Investors update: Africa’s leading telcos to invest over $1bn in fiber cable

Africa’s leading telcos to invest over $1bn in fiber cable

Highlights

• MTN Group, Africa’s biggest mobile-phone operator, plans to build a $320 million inland fiber cable to connect ten countries, as telecommunications companies push to expand service to the continent’s growing population. 
• Similarly, Vodacom plans to expand its fiber business, pending the Competition Commission’s approval of its $693 million deal with Remgro. Through the deal, Vodacom plans to expand its fiber offering into some of its other operating countries, including Tanzania and the Congo. 
• Despite the major investments by the two South African telco giants Telkom currently dominates the fiber industry in the country through its subsidiary, Openserve.

Source: Bloomberg

Our Takeaway

Africa’s telecommunications industry has witnessed rapid growth over the past two decades while playing a key role in shaping the continent’s economy. Much of this growth is driven by some deregulation of the sector, a large young population increasingly adopting mobile voice and data services, and massive investments in network infrastructure by dominant multinational operators. By 2025, the contribution of the mobile industry to Africa’s GDP will grow to almost $155 billion from $138 billion in 2021 while the region will add nearly 100 million new subscribers, with industry leaders like MTN set to rake in huge revenues.

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Tanzania’s coal exports hit a record $224m amid Europe’s energy crisis

Highlights

• Europe’s energy crisis caused by the invasion of Ukraine by Russia has seen Tanzania coal exports record a seven-fold jump in the year to March due to high demand, the latest central bank data show.
• Tanzania, which has 1.9 billion coal reserves of which 25% are proven, saw its exports of fossil fuel surge to $223.8 million from $31.9 million in April.
• Exports of coal edged up, induced by rising demand for alternative energy, amid supply challenges caused by the war in Ukraine, per Bank of Tanzania’s April Economic Review.

Source: Zawya

Our Takeaway

The exponential increase in Tanzania’s coal exports indicates a significant economic opportunity for not just the country but Africa at large. This increase in demand could result in a boost in Tanzania’s economy, particularly in the coal industry. Additionally, it could signal an opportunity for other African countries to expand their energy exports and potentially benefit from the European energy crisis. But, it is essential to consider the environmental impact of increased coal production and consumption, as it could hinder efforts to transition towards cleaner sources of energy.

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Opportunik launches global fund targeting retail investors in Africa, diaspora

Highlights

• Opportunik, a private wealth fund giving Africans and Diasporans access to global investments, has announced the launch of its licensed fund. 
• Driven by an in-house team of fund managers located across Africa (South Africa, Nigeria, Kenya, and Zambia), the fund will work alongside Mauritius-based Accuvise Administrators, which has over $216m in Assets Under Administration (AUM).
• The fund aims to offer a diverse mix of asset classes enabling investors to create wealth with minimal currency or political risk.

Source: ABC

Our Takeaway

Henley & Partners’ Africa Wealth Report estimates that a total of $2.4 trillion total investable wealth is held on the continent, with South Africa, Egypt, Nigeria, Kenya, and Morocco accounting for more than half of Africa’s high-net-worth individuals. More so, the region’s wealth management market is estimated to grow by 60% in the next decade, driven by strong AUM growth in most major markets. This presents a good opportunity for middle-class Africans if given access to the same wealth management options made available to high-net-worth individuals.