The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has advocated for sustainable investment in housing development to mitigate the economic challenges the economy is presently facing.
Answering reporters’ questions in the just-concluded Africa’s Housing Agenda, jointly organized by the African Union for Housing Finance (AUHF) and the Nigerian Mortgage Refinance Company (NMRC) in Abuja at the weekend, Emefiele suggested sustainable investment in housing to grow it from its dismal 1 percent contribution to the Gross Domestic Product (GDP).
Represented by Mr. Ahmed Abdullahi, a Director in the bank, he said if the housing sector can contribute over 80 percent to GDP in the United States of America (USA), it can also be used to improve the economy significantly.
He said: “If you look at the housing market in Nigeria and in Africa, compared to the more developed economies, you will find that the housing markets in Africa are indeed largely underdeveloped.
“The contribution of the housing market to the GDP in Nigeria is less than 1 percent, compared to that of the U.S, which accounts for over 80 percent.”
According to him, the housing sector in the U.S. represents the highest financial assets class in the world as it is the highest contributor to its capital market combined, adding that it represents a higher subsection of that country’s economy.
He advised African governments to use the housing sector as stimulant to grow the economy thereby increasing its contribution to GDP.
“If you look at Nigeria’s 1 percent contribution of housing to GDP, imagine what the economy will look like when it is grown to 80 percent.” the CBN governor said.
Additional Pension Fund Assets Invested in Banks in Third Quarter (Q3) of 2021
The National Pension Commission has released a new report on pension fund assets, which has shown that investment in Local Money Market Securities had more pension fund assets invested in banks than in papers through Open Market Operations, as well as fixed deposits of banks in the third quarter of 2021.
The report from the NPC also showed that the total invested fund placed with banks as a percentage of the total pension fund assets sat at 17.10 percent, which translates to N2.22 trillion in September, rising from 13.15 percent or N1.66 trillion in June 2020.
It showed that investment in commercial papers which constitutes about 0.5 percent of investment in pension fund assets, went down to N0.68 trillion from N0.72 trillion (which constitutes 0.57 percent).
The report also addressed corporate debt securities, stating that the amount invested in the space went up by 1.82 percent to N0.97 trillion in Q3 from the N0.95 trillion which it had recorded in Q2.
Cash and other assets which are responsible for 0.46 percent (or N59.79 billion) of the total pension fund assets in September 2021 also fell from 0.59 percent (or N74 billion) in June 2021.
All funds invested in real estate properties as a section of the total pension fund assets went down to 1.18 percent (or N153.4 billion) from 1.24 percent (or 156.88 billion) in the period which was under review.
Cowry Research analysts discovered that the increased investment by the Pesnion Fund Administrators (PFA) in bank placements was mainly to take advantage of the relatively high yields in the short term without gaining much exposure to the risk that is inherent in the money market.
The Cowry analysts stated that the increased activities of pension managers in the equities market throughout Q3 2021 was on the platform of an improvement in the performance of corporate organizations as the Nigerian economy continues its recovery from the COVID-19 pandemic.
Verdant Capital Advises WIOCC on USD80 Million Equity Capital Raise
Verdant Capital has advised WIOCC Holding Company Limited (or “WIOCC”) on an USD 80 million equity capital raise. USD 75 million of equity was invested by CAPE IV, a fund managed by leading African private equity fund manager African Capital Alliance. The balance was invested by management and an existing shareholder.
The equity raised has been supplemented by a debt capital raise. The total capital raise of USD 200 million will be used to expand its connectivity within Africa and internationally, and through Open Access Data Centres (or “OADC”) – a newly created WIOCC Group company – to launch a network of pan-African data centres optimised to serve the needs of the cloud provider and wholesale community.
As well as introducing a strong new investor into the company, the capital will be used to support WIOCC’s expansion strategy across Africa and accelerate its investment in enhancing the continent’s digital infrastructure. Strategic investments in the new Equiano and 2Africa international subsea systems will augment and complement WIOCC’s existing core network infrastructure, cost-effectively adding multi-Terabits (Tbps) of capacity and significantly increasing its options for delivering the high-availability solutions demanded in markets across Africa. WIOCC’s terrestrial strategy, which includes deployment of metro and national networks in key locations, will be extended to include new countries and metropolitan areas, increasing its portfolio of end-to-end solutions for clients across Africa.
Part of the capital raise will be used in funding OADC, which is creating a transformational interconnected pan-African network of open-access, carrier-neutral data centres. First-phase locations will house key submarine cable landings in Lagos, Durban and Mogadishu, supporting the drive to land international submarine capacity directly into carrier-neutral data centres. Each will provide clients with bespoke colocation facilities and ultra-reliable, seamless connectivity directly into new international subsea systems, eliminating the costs and risks traditionally associated with terrestrial backhauling. Construction and fit-out is underway in Lagos and Durban, with both to be launched early in 2022, whilst the Mogadishu data centre will be ready before the end of 2022. Further phases of deployment will deliver more than 20 new data centres in strategic locations throughout the continent, focusing on major connectivity hubs in each country.
African Capital Alliance was attracted to the investment by the clear vision to develop high quality and synergistic assets and solutions to support its long-term client partnerships. The investments will further position WIOCC to take advantage of the accelerating migration of infrastructure and services into the cloud, driving demand for data transmission, storage and processing in wholesale, enterprise and consumer end-markets in Africa, and bringing forward realisation of WIOCC’s vision to make an enduring contribution to Africa’s communications.
The successful capital raise further strengthens Verdant Capital’s track record as a leading advisor on transactions for or involving pre-eminent private equity firms in Africa.
Investment Opportunities in Africa in Full Display at IATF’s Investor Forum
The Intra-African Trade Fair (IATF) 2021, which is currently taking place at the Durban International Conference Centre, will be hosting tomorrow, 18 November, its Investment Day. Organised under the theme “Unlocking Investment and Accelerating Deal Flow in Africa”, the Investor Forum is a full day dedicated to showcasing Africa’s investment potential and showcasing investment-ready projects. The Investment Forum will also feature sector specific parallel sessions on: Agriculture, Logistics, Technology and Tourism.
IATF is Africa’s biggest in-person B2B and B2G event of the year and seven Heads of Government attended the opening ceremony. The message was loud and clear that there is the political will and engagement to make the African Continental Free Trade Agreement a success and that at the heart of this is developing intra-African trade and investment.
IATF has featured three days of debates and discussions to help overcome the obstacles holding back trade such as the cost of moving goods and cross-border payments. Afreximbank has developed some specific products to help deal with these structural issues: the Afreximbank African Collaborative Transit Guarantee Scheme (AACTGS) and the Pan-African Payments and Settlements System (PAPSS). A full day of deliberations focusing specifically on the Automotive Sector and the Pharmaceuticals Industry to help grow domestic manufacturing is also taking place.
The Investor Day will focus on investment opportunities on the continent and unlocking cross-border investment by African national champions, focusing on some key sectors and learning from investors and companies who are committed and invested in the African continent.
Confirmed speakers include: Hon. Ms. Bogolo Joy Kenewendo, Global Economist, Kenewendo Advisory and Former Minister of Investment, Trade and Industry, Botswana; Mr. Amr Kamel, Executive Vice President, Business Development & Corporate Banking, Afreximbank; Dr. Acha Leke, Senior Partner and Chairman, McKinsey & Company, Africa; Mr. Akol Ayii, Founder and Chairman, Trinity Energy; Mr. Paulo Gomes, Chairman, Orango Investment Corporation; Ms. Ndiarka Mbodji, Founder & Chief Executive Officer, Kowry Energy; Mr. Abdou Souleye Diop, Managing Partner, Mazars.
“I have always been a believer in the development of national champions and for these national champions to be the locomotive of private sector investment across the continent. We’re seeing it but the examples are still too seldom. The pandemic has highlighted the necessity to become self-reliant and this will require cross-border collaboration,” said Omar Ben Yedder, Project Lead on the Investment Forum and Publisher of African Business magazine. “This Investment Forum is built on this same spirit of cooperation, bringing together projects from across the continent to present the investment potential in Africa,” he added.
To coincide with the dates of the event, the IATF 2021 Investment Forum team, in coordination with African Investment Promotion Agencies, is making available an IATF 2021 Project Book, a compilation of investment ready projects across multiple sectors. The IATF 2021 Project Book can be downloaded here.
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