Investors update: Nigerian equities, bonds rally on economic reform promises

Nigerian equities, bonds rally on economic reform promises

Highlights

• Nigeria’s dollar bonds and equities rallied after the new president Bola Tinubu said he will end the nation’s $10 billion fuel-subsidy program and adopt a uniform exchange rate.
• Debt due in 2047 jumped 1.6 cents on the dollar to 66.23 in London, heading for the biggest advance in a month while bonds due in 2049 gained 1.7 cents, and those maturing in 2051 advanced 1.9 cents.
• The NGX 50 Index, which comprises the nation’s biggest companies, has surged 5-7% after the speech, sustaining the positive momentum from last week with key stocks in the banking sector catching the eye of investors.

Source: Bloomberg

Our Takeaway

Nigeria’s Tinubu inherits a struggling economy with record debt, forex and fuel shortages, a weak naira currency, nearly two-decades-high inflation, skeletal power supplies, and falling oil production due to crude theft and underinvestment. Much of this was driven by protectionist policies and foreign currency interventions under his predecessor Muhammadu Buhari, which spooked investors all through his eight-year tenure. But the new leader has vowed to expand the economy by at least 6% a year, lift barriers to investment, create jobs, and unify the exchange rate, while also tackling rampant insecurity, creating a positive outlook for Africa’s largest economy.

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AFC secures $625m from new Middle East and Asia-based lenders

Highlights

• Africa Finance Corporation, the leading infrastructure solutions provider on the continent, has secured a $625 million syndicated loan with new lenders from the Middle East and Asia.
• The transaction was upsized from an initially planned $500 million following an oversubscription of 61%, reflective of the strong demand from investors. Gulf Bank, National Bank of Ras Al-Khaimah, China CITIC Bank Corporation, Qatar National Bank, Doha Bank, and Industrial Bank of Korea Limited joined the syndicate as first-time lenders.
• This funding testifies to an increasing global interest to capture Africa’s infrastructure opportunities and AFC’s creditworthiness in a challenging macroeconomic environment.

Source: ABC

Our Takeaway

Africa presents a massive infrastructure investment opportunity with a current investment gap of over $150 billion per year. The continent is home to some of the fastest-growing economies in the world, with a combined GDP of $2.3 trillion and a population of 1.3 billion people. But only 60% of the population has access to basic electricity, among other infrastructure challenges. With funds like the AFC initiatives and a growing middle class, investors from across the world are showing increasing interest in Africa’s infrastructure market, which is poised for substantial growth in the coming years.

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Moroccan healthtech DataPathology raises $1m from Azur Fund

Highlights

• Morocco-based healthtech startup DataPathology has raised $1 million from Azur Innovation Fund.
• Founded in 2020 by Mohammed El Khannoussi and Hicham El Attar, DataPhathology aims to deliver quick and accurate pathological diagnosis for patient care using technologies such as AI.
• On the back of the recently-acquired funds, the startup, which raised a $196,000 round from Witamax a year and a half ago, plans to expand its network of laboratories in Morocco and Africa and improve its proprietary capabilities to increase the volume of data processed into its platform.

Source: Wamda

Our Takeaway

DataPathology presents one of the innovative uses of AI in Africa, where AI-focused tech startups are springing up and increasingly attracting VC dollars to serve several industries, including financial services, logistics, healthcare, and consumer goods (FMCGs). Earlier this year, Germany’s BioNTech SE announced its acquisition of InstaDeep, a Tunis-born AI startup, for up to $680 million. Egypt-based Instabug and Synapse Analytics raised $46 million and $2 million respectively last year and we anticipate even more investments in AI-driven solutions this year.