Although the continent has continued to suffer a number of macroeconomic aftershocks in the wake of the Covid-19 pandemic, which has hampered the growth prospects of many African countries, the outlook for the top performing economies on the continent is broadly positive.

This is despite the fact that the ongoing conflict between Russia and Ukraine has had a harsh impact on the continent, leading to higher commodity prices, inflated food costs, increased fuel prices and headline inflation rates that have spiralled.

Despite this confluence of factors, however, according to the IMF’s recently published World Economic Outlook report, five of the world’s fastest growing economies are located in Africa. This includes Angola, Ethiopia, Nigeria, Kenya and South Africa – all of which look set to experience significant continued growth in 2023 and 2024.

This has been bolstered by recent moves such as that by the African Union, which has pledged to integrate the many recommendations set out in the newly released Africa’s Macro-Economic Performance and Outlook report.

Investing in African companies

For individuals looking to take advantage of investment opportunities on the continent, this is good news. Reports such as these speak to the resilience of the economies of many African countries as well as the corporate and commercial innovation that is continuing to take place on the continent.

Since the early 2000s, many countries in Africa have made a concerted effort to turn their economies into attractive investment opportunities for investors with interests in emerging markets.

The combination of a vast continent rich with natural resources, a young and increasingly educated workforce, and steadily growing political and economic stability has proved incredibly attractive for many investors. This has seen many take advantage of the opportunities to invest in JSE top 40 stocks.

Currently, there are around 29 different stock exchanges in Africa, representing 38 different African nations’ capital markets. The five largest of these are based in Johannesburg, Nigeria, Morocco, Egypt and Kenya. Of these, the JSE – or Johannesburg Stock Exchange – has proved particularly attractive to investors.

How to choose African companies to invest in?

These exchanges provide both retail and institutional investors the opportunity to access local African publicly listed companies. The JSE, for example, has around 264 publicly listed companies, while the Egyptian and Nigerian stock exchanges host 240 and 177 companies, respectively.

But for investors looking to take advantage of these investment opportunities, how can you spot the best companies to invest in?

If you don’t want to deal with the hassle of investing in individual companies, which requires a relatively high level of financial and economic literacy, one good option is to use exchange-traded funds (ETFs) or mutual funds. ETFs and mutual funds are available both domestically and outside the continent, and allow you to invest in a fund that holds a basket of diversified securities.

Another way to choose African companies to invest in is to choose them based on the industry or sector they are in. For example, if you believe the mining industry in Africa is going to perform particularly well in the months and years ahead, you can simply choose to stick to companies working in that sector of the economy.

Based on this, you would then have to do further research to select the best performing companies from within that sector. However, sticking to one specific sector or industry significantly cuts down on the amount of research you have to do. The only issue with this approach is that it would not leave you with a particularly well diversified portfolio.

The other approach, as mentioned, is to do your research and pick individual African stocks to invest in. Although this can be a productive approach, it requires not only a deep understanding of the economy and the stock exchange you want to invest through but also a high level of due diligence regarding the particular company. This might be difficult, given that so many African companies are relatively young and might not have the same amount of public information available as those in other countries.

Despite these difficulties and challenges, however, Africa and African stock exchanges represent some of the most exciting investment opportunities available today. Although the continent faces many challenges in the road ahead, such as tightening liquidity, it is clear that there is a strong entrepreneurial flair present across the region, and many African countries and business people look set to experience significant growth in the months and years to come.

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US President Joe Biden said Thursday that Washington is nominating former Mastercard chief executive Ajay Banga to lead the World Bank, after its current chief David Malpass announced plans to step down early.

The development lender has just started accepting candidate nominations in a process set to run until March 29, with the bank saying women candidates would be “strongly” encouraged.”

The president of the World Bank is typically American, while the head of the International Monetary Fund is customarily European.

Banga, 63, is Indian-American and currently serving as vice chairman at equity firm General Atlantic.

He has a proven track record managing people and systems, and partnering with global leaders around the world to deliver results,” Biden said.

“Banga also has critical experience mobilising public-private resources “to tackle the most urgent challenges of our time, including climate change,” the US President said.”

Raised in India, Banga has a unique perspective on the opportunities and challenges facing developing countries and how the World Bank can deliver on its ambitious agenda to reduce poverty and expand prosperity, he added.

Over the course of his career, Banga has become a global leader in technology, data, financial services and innovating for inclusion. He is honorary chairman of the International Chamber of Commerce, serving as chairman from 2020-2022. He is also chairman of Exor and independent director at Temasek.”

He became an advisor to General Atlantic’s climate-focused fund, BeyondNetZero, at its inception in 2021. He previously served on the Boards of the American Red Cross, Kraft Foods and Dow Inc.

Banga, who has worked closely with Vice President Kamala Harris as the Co-Chair of the Partnership for Central America, is a member of the Trilateral Commission, a founding trustee of the US-India Strategic Partnership Forum, a former member of the National Committee on US-China Relations, and Chairman Emeritus of the American India Foundation.

He is a co-founder of The Cyber Readiness Institute, Vice Chair of the Economic Club of New York and served as a member of President Barack Obama’s Commission on Enhancing National Cybersecurity. He is a past member of the US President’s Advisory Committee for Trade Policy and Negotiations.

He was awarded the Foreign Policy Association Medal in 2012, the Ellis Island Medal of Honour and the Business Council for International Understanding’s Global Leadership Award in 2019, and the Distinguished Friends of Singapore Public Service Star in 2021.

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Gems Cambridge Education founder Sunny Varkey is liquidating his school investments in Kenya, leaving behind a trail of debt.  Kenyan tycoon Peter Burugu has taken over the management of Regis School in Runda.

According to sources in Kenya, Mr Varkey’s Gems Group may have sold the majority shareholding in their sole remaining asset in Kenya the Regis School in Runda to local businessman Ernest Mureithi for just $1 (Sh124).   

Court papers and sources at Regis School have indicated that Gems Cambridge transferred 70 per cent of the institution’s shares to Dr Mureithi through his Ernestem Holdings.

NCBA Bank is demanding repayment of a Sh1.6 billion loan. Dr Mureithi, who has been Gems Cambridge’s regional director since 2016, denied the claim, insisting that he is just a CEO looking out for Gems Cambridge’s interests in Kenya.

He further denied that Mr Burugu’s Runda Gardens Development Ltd has taken over the management of Regis School, Gems Cambridge, he added, has already found buyers to take full ownership and control of the school.

On the dispute with NCBA, Dr Mureithi said negotiations are ongoing to settle out of court. 

Mr Varkey, an Indian national based in Dubai, opened his school’s first East African campus on Magadi Road in Karen, Nairobi,11 years ago. Despite attracting hundreds of learners who have collectively paid billions of shillings over the past decade, Gems Cambridge has irked some firms it entered into contracts with as the deals have been broken, leaving debts of over Sh2 billion.

The latest entrant is Runda Gardens Development Ltd, a firm owned by Mr Burugu and his family, which built Regis School’s facilities and is now at risk of losing close to Sh1 billion incurred in construction costs. A government valuer who calculated the amount of stamp duty due placed the value of the property at Sh795 million in 2019.

Mr Burugu’s real estate firm further obtained a Sh17.6 million loan to pay Regis School workers in October and November last year. That debt remains unpaid.

When Gems Cambridge started operations in Kenya, it signed a deal with real estate firm Goodison Sixty One School Ltd to set up the Karen school. Gems Cambridge wanted the Karen development to be a near replica of Wellington International School in Dubai, but with slight modifications.

Under the agreement, Goodison was to lease the building to Gems Cambridge Education’s local subsidiaries to recover construction costs. Goodison spent Sh3 billion for the project, which was expected to be recovered from Gems Cambridge.

Goodison Sixty One subcontracted experienced architectural firm Symbion Kenya Ltd to design the school and help put it up.

The Dubai group started to complain about the quality of the Karen facilities shortly after Gems Cambridge International School opened for its first term. Goodison pushed the blame to Symbion Kenya, and a legal battle ensued. Arbitrator Paul Ngotho in February 2016 ordered Goodison to pay the Sh131 million claimed by Symbion.

This meant that Goodison was expected to pay and recover the cost from Gems Cambridge. Attempts to challenge the arbitration award in court were dismissed by Justices Fred Ochieng and Francis Tuiyott. As Justice Tuiyott was closing the door on Goodison’s appeal, Gems Cambridge was being introduced to Mr Burugu.

After meeting with the Dubai investors, Mr Burugu struck a deal similar to the Goodison one; build a world-class facility and lease it back to Gems Cambridge to set up Regis School, Runda.

Gems Group had also entered into negotiations for the purchase of Hillcrest School from Fanisi Capital, which had bought it from the family of former politician Kenneth Matiba.

The Dubai investors eventually paid Sh2.6 billion for Hillcrest in 2019. Shortly after, they closed the Karen school and moved students to Hillcrest.

To finance the purchase, Gems borrowed Sh1.3 billion from NCBA Bank. In January 2022 Gems sold Hillcrest to a rival, Braeburn, for an undisclosed amount. By the time of the Hillcrest acquisition, a deal had also been struck with Mr Burugu who built a facility in Runda.

Gems signed a 30-year lease with Mr Burugu, but details of the costs remain a secret. When Nation contacted Mr Burugu, he refused to reveal the value of the deal but confirmed that a contract was signed in August 2019. 

A Lands ministry valuer assessed the stamp duty due from the leasing deal at Sh31.8 million, which was to be paid by the Gems group within 30 days. The Gems group was targeting a January 2021 opening date.

But the stamp duty remained unpaid over a year later, accumulating penalties of Sh3.2 million.

In November 2021 Mr Burugu’s firm was furnished with a copy of a lease agreement purporting to grant Gems Cambridge and its Regis School an exemption on stamp duty. It was then that Mr Burugu’s firm discovered that Gems Holdings Africa had transferred 70 per cent of its shareholding in Regis School for a consideration of $1.

Somehow, the Gems group had managed to alter the lease contract without involving Runda Gardens Development Ltd and held verbal non-recorded conversations with the collector of stamp duty that resulted in the tax waiver.

The contract was dated August 27, 2019. But the altered document which led to a stamp duty waiver was dated November 8, 2019. Under Kenyan law, stamp duty assessment can only be challenged by filing a case at the High Court after paying the amount demanded by the collector.

Runda Gardens Development Ltd demanded that Gems Group adhere to the original lease deal of August 27, 2019, and pay the Sh31.8 million stamp duty to avoid legal trouble. When Regis School failed to adhere to the lease, Mr Burugu’s firm termed the contract as frustrated hence null and void.

Runda Gardens Development Ltd opted to let Regis School continue operating under a regular tenancy deal with quarterly payments. By December 2022 Regis School was still behind on rent payments and was now delaying workers’ salaries. Runda Gardens Development Ltd was owed Sh19.55 million at the time.

The landlord had also lent Regis School Sh17.6 million to pay salaries in the months of October and November 2022. Regis School promised to repay the loan by end of November. Three days before Christmas, Regis School. through Dr Mureithi, sought to borrow more money to pay December salaries.

In the December letter, Dr Mureithi allowed Runda Gardens Development Ltd to use Gems equipment and property as security, meaning an auction could be done if the debts were unpaid at the end of January 2023.

The school revealed that it is searching for a new buyer.

But as the search continues, parents, students and workers at the school remain in limbo over their future with Regis School.

A new dispute is brewing, as Dr Mureithi collected over Sh10 million from a section of parents in school fees for the first term of 2023 despite Mr Burugu’s temporary management takeover.

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The Ugandan business community revealed that the South Africa Trade Investment and Tourism summit, scheduled at the Gallagher Convention Center, Midrand, South Africa, from 27th to 28th February 2023 under theme “Boosting Trade and Investment Relations between South Africa and Uganda”, will provide a platform for the business community and government agencies to identify existing and emerging business and investment opportunities of mutual benefit.

Over 300 delegates comprising business leaders, government agencies, and investors from the two countries will be in attendance. They will explore opportunities in sectors of Agriculture, tourism, oil and gas, healthcare, and transport and logistics, amongst other sectors.

The purpose is to bring buyers and sellers from both countries along with investors in the value chain of the key export products from Uganda, together.  Uganda has a target of US$6bn in non-oil exports between 2023 and 2028, to stave off growing unemployment, restore sustained growth in key sectors of the economy post covid19 and increase value addition in agriculture along with more manufacturing in the country.

Uganda is focused on increasing exports of beef, dairy, coffee, sugar, cement, steel products, poultry, bananas and banana flour, fruits, and vegetables, and tourism. South Africa consumes Uganda’s coffee, vanilla, chocolate, and other products.

The trade summit will begin on 27th February, with the plenary session followed by a panel discussion by technical experts on the bottlenecks and mechanisms for unlocking trade and investment potential between Uganda and South Africa.

Roundtable meetings with industry experts will follow, focusing on the opportunities of mutual benefit in the Energy, Oil, and Gas sectors, boosting African trade in value-added products, and unlocking mutually beneficial business opportunities in infrastructure.

On 28th February, the business community will be provided with a networking platform to identify potential projects and partners for investment and collaboration. This session will be graced by His Excellencies, Yoweri Kaguta Museveni and his host Cyril Ramaphosa.

Speaking at the briefing event, Robert Mukiza, the Director General at the Uganda Investment Authority said: “Uganda enjoys excellent bilateral relations with South Africa, and this is premised on the long-standing bond between our two countries long before South Africa gained independence. The summit is one way we leverage the existing cordial relations to showcase and identify potential areas for collaboration so that we scale up trade between our two countries.”

The Chairman of, Presidential Advisory Committee on Exports and Industrial Development, Mr. Odrek Rwabwogo further emphasized Uganda’s need to grow export revenue, especially in Africa. He requested the Uganda business community to travel to South Africa to conclude deals and attract investors in order to achieve a growth in export revenue by USD 6BN over the next 5 years.

 “Markets only make sense if the firms have a deep working relationship and knowledge of what to sell and how. Each of us must carry sample products, brochures, have books of accounts from the last five years, be honest with our strengths and weaknesses, and know how to communicate with our brothers in South Africa and this should be for every market. We go to avoid talk shops and go for deals and equity investors in our firms,” he said.

Enid Edroma, General Manager, of Corporate Affairs at MTN Uganda thanked the government for the favourable policies and regulations that have enabled the telecom company and other businesses to succeed.

She, however, requested the government to harmonize its policies, especially in the telecom sector, with the country’s aspiration for digitalization.

She said the government needs to forfeit taxes on smartphones like it is in Rwanda to drive the prices of smartphones downwards and thus stir their uptake leading to a reduction in operational costs and so the cost of internet.

South Africa is one of Uganda’s fastest-growing sources of Foreign Direct Investment and is leading in telecommunication, banking, energy and many others. Uganda, on the other hand, exports pharmaceuticals products, coffee, Vanilla, Flowers, and vegetables.

The South Africa – Uganda, Trade Investment and Tourism summit is part of the government’s intentional initiatives to increase its export quota in the regional and international markets.

The summit was coordinated in Uganda by the Presidential Advisory Committee on Exports and Industrial Development, Private Sector Foundation Uganda, and Government agencies in partnership with MTN Uganda, Stanbic Bank, UNDP and Uganda Airlines.

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