Investors update: July 6 2023 - Direct investment flows to Africa dropped to $45bn in 2022

Direct investment flows to Africa dropped to $45bn in 2022

Highlights

• Foreign direct investment (FDI) flows to Africa declined to $45 billion in 2022 from the record $80 billion set in 2021. They accounted for 3.5% of global FDI.
• The number of greenfield project announcements rose by 39% to 766. Six of the top 15 greenfield investment megaprojects (those worth more than $10 billion) announced in 2022 were in Africa.
• Over the past five years, FDI inflows have risen in four of the regional economic groupings on the continent, per UNCTAD’s World Investment Report 2023 published recently.

Source: ABC

Our Takeaway

With its vast natural resources, expanding consumer markets, and improving business environment, Africa offers promising opportunities for investors. In addition, many countries have made significant strides in improving governance, infrastructure, and regulatory frameworks, creating a favorable climate for business growth. Governments across the continent have implemented policies to attract FDI, including tax incentives, streamlined bureaucracy, and sector-specific reforms. As a result, Africa has become a compelling investment destination, offering both high returns and a chance to contribute to the continent’s sustainable development.

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Moove bags fresh $8m from Absa to drive car ownership in Africa

Highlights

• Mobility fintech, Moove, has secured $8 million in financing from Absa Corporate and Investment Banking (CIB), bringing its total funding to date from the bank to $28 million. 
• This follows Moove’s USD $20mn financing facility from Absa for its South Africa operations announced in June 2022. 
• The new funding will play a crucial role in bolstering Moove’s expanding vehicle fleet in Ghana, further fuelling its mission to democratize vehicle ownership and provide employment opportunities within gig economies worldwide.

Source: TechNovaGH

Our Takeaway

Despite Africa’s status as the world’s fastest-growing continent, it has the lowest per capita car ownership rate, with over 1 billion Africans having limited or no access to vehicle financing. However, Moove has emerged as part of a new generation of African-born fintechs to lead the charge in the “mobility fintech” sector. This is a white space founded by the company to address the acute vehicle financing problem across emerging markets globally and empower mobility entrepreneurs to become more productive and successful.

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Masroofi gets $1.5m to boost financial inclusion for children

Highlights

• Egypt-based fintech Masroofi, which provides electronic payment services, has closed a $1.5 million investment round from undisclosed investors.
• Founded in 2022 by Mostafa Abdel-Khabeer and Sayed Hosni, Masroofi focuses on digital payments for children, aiming to enhance financial inclusion for kids between the ages of 5 and 15.
• The new round will enable Masroofi to grow its customer base, covering its evolving needs in various segments of the market, including offering neo-banking services.

Source: Wamda

Our Takeaway

Digital banks have enormous potential in Egypt, a country where 2 of every 3 individuals are partly or totally excluded from formal financial services but 50% of its 100 million people actively use smartphones. In addition to high mobile and internet penetration, the North African country boasts a young and tech-savvy population with 61% below 30. Startups like Masroofi have thus moved to capture this opportunity with neo-banking platforms, contributing to the general booming fintech sector in Egypt.