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All sectors in Africa are viable, have potential of attracting investors

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Miguel Azevedo,Citibank’s head of investment banking for Africa. PHOTO|FILE 

By ALLAN OLINGO

Posted  Friday, April 21   2017 at  13:37

In Summary

  • Background: Miguel Azevedo joined Citigroup in 2010 as head of corporate and investment banking in Portugal. In mid-2012, he was appointed head of investment banking Africa.
  • Education: Mr Azevedo has an MBA in Finance from City University (Cass) Business School and an Economics degree from Nova School of Business and Economics in Lisbon.
  • Previous work: In the past few years, Mr Azevedo has been involved in some reference transactions in Africa such as: Debt capital markets issues for several African sovereigns, Nigerian banks, including Zenith, FBN, Access, Diamond and other African corporates like IHS; equity capital markets deals such as the IPO of Atlas Mara, a pan African banking holdco and the IPO of Seplat, a Nigerian oil and gas company.

The continent is picking up but is still slow in attracting investors. Miguel Azevedo, Citibank’s head of investment banking for Africa speaks on the investment outlook and challenges

In the past two years, we have seen a rout in commodity price, currency depreciations and a widening deficit. Are these dampening investors’ appetites?

Devaluation affects the value of assets in foreign currency.

It is never a good thing but it is expected and people can live with that.

It does affect the sentiments because when you lose money, it affects confidence. In the countries that this happened, they are now beyond it and we should now see an upswing from them.

What is critical in a few countries, is the ability to convert currency as any investor may need this flexibility and this is what informs the sentiments. In West Africa, we had a massive issue last year as liquidity became tight.

When it comes to mergers and acquisitions, what sort of outlook are we looking at?
Africa has many areas of long term growth.

It may remain muted in the next year but we are seeing growth, especially population and consumer spending growth. For the long term, strategic investors can see through that. In the past year and the coming year, we are seeing strategic investors coming in.

In the stock markets, we are seeing interests but we need sentiments to improve a bit. Unfortunately, we are yet to see more companies listing on the stock markets in Nairobi, Johannesburg and Lagos.

The challenge is more on the supply of companies to the market rather than investors seeking to put their money in them.

Having crafted some mega merger deals, what sectors are emerging as attractive to investors on the continent?
It is pretty much every sector. Leaving mining aside, there is a lot of interest in consumer related mass market sectors.

That is healthcare, financial services, construction and telecommunications. Infrastructure is also becoming a bigger sector especially because of the continents; massive need for it.

This includes roads and power infrastructure. There is interest in this but few transactions happening mostly because of its complexity of structuring the deals.

How was African countries performance last year in the eye of investors?
Last year was a year of pause, with different pictures for most countries. West Africa, with the exception of Nigeria was coming out of recession.

North Africa was working its way out despite having different situations like Egypt. East Africa was more interesting as it is more diversified and less dependent on mineral.

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