AF AFRIC RICA A IN INVES VESTMENT TMENT FORUM ORUM Africa’s Investment Market Place June e 2018
Africa’s Development Landscape Africa’s Investment Market et Place Averag erage e annually ally $65 – 90 billion Light up and power Africa The e High 5s will ll acceler lerat ate e Feed Africa $32 – 40 billion progress ogress towar ards s the SDGs s Approx. Industrialize Africa $40 billion According to a UN report, the $170 billion High 5s will contribute Integrate Africa $10 billion per annum to achieving almost 90% of the SDGs in Africa. $5.5 billion Improve the quality of life TOTA TAL $153 – 186 billio lion The e globa bal l develo elopme ment t agen enda da This gap cannot be The MDBs/DFIs are is ambi bitio ious addressed by MDBs and maximizing their current At the same time, Africa’s Governments only. It resources; however, The international community requires broad based fina nanci ncing ng gap continues constraints imposed by has asked the MDBs to scale up partne nersh ships ps and colle lecti ctive e to expand prudential ratios will limit their operations and go from effort with the private sector their lending capacity. “billions to trillions” to help the to leverage capital l at scale. planet achieve the SDGs.
Wh Wher ere e is is the e Capit pital? al? Africa’s Investment Market et Place USD 84.9 9 trill llio ion n in Global Assets sets Und nder er Mana nageme gement nt (AUM) UM) USD 7 trill llion ion USD 500 500 – 550 550 and projected to Net t banking ing managed through bill llion ion in combined 94 sovereign doube to USD 145 assets of circa net assets from wealth funds in trill llion ion by 2025 USD 800 Africa ican n pens nsion ion 60 countiries billion lion in Sub- fund nds and sovereig eign n Saharan Africa wealt lth fund nds & (SSA) alone. projected jected to reach ch USD1 1 trill llion on by AIF 2030 2030 AIF AIF AIF AIF is a leveraging ing platf tfor orm m that will ll tilt the balance lance of capital ital towards Africa’s critical sectors to achieve the SDGs, High 5s and d Agen enda da 2063
Why hasn’t this happened? Africa’s Investment Market Place Invest vestme ment nt Risk sk Info form rmat ation on Asymmetry mmetry - Negative perception of investment risk - Limited information on African markets - Limited availability of tools for credit - Data paucity enhancement and risk coverage Africa ica strug ruggles les to attr tract act signif ific icant ant capit ital al Dearth arth of Bankab nkable le proj oject ects Business siness & Regul ulator atory y Envi vironm ronment ent - Poor preparation and packaging of - Adverse government actions and project proposals unpredictability - Limited availabilty of finance for project - Cumbersome business regulations preparation 3
Afric ica a Inve vestm tment ent Forum rum (AIF) F) – Str Strat ategi egic c Intent ent Africa’s Investment Market et Place Advance projects to Bankable stage Capital raising SPECIFIC IC OBJECTIVES TIVES Accelerate financial closure of deals Projec ject Preparat aration ion Invest stment ment Policy y Envir iron onmen ent Pipeline line Develop lopmen ent Projec ject Bankabil bility ity Promotion tion TREAMS AMS • Partner • Visibility Funding - Grants • • Regulatory reforms • Credit WORKSTR engagement • Deal screening • Process and consistency enhancement • Market harmonization Co-guarantee • Advocacy efforts for • Intelligence Platform institutional building
What Wh t is is the e AIF? An enabling mechanism for MDBs/DFIs to do more with less Africa’s Investment Market et Place The Platform The Market Place The Market-Days AIF AIF AIF AIF Totally Efforts that culminate into the Connecting investors, other transactional success of the market-days market players and policy makers A) Deal onboarding A) Investment promotion Sessions: sions: - Digital platforms e.g Source & - Roadshows Convergence, ConnectAmerica - Investor conference calls A) Speed-Dating B) Match-making investors and B) Deal screening & filtering transactions B) In the Board Room - Deal profile: private sector centric, demonstration effect, C) Partner engagement & C) Sharing success stories scalable etc) crowding-in. - Deal types (Elephants, Zebras, Cheetahs, Turtles) C) Improving deal quality at entry - Leveraging existing and new Instruments - Mapping potential deal partners 5
AIF F PROJE OJECT CT PIPELINE ELINE Africa’s Investment Market et Place Sector Distribution by Ticket Size (USD Mln) Sector Distribution by No Of Deals Urban Development Urban Social - Education & & Real Estate Industrial & Health Development & 2% Trade Real Estate 3% Industrial & Trade 6% 0% Agriculture Hospitality & 5% Tourism Agriculture Social - Education 4% 10% Energy & Health 1% Hospitality & Agriculture Infrastructure Tourism Infrastructure 31% 8% 10% Hospitality & Tourism Infrastructure 14% Industrial & Trade Urban Development & Real Energy Estate 71% Social - Education & Health Energy 35% 6
Wh What t succ cces ess s wil ill l lo look k li like ke for the e AIF Africa’s Investment Market et Place V V V V Leveraging MDBs/DFIs Assist MDBs/DFIs in comparative advantage (as achieving deal closure Effective tracking of deals to key conveners and honest Contribute to closing through co-financing and follow through on transaction brokers) to further Africa’s investment gap syndication in the delivery consolidate their trusted marketplace relationships and brand equities 7
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