KEY FINANCE UPDATES
Nigeria's manufacturing sector expands for third consecutive month
The Central Bank of Nigeria (CBN) has reported that the country's manufacturing sector expanded for the third consecutive month in June, owing to continued growth in production and new orders.
The apex bank said the Purchasing Managers Index (PMI) for the manufacturing sector rose to 52.9 points in June from 52.5 points recorded the previous month.
A PMI reading above 50 points indicates an expansion in the manufacturing/nonmanufacturing sector, while readings below 50 points indicate a decline. A reading of 50 points indicates no change.
The CBN said manufacturing production level grew for the fourth consecutive month in June to 58.2 points, while new orders grew for the third consecutive month to 51 points. Raw material inventory, employment level, and supply delivery time also expanded during the month under review.
IFC approves $200 million loan for South Africa's First Rand to support SMEs
The International Finance Corporation has approved a 2.6 billion rand ($200 million) loan to the FirstRand Group to expand lending for small and medium enterprises in South Africa.
The Washington D.C.-based multilateral lender said its financing is part of its SME Push programme. The programme is designed to channel up to 26 to 36 billion rand ($2-3 billion) investment into South Africa's SMEs over the next five to seven years through investments, risk sharing facilities and advisory services.
FirstRand's retail and commercial franchise, First National Bank (FNB), has one of the strongest SME banking models in South Africa, with over 7.2 million customers across the country.
IFC said its advisory services unit will work with FNB to develop new tools to improve risk assessment in the SME sector, and also provide financial literacy training to build the capacity of SMEs.
Fitch assigns B+ rating to Nigeria's $300 million diaspora bond
Fitch Rating has assigned a B+ rating to Nigeria's maiden diaspora bond, which was launched last month as part of the federal government's efforts at raising funding to plug the budget deficit.
The ratings agency said its ratings decision is in line with Nigeria's long-term foreign-currency issuer default rating of B+. The B+ rating is a non-investment grade rating that often increases the cost of borrowing.
The $300 million diaspora bond – which has a coupon rate of 5.625 percent – was rolled out after the government completed its $1 billion Eurobond offering earlier in February this year.
Bank of America Merrill Lynch and Standard Bank of South Africa acted as international joint lead managers, while First Bank of Nigeria and United Bank for Africa acted as the Nigerian lead managers for the diaspora bond issuance.
Tizeti raises $2.1 million to expand Wifi services in Nigeria
Tizeti, a Nigerian wireless Internet company, has raised $2.1 million in seed funding to extend its Wifi services in Nigeria. The company said the capital injection will allow it to expand its flagship Wifi.com.ng service in Lagos, via the launching of an Xfinity Wifi-like hotspot service. This is expected to create about 3,000 new public hotspots across the state.
Founded in 2012, Tizeti seeks to improve Internet connectivity in Africa by deploying its own solar-powered towers, which reduce overheads on generators and diesel and make the company competitive in a growing data market currently dominated by large telecoms companies. Tizeti's basic subscriptions starts from N9,500 for unlimited Wifi at speeds of 10mbps.
With the latest financing, Tizeti is expected to increase its network of solarpanelled towers from the current 45 to over 100 over the next nine months. The company raised its seed funding from several African and American venture capital firms.
Abraaj Group to acquire East Africa's largest coffee chain
The Abraaj Group has agreed to buy 100 percent of Java House Group, East Africa's largest coffee chain, from Emerging Capital Partners and Kevin Ashley, Java House's Founder and Chairman.
The Dubai-based private equity firm reportedly paid up to $110 million for Java House, according to the Wall Street Journal. The fund manager said it plans leverage Java House's market leadership position to transform the company into the leading Pan-African food services platform by expanding into new markets and through acquisitions.
Java House Group was established in Nairobi in 1999. In 2012, Emerging Capital Partners acquired 90 percent stake in Java House, with Ashley holding the remaining stake. The company has three flagship brands: Java House, a coffee and casual dining chain; Planet Yogurt, a self-service frozen yogurt chain; and 360 Degrees Artisan Pizza, an upmarket Italian pizzeria concept. The company has a strong regional footprint with 60 stores across 10 cities in Kenya, Uganda, and Rwanda.
Founded in 2012, The Abraaj Group has over $10 billion in assets under management. The fund manager has invested over $3 billion in Africa in sectors such as healthcare, financial services, logistics, consumer goods, and food and beverage.
Java House coffee