding.

The fund which it dubbed Technology Innovation Fund was announced by Ayo’s Chairman Wallace Mgoqi and Ayo Technology and Innovation Fund’s head of talent Snow Mokgalabone who maintained that the Fund would be an annual amount and that it would be allocated to qualifying companies, organisations and entrepreneurs to help scale their businesses. Ayo’s Technology Innovation Fund would have R200m to annually invest in equity stakes in startups. The Fund will make equity investments in those businesses it identifies for funding.

Ayo said in the earlier statement that half of the fund would be allocated to SA companies of which, 50% will be geared to specifically supporting black-owned startups. The remaining half will go to help grow companies founded and operated on the African continent beyond South Africa’s borders. Ayo also stressed that the fund is aimed at second round funding opportunities for companies that have a proof of concept and that are ready to scale.

It said applications would be accepted by its website from today, adding that strict criteria and appropriate due diligence measures would be followed in assessing applications. It said Ayo will also use its stable of companies to offer beneficiaries a variety of opportunities for self and business acceleration, through access to professionals, services, and marketplaces within the Group. “Investee companies will also be in a position to offer their own skills and support to companies within the greater Ayo group,” it said.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

“I am Generation Equality: Realizing Women’s Rights”, As the World Marks International Women’s Day

This year’s International Women’s Day 2020 is marked today 8th March 2020 globally with the theme, I am Generation Equality: Realizing Women’s Right, and calls for a more gender balanced work place. The theme is aligned with UN Women’s new multigenerational campaign, Generation Equity, which marks the 25th anniversary of the Beijing Declaration and Platform for Action. Adopted in 1995 at the Fourth World Conference on Women in Beijing, China, the Beijing Platform for Action is recognized as the most progressive roadmap for the empowerment of women and girls, everywhere.

The year 2020 is a pivotal year for advancing gender equality worldwide, as the global community takes stock of progress made for women’s rights since the adoption of the Beijing Platform for Action. It will also mark several other galvanizing moments in the gender equality movement: a five-year milestone towards achieving the Sustainable Development Goals; the 20th anniversary of UN Security Council resolution 1325 on women, peace and security; and the 10th anniversary of UN Women’s establishment.

The emerging global consensus is that despite some progress, real change has been agonizingly slow for the majority of women and girls in the world. Today, not a single country can claim to have achieved gender equality. Multiple obstacles remain unchanged in law and in culture. Women and girls continue to be undervalued; they work more and earn less and have fewer choices; and experience multiple forms of violence at home and in public spaces. Furthermore, there is a significant threat of rollback of hard-won feminist gains. The year 2020 represents an unmissable opportunity to mobilize global action to achieve gender equality and human rights of all women and girls.

This year’s International Women’s Day celebration started on Friday 6th March, 2020 at the United Nations Secretariat in New York . The Observance aims to bring together the next generations of women and girl leaders and gender equality activists with the women’s rights advocates and visionaries who were instrumental in creating the Beijing Platform for Action more than two decades ago. The event will celebrate change makers of all ages and genders and discuss how they can collectively tackle the unfinished business of empowering all women and girls in the years to come.

The Observance will include addresses by senior representatives of the United Nations system, an inter-generational dialogue with gender equality activists, and musical performances.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Jack Dorsey Delays His Temporary Relocation to Africa

March 7, 2020

Twitter Chief Executive Jack Dorsey will probably delay his planned temporary relocation to Africa due mainly to the Covid-19 epidemic ravaging the world presently. It could be recalled that the Twitter boss had in November 2019, during a visit to Nigeria surprised many by announcing that in 2020 he will be moving to a country in Africa for six months. Adding that “Africa will define the future, but not sure where yet, but I’ll be living here for 3-6 months mid 2020. Grateful I was able to experience a small part.”

However, Jack Dorsey seems to be backtracking from his African plans, citing concerns over the global Coronavirus outbreak. He made this known during a telecoms conference over the week that there is need to take a cautionary approach to the planned relocation as events are unfolding globally especially as concerns the corvid-19 outbreak. Speaking, he said that “ with everything happening with the world, particularly coronavirus, I have to reconsider what’s going on and what that means for me and for the company,” he said, adding, “next time we give updates on this, I’ll explain all the ‘whys’ and give much deeper context.” He added that “I had been working on my plans where I’d work decentralized, as my team and I do when we travel, but in light of COVID-19 and everything else going on I need to reevaluate,” Dorsey said. “Either way we’ll continue to pursue opportunities in Africa.”

Analysts however say that Dorsey’s change of plan has nothing to do with the Corvid-19 but that the CEO is facing a restive board and likely shareholder revolt. Shrtly after his return from his African trip late last year, Prof. Scott Galloway wrote to demand for Dorsey’s replacement over his announcement of a move to Africa. He also faulted Dorsey’s leadership of two companies. Aside his being head at Twitter, Dorsey is also the CEO of financial services company, Square.

Galloway’s letter while citing concerns over Twitter’s performance, what was left unsaid was the widely held belief that Dorsey was moving to Africa for his other company, Square. His tweet in November expressing a belief in a future for cryptocurrency in Africa may have fueled this belief. In the end, Galloway’s letter did not change the state of affairs at Twitter, but a more influential investor is looking to do that.

Just last week, a New York based Elliott Management Corp bought 4% shares of Twitter and has now nominated four directors to Twitter’s board as it reportedly makes plans to remove Dorsey as CEO. While Galloway’s open letter might have made some headlines, it is Elliott Management which will be able to force Dorsey out from the company he co-founded. Observers say that Elliot will most likely call for a change in Twitter as they are known to have done elsewhere, especially with Pernod Ricard. Thus it is no surprise that this sequence of events coincide with Dorsey’s announcement. Even with his preference for remote work, trying to retain his control of Twitter will need him to be on the ground.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Africa’s Business Leaders Share Ideas on Solving the Continent’s Biggest Social Challenges

March 6, 2020

Shared Value Africa Initiative Founder and CEO Tiekie Barnard

Business leaders from across Africa will seek solutions to some of the continent’s most challenging social issues at the Africa Shared Value Leadership Summit in Kigali, Rwanda from the 4^th to the 5^th of June 2020. The Summit, which will draw leaders from some of Africa’s biggest companies as well as decision-makers from government and civil society, provides a platform for business to collaborate on social upliftment of the continent, as well as to share insights about the most effective ways for companies to solve social challenges as a core part of their business operations.

The Shared Value Africa Initiative (SVAI) brings businesses and business communities from across Africa together with a common purpose: build ecosystems to drive the growth of the African economy; shift Africa from being the poorest continent to become the most economically viable; and bring about change at scale to the benefit not only business but also society and the environment. Its main objective is to build one of Africa’s most powerful business networks. The SVAI enables people to partner with and learn from others to sustainably create both economic and societal value through their Shared Value strategy, as well as how to motivate others to make the shift to Shared Value, further influencing change at scale.

The decision to hold the 2020 Summit in Rwanda gives delegates an opportunity to learn from the economic and social developments in the country over the last two decades, with the summit’s content aligned with selected priority areas of Rwanda’s National Strategy for Transformation (NST1). “The solution-seeking sessions enable attendees delegates to discuss specific regional challenges and collectively contribute and suggest possible solutions,” says Shared Value Africa Initiative CEO Tiekie Barnard. “This provides a significant opportunity for delegates to learn and form networks across the continent.”

In line with the Summit’s partnership with Africa Leadership University (ALU), these sessions will be facilitated by students and alumni of ALU School of Business MBA course, with ALU faculty members compiling reportage of these sessions. Undergraduate students will be ambassadors throughout the Summit, while African Leadership Group founder Fred Swaniker will also give a keynote address at the Summit. The solution-seeking sessions allow some of the greatest minds in Africa to grapple with complex issues such as how Africa connects across borders to make the continent the global tourist destination, what is required to create food security in Africa and outbreaks, pandemics and the future of Africa’s health. Other issues they will look into are how to track the societal benefit of the AfCFTA, building shared value ecosystems and exchanges in conversation regarding entrepreneurship and Public-Private Partnerships.

“The Shared Value business model, developed by Harvard Business School’s Prof Michael Porter and Mark Kramer, is practised by an increasing number of businesses across the world,” says Shared Value Africa Initiative Founder and CEO Tiekie Barnard. “This provides opportunities to build business initiatives around solving social problems at scale, contributing to achieving the United Nations Sustainable Development Goals on the continent.”

The Summit has become a platform for Africa’s business thought leaders to exchange insights and share their experiences implementing the Shared Value business model in the diverse African context. The event connects speakers from industries ranging from telecommunications to healthcare, manufacturing and mining.

Discussions enable participants new to Shared Value thinking to learn how to embed shared value into core strategy of the business, and how to develop shared value opportunities to address social and environmental issues. As well as the solution-seeking sessions, the Summit will also feature African leaders sharing how their businesses create economic value and value for society, as well as presentations from various industry sectors.

The Summit, which took place 23-24 May 2019 in Nairobi, was attended by more than 350 business executives per day over two days, with more than 18 countries represented. The Summit also aims to encourage business to contribute to achieving the United Nations Sustainable Development Goals on the continent. “As with previous years, the UN Sustainable Development Goals will be a theme throughout at the Summit as a guide to the business leaders to demonstrate how business can contribute to achieving the goals and to addressing e social challenges, a core part of their operations” says Barnard.

The Shared Value Africa Initiative (SVAI), is a pan-African organisation and the custodian of the global Shared Value movement on our continent. The SVAI is the regional partner of the global Shared Value Initiative started by economists Prof Michael Porter and Mark Kramer from Harvard Business School. Prof Porter is a current member of the Rwandan Presidential Advisory Council.

Since its inception, the SVAI has been working to establish a strong footprint across the continent, beginning in South Africa. As East Africa is home to some of the fastest-growing economies on the globe, the SVAI believes that this region has the potential to catalyse a business revolution across the continent. Successful economies, such as Kenya (hosts of the 2019 Summit) and Rwanda, influence and motivate others to follow in their footsteps – and, by becoming Shared Value hubs, can influence positive change on our continent.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

African capital market activity declines further in 2019

Andrew Del Boccio, PwC Africa Capital Markets leader

Overall, African equity capital market (ECM) activity in 2019 declined sharply both in volume and value from 2018, with 2019 posting the lowest proceeds raised in ten years. The general slowdown in equity markets was largely driven by a series of macroeconomic factors including an ECM deceleration in global markets, caution in the period leading up to key local elections, which took place in both Nigeria and South Africa in 2019, and more specifically in South Africa, growing political gridlock and economic stagnation.

These are some of the key findings from PwC’s 2019 African Capital Markets Watch publication issued today, which analyses equity and debt capital market transactions on an annual basis. This report lists all new primary market equity initial public offerings (IPOs) and further offers (FOs) by listed companies, in which capital was raised on Africa’s principal stock markets and market segments. The report also includes IPO and FO activity on international exchanges or non-African companies on African exchanges.

Andrew Del Boccio, PwC Africa Capital Markets leader, notes that a state of uncertainty seems to have become the ‘new normal’, and we expect some degree of volatility and caution to continue to affect Africa’s capital markets activity in 2020.

“This sentiment is also reflected in PwC’s annual 2019 Global CEO Survey, in which African CEOs noted their expectations for a slowdown in economic growth as well as their top concerns, which included political risk, over-regulation, and worries about finding top talent to fill the skills-gap.”

2019 ECM value was the lowest seen over the past decade, while the volume of deals was only lower in 2012. Overall ECM activity in 2019 declined in value and volume by 44% and 29% respectively, compared to 2018. The decline was mainly related to activity in South Africa, where ECM activity dropped by 69% in terms of value and 46% in terms of volume compared to 2018, and where Africa’s largest bourse saw no capital raised through IPOs in 2019.

Between 2010 and 2019, there were 927 African ECM transactions, raising a total of $88 billion. The highest volume of transactions was recorded in 2015 and 2017, with 125 deals each, while 2012 recorded the lowest volume of transactions with 65 deals.

Over the past ten years, there have been 215 IPOs by African companies on both African and international exchanges, raising $16.9 bn. 2019 saw the lowest volume in IPO activity over the past ten years, recording a decline of 47% compared to 2018 activity.

No capital was raised via IPOs on the JSE in 2019. However, South Africa still dominated during the decade under review, with seven of the top ten IPOs between 2010-2019, and accounted for the two largest IPOs by value – the $1.2 billion Steinhoff Africa IPO in 2017 and the $819 million Vivo Energy dual listing on the Johannesburg Stock Exchange (JSE) and London Stock Exchange (LSE) in 2018.

Aside from the decreased levels of activity in 2019, there were some other notable events in specific markets. IPO activity resumed in Nigeria after four years, with Airtel Africa Plc’s dual listing on the Nigerian Stock Exchange (NSE) and the LSE, raising $687 million. Mozambique also recorded its first IPO in six years with the listing of Hidroeléctrica de Cahora Bassa on the Bolsa de Valores de Moçambique.

Between 2010 and 2019, total IPO proceeds of $15.9 billion were raised on exchanges in Africa in 202 IPOs. Sub-Saharan African exchanges accounted for 133 IPOs (or 66%) and $12.3 billion (or 77%) of the value raised. The remainder was raised on the North African exchanges.

Of the amount raised on the sub-Saharan African exchanges, the JSE accounted for 71% or $8.7 billion, while the NSE accounted for 13% or $1.5 billion. In terms of IPO volume, the JSE and the Botswana Stock Exchange recorded 64 IPOs and 10 IPOs, respectively, while the Ghana Stock Exchange, Bourse Régionale des Valeures Mobilières (BRVM) and the Dar es Salaam Stock Exchange each had 9 IPOs. The Egyptian Exchange accounted for the largest proportion of the IPO proceeds raised on North African exchanges, at 60% or $2.2 billion raised from 23 IPOs.

In 2019, FO activity declined significantly in terms of transaction volume and value, by 25% and 44%, respectively, over the prior year. Low levels of activity in South Africa fueled the decline, with the volume of FOs on the JSE decreasing by 42% from 38 deals recorded in 2018 to 22 deals in 2019, and the value decreasing by 58% from $3.8 billion in 2018 to $1.6 billion in 2019.

Over the past ten years, a total of 712 FO deals were recorded on African exchanges and by African companies on international exchanges with a total of $71.1 billion raised.

2019 saw the lowest FO proceeds raised on African exchanges in the past ten years with $3.5 billion from 59 FOs. Over the past decade, a significant proportion of FO activity took place in South Africa, with the JSE accounting for 58% and 79% of total FO volume and value, respectively. Egypt accounted for the next-largest amount of FO volume and value at 10% and 6%, respectively, followed by Nigeria with 4% of both FO volume and value.

African ECM activity in 2019, similar to prior years, was led by domestic deals, comprising 71% of both ECM volume and value. Outbound ECM saw a marginal increase in the value of transactions between 2018 and 2019, with 11 transactions raising $225.4 million in 2018 versus 11 transactions valued at $244.9 million in 2019.

The JSE led inbound activity in 2019, with ECM funding raised largely by global companies with primary South African operations or historical market ties.

On the continent’s debt market, Egypt was the largest sovereign issuer of non-local currency debt in 2019, raising a total of $8.2 billion. South Africa was the second-largest sovereign issuer, raising $5.0 billion in September in its largest ever Eurobond issuance, as the country seeks liquidity to address budget deficits and broader systemic issues stifling economic growth.

African issuers have raised $245.9 billion of non-local currency debt from 759 issues over the past ten years, with almost 50% of that value raised in the past three years. South African corporate issuers accounted for 52% of non-local currency corporate debt issued between 2010 and 2019, including energy utility, Eskom, which accounted for the largest cumulative non-local currency debt value raised by a single issuer over the past decade at $5.5 billion, largely intended to fund the company’s capital expansion programmes, such as the construction of its coal-powered Medupi and Kusile power stations.

The outlook is however bright but only is governments take the right steps. PwC expect governments across the African continent to continue to implement strategies towards building robust capital markets. Some recent examples include Ethiopia’s plan to launch a local stock market during this year, and Angola’s roadmap to privatise its state-owned companies by 2022. In addition, we can expect to see other announced privatisations in Nigeria, Malawi and Ghana.

According to Alice Tomdio, PwC Africa Capital Markets Director, “despite the lacklustre activity in 2019, we saw significant progress in various capital markets initiatives during the year, including the drive for sustainable finance through the issuance of social, green and infrastructure bonds in South Africa, Kenya, and Nigeria. Together with a move towards more local currency and blended financing, we expect this trend to continue, and to unlock new sources of capital for African issuers.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

World Bank’s Private Sector Arm, IFC Acquires TerraPay in $9.6 million Joint Investment

March 4, 2020

Ambar Sur, Chief Executive Officer of TerraPay

The World Bank’s private sector arm, International Finance Corporation (IFC) has joined a consortium of investors to acquire TerraPay, a mobile payments switching company that has operations in Africa, Asia and Europe in a $9.6million deal. The deal involves other investors such as Prime Ventures, a Europe-focused venture capital firm, and Partech Africa, an investor in African tech startups and will see the mobile payment switching firm move to the next level of its expansionist aspirations. Before now, TerraPay has been on an incubation period under Comviva, an Indian-based mobile solutions company.

The International Finance Corporation (IFC) and Terrapay’s management team are other key participants in the acquisition. Sources that are familiar with the deal say that Prime Ventures, Partech and the IFC hold the controlling stake, while TerraPay key management also have significant stake. TerraPay facilitates business-to-business transfers and settlements for financial services companies. Money transfer operators, banks and mobile money startups are their primary clients. The company was founded in 2015 and has acquired more than 25 licenses enabling its global operations in about 60 countries.

Speaking on the development, Ambar Sur, Chief Executive Officer of TerraPay said that the company believes in its mission to address financial inclusion by making real time national, regional and global payments accessible to everyone, adding that “we are excited by this validation from our marquee investors, and look forward to growing rapidly and reaching most of the world’s under-served in the coming years.”

TerraPay’s value addition has been in reducing the cost of money transfers. Remittances are a significant contributor to the GDP of emerging markets. To cite one example, Nigeria received $17.57 billion in diaspora remittances in the twelve months of 2019. Remittances are a half-a-trillion dollar market globally. But it’s not all good news yet: the cost to send money to and fro averages around 9.3% in emerging markets compared to the global average of 7%. A number of factors, especially the cost of handling cash by senders and receivers, contribute to high cost of remittances in Africa.

After starting in Ghana, TerraPay has obtained licenses in 15 African markets. They partner governments and money transfer operators to create central transfer protocols that reduce the cost of financial services transactions. TerraPay’s revised corporate structure and $9.6 million investment from the acquiring parties will see it expand to more countries. By this, TerraPay becomes the latest addition to the IFC’s portfolio of African fintechs. They join Nigeria’s Interswitch, Egypt’s Fawry as well as Lulalend, Net 1 and Zoona from South Africa.

It is in line with the organisation’s mission to help streamline money transfer processes for diasporans while increasing financial inclusion in emerging markets, according to Paulo de Bolle, IFC’s Global Director for Financial Institutions Group. The IFC focuses its fintech searchlight on late venture or growth stage tech-driven businesses with existing revenues demonstrating commercial viability. It’s tickets are between $3 million and $20 million for a minority equity position, or a minimum of $10 million in debt with equity features.

TerraPay’s success over its five years of existence partly stems from partnerships with global money transfer companies. Western Union, Visa, Xpress Money, MoneyTrans, Paga, Ria, Instant Cash, Ripple and MoneyGram are among its partners. In December 2019, TerraPay partnered with UBA, a Nigerian bank, to offer real-time money transfer services to the bank’s 20 million customers. The service currently exists in Cameroon, Sierra Leone, Côte d’Ivoire, Ghana and Burkina Faso.

Cyril Collon, a general partner at Partech Africa, said his Africa-focused firm became interested in TerraPay as a result of the latter’s cutting-edge platform. He hopes TerraPay “will play a key role in reaching the interoperability goals necessary for true financial inclusion.” Based on its founding history of being incubated in India and incorporated in the Netherlands, TerraPay is not an African tech startup in the same breath as Kudi, Yoco, Trade depot or the other startups Partech Africa has invested in so far.

However, they have “built a platform geared toward facilitating flow of money first in African and within Africa,” Collon said while making the case that they are an African tech company. “Most of its revenue is in Africa by servicing today already 2/3 of all African countries,” Collon said.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Ghana Commends African Development Bank for Support

Ghana has commended the African Development Bank for its support which has helped boost Ghanaian government’s efforts to consolidate the economy, this was made known by the country’s Vice President, Mahamudu Bawumia.

Bawumia, while welcoming a team of Executive Directors and senior officials of the Bank on an official visit, cited various Bank-supported projects, especially in the areas of infrastructure, agriculture and technical innovation, as examples of interventions that have helped to boost the government’s efforts to consolidate the economy.

“Those are areas very critical for us and we are happy to have the African Development Bank helping us. You have been in the trenches with us and things are now going well,” Bawumia said.

The Bank delegation, led by Bright Okogu, Executive Director for Nigeria and Sao Tome & Principe, will meet local authorities, the private sector, civil society and other development collaborators.

Bawumia said Ghana’s economy has begun to show great potential following three years of bold fiscal policy reforms, which included the adoption of a law capping fiscal deficit at 5% of Gross Domestic Product as part of measures to enhance debt sustainability and win investor confidence.

“These are not easy to do but it had to be done and we’re seeing the benefits…. All the indicators are in the right direction; macroeconomic conditions have stabilised, agriculture is doing well, interest rates have come down, while inflation has also come down to its lowest since 1992,” Bawumia said.

Ghana is looking to the Bank for investment in an integrated aluminium industry, using the country’s large bauxite deposit as raw materials. The Bank should also consider supporting Ghana to tackle climate change in line with the Group’s crosscutting interventions, the vice-president said.

The Executive Directors commended the country for its newly constructed Terminal 3 facility at the Kotoka International Airport, which was partly financed by the Bank.

“We flew in through the airport and we are pleased about what we saw,” said Okogu, who is also the Dean of the Bank Group’s Executive Directors.

Later Monday, the Bank delegation met with Bank of Ghana Governor Ernest Addison, who briefed them on the country’s assessment of the likely impact of the coronavirus on Ghana’s economy. The group also had a briefing by Finance Minister Ken Ofori-Atta, a Governor of the African Development Bank Group.

The Bank’s current portfolio in Ghana is channelled through various projects aimed at job creation, economic inclusiveness, macroeconomic stability and industrialization.

Key financing for development to the country includes mobilizing a seven-year $600 million syndicated receivables-backed loan for Ghana Cocoa Board to improve productivity and domestic value addition; approval of the first phase of the Easten Corridor Road Project estimated at $102 million; and an urban transport project entailing the construction of a three-tier interchange.

The other members of the Bank Group delegation are Kenyeh Barlay, Executive Director, representing The Gambia, Ghana, Liberia, Sierra Leone and Sudan, Ahmed Zayed for Egypt and Djibouti, and David Stevenson, representing Canada, China, Korea, Turkey and Kuwait. Director-General for West Africa, Marie-Laure Akin-Olugbade and Acting Country Manager Sebastian Okeke also travelled along

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Businessmen In Egypt Can No Longer Go To Jail

February 25, 2020

Speaker, Egyptian parliament,Ali Abdel Aal Sayyed Ahmed

Egypt ‘s parliament has announced that laws which allow investors to be imprisoned have been scrapped over fears that imposing jail terms on businessmen affects investment in the country.

According to Arab News, parliamentary speaker Ali Adel-Aal said during a session that parliament will not allow investment to “escape” from Egypt, “so the idea of replacing imprisonment with deterrent fines must be reserved”.

“I will never allow the imprisonment of businessmen involved in financial violations,” Abdel-Aal said.

Here Is All You Need To Know

Ahmed Samir, the chairman of the Economic Affairs Committee in parliament, defended the move saying other countries have abolished penalties to protect the freedom of investors in order to support and encourage investment.

However, he stressed that investors do not enjoy absolute immunity and that there are crimes in which jail is necessary, including harming public money or the interest of the state or harming the health of citizens.

Ahmed El-Zayat, a member of the Egyptian Businessmen’s Association, believes that replacing jail terms with financial fines and providing new mechanisms to tighten control over economic business will raise the confidence of investors in the country’s economy. He said this will realise the state’s vision of increasing exports to $55 billion over the coming years.
The announcement comes amid reports that an Egyptian court acquitted two sons of former Egyptian President Hosni Mubarak of illicit share trading during the sale of a bank four years before the revolution which ousted their father in 2011.
Alaa and Gamal Mubarak, along with six other business figures, had faced charges of illegally profiting from the sale of the National Bank of Egypt to the National Bank of Kuwait in 2007. Among those acquitted is prominent businessman Hassan Heikal, son of the late journalist and political commentator Mohammed Hassanein Heikal.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com