Africa’s growth is slowing dramatically, says the International Monetary Fund, and is likely to be 3.75% this year and 4.25% next year. It could get worse if the global economy does not grow.
Ethiopia saw soaring demand yesterday (4 Dec) for its debut $1bn Eurobond, after a quick US roadshow. Total demand was $2.6bn and the yield on the 10-year bond was settled at a relatively low 6.625%.
Charts circulated by Reuters show the rebased Nigerian economy as biggest in Africa, followed by sluggish South Africa, Egypt, Algeria, Angola and Morocco. They also show growth rates: oil-fuelled Ghana led the pack with historic growth of 10.2% a year over 2010-13.
The first Eurobond issued by Rwanda, due to mature in May 2023, raised $400 million at 6.875% and the money will go to start generating hydroelectricity by December with further expansion in June 2014 and also pay for airline expansion and a convention centre.
“Africa reminds me of China back in 1999. If you missed China then, don’t do that (miss Africa) now,” is how Plamen Monovski, chief investment officer at Russia’s Renaissance Asset Managers, describes prospects for Africa. “It’s the last place in the world that is due for that rapid change and advancement.”
Mark Voss of fund manager Silk Invest foresees a turning point for the Egyptian market in a recent note. He also notes growth in Tunisia, with companies back to pre-revolution levels, tourism boom in Morocco, giant growth in Ghana and telecom payments innovation in Kenya.