Kurt Davis Jr.

  • Currency Devaluations In Egypt And Nigeria: Why Are The Results So Different?

    By Kurt Davis Jr., 12:26 pm AFKI Original

    Egypt floated its currency earlier this month. The Egyptian pound dropped nearly 50%. Early signs show increased investment in the country. Despite diverging perspectives on the methodology, most economists buy the long-term upside. If the Egyptian story is any indication of success, letting the naira hit rock bottom on a fully-floated basis will result in greater investment in the country and a recovering naira over time. As one local put it, Nigeria should be able to do this (and many other things) better than Egypt. Maybe this is the opportunity to back up such bold statements.

  • Financing African M&A: Here’s Why Africa Needs More Mezzanine Finance

    mezzanine finance By Kurt Davis Jr., 10:10 am AFKI Original

    The risk in some sub-Saharan Africa deals can push mezzanine interest rates up between 20-30%. Yet mezzanine finance is a vital opportunity for the SSA financial market. Avoiding equity dilution is a top concern for entrepreneurs and family business owners. Mezzanine finance is a way to do that. If the company is willing to assume more debt to avoid equity dilution, then mezzanine finance is vital. Mezzanine finance is also a vital part of greenfield or brownfield infrastructure, especially power projects.

  • Bye-Bye Brick And Mortar: Sub-Saharan African Markets With The Most Fintech Opportunities

    fintech opportunities By Kurt Davis Jr., 3:41 pm AFKI Original

    Sub-Saharan African banks are late to the party. More than 75% of Africans lack access to traditional banking. Fintech offerings with the most potential are the ones that address the unbanked and underserved. Addressing Africa’s poor is impactful and a money maker, but it’s also time-consuming — something to consider if you want a quick return. Africans may be quick to try a mobile app or technology but end users are not always quick adopters. Here are five sub-Saharan markets with the most opportunities in fintech.

  • Japan Trails China In Trade With Africa. Either Way, Africa Wins

    Japan trails China in trade with Africa By Kurt Davis Jr., 8:49 am AFKI Original

    Japan has a favorable rating in many countries. The Chinese have been criticized for executing half-effort projects such as using poor quality materials on roads. China-Africa trade in 2015 amounted to about $180 billion — nearly 7.5 times more than Japan-Africa trade. African leaders are watching and appear willing to benefit from the sociopolitical competition between the two countries. If the numbers grow because of the “race to Africa,” Africa will benefit.

  • Comparing Ghana-US Elections: Economy Will Determine Results

    presidential election By Kurt Davis Jr., 10:42 am AFKI Original

    When the vote closes on Nov. 8 in the U.S., Ghanaians may realize that they were watching the American version of their election, which will take place in December. The opposition New Patriotic Party, still led by Akufo-Addo, is pushing a narrative centered on the economic trail of tears. He prefers to ask the crowd if their lives have improved in the last eight years, emphasizing the perceived economic woes of President Mahama’s party’s eight years in office.

  • The Future Of AGOA With Trans-Pacific Partnership Rising

    future of AGOA with Trans-Pacific Partnership By Kurt Davis Jr., 9:53 am AFKI Original

    Critics argue the Trans-Pacific Partnership will cancel out trade benefits that many African countries have under the African Growth and Opportunity Act. Others say TPP is the newer, better AGOA. The next trade agreement between the sub-Saharan African countries and the U.S. as well as Europe should be a better version of TPP. Intra-Africa regional trade still accounts for just 25% of total exports in sub-Sahara. By comparison, European and Asian intra-regional exports are at 70% and 50%. Sub-Sahara still has a way to go.

  • Where Are The Private Equity Buyers In Sub-Saharan Africa Buyer’s Market?

    private equity buyers in sub-Saharan Africa By Kurt Davis Jr., 1:34 pm AFKI Original

    African private equity deals fell to $2.5 billion in 2015, compared with $8.1 billion in 2014. Fundraising and transactions are expected to be down further in 2016. It is time to buy for 2017. Market expectations are low in some places, so asset prices are low. Logistics and financial services – going against the past market movement – are huge opportunities if you can buy in at low asset prices and ride the unavoidable African rebound in the next year and beyond.

  • Why The Bad News Of 2016 Spells Opportunity For Investors In Africa 2017

    opportunity for investors in Africa By Kurt Davis Jr., 3:21 pm AFKI Original

    Fund managers have struggled in 2016 to raise capital for sub-Saharan Africa-focused natural resource funds. Here’s where having a $1 billion sub-Saharan Africa natural resources fund really helps. In 2017, expect more assets on the market at more reasonable prices. The focus will be on capital management. Expect a buyer’s market. Low M&A value will persist but expect a recovery in volume of deals. Transaction structures will become more complicated. Expect contingencies as buyers and sellers attempt to manage exposure to commodity price volatility.

  • Kenya Real Estate: Boom, Bubble, Or Bust? Less Than 10% Can Afford A Mortgage

    Kenya Real Estate By Kurt Davis Jr., 8:52 am AFKI Original

    Many Kenyans worry a crash may be coming. Bubble advocates stress the near-30 percent annual growth rate in real estate since 2011, but occupancy rates are stable and high at 90 percent. Residential housing demand has always outpaced supply, particularly in lower- to middle-income segments of the market. The reality is most housing constructed in Kenya in the last five years is unaffordable to most Kenyans. Less than 10 percent can afford a mortgage. A local land price index shows that land and property returns in Kenya are outperforming treasury bills, bonds and stocks.

  • Capping Loans In Kenya: Touchy Amendment Provokes Vigorous Debate

    Capping loans in Kenya By Kurt Davis Jr., 10:00 am AFKI Original

    Under the new law, lending rates will be capped at 4 percentage points above the benchmark central bank rate. The Kenya Bankers Associations criticizes the move as a populist policy, arguing that President Kenyatta has his eye on next year’s election and hopes the cap will boost the economy in the short term. Kenyans supporting the bill are asking the bankers to suggest a better rate if this bill is so bad. Some fear a cap on interest rates brings potentially riskier borrowers into the system.