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Mauritius PE conference sets the ball rolling.

Summary: Private equity seems the ideal source of funding for the majority of Africa's companies, but lack of knowledge about opportunities and a certain lack of confidence in regulatory systems in Africa are getting in the way.

Anver Versi participated in what is perhaps the premier conference on private equity in Africa.

The annual private equity conferences organised by the Mauritius Board of Investment have gained a well-deserved reputation as the most important such conferences on the continent.

The latest conference, Connecting Global Investors with African Opportunities, is a case in point. Two ministers, Charles Xavier-Luc Duval (Vice-PM and Minister of Finance and Economic Development) and Arvin Boolell, the Minister of Foreign Affairs, Regional Integration and International Trade) attended the event to underline its importance.

The composition of the delegates and speakers was a cross-section of the financial, regulatory and investment components active on the continent or intending to become so.

This was a practical and pragmatic conference. The topics discussed cut to the chase immediately and placed Africa within a wider geographical sphere. Presentations included comparisons of PE investments trends in Africa, Asia, Latin America and the Middle East; creating exit strategies; the global evolution of rules and regulations and Africa response to them; the importance of ICT, Africa's growing consumer base and the role of Mauritius in mitigating risk exposure in PE deals in Africa.

This was a densely put-together package of goodies for both investors and those looking for investments. The speakers, far too many to mention all individually in this piece, provided crisp, concise but invaluable insights into the world of African investment, including, interestingly, international venture capital prospects. Yigal Erlich from Israel, for example, explained how venture capital in that country had led to a flowering to the innovative ICT sector.

Papa Madiaw Ndiaye (Advanced Finance & Investment Group) told a rapt audience how his organisation was rewriting the rules to fund African SMEs and making a tidy profit in the process. I found the presentation by Dr Jung, the founder president of Korea's giant MK Industries, utterly fascinating. He told me that Africa was becoming an increasingly interesting area for Korean investors.

The conference, organised by the Mauritius Investment Board, set out to present the attractions of the investment opportunities now on offer in Africa and made a very strong case for Mauritius, with its sophisticated financial and regulatory expertise, as the natural gateway to investment in Africa. This was fa i r enough, considering the facilities available on the island nation, but the organisers had made sure that several African countries had their say.

The one point that is dear to the Mauritians is a wish for a faster and more efficient regional integration. They have, quite rightly, been pushing forward the notion that economies of scale are irresistible to investors and that this can only be achieved by greater regional integration and therefore bigger markets.

The conference included a Q & A session I had with Minister Boolell, who said: "We are keen to have a continental Free Trade Agreement (FTA) by 2017 but between words and actions we need to fill the gap. There is a need for convergence of policies, a need to clarify uncertainty. We need to highlight the merits of economies of scale. How many times have we seen that it is easier to move a product from Tokyo to Kinshasa rather than from Kinshasa to anywhere on the African continent."

His point was underlined by Lawrence Masha, Managing Partner, IMMMA Advocates, Tanzania, who said, "It's my hope that my colleagues in Tanzania will realise that you cannot work in isolation with the people around you and that your economy is greatly dependent on the interconnectivity between yourself and the states surrounding you."

It seems clear that Africa is still nibbling at the PE pie instead of sinking its teeth into it. More events like this may change the situation completely. ua

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Publication:African Banker
Article Type:Conference news
Geographic Code:60AFR
Date:Feb 17, 2014
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