SIGNING OF AGREEMENT: IFG

STATEMENT BY PRESIDENT AND CEO OF INVESTMENT FUND AFRICA

The President and CEO, Mr Neil De Beer, of the Investment Fund Africa, today signed a historic agreement in an international merger of two organizations namely ACUSTER CAPITAL and IFA CAPITAL.

The Spanish based ACUSTER CAPITAL and Mauritian based IFA CAPITAL, are forming a new entity namely “IFG” or INVESTMENT FUND GLOBAL.

“ I am truly excited about this new partnership with ACUSTER and indeed to lead with its President, Mr Jaume Puig, this dynamic new team. We are creating innovative ideas on global funding, consulting services and implementation of infrastructure projects globally and no doubt will we give solutions to African and global challenges.”

-Neil De Beer, President IFA and Co-President IFG

“ We recognize that the world and business are changing and that post Covid19, we will have a need for new solutions to global questions. The world will need more infrastructure reform on all levels together with capital investments packaged in innovative solutions. I am excited about creating those solutions through our IFG group”

-Jaume Puig, President ACUSTER  and Co-President IFG

 

 

 

How Africa’s Economy is Impacted through the lens of COVID-19?

Declared a pandemic by the World Health Organization (WHO) on 11 March 2020, COVID-19 has become a global emergency, given its impact on the entire world population and the economy. COVID-19 is disrupting an interconnected world economy through global value chains, which account for nearly half of global trade, abrupt falls in commodity prices, fiscal revenues, foreign exchange receipts, foreign financial flows, travel restrictions, declining of tourism and hotels, frozen labour market, etc. The Covid-19 crisis is affecting the entire world economy and that of Africa to which many believe is experiencing the lull before the storm. This was echoed by World Health Organization Head of Africa, Matshido Moeti who stated that not only could coronavirus “cause thousands of deaths” in Africa, but it has the potential to “unleash economic and social devastation on the continent”.

African growth has improved considerably over the decade 2000-2010. However, after this decade of “growth”, there were extreme doubts risen on the continents ability to sustain high growth rates for the future. Since then Africa’s growth rates had fallen to 3.3% between 2015 and 2019. The forecasts are projecting a growth rate of 3.4% for 2020. However, with the negative impact of COVID – 19 on key sectors of the economy such as tourism, travel, exports; with falling commodity prices, declining governments’ resources to finance public investment, it would be virtually impossible to achieve this optimistic forecast of growth rates in 2020. Africa is once again facing insufficient growth rates to catch up on the economic lag in the COVID – era.

The Covid19 outbreak has taken a heavy toll on the top five African economies (Morocco, Algeria, Egypt, Nigeria and South Africa) which represent more than 60% of Africa’s GDP. The level of the impact of Covid19 on these 5 economies will be representative for the whole of the African economy. The tourism and petroleum sectors represent on average a quarter (25%) of the economy of these countries. As such, growth is expected to drop in these nations. The effects of Covid-19 on global value chains are seen in the fall oil prices which will lead to the deterioration of the Nigerian and Algerian economies. Morocco’s automotive industry, representing 6 % of GDP over the period 2017-2019. Egyptian industries that depend on inputs from China and other foreign countries are affected and unable to meet both domestic and international market needs. The tourism sector is seeing a decline with the restrictions that will negatively impact domestic investments and employment in the country. Remittances are one of the Egyptian foreign sources of financing. It reached in 2018 over $25.5 billion, compared to $24.7 billion in 2017 while in Nigeria, remittances were US$25.08 billion in 2018, contributing to 5.74 % of the GDP. Both countries account for more than 60 % of Africa’s remittances inflows. Lastly, we can surmise that the COVID-19 pandemic will be susceptible to two valuable main sources of income for South Africa: mining and tourism.

The coronavirus outbreak ensured that the Year of the Rat did not get off to the most favourable start at the beginning of the year as the Chinese market had anticipating effect on the South African market. Based on the research analysis the disruption of Chinese market would undoubtedly reduce the demand for South Africa raw materials including iron, manganese and chromium ores to China (which worth an equivalent of 450 million euros exports every year). In late last year, South Africa entered a recession during the fourth quarter of last year, the current crisis will add on to the already deteriorated public finance, health infrastructure and mass unemployment in the country.

United Nations Conference on Trade and Development found that for the period (2015-2019), total Africa trade average value was US$ 760 billion per year which represents 29% of Africa’s GDP. Intra-African trade accounts for only 17% of the total trade of African countries. Intra-trade between African nations is one of the lowest compared to other regions of the world, at 16.6% of the total. To date, organisations have not fully addressed the economic impact on individual African countries. This makes the African economy an extrovert economy and vulnerable to shocks and external decisions. A major shift is needed in order to change the trade patterns of African countries within themselves and with the rest of the world particularly with China, Europe, USA and other emerging countries.

The Coronavirus disease poses many serious challenges at global, national and regional levels. The consequences, even if they are difficult to calculate, are expected to be enormous in view of the rapid spread of the Covid-19 and the drastic measures taken by countries whatever their size worldwide. Even if African countries are relatively less affected compared to other regions, for now, the spillover effects from global developments or broken supply chains may still lead to faltering economic activity.

COVID 19 – AFRICAN LOCKDOWN NOW?

Global leaders in their quest to fight COVID-19 have put in place different measures to ensure the safety of their Citizens. Africa in recent times has had questions asked of its precautions to fight the virus spread in all the 55 States.

South Africa, DRC, Rwanda and Tunisia to date are the only nations in Africa that have announced full-scale citizen lockdown. The fact that only 3 of 55 nations have taken these measures is truly sad and unacceptable. Based on this, leadership in the African Union (AU) is placed under considerable interrogation and severe pressure.

President Cyril Pamaphosa announced a 21-day national Lockdown for South Africa starting midnight 26th of March. It is also common knowledge that President of South Africa is also the Chairperson of the African Union (AU) and has the responsibility to show the same leadership for the country at AU level to the other African states. Today there is no rhythm in Africa’s band as the players seem to be concerned about the sound of their instruments more than cohesion into producing a great song.

The opportunity for Africa, to defend itself against the mass spread of COVID-19 is imminent and now. Leaders will now be judged and remembered for what they did in the time knowing the cause and effect of this pandemic. Africa, from current statistics, lags behind the world-known infections if you compare it to Europe and Asia for example. No doubt​, ​the time has come to take drastic measures to ensure that Africa keeps the spread of the COVID-19 to its bare minimum.

Africa has had the global picture well in advance and no person can deny that the worldwide channels of communication are not effective enough. On all street corners, social gatherings that still take place, the only topic today is COVID-19. The fact that this pandemic crosses all borders, religions, cultures and social classes and has no distinction between rich and poor, is a fact.

The challenges though in Africa is so obvious but needs to be brought up repetitively, but history has shown us it is sadly not done enough. Most African people on the continent are poor, have less access to basic sanitation and no doubt hygiene. The other problem and challenges facing us are that a huge number of Africans are uneducated and thus make the education process on fighting the spread of COVID 19 more difficult.

The huge movement of basic supplies to combat the COVID virus needs to be led by the AU. As of current actions, we also find a huge collective gap coming from an AU central COVID command structure, health updates led aggressively by the AU and indeed if there was such, the promotion, media and continued guidance would be poor if not indeed sad. Leaders must take a collective decision and must make these not to be popular but be secure and in defence of its people. More than one billion people on the continent are in need now of action not talk.

The fact that we have a central body for Africa called the AU, was surely created for such pandemics and the united approach to combat such. Simple daily stats on 55 countries spread and indeed actions to curb it, is needed. Gross public panic versus informing our people needs balance, but global trends like received from the US, Italy, etc are vital.

The question will remain today, apart from lack of a continental lockdown, are we settling supplies for states in Africa for example masks, gloves, and sanitizer stock. I know that we are maybe asking for a form of a federal central state approach, but there is no better method and time to Unite Africa than in this crisis. Africa LOCKDOWN NOW OR NEVER !!!

 

 

Corona Virus – The African Perspective

Over the past few weeks, African governments have been holding on tight and asking themselves hard questions concerning the effects of the spread of the virus into Africa. The Kenyan President Uhuru Kenyatta stated that the worry was not on the ability of China to manage the virus but effects on the countries with poor health systems. Today African Governments are forced to look at the decisions they have made previously in addressing public service offering whereas citizens are getting comfort in having the same health facility at their disposal as the Government Officials. African Political Leaders have been over the past travelling to Malaysia, China, India, and other countries to get special medical assistance and now that the global lockdown is active, they get to face the music with exposure to the same quality health infrastructure as their citizens.

As of Monday 16 March 2020 the countries most affected in Africa with Covid-19 include Egypt with 126 confirmed cases,2 deaths, South Africa with 61 infected, no deaths, Algeria with 48 infected,4 deaths and among the lowest infected countries there are Botswana, Zimbabwe, Tanzania, South Sudan, Chad, Somalia and Others with zero cases.

        The Corona Belt Cases recorded and Severity                   The Dominant Flight Routes Network

From the African perspective countries with the greatest connectivity routes wise and passenger compliment in Africa is Cairo (Egypt) and OR Tambo (South Africa) which make 1st and 2ND most affected countries in Africa. Do these figures explain severity according to infrastructure and level of development? The question may not be easy to answer but today the need to contain and reduce the spread remains a top priority as we do not know the severity of the African context with regards to the strength of our economies, health services, and infrastructure.

The effects of the outbreak are undoubtedly devastating to Africa more than anywhere else in the World as Africa is a net importer and relies on Imports from China, India, Europe, and America. With the largest sectors dominated by small scale businesses affected by the inability to procure raw materials and markets outside Africa due to the imposed lockdown, Africa’s vulnerability remains immense and beyond measure. The recent developments that have highlighted that the virus can be passed on before symptoms can be detected are nothing to undermine. Only a handful of countries have the ability and facilities to test for the Coronavirus in labs and the World Health Organization hopes that the number may reach half by month-end.

The state of health facilities Is a mere reflection of the effects that are yet to come. In 2016 the top 5 killers in the world according to the World Health Organisation were:

Rank Top 5 causes of Death (Africa) Top 5 causes of Death (World) Top 5 Causes of Death

(Low-income countries)

1 Lower respiratory tract infections Ischaemic heart disease Lower respiratory tract infections
2 HIV/AIDS Stroke Diarrhea
3 Diarrhea Chronic obstructive pulmonary disease Ischaemic heart disease
4 Ischaemic heart disease Lower respiratory tract infections HIV/AIDS
5 Parasites and vector-borne diseases Alzheimer disease Stroke

Africa and Low-income countries have been haunted in the past with high mortality rates from respiratory tract infections. If the major killers from 2016 are still in action, Africa maybe in far much more trouble as this will add on to an existing family of killers. Covid-19 has been known to attack the old, sick and weak, which makes Sub Saharan Africa’s exposure up to 5% as the population of the elderly (+65) is only 5% of the total population.

Today the slogan and change in lifestyle required to contain and manage the spread of the Covid-19 need the support of an enabling environment that works in favour of the people and not of the virus. Mother nature has already proven to be on Africa’s side already as the humidity and temperature are too high than the most severely affected countries and regions.

The above diagram is a true reflection of the population distribution and vulnerability, as this shows that Asia (Northern, Southern, Eastern, and Western) where the virus emerged from has the oldest population of more than 44% hence the cases are more fatal. The same can be said for Europe and North America which also have an ageing population of up to 29% of its population.

Despite efforts being made to reduce the panic and detrimental effects that Covid-19 has had globally, Social Media and Technology have not been helping as these platforms have perpetrated more than enough panic attacks in communities, cities, and countries.

Africa remains greatly exposed to the threats brought about by the spread of the virus but mostly because of the capacity to process information and resources for research on the matters of the pandemic. The lacking infrastructure such as access to electricity which hinders communication in education and awareness on the virus and access to water and resources which are essential for hygiene purposes. These are just but a few problems that Africa has, and the next two months will be key in determining the fate of Africa.

IFA Agrees Strategic Partnership with Power Group

The new arrangement will give the Power Group access to a broader range of bankable pan-African infrastructure transactions, and provide the IFA with a leading, ‘unashamedly ethical’ partner with whom to pursue its prioritization of a new form of ‘Governance Leadership’ in African infrastructure investment

The IFA and Power Construction entered into a memorandum of understanding today, setting out the terms of its new practical business partnership.  Under the provisions of the agreement, the IFA will utilise the diligence, evaluation and technical construction and engineering services of the Power Group as it works through the strong pipeline of infrastructure transactions it is now being presented with in its target AU Member States.

Neil de Beer, the Chairman of the IFA said:

“It is a huge privilege to announce the collaboration between ourselves and Power Group.  I have known Graham Power as a mentor and guide in life for the past 30 years; for me personally, the entering into of this arrangement allows me to continue to pursue my dream of working with the finest leaders in Africa.  More than that, however, today is about forging a partnership that will change the way we assess, execute and manage infrastructure development on the African continent

The vision of the Power Group, as a leading business in South Africa, is to build the continent through an ethical approach to construction – as the IFA, we can think of no better partner for our own deep-seated principles and values.

As an infrastructure fund for Africa, the IFA is proud to form this association to ensure that not only we can fund huge infrastructure developments into Africa, but also with the Power Group, construct and implement these projects to enhance regional trade  among AU Member States and dramatically improve the lives and opportunities for the African people.”

Mr Eric Langalakhe Mahamba-Sithole Joins the IFA Team

 

Today the IFA is proud to announce the appointment of Mr Eric Langalakhe Mahamba-Sithole, a former IDC AFRICA executive, as advisory consultant.

I am most proud to have Eric as an advisor to the IFA and, as a group, to have Eric is a true honor. Eric served the IDC in Africa for more than a decade and will now assit our future development in funding African infrastructure projects.

Neil De Beer
Chairman
IFA

African Potential To Reality

 

Having spent a week in Europe, traveling to London and then Zürich, has indeed given me the opportunity to engage several stakeholders on the future of African Development.

All of the stakeholders I have engaged with, speak of the great POTENTIAL of the African continent.

For centuries we have debated that Africa is the Dark Continent that needs light and no doubt for so long the world has capitalized on the resources of Africa. Be it human or mineral resources, all the world has benefited.

As Africans though, we must now look back and ask why have we, as the custodians and African born, not done the same. Times have now changed and a new form of Africanism and African awakening has arrived.

The IFA as an infrastructure fund, focused on developing Africa, forms part of this awakening. Our fund is dedicated to ensuring the full compliment and circle of African Development. We are the AFRICAN CIRCLE OF LIFE !

The IFA team builds this continent with honour and ethics as a cornerstone and are totally committed to delivery. IMPLEMENTING POTENTIAL!

 

Neil De Beer

Chairman

IFA

“The absence of political commitment, not finance, is the reason for the African Infrastructure Deficit in 2018”

With an estimated annual deficit of $130 – $170 billion US Dollars, the African continent should
have investors actively pushing for transactions. Instead, governments, development agencies and
investors continue to bemoan the lack of transactions achieving financial close because of poor
project preparation, management or governance and a perceived risk that is higher than that
attributed to other geographies. This ultimately has a direct impact on the economic development
of nation states and the eradication of poverty from Africa.

Neil de Beer, Chairman of the Investment Fund Africa (“IFA”) and Cape Town-based Nedebe Group, speaking at the ADIC 2018 in Zurich, Switzerland said:

“At our new fund, the IFA, we are focused on effective and measurable deployment of investors’ money.
I am an African. And as I travel to our target investment SADC nations, I make no apologies for emphasising
that it is not the absence of capital which is the challenge, but trust that is hampering investment – trust that
our capital will be managed, deployed and monitored properly. That is why at the IFA, we involve ourselves in
every aspect of project development and the utilisation of capital to ensure that our investors see a return, and
people see positive change. It is time to fix that trust deficit. But we are only going to do that if we apply
ourselves to the proper use of investment capital.”

Alex Woolgar, Chairman and Chief Executive of New Point Capital, the international financial services group and fund management partner of the IFA said:

“In the IFA, we have finally found a group who – because of their huge experience and ‘boots on the ground’ –
understand what is really going to make infrastructure investment work in Africa. The whole team at New
Point Capital are delighted to partner with the IFA and look forward to delivering real, systemic change across
the continent.”

Zimbabwe’s Bond Note: The Zim Dollar’s Ghost Haunting Zimbabwe’s Economy

“A dollar today is worth more than the same dollar tomorrow” …The ultimate rule in finance (Time value of money).

Zimbabwe has been characterised by currency regimes from the time of the Black Thursday (In 1997 the veterans of the 1970s war were each given Z$50 000 in gratuities by President Robert Mugabe’s government after embarking on a series of protests). In one day the buying power of the Zimbabwean Dollar depreciated by nearly 70%. One would trace the depreciation to Demand and Supply or to the instability of the money demand function or to the policy makers but all the same, the effects turned out to be far worse for a decade after. Inflation became rampant and negative interest rates became inevitable.

In the period between 1997 and 2009, before multicurrency, the value of money was unstable and citizens lost confidence in the Zimbabwean Dollar to a point where goods were not available on shelves, bank deposits declined, transactions were mainly done through bank transfers (RTGS) and card payments as hard currency was hard to come by. The time value of money put to test revealed that if Zimbabwe was to keep the Zimbabwean Dollar, it would lose its value faster than it gains interest as the inflation rate was far greater than interest rate hence the perpetual depreciation of the Zimbabwean Dollar. In 2009, the United States Dollar (USD) was introduced and currency stability was achieved, inflation curbed from over a 1000% to -6% in 2010 and interest rates were positive once more.

Today Zimbabwe is haunted by the ghost of the past, the Bond note reintroduction in 2016 brought about the parallel market, inflation, an illiquid cashless economy and more. The time value of money put to test yet again, but this time a dollar today is worth more than a dollar tomorrow, not because a dollar today would have earned interest, but because a dollar tomorrow would have depreciated.

Thus to put this ghost to rest, the future of this nation can be economically restored by simply re-visiting the key cornerstones of Zimbabwe’s legacy, agriculture and mining.

Although these two factors are still clearly prominent today, they are in no way explored to the Maximum. Zimbabwe has a myriad of underground and above ground resources that it can recapitalise itself to become a sustainable hub that is competitive both regionally and internationally.

Infrastructure on both Agriculture and Mining is the 4th Industrial revolution and the Investment Fund Africa (IFA) partnering with this very uniquely placed country is the FUTURE.

 

Dennis Sakupwanya

Research and Development Executive

Investment Fund Africa (IFA)  

Aid to Trade

It is no doubt a definitive legacy on the AFRICAN continent, that Aid has evolved from a huge humanitarian process to what we now would identify as a culture of AID DEPENDENCE.

There can be no dispute, that without the continued Aid from a multitude of donors, many countries on the African continent would of suffered massive catastrophes on a huge human scale.

The basis of which does result from poverty, natural causes and poor leadership. The fact that we as Africa have more resource wealth than most other countries put together, will be a fact not ever disputed.

The question then Why Aid ? There are so many debates on the cause and effect of this continued process but one overwhelmingly stands out…GLOBAL VESTED INTEREST

It is time that Africa rises on its own solutions to take our destiny forward and for once build, mine, construct, develop and market our selves. We have all the resources, technology and human capital to be the next huge thing.

The answer lies with Africa and the future is Africa. The IFA an African fund is the catalyst to ignite the pride and potential of this new African Revival to move from AID TO TRADE.

NEIL DE BEER

CHAIRMAN

IFA