The Lusophone Compact is one of many successes that have emerged from the innovative Africa Investment Forum. The compact is a financing platform that provides risk mitigation, financing products and technical assistance to accelerate development of the private sector in Africa’s Portuguese-speaking countries.
The African Development Bank, the government of Portugal and six Portuguese speaking African countries—Angola, Cabo Verde, Equatorial Guinea, Guinea-Bissau, Mozambique and São Tomé and Principe—signed a memorandum of understanding during the inaugural Africa Investment Forum Market Days event in November 2018.
The African Development Bank president, Dr Akinwumi A. Adesina, says the partnership was “designed with one simple, overarching goal: more private sector and public private partnership investments in Africa’s Portuguese-speaking countries.”
The compact was conceived in 2017 during a visit by Adesina to Lisbon, where he urged Portugal’s participation in driving private sector development in Africa’s Portuguese-speaking countries.
Since its establishment, the compact’s partners have worked to address differences in size and structure of member economies. Angola, for instance, is Africa’s tenth largest economy. Sao Tome and Principe is the continent’s smallest, but it is one with a traditionally heavy reliance on agriculture.
The Africa Investment Forum continues to be a conduit for investment into these economies. The Africa Investment Forum Market Days 2019 event featured six projects with a value of over $700 million, which were eligible for Lusophone Compact financing.
One project at that event—though ineligible for compact financing, was the African Development Bank-led structuring of the largest ever single foreign direct investment in Africa. This was the Mozambique Liquified Natural Gas (LNG) Area 1 Project, valued at over $24 billion. The African Development Bank contributed $400 million to the project.
Two years ago, the Mozambique LNG Area 1 Project and the African Development Bank jointly received Project Finance Magazine’s Multilateral Deal of the Year 2020 Award.
Since its establishment, the compact has continued to grow in scope. In September 2022, during a business and investment forum organized as part of the 5th Luso-Mozambican Summit in Maputo, the African Development Bank and the Portuguese government signed a guarantee agreement for €400 million. Under the agreement, Portugal is providing guarantees of up to €400 million exclusively to African Development Bank-financed projects approved under the arrangement.
As African countries currently face challenging conditions linked to the Covid-19 pandemic, Russia’s war in Ukraine and climate change, the Africa Investment Forum is prioritizing the areas of transport, health, energy, infrastructure, and food security. These are the areas the forum finds necessary to dwell on to drive recovery.
This year’s Market Days event will also promote opportunities in industries where Africa has a comparative advantage, notably music, film and textiles. In addition, it will promote transactions that offer considerable benefit to women.
The investment transactions will be sourced from the investment pipelines of the eight founding partners of the platform. These partners are the African Development Bank, Africa 50; the Africa Finance Corporation; the African Export-Import Bank; the Development Bank of Southern Africa; the Trade and Development Bank; the European Investment Bank; and the Islamic Development Bank.
Source: afdb.org
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Insurer and financial services provider Britam posted a 22.5 percent jump in net earnings for the half-year ended June 2024, to Sh2 billion, buoyed by increased investment income.
The rise in half-year net profit from Sh1.64 billion posted in a similar period last year came on the back of net investment income rising 2.5 times to Sh13.27 billion from Sh5.3 billion.
“We are confident in the growth and performance trend that Britam has achieved, supported by its subsidiaries in Kenya and the region. Our business is expanding its revenue base while effectively managing costs,” Britam Chief Executive Officer Tom Gitogo said.
“Our customer-centric approach is fueling growth in our customer base and product uptake, particularly through micro-insurance, partnerships, and digital channels.”
The investment income growth was fueled by interest and dividend income rising 34 percent to Sh9.1 billion, which the insurer attributed to growth in revenue and the gains from the realignment of the group’s investment portfolio.
Britam also booked a Sh3.79 billion gain on financial assets at a fair value, compared with a Sh1.8 billion loss posted in a similar period last year.
The increased investment income helped offset the 12.7 percent decline in net insurance service result to Sh2.13 billion in the wake of claims paid out rising at a faster pace than that of premiums received.
Britam said insurance revenue, which is money from written premiums, increased to Sh17.8 billion from Sh16.6 billion, primarily driven by growth in the Kenya insurance business and regional general insurance businesses, which contributed 30 percent of the revenue.
The group has a presence in seven countries in Africa namely Kenya, Uganda, Tanzania, Rwanda, South Sudan, Mozambique, and Malawi.
Britam’s insurance service expense hit Sh13.6 billion from Sh11.3 billion, while net insurance finance expenses rose 2.6 times to Sh12.3 billion during the same period.
“Net insurance finance expenses increased mainly due to growth in interest cost for the deposit administration business driven by better investment performance. This has also been impacted by a decline in the yield curve, which has led to an increase in the insurance contract liabilities. The increase has been offset by a matching increase in fair value gain on assets,” said Britam.
Britam’s growth in profit is in line with that of other Nairobi Securities Exchange-listed insurers, which have seen a rise in profits.
Jubilee Holdings net profit in the six months increased by 22.7 percent to Sh2.5 billion on increased income from insurance, helping the insurer maintain Sh2 per share interim dividend.
CIC Insurance Group posted a 0.64 percent rise in net profit to Sh709.99 million in the same period as net earnings of Liberty Kenya nearly tripled to Sh632 million from Sh213 million, while Sanlam Kenya emerged from a loss to post a Sh282.2 million net profit.
