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$70bn INVESTMENTGlobal investors plan to enter Africa

Current ICT spending in sub-Saharan Africa is approximately $70bn and it will nearly double by 2015

tarting a business in Senegal takes 5 days, the same as Canada. Construction permits in Burkina Faso take 98 days, three months faster than the EU

»Some of the world’s largest institutional investors intend to make their first significant step into Africa over the next five years, according to IntoAfrica, a report based on a survey of 158 senior executives by Invest AD and the Economist Intelligence Unit (EIU). The report's key findings: Institutional investors see Africa as holding the greatest overall investment potential of all frontier markets. Two thirds (66%) of those interested in frontier markets see African markets as having the greatest opportunity. Many predict that Africa‘s growth rate will outstrip all others in the next five years. • Institutional investors plan to increase their asset allocation in African markets over the next five years. Frontier markets investors are just starting to explore African markets. By 2016, all expect to have some exposure to Africa, with nearly one third expecting to shift at least 5% of their fund value there. • Investors are moving towards longer-term investment strategies for Africa. Nearly two thirds (64%) of investors agree that market volatility, partly due to limited liquidity, now requires a longer-term investment approach. • Africa’s emerging middle class is catching investors’ eyes, ahead of commodities and natural resources. Four in ten investors (39%) selected this as the most attractive aspect of African markets, ahead of high commodity prices (34%) or high growth rates (35%). • Investors now worry more about technical concerns than about macroeconomic and political risks, at least in key markets. But a striking shift is a change in focus from macroeconomic and political worries towards more technical market concerns. The first Twitter map of Africa shows more than 11.5m geographically pinpointed tweets on the continent over the last three months of 2011. A survey of 500 of Africa’s most active tweeters found the social media is fast becoming an important source of information on the continent he amount of money transacted by M-Pesa in Kenya in December 2011 exceeded the amount of money Western Union transacted globally

Experts estimate Africa would need around $32bn-$39bn annually to achieve full economic potential in its farm sector Rock star Bob Geldof has raised $200m for his ‘8 Mile’ African private equity fund to promote private quity fund to promote private enterprise on the continent

OIL Kenya/South Sudan sign pipeline agreement South Sudan and Kenya have signed an agreement to build the much-talked-about pipeline to connect South Sudan’s oil fields with the Kenyan Port of Lamu. The pipeline will be developed through Kenyan territory, and will be built and owned by South Sudan, taking around 11 months to complete.

The North and South of Sudan have so far failed to reach agreement over transit fees for the crude shipped to the north for export, thus tipping the scales toward the pipeline. (See story on page 56.) Uganda and Tullow sign oil production deal The government of Uganda has signed productionsharing agreements with London-based Tullow Oil, which will allow the country to complete deals with Chinese company CNOOC and France’s Total, paving the way for commercial oil production in Uganda. There will be a $10bn investment in an oil refinery and also a crude oil export pipeline.

Tullow will sell two thirds of its interest in the Lake Albert Rift Basin, a long-term development in Uganda, to Chinese company CNOOC and French firm Total in a deal worth $2.9bn.

The refinery is expected to begin with a limited capacity of 20,000 barrels per day, increasing to a peak of 150,000-200,000 barrels per day. The oil deposits and refinery are expected to be large enough to meet Uganda’s needs as well as those of some its neighbours including eastern DR Congo. MINING West Africa’s first online mining database Sierra Leone has launched West Africa’s first online mining database, aiming to increase transparency and accountability in the sector. The ‘Government of Sierra Leone (GoSL) Online Repository System’ is a joint initiative between the government and international donors, including the German Society for International Cooperation (GIZ), the UN’s Development Programme, the Revenue Development Foundation and the World Bank.

The database will hold information on all revenue information for the country’s extractive industry – payments for licences, royalties and contributions to local chiefdoms – collected, recorded and published so as to be publicly accessible. It will also show whether mining companies have been authorised to operate legally in the country.

The system is part of the move to make Sierra Leone compliant with the Extractive Industries Transparency Initiative, which requires the timely publication of payments made by mining companies to government, as well as revenues generated from the projects.

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African Business | March 2012 e

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17/02/2012 16:09