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Despite COVID-19 Pandemic, Africa Still a Prime Investment Destination

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Africa Still a Prime Investment Destination, Says Participants at African Development Bank (AfDB) webinar for Asian Audiences

Participants at a webinar to present the African Development Bank’s African Economic Outlook Supplement to Asian audiences on Monday have endorsed the report as critical for post-COVID-19 Africa.

The supplement revises the growth projections and outlook for Africa for 2020 and 2021 and highlights the impact of COVID–19 on Africa’s socio-economic landscape. It recommends policy responses to safely reopen economies and accelerate growth recovery.

“Despite the COVID-19 pandemic, investment opportunities still abound in Africa,” said Tetsushi Sonobe, the Dean of the Asian Development Bank Institute (ADBI). “Global markets are shifting to South Asia and Africa. In a sense, Africa is not very far for Asian investors who might be interested in the investment opportunities on the continent.”

Around 350 participants attended the virtual event, which was co-hosted by the Asia External Representation Office of the African Development Bank. The audience included government officials, representatives from the African diplomatic corps in Asia, development professionals, representatives of civil society, academics and think tanks, students, journalists, and the general public

Sonobe observed that Africa’s GDP growth is projected to quickly rebound in 2021 following steady growth before COVID-19.

Sonobe identified some of the potential opportunities highlighted in the African Economic Outlook Supplement: “A large market with a very talented youthful population; a three-trillion-dollar market opportunity through the African Continental Free Trade Area (AfCFTA) agreements; greater manufacturing potential as low-cost manufacturing opportunities continue to move to Africa; improved business environment; and improving macroeconomic governance.”

Khaled Sherif, the African Development Bank’s Vice President for Regional Development, Integration and Business Delivery said despite the pandemic affecting all African economies, its magnitude will vary considerably from country to country, depending on the economic characteristics and initial conditions of the countries.

“This urges us to avoid the one-size-fits-all solution to address the effects of COVID-19 in Africa. For that, the AEO Supplement notes that the continent will need the support and expertise of all. This is an opportunity to enrich the debate on what appropriate measures are needed to support African countries to recover from the pandemic, drawing particularly from Asian experience,” Sherif said.

The webinar noted that the policy recommendations of the African Economic Outlook Supplement could be regarded as important opportunities for investments. Participants also observed that although Africa is human-resource-rich, Africa will need to work on closing its infrastructure gap – an issue the African Development Bank has made one of its top priorities.

The African Economic Outlook Supplement underlines the urgency to build the resilience of Africa’s healthcare systems and economies to improve countries’ preparedness for future shocks. This means that African countries will need to rethink their current development strategies and priorities, which have clearly shown their limitations.

“Policymakers must seize the new and real opportunities for participation in global value chains, particularly with Asia and within Africa and build the infrastructure needed to encourage large-scale teleworking, e-health, and distance learning architectures for a rapid, resilient, and sustainable recovery in a post-COVID-19 digital world,” said Chuku Chuku, Officer in Charge of the Bank’s Macroeconomic Policy, Debt Sustainability and Forecasting Division.

“The pandemic notwithstanding, Africa is open to business and we look forward to working with our Asian partners.”

Released annually since 2003, the African Economic Outlook provides compelling up-to-date evidence and analytics to inform and support African decision-makers.

 

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.

Finance

Global Deal Activity Down by 4.5% in October 2020

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A total of 6,304 deals were announced globally during October 2020, which is a decrease of 4.5% over the 6,598 deals announced during September, according to GlobalData, a leading data, and analytics company. An analysis of GlobalData’s Financial Deals Database revealed that the deal volume during October remained below the monthly average of Q3 2020.

Aurojyoti Bose, the Lead Analyst at GlobalData, comments: “After demonstrating growth for four consecutive months, the deal volume shrank in October. The decline in deal activity could be attributed to inconsistencies across different regions. The APAC region remained a weak spot, while deal activity remained mostly flat in North America, and the Middle East and Africa (MEA) region witnessed growth in deal activity.”

North America attracted the highest number of investments, followed by APAC, Europe, the MEA, and South, and Central America.

The uncertain global economic landscape lowered the deal volume in October for major markets such as the US, Germany, Australia, France, India, and China compared to the previous month. On the contrary, the UK, Japan, South Korea, and Canada saw growth of 15.6%,14.9%, 3.8%, and 2.2%, respectively, in October as compared to September’s deal volume.

Bose continued: “Most of the deal types witnessed a decline in volume during October compared to the previous month. Private equity, equity offerings, venture financing, debt offerings, and partnership deals volume decreased by a respective 2.4%, 9.1%, 9.8%, 14.6%, and 24.6% – while the deal volume for mergers and acquisitions (M&A) increased by 7.2%.”

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Investment

Japaul to Invest in Chinese Firm H&H to Deepen Mining and Exploration Business

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Japaul Gold & Ventures Plc (Japaul), formerly known as Japaul Oil and Maritime Services Plc, announced it has gotten approval in principle from H&H Mines Limited to invest in or acquire shares in the company once it concluded its fundraising exercise.

According to a statement released through the Nigerian Stock Exchange (NSE), H&H Mines Limited has several licenses, which include two major Mining Leases for 25 years renewable.

The statement noted that extensive exploration has been done on the Mining properties and the last lap of the exploration works is core drilling. This, it said will allow Japaul knows the measured Minerals Reserve contained in the Mine, which it claimed contain Gold, Silver, Lead, Zinc, etc.

Japaul further explained that the need to get the drilling done was what led H&H Mining to engage the services of Xiang Hui International Mining Company Nigeria.

“Since Japaul will eventually be part of H&H Mines Limited, it was necessary that Japaul is carried along on the kind of Contract of Drilling to be entered into, and that was why the signing of the Drilling Contract between the Chinese Company and H&H Mines Limited was concluded at Japaul’s Head Office,” the company stated.

The drilling is expected to be concluded in the next 12 months and within this time, Japaul is expected to have concluded the Fund Raising and formalise her involvement in the Mining.

The company added that Canadian reports revealed that there are huge gold, silver, lead, etc deposits, but it is drilling that will show the actual reserve.

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Africa Investment Forum (AIF) Rescheduled to Hold in 2021 – AfDB

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Investment Forum to Now Hold in 2021 in a Bid to Curb Possible Second Wave of COVID-19  

The Africa Investment Forum scheduled to hold in November 2020 in Johannesburg, South Africa has been rescheduled to hold in2021 as a result of the ongoing global health pandemic.

This announcement was made in a statement by AfDB on Wednesday. The African Development Bank (AfDB) and the Africa Investment Forum founding partners agreed to the postponement of the annual three-day investment market place.

Considering the negative effect of Covid-19 on the global economy, agreement by the two bodies was made after a careful assessment of the impact of COVID-19 on global travels, investments, observing the social distancing rules and curbing the likely possible risk of a second wave.

In the statement, the bank stated that through the forum innovative digital platforms, it would track investments, source for new deals, progress on financial closure of transactions and other existing deals.

“At the 2019 Africa Investment Forum, 57 deals valued at $67.7bn were tabled for discussions. Fifty-two deals worth $40.1bn secured investment interest.

“In July this year, the AIF Founding partners pledged to strengthen strategic partnership engagement and commitments for Africa Investment Forum Market Days 2021, to help ‘reboot investments in Africa.’ They underscored the need to boost local manufacturing while leveraging the continent’s vast resources to unlock investment.”

In the statement, Africa Investment Forum objectives are achieved through the forum’s four pillars; Closing, Connecting, Engaging and Investment Tracking.

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