With the global economy performing really well at the moment, the International Monetary Fund upped its world economic outlook, projecting global growth of 3.6 percent in 2017, followed by an estimated 3.7 percent in 2018. The consensus among private-sector forecasters seem to agree.
Interests rates have begun to rise modestly in the US and a hike is expected next month in Britain. Central banks in the United States, Britain, European Union and Japan are focusing on steadily reducing the huge stock of liabilities and assets built up through quantitative easing and other direct financial-market interventions – without disturbing the growth recovery.
Bitcoin is gaining major momentum, digital currency hedge funds are sprouting at the rate of two a week and the value of all cryptocurrencies has surged tenfold this year to more than $170 billion. Bitcoin, still viewed with caution as something out of the Dark Web, is the biggest cryptocurrency and has outperformed all the world’s traditional currencies since 2011. This year, a flood of new hedge funds focused on cryptocurrencies has offered many investors a way into this world.
Alternative Investments Focus| Global
Interest in private equity in South Africa is building with last year’s allocations increasing by 5%. Reasons why alternative assets could make a good addition to a portfolio is performance, diversification as well as the economic and social impact that a person can get from investing in these places. Infrastructure is an area being looked at with the World Bank estimating that if our energy and transport infrastructure were up to standard in Africa, we could lift GDP across the continent by 2% per annum.
Pensions Focus | Mauritius
The Financial Services Commission (FSC) has been elected to the Executive Committee of the International Organisation of Pension Supervisors (IOPS), the international standard setter and think tank of the Pensions Industry globally. Members such as Italy, Romania, Uganda, Egypt and Botswana were also elected. The Executive Committee with the support and guidance of the OECD is responsible for driving policy matters in the Pension Industry globally. The FSC will now be able to participate in formulating policies with the pensions sector in mind.
Pensions Focus | South Africa
People are seeking more innovative ways to invest as retirement funds across Africa have started to invest in alternative asset classes such as private equity. One of the ‘innovative’ investment questions are around crowdfunding and Bitcoin.
In South Africa, asset-spreading requirements of private retirement funds are governed by Regulation 28 of the Pension Funds Act which sets out various categories of assets a retirement fund may invest in. Crowdfunding, Bitcoin and other such cryptocurrencies could fall under other assets.
Experts have said that investing in crowdfunding platforms that could be facilitating infrastructure development could be a preferred next generation alternative asset class. However, there is currently no crowdfunding regulation in South Africa and the FSB said it would look into it.
Infrastructure Focus| Africa
The Infrastructure Consortium for Africa (ICA) released a report “Infrastructure Financing in Africa 2016” this month saying that Africa must double its spending on infrastructure over the coming years, warning that overall investment in transport, energy, water and IT/communications fell back last year. A total investment across these four sectors was $62.5bn in 2016, while it was $78.9bn in 2015. A spending requirement of between $120bn – $140bn is needed in the short term. Transport accounted for 39.2% of infrastructure investment in 2016, followed by energy (31.9%), water and sanitation (16.9%) and information technology/communications (2.6%).
Infrastructure Focus| Nigeria
Olusegun Obasanjo, Former Nigerian president has said that it will take Nigeria to 2030 to bridge the housing deficit, constructing 500 million housing units per year. He pointed out that the development of housing estates could also be fast tracked through PPP arrangements as exemplified by the newly built River Park Estate which was built by two firms – Houses for Africa and Jonah Capital Nigeria .
Waste management, safety and private sector partnerships are three key areas through which Lagos State hopes to achieve a more rigorous development of the Lagos Island Central Business District (CBD). The CBD, which hosts major financial and non-financial organisations, conglomerates and multinational corporations, will continue to receive attention from the government. Mr Olatunjo Bello, SSG, said “We are determined to make the business climate in the state as conducive as possible. We are implementing reforms that would deliver for the benefit of Lagosians an effective intermodal transportation system through public private partnership. We are making good progress on the blue line rail which when completed will ease movement into the Lagos Island Business District from Okokomaiko and Mile 2 axis.”
Infrastructure Focus| Rwanda
The Minister for Health Diane Gashumba is proposing incentives, with accommodation in particular, for medical doctors working at government hospitals. This will present an opportunity for real estate investors. 1300 doctors is a good business case for developers, especially with the really good incentives from Rwanda Development Board for affordable housing.
Infrastructure Focus| Zambia
Zambia has signed its letter of adherence to become the 16th member country of the Africa Finance Corporation (AFC) , a development finance institution for infrastructure in Africa. This marks a significant milestone in AFC’s mission to address the infrastructure needs in Africa, adding the first Southern African member country and building a foundation for robust economic development. AFC’s other members are: Nigeria, Guinea Bissau, Ghana, Sierra Leone, Gambia, Liberia, Guinea, Chad, Cape Verde, Gabon, Côte d’Ivoire, Rwanda, Uganda, Djibouti and Kenya.
Public Private Partnerships Focus | Global
U.S. Agency for International Development (USAID) has moved beyond grant-making and contracting, and instead, they are looking to PPP collaborations to rapidly change relationships between private enterprise and the development community. USAID announced a new collaboration with Keurig Green Mountain and Root Capital to strengthen the global coffee supply chain and help small-scale producers in Uganda, Rwanda, Colombia, Peru and Indonesia grow higher-quality coffee and connect with financing and buyers.
The Middle East and North Africa (MENA) region has witnessed a 116 per cent increase in the value of projects planned or those underway using PPP over the past year. The MEED report said that about 151 PPP projects are currently planned or started across the MENA region outside the energy sector with a combined value of about $185 billion.
Public Private Partnerships Focus | South Africa
The Deputy Director-General responsible for Special Economic Zones and Economic Transformation at the Department of Trade and Industry (the dti), Mr. Sipho Zikode says programmes like the Technology and Human Research for Industry (THRIP) can be used to strengthen the Public Private Partnership (PPPs) initiative by government. THRIP, a PPP initiative brings together government, industries, universities and science councils focusing in innovation, technology and scientific development and is targeting the agro-processing sector for elevating produce and creating sustainable jobs.
Plans are set for the multi-million rand railway project Swaziland Railway, which will be a new line of 50km in South Africa, starting from Lothair in Mpumalanga and 100km in Swaziland, ending in Sidvokodvo, and will also require the revamping of adjacent existing lines to align and provide support to the new link.