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Egypt and South Africa recorded the highest number of FDI in 2018

In contrast, Nigeria, Africa’s largest economy saw a 36% drop in FDI in 2018

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Africa registered a 6% increase in Foreign Direct Investment inflows in 2018. 

According to the United Nations Conference on Trade and Development (UNCTAD) in its Global Investment Trends Monitor, it increased to $40bn from $38bn in 2017.

Growth was recorded in  few economies.

Relatively diversified economies such as Egypt and South Africa saw more stable and increasing FDI inflows

Egypt, where recent economic reforms have led to improved growth, was Africa’s biggest recipient of FDI in 2018, recording an inflow of $7.9bn, a 7 percent increase over the $7.4bn recorded a year earlier. According to UNCTAD, investment inflow was in real estate, food processing, oil and gas exploration and renewable energy.

South Africa received FDI amounting to $7.1bn in 2018 from $1.3bn in 2017, with large investments in mining, food processing, petroleum refining, information and communications technology, as well as renewable energy. 

In contrast, Nigeria, Africa’s largest economy and top oil producer saw FDI drop 36 percent to $2.2 billion in 2018. This decline saw Ghana overtake Nigeria as the country with the highest FDI in West Africa, recording an inflow of $3.3 billion.

 Policy decisions have been blamed for Nigeria’s poor FDI inflow in 2018,  but UNCTAD expects 2019 to be better for the country, especially due to some significant greenfield project announcement in the oil and gas industry.

Ethiopia was the largest recipient of FDI in East Africa in 2018 Major investments in the country were in petroleum refining, mineral extraction, real estate, manufacturing and renewable energy.

UNCTAD concludes that progress in the implementation of the Africa Continental Free Trade Agreement (ACFTA), diversification in greenfield projects targeting the manufacturing sector and the stabilisation of commodity prices show that FDI in Africa could potentially grow in 2019 at a higher pace than the 6 percent recorded in 2018.

Meanwhile, global FDI fell by nearly a fifth in 2018 to an estimated $1.2trn from $1.47trn in 2017.

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International partners set to boost northern Nigeria’s leather industry

The partners will develop a leather tannery aimed at improving the production capacity of indigenous entity, Sokoto Shoe

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International partners set to boost northern Nigeria’s leather industry

In a bid to revitalise the region’s traditional leather sector, Sokoto state, in northern Nigeria has attracted international partnership towards the development of a leather tannery aimed at improving the production capacity of indigenous entity, Sokoto Shoe.

The latest firms to seek business opportunities are UK-based Pan African Enterprises and Asia-based Simple Factory Group, a footwear producer- a marriage of convenience credited to the state government’s Sokoto Investment Company Limited.

With a target of 2000 shoes per day, the output increase and further boost in quality could position Sokoto Shoe as a leading player in the leather goods industry increasing the continent’s export potential.

Nigeria’s leather industry is a network of production clusters with a concentration in a number of its cities such as Kano, Aba, Lagos, Sokoto and Onitsha. Leather produced from these centres are fashioned into footwear, bags, belts, and houseware by local workers.

While Nigeria exports a lot of its finished products, (estimates place its annual revenue at $100 million), the country imports about 5 times this value, leading local producers to compete with foreign manufacturers.

The country’s capacity to take up a large share of the global leather industry is, however, immense with its huge cattle population and age-long leather working tradition.

The partnership inches closer to accessing manufacturing and supply-chain advantages in the footwear sector to develop northern Nigeria’s productive capacity. Operations are expected to begin next year.

PAE’s chief executive, Dawn Spetale says “Simple is a natural partner for us to develop our vision in Nigeria with Sokoto Shoe”

“Teaming up with such a well-established producer allows us to leverage its networks, experience and marketing know-how from the past 30 years.

We’re excited that some of our staff will get training in Asia through Simple, as this will greatly enhance our production capacity and quality control from the outset,” Spetale adds.

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World’s biggest marine diamond mining vessel to be financed by African banks

Nedbank Namibia, RMB Namibia, Standard Bank, ABSA and Bank Windhoek agreed to provide 80% of the funding for the ship

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African banks to finance World’s biggest marine diamond mining vessel
(File photo)

Five African commercial banks have partnered in a $375 million financing deal to build a new diamond mining vessel for a subsidiary of Anglo American’s diamond unit, De Beers. 

Nedbank Namibia, RMB Namibia, Standard Bank, ABSA and Bank Windhoek agreed to provide 80% of the funding for the ship, which will be the world’s largest of its type. 

Debmarine Namibia – a 50-50 joint venture company between De Beers and the government of Namibia – will provide the balance of $94 million. 

The ship, to be known as the AMV3, will be the seventh in the Debmarine Namibia joint venture’s fleet, which mines high-quality diamonds from the ocean floor using hi-tech surveying equipment. 

The AMV3 has the capacity to add 500,000 carats of annual production from 2022, and is expected to contribute 2 billion Namibian dollars ($137.64 million) a year in taxes and royalties to the Namibian treasury in its first five years of production.

“The highest quality diamonds in the world are found in our ocean,” Debmarine Namibia Chief Executive Otto Shikongo said in a statement. 

“With this investment, we will be able to optimize new technology to find and recover diamonds more efficiently and meet growing consumer demand”.

Nedbank Namibia, which facilitated the arrangement, will contribute 40% of the financing and will also provide currency hedging for the deal, according to Karl-Stefan Altmann, an executive at Nedbank Corporate and Investment Banking and Treasury.

Mining, of which uranium and diamonds are a major part, contributed 14% of Namibia’s gross domestic product in 2018, according to the latest annual report of Namibia’s Chamber of Mines. 

Diamonds also accounted for 14% of Anglo American’s core profit in 2018.

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Zimbabwe’s inflation soars, stocks hit record high

Stocks are rising because local investors are desperate to hedge against inflation

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Zimbabwe's inflation soars, stocks hit record high | News Central TV
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Zimbabwe’s stock market has hit a record high, for all the wrong reasons as the country’s Industrial Index rose 5.6 per cent on Monday to extend its gain this quarter to 80 per cent.

Stocks are rising because local investors are desperate to hedge against inflation, which accelerated to 98 per cent in May. Prices are rocketing amid a scarcity of foreign exchange, which is causing shortages of fuel, medicine, and other imported goods.

In Zimbabwe, investors’ fears about inflation are heightened by a plunging currency.

The RTGS$, which the government de-linked from the U.S. dollar in February, has sunk about 57 per cent since March on the black market.

On the streets of Harare, the capital, it trades at 9.7 against the greenback. That compares with the central bank’s official and much stronger rate of 6.08.

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