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Japan Sets Sights on Africa As a Top Investment Destination

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  • Japan Sets Sights on Africa As a Top Investment Destination

Focus for the longest time has been on China’s domination when it comes to investments in Africa. While true that China leads the pack when it comes to investments, Japanese investments are becoming increasingly popular as the island nation looks to explore the continent’s untapped resources.

While Japanese African relations trace back to the 1960’s, it is only now that the economic powerhouse appears to have started taking a keen interest on what the continent has to offer when it comes to investment opportunities.

Japanese investors are increasingly showing great interest in setting up companies and financing other businesses around the continent. The result has been win-win situations for both.

Japan’s investments are becoming increasingly popular in part because of the country’s balanced trade across the continent. In 2017 the country exported $7.5 billion worth of goods to Africa and imported $8.3 billion.

South Africa Top Destination for Japanese Investors

While China has sought to spread its investments around the continent, Japanese investors appear to be maintaining a keen interest in some markets, more than others. According to data compiled by Asoko Insight the Japanese Ministry of Foreign Affairs and the Japan External Trade Organization, South Africa remains a top investment destination for Japanese investors.

According to data compiled by JETRO and analysed by Asoko Insight, there were about 738 Japanese companies registered in the Content as of the end of last year. Almost half of the companies, at 354, had their investments distributed across South Africa.

Most of the Japanese companies in Africa operate either as wholly owned subsidiaries or in partnership with local companies. Some of the companies are also believed to have formed alliances with foreign firms particularly from Asia and Europe.

Away from South Africa, Japanese company’s presence is also being felt in North Africa which happens to be the next top investment destination. In North Africa, there were about 138 Japanese companies representing 7.3%. East Africa comes third with about 120 Japanese companies followed by West Africa with 114 companies.

Areas of Investments

When it comes to investment areas, Manufacturing remains a top investment area with the JETRO Survey indicating about 315 companies involved in such operations. A quarter of the companies employ more than 51 staff with the others employing 50 or less.

Energy and mining are the two most popular investment areas for Japanese companies in the continent. The companies are in pursuit of fresh raw materials in the form of mineral resources that would keep their country’s industries up and running.

Why Africa?

Increased investments in Africa are part of a bigger plan of gaining access to markets for finished products back at home. The island nation plays host to some of the biggest companies in the world.

Faced with competition in developed markets, Japanese’s companies have had to look for new markers elsewhere, with Africa emerging as an exciting prospect in this case.

The continents market size is another attribute that appears to be fuelling investments according to JETRO Survey. Other factors include the vast continent portfolio of untapped natural resources. Pursuit of natural resources in Africa does not come as a surprise given that the country is not the most endowed on this front.

Asoko Insight is a data and information services company operating across Africa. Asoko is bridging the information and data gap across the continent, focussing on delivering the best corporate data and analytics platform of African private companies for market mapping, due diligence and investment needs.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Lagos Gov to Shut Down Third Mainland Bridge this Friday

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Lagos Gov to Shut Down Third Mainland Bridge this Friday

The Lagos State Government will shut down the Third Mainland Bridge for 24 hours from midnight Friday, February 26th to midnight Saturday.

The Commissioner for Transportation, Dr. Frederic Oladeinde who made this known in a statement issued on Wednesday, said the total closure of the bridge is to enable the contractors move the equipment used during the rehabilitation process off the bridge and allow both the Oworonshoki and Adeniji bound lanes open fully to traffic.

Oladeinde therefore, advised motorists approaching the bridge from Ogudu, Alapere and Gbagada to use Ikorodu Road, Jibowu and Yaba, as alternative routes, while Iyana Oworoshoki-bound traffic from Lagos-Island, Iddo, Oyingbo, Adekunle and Yaba are to use Herbert Macaulay Way, Jibowu and Ikorodu Road as alternative routes.

The Commissioner assured that traffic management personnel would be deployed along the affected routes to minimize and address any traffic impediments during the closure.

Commending Lagosians for their cooperation during the prolonged repair works of the Bridge, the Commissioner assured that the bridge is now safe for use by all and sundry.

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FSD Africa Partnership Aims to Safeguard and Leverage Investment for Small and Medium-sized African Businesses

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 The four co-operation agreements signed between FSD Africa and the African Private Equity and Venture Capital Association (AVCA) and East Africa Private Equity and Venture Capital Association (EAVCA) and Southern Africa Venture Capital and Private Equity Association (SAVCA) and the Private Equity and Venture Capital Association Nigeria (PEVCA) will help to ensure local expertise and tailored delivery for regional and country mandates.

FSD Africa today announces the signing of co-operation agreements with AVCA, EAVCA, SAVCA and PEVCA to coincide with the launch of the Africa Private Equity and Private Debt Programme. The programme is a new initiative to support the development of private capital markets in Africa as a complement to public capital markets. It will work to improve the long-term financing options available for businesses across key sectors in Africa’s economy, including healthcare, climate and agriculture.

Access to long-term finance has continued to be a challenge for small and medium-sized businesses across the continent. The economic impact of COVID-19 has only exacerbated the strain on Africa’s formal public markets aiming to provide long-term finance options to businesses desperately in need of capital. This alongside increased risk averseness by lending institutions has left few options for SMEs to access long term financing, in many cases resulting in business closures and job losses.

Through the Africa Private Equity and Private Debt Programme FSD Africa aims to leverage various tools including grants, technical assistance, advocacy and investment capital to support the growth of private capital markets. The partnership aims to support growth in a way that is uniquely African in character, tailored to the local context and delivering long term financing options for SMEs.

FSD Africa, AVCA, EAVCA, SAVCA and PEVCA will work with policymakers, regulators, industry associations, institutional investors and other market operators to encourage and advocate for changes that promote increased flow of institutional capital into private capital markets. Through the programme FSD Africa and its partners will seek to create a knowledge sharing environment by working with regulators to put in place regulatory provisions and/or incentives, build capacity and understanding of relevant market stakeholders.

Mark Napier, CEO at FSD Africa, said:

“Supporting the development of private equity and private debt markets in Africa will provide a boost to small and medium-sized businesses and local economies. We believe this will be greatly welcomed in the short term, ensuring that more jobs are saved, but it will also provide long-term benefits and improve access to capital.  Globally, there has been a secular shift towards private capital markets and it is appropriate that, as part of our response to COVID-19, we pay enough attention to the development of private markets, allowing for more local capital to be channelled into essential sectors including health, agriculture and climate.”

Evans Osano, Director, Capital Markets at FSD Africa, said:

“By encouraging long-term investment capital to Africa’s private sector, real impact can be delivered, including creating and sustaining jobs, and increasing access to services like healthcare. We urge local investors, regulators, and other relevant individuals to come forward to be a part of this programme and look forward to working with them on this exciting next step.

Ify Ossi, Executive Secretary, PEVCA, said:

With the unprecedented economic shocks brought on by the pandemic, the case for mobilizing private capital in our clime has become more evident. In the face of the huge funding gap and growth lag facing sectors across Nigeria, long-term access to local financing coupled with structural adaptations, were necessary, are key to our economic growth and sustainability. Interventions that address industry gaps and challenges must be both private sector and policy driven guided by suitable strategic partnerships and alliances, among other factors. We are excited about PEVCA’s partnership with FSD Africa, particularly its pan African approach towards capital market development, and look forward to jointly facilitating solutions for our industry.

Tanya van Lill, CEO, SAVCA, said:

“SAVCA is looking forward to partner with FSD Africa on this initiative to support the development of private capital markets in Africa. This Programme has the potential to unlock much needed catalytic capital for businesses and industries that have the potential to not only create and preserve jobs, but also contribute to much needed economic growth given the impact of COVID-19.“

Eva Warigia, Executive Director, EAVCA, said:

“For the EAVCA, FSD Africa is a natural partner given their in-depth knowledge of local markets. We see this as a strategic partnership that will advance EAVCA’s commitment to increase local participation in financing private business- both mature and early stage- in East Africa by providing alternative sources of capital”.

Abi Mustapha-Maduakor, CEO, AVCA, said”

“In addition to facilitating greater inflow of private investment to the continent, advocacy is at the centre of our work at AVCA. This collaboration with FSD Africa is timely, and I look forward to working with our colleagues at EAVCA, SAVCA and PEVCA to support investors, businesses and governments in their efforts to strengthen Africa’s economy over the coming years.”

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Spotify to Launch in Nigeria, Bangladesh, Others in Few Days

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Spotify to Launch in Nigeria, Bangladesh, Others in Few Days

Spotify, an audio streaming and media services provider, announced it will launch in Nigeria, Bangladesh, Pakistan and more than 80 other new markets in few days.

The company disclosed this in Tweet put out on its official Twitter handle @Spotify.

Launched in October 2008 by Spotify AB, a Swedish company, the audio streaming platform was listed on the New York Stock Exchange in 2018.

Spotify is presently available in 93 countries and has over 345 million active monthly users.

With the new markets in Asia, Africa, Europe and Latin America, its active users could jump significantly compared to rivals, Apple Music and Amazon Music.

Together these markets represent more than a billion people, with nearly half of them already using the internet,” said Chief Premium Business Officer Alex Norstrom. “Some of the places we’re going like Bangladesh, Pakistan and Nigeria have the fastest growing internet populations in the world.

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