According to a statement by ECP, the investment into Nairobi Java House is the first private equity deal in east Africa’s restaurant industry. ECP did not disclose the finer details of the transaction, but said that the capital will be used to expand the chain’s operations and the number of locations around Kenya and the broader region.
Nairobi Java House opened its first outlet in 1999 and has since expanded to 18 locations throughout Kenya’s capital city, with new branches set to open in the cities of Mombasa, Nakuru and Kisumu. The chain serves African-grown coffee alongside a full menu that includes everything from hamburgers to Mexican food.
“Nairobi’s affluent and middle class have both embraced Nairobi Java House as a high-quality, affordable restaurant destination. By day, it is frequented by business professionals for a quick snack or a meeting over breakfast, coffee, or lunch; by night and at weekends, the crowd returns with friends and family for socialising and casual dining in the unique family-friendly ambiance,” said ECP in a statement.
“Africa has become a place where you will make money, not lose money,” said Graca Machel, the wife of former President Nelson Mandela and a renowned women and children’s rights activist.
She addressed delegates at the “Money, Power and Sex: the Paradox of Unequal Growth” conference organised by the Open Society Institute of Southern Africa May 22 to 24 in Cape Town, South Africa.
Liberia’s Foreign Minister Augustine Kpehe Ngafuan has urged Sub-Saharan African countries to take advantage of the current economic growth they are experiencing to reduce crippling poverty, develop infrastructure and provide opportunities for their vast generation of eager youth.
Minister Ngafuan said that although Sub-Saharan Africa was not shielded from the financial and economic crisis that began in 2008, the region has largely recovered and is growing at a pace which seemed impossible decades ago.
He noted that Sub-Saharan Africa’s resilience in the wake of the global economic slowdown and the region’s estimated growth rates of 5.3% and 5.6% for 2012 and 2013 are due largely to improved macroeconomic policies implemented by African countries themselves.
A dispatch from the Permanent Mission of Liberia to the United Nations said Minister Ngafuan, who represented President Ellen Johnson Sirleaf, made the remarks on Thursday, May 17, 2012 when he served as a Co-Chair at a United Nations High-Level “Thematic Debate on the State of the World Economy and Finance in 2012”, held at the United Nations General Assembly in New York.
Hotel Development in Sub Saharan Africa 2012
Top Countries by Number of Rooms
Rank Country Hotels Rooms
1 Nigeria 43 6,808
2 Ghana 11 1,752
3 Gabon 8 1,26
4 South Africa 8 990
5 Cote d’Ivoire 3 858
6 Angola 3 624
Nigeria, Africa’s largest country by population, the power house of West Africa (and tipped to overtake South Africa this decade as the largest economy on the continent) has almost 7,000 rooms under contract, up 2,000 on last year’s figure, with thousands more in the “nearly” category.
New openings recently have included Radisson Blu, Four Points by Sheraton, Ibis and Legacy in Lagos, and many groups have hotels under construction there, including Accor, Hilton, IHG and Protea, the last named increasing their presence in the country from 10 hotels to 16 hotels in the next three years.
Africa is on the brink of a major transformation. In the last decade, the continent is home to six of the world’s 10 fastest growing economies, and the number is expected to rise to seven in the next five years, according to projections by the International Monetary Fund (IMF). These projections are coming on the heels of the outlook for the region, which remains bright at a time when the rest of the world is facing political and economic challenges.
Developing nations, most of who are now the fastest growing economies in the world have become attractive partners for growth-hungry western nations. Powered by exports such as oil and gas to the rest of the world, Africa’s economy has been booming.
Even though not free from fallout of the global economic turmoil, the continent’s economy bounced back fast, in comparison with the developed nations that are still grappling for recovery. The World Bank forecasts the growth rate of Gross Domestic Product (GDP) for the sub-Saharan Africa to be 5.3 percent for 2012 and 5.6 percent for 2013, higher than the 4.9 percent for 2011.
The IMF put its estimated growth rate for the region at 5.5 percent for 2012. Furthermore, Africa is believed to have the highest rate of return on Foreign Direct Investment (FDI) of any developing region.
These are exciting times to be in Africa. We are witnessing a unique moment in Africa’s political and economic development, standing on the cusp of what many of us believe is the African Century. It is a century structured around hope and crucially, about conviction, the conviction that we can, at last, leverage the macroeconomic fundamentals and competitive advantages with which we have been endowed as we move toward 2040 — the year by which Africa will become home to the world’s largest and fastest-growing working-age population.
This transformation is being led by a new generation of can-do leaders in business, government and civil society who are reshaping Africa into an economic powerhouse.
Tony Elumelu has spoken out about the value of what he calls Africapitalism, underlining the importance of Africans leading the development of the continent. At Citadel Capital we echo this sentiment. We believe this is Africa’s primetime.
Six of the ten fastest-growing economies globally in the 10 years to 2010 were in Africa, and seven of the ten fastest-growing economies in the five years to 2016 will also be on our continent. Dynamic and heterogeneous, Africa is long on opportunity, but short on capital and management expertise — two things that private equity is uniquely positioned to bring to the table. Governments face rising public expectations and constrained balance sheets, a development that has seen them open previously hands-off industries to the private sector. Couple that with enduring investment fundamentals structured around deregulation / government pullback, infrastructure with PE returns, natural advantages and resources, and a fast-growing consumer population and you have a recipe for generating outstanding returns while simultaneously helping governments meet the aspirations of their citizens.
The re-launch of the Africa Venture Capital Association this week in Accra demonstrates the increasing sophistication and scale of the PE industry on the continent and the need for a respected industry body to provide leadership and structure to a sector playing a transformational role in catalyzing growth in Africa.
While the opportunity for growth is massive for companies that can overcome Africa’s specific obstacles (see “Lessons from Africa’s pioneers”), the continent is brimming with competitors that have the same idea. More than 70% of the top 50 global consumer packaged goods makers are already tapping Africa’s rapidly expanding consumer market. For 20% of this top 50, Africa already represents more than 5% of their global sales—as much as 14% for Diageo and 10% for Parmalat— and most in that group also enjoy strong profitability.
In addition to the leading global players, a new species of consumer products competitors is quickly rising from the ranks of emerging market champions. Companies like Singapore’s Olam, Saudi Arabia’s Savola Foods and India’s Marico or Godrej Consumer Products are also aggressively going after the growing African consumer market.
(via Growing with Africa’s consumers Growing with Africa’s consumers - Bain & Company - Publications)
