Investors run to Africa

TIMELY: TMT FINANCE AFRICA CONFERENCE IN CAPE TOWN ON MARCH 28

Likely beneficiaries of the process included Madagascan and Kenyan firms.

South Africa is set to be one of the beneficiaries of more than $10 billion (R136 billion) earmarked to be invested in Africa’s telecom, media and technology (TMT) infrastructure by the global community.

This investment comes as the initial public offering (IPO) and mergers and acquisitions (M&A) deals are predicted for this year with a high-level industry conference taking place in Cape Town next month.

South Africa is among the countries earmarked by investors with huge appetite for Africa. This coincided with news that the TMT infrastructure, M&As and fundraising on the continent was forecast to continue growing this year.

An expert welcomed the news, saying this presented a great opportunity for the country. Madagascar and Kenya are also set to be beneficiaries.

Ian Jacobsberg, a partner at Hogan Lovells, said this kind of investment was important for South Africa’s economy.

“An injection of capital of this size and nature can only be seen as a boost for the TMT sector in South Africa and vote of confidence at a time when it is most needed,” Jacobsberg said.

“It represents an opportunity for SA to capitalise on increasing international demand for technology and communications services, on the back of the growing virtual and online economy.”

South Africa’s fortunes were likely to be boosted further as it would host to influential leaders from large TMT firms, investment banks and investors at the annual TMT Finance Africa Conference in Cape Town on March 28.

The leaders at the exclusive event were expected to discuss and assess the latest investment opportunities that South African TMT players could exploit.

According to reports, TMT Finance transactions for the year would exceed $10 billion, linked to increasing deal-flow across southern Africa and appetite for the continent from global industry and investors.

Likely beneficiaries of the process were big national operators including Towerco of Madagascar and Wananchi of Kenya that are already making preparations for investments.

South African regional sea cable giant Seacom and Nigeria’s MainOne are weighing up sale and investment options.

TMT Finance said it expected 2019 to be a record year for investment and M&A deals in TMT infrastructure in Africa.

It cited, among others, leading regional African digital and mobile telecom operators such as Liquid Telecom, IHS Towers, Eaton Towers and Helios Towers Africa, all of which have been hiring investment banks to arrange for IPOs.

But Jacobsberg warned about graft and investors’ attitudes being the likely hurdles for smooth investments in the continent. “One cannot escape the elephant in the room, being corruption and the perceptions around it ...” –