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Five key sectors to consider when investing in Africa

Five key sectors to consider when investing in Africa

Still in its infancy stages of development, Africa has become a global platform for economic competition, catching the eye of multinational organisations looking to expand operations. It’s safe to say, Africa is fast-emerging as an investment destination of choice.

Africa’s economy has traditionally been rooted in the primary sectors, given its favourable climate conditions and abundance of natural resources. However, the success of its economic development is not restricted to the extractive industries.

Other sectors such as construction, financial services, food, agri-processing, healthcare, manufacturing, wholesale, and retail are emerging as vital industries driving development on the continent.

A recent study by Adams.Africa Advisory details the key sectors that are poised for take-off, helping clients navigate challenges to secure opportunities across the continent.

1. Agriculture

Africa’s economy is heavily dependent on its agriculture sector, which contributes significantly to the continent’s development. While the continent accounts for about 60% of the world’s uncultivated arable land, only 7% is irrigated, and only 8% is under managed water and land development.

2. Energy

Despite Africa’s sizeable pools of energy resources, access to both fossil fuels and renewable energy is in short supply. African states are placing the utility of renewable energy high on the agenda.

3. Healthcare

New healthcare technologies, such as medical drones, AI, robotics, telemedicine, mobile screening, and mobile applications are gaining momentum, allowing Africa to leapfrog traditional infrastructures and improve access to services while promoting efficiencies in delivery.

4. Telecommunications

Africa continues to experience delays in the development of reliable and fast internet infrastructure. Investment is needed for the development of broadband networks, as well as the expansion of advanced telecommunications technologies.

The shortfall in investment, coupled with a growing skills shortage and lack of technological innovation will continue to hinder development. To bridge the gap, the participation of the private sector is needed, and can assist markets in becoming viable investment destinations in the long run.

5. Transport

Inadequate infrastructure capacity across all four modes of transport continues to hinder economic growth. 50% of the road networks are in dire condition while the continent’s railway network is grossly underdeveloped and requires considerable investment in order to realise several planned large-scale transportation corridors, including the Trans-Kalahari Highway.

These factors give investors room for financial and knowledge injections into the various development projects currently underway, as well as those that are needed to meet the demand for optimal human and economic development. Modernising Africa’s transport infrastructure requires both investment and expertise, specifically public-private partnerships.

Development priorities vary in scale and by industry across regions and countries. Investors require targeted research, market entry strategies, and feasibility studies in identifying regional and country-specific gaps and opportunities in being better informed on potential investment costs and risks before making in-roads on the continent.

To assist investors entering the African marketplace, Adams & Adams through its Adams.Africa Advisory unit offers a comprehensive range of business, economic, political, and legal research services, coupled with up-to-date information and a precise framework for investment and IP protection across Africa’s jurisdictions.


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Following reverse listing, public can now acquire shareholding in Paratus Namibia

Promotion

20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.