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What Are We Building? The Next Phase of Real Estate Financing in Africa

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real estate transactions nigeria

By Selwyn Blieden

For a long time, the most prominent players in the African property sector have been private equity or other institutional investors. It is also true that there has been an obvious gulf between demand and supply in all property sectors (commercial, industrial and residential) across many markets on the continent.

The investment proposition, often-repeated to prospective funders, regulators and local partners, was that by pioneering landmark projects international investment and development teams would go some way to bridge this gulf. But few of those presenting this thesis have shown the success they predicted for themselves and their investors.

Asset realisations have taken longer and have been less profitable than expected. Some institutions have chosen to exit direct African real estate investment entirely. With few exceptions, large South African REITs that expressed broader African ambitions have either closed their African operations or indicated that they intend to do so. Given its uneven performance record, an observer of the market might question the market-theses that seemed to be so alluring only a few years ago.

Despite this, we still believe that there is evidence to show that the African property market has evolved, just not in the way and for the segments previously expected. It is up to investors, financiers and other stakeholders to adapt their approaches to pursue the opportunities this market offers.

For the past years we at Absa have been tailoring our business approach to cater for the range of real estate investment activities that we have seen taking place in our target markets. This has meant that we have been monitoring a wider market than that represented by the large multi-jurisdictional players that for some years dominated African property media coverage and were most visible at industry conferences.

Our analysis shows that since the end of 2015 the domestic bank-financed commercial property market in our active African jurisdictions (which we identify as Botswana, Zambia, Mozambique, Kenya, Uganda, Tanzania, Mauritius, Seychelles, Ghana and Namibia) has grown in US dollar terms at a compounded rate of 9.5% per annum. This represents an acceleration in growth since the period 2012 to the end of 2015 the same market grew by 8.3% per annum.

This means that since 2012, and even more so since 2015, growth of bank-financing to many African property markets has been faster than the growth of the underlying economies in these jurisdictions. Such growth could only have been possible if some combination of the following factors had been in place: the number and size of bankable projects and clients has increased; banks have become increasingly willing to undertake property finance; and/or the currencies in which property loans have been denominated have strengthened.

In all cases the factors mentioned above are positive for the property markets we are targeting: either the broader economies in which they are located are strengthening (as indicated by stronger exchange rates) or the property finance markets are becoming more active and formalised.

It bears repeating that not all African property markets are alike and data covering multiple markets may often conceal wide-ranging differences between those markets and nuances within markets. In the case of the countries we have been studying, there are two where the bank-financed property market has actually declined since 2015. These are Mozambique and Uganda.

In Mozambique’s case the decline (of 8.8% per annum) would be expected given the broader debt-crisis in the country. In Uganda the decline has been an annual 2.1% — less than the decline in the local currency over the period and thus indicating a market that is, at least, growing in local currency terms.

The largest property finance market on our list is Kenya which on its own holds about 46% of the total commercial property financing pool within the markets we service. Its commercial property finance growth rate has been at 9.6% over the past years. Its currency has been relatively stable, ranging only from 99 to 105 Kenyan Shillings to the US dollar over the period.

The growth has achieved is largely, therefore, a function of real growth in bank funding and property investment activity. In our experience, growth in this market has been led by market participants that would in South Africa or similar banking markets be classified as commercial or local corporate clients rather than institutional players.

In conclusion, it is evident that even though the most prominent segment of the investment-grade African property market has shown signs of strain, the broader bankable property market has been growing significantly and in the case of key markets such as Kenya, the growth is the result of real property activity and risk-taking.

For banks and other financiers, future growth may require broadening their target-range of clients and adapting their credit and service models for strong local players. For equity investors, potential focus may be on finding ways to get effective exposure to this same category of market participants. Opportunities exist for those who are willing to adapt their approach and their guiding beliefs regarding this market.

Selwyn Blieden, is the Head of Africa Coverage, Commercial Property Finance at Absa. He is also the moderator of the Investment Panel at the 6th Annual East Africa Property Investment (EAPI) Summit taking place on 10 & 11 April at the Radisson Blu Hotel in Nairobi.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]

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A Beginner’s Guide to Temu: Your Ultimate Shopping Companion

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Temu

Ever wondered where to find trendy fashion, cutting-edge tech, or stylish home decor at unbeatable prices? Look no further than Temu.

What is Temu?

Temu, an online marketplace sensation, has taken the world by storm with its vast array of products, competitive prices, and user-friendly platform. 

Since its 2022 launch, it has quickly become a global sensation, boasting hundreds of millions of downloads and catering to over 80 markets. Now, Nigerian shoppers can experience the Temu magic firsthand.  

This guide will walk you through the Temu shopping experience, ensuring a smooth journey from product discovery to delivery.

Step 1: CREATE AN ACCOUNT TO UNLOCK SMART SHOPPING

The registration process

Joining Temu is super easy! Whether you prefer the traditional approach or the convenience of social media, Temu has you covered. For the classic signup, simply visit temu.com or download the mobile app, enter your email or phone number, create a strong password, and confirm your details. It’s as easy as that!

For social media savvy, link your Google, Apple, or Facebook account and skip the hassle of creating a new login. With Temu’s streamlined process, you can spend less time logging in and more time exploring the incredible deals awaiting you. 

                          

Mobile app vs. desktop: Which platform offers the best shopping experience?

Both the mobile app and desktop website offer a seamless shopping experience. However, for a truly dynamic and interactive shopping journey, we recommend the mobile app. You will enjoy real-time price alerts, exclusive mobile deals, and easy order tracking.

For a more deliberate shopping experience, the desktop website is the perfect choice. With larger screens and easy-to-use comparison features, you can take your time and make informed decisions.

Step 2: BROWSING AND SHOPPING LIKE A PRO

Navigating Temu’s vast selection

Temu offers a vast selection of over 200 product categories, from fashion and tech to home goods and beauty. 

To get started, simply use the search bar function to find specific items or explore categories, and refine your search with filters for price, colour, size, and more. Sort items by relevance, price, or newest arrivals to find the perfect products.

Temu’s ranking system highlights popular and trusted products, often based on customer reviews and sales trends. To make informed choices, compare prices, features, and reviews before purchasing.

Best-selling products

Temu’s best-selling products are constantly updated based on real-time sales data. 

          

                                    Best sellers: Popular products based on sales. Updated hourly.

Other metrics beyond rankings

Temu goes beyond traditional product rankings, focusing on the performance and quality of its providers. By considering factors like historic ratings, repurchase records, follower numbers, and new product releases, consumers can make informed decisions. This approach not only empowers buyers but also incentivises providers to deliver high-quality, diverse products and build strong customer relationships.

Providers can earn recognition directly on their product pages by ranking highly in categories like Top Sales, Top Rated, Top Repurchased, Top Followed, or New Arrival. These rankings are based on the provider’s performance over the past 30 days and are updated daily to ensure the most current information is displayed to consumers.

Finding your perfect fit

Temu provides detailed size guides to help shoppers find the perfect fit, particularly for clothing and accessories. These guides often include measurements, comparison charts, and sometimes even virtual fitting tools to make your online shopping experience seamless.

Save more, shop smart

Simplify your shopping and maximise your savings with Temu. All discounts are displayed directly on product pages. For the best deals, explore the platform’s Lightning Deals. To ensure satisfaction, pay attention to details, read descriptions, verify measurements, understand features, and consult seller ratings and reviews.

Step 3: PLACING AN ORDER 

Shopping safely and securely

Temu offers a variety of payment methods, including popular credit cards and digital wallets like Visa, Mastercard, American Express, Maestro, Discover, JCB and Diners Club. To prioritise your security, the platform employs advanced security measures, adhering to strict industry standards to protect your information.

Step 4: FAST AND RELIABLE DELIVERY

Hassle-free delivery, every time

Temu prioritises customer satisfaction by providing real-time order tracking and reliable shipping options, including free standard shipping and express delivery. The platform guarantees on-time delivery and offers full refunds for damaged or undelivered orders. 

At the moment, Temu is in partnership with local logistics firms, such as Flyt Express, SKYNET, and Speedaf to make delivery to Nigerian shoppers on time.

Step 5: AFTER-SALES SERVICE – BEYOND THE PURCHASE

Returns and exchanges made easy

Temu provides a seamless return process with its Purchase Protection Program. If you’re unsatisfied with a purchase, log into your account, select the item, provide a reason, and submit a return request. Temu will provide a prepaid shipping label. 

You have a 90-day return window for most items. Once processed, you can choose a refund to Temu credit or original payment. For exchanges, return the item and place a new order. Temu also offers refund policies for no updates and no deliveries. Check Temu’s specific return policy for the latest information.

Beyond shopping: A greener future

Temu is committed to sustainability. By shopping on Temu, you contribute to a greener future. The platform’s Tree Planting Program and combined shipping initiatives help reduce environmental impact.

Smart shopping simplified

Temu has transformed online shopping, offering a wide range of affordable products and a user-friendly experience. 

Follow these simple steps to easily navigate the platform and discover your next favourite find. If you need assistance, Temu’s customer support team is available 24/7. 

So, shop with confidence on Temu!

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Ebie: 55 Garlands to a Rare Breed of Human

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Chiedu Ebie NDDC Chairman

By Jerome-Mario Utomi

Some persons are born as a special breed of humans. Chiedu Ebie, Chairman of the Governing Board of the Niger Delta Development Commission (NDDC) is one of such persons.

In fact, at 55, Ebie encapsulates Menachem Mendel Schneerson’s postulation about people born as a special breed. Schneerson: “Because time itself is like a spiral, something special happens on your birthday each year: The same energy that God invested in you at birth is present once again.”.

When you look at Ebie’s career trajectory, his exhilarating performances in all the public offices he has held, his contributions to making Delta State a dream state for Deltans, and his current efforts to saturate the Niger Delta region with socio-economic, infrastructural, and human capital development as NDDC chairman, you won’t but agree that he indeed, as submitted by Menachem Mendel Schneerson, belongs to a rare breed of humans. Born January 2, 1970, Ebie’s birthday is a huge celebration of excellence.

Though he wears no airs and does not sound his own trumpet, anyone who encounters him will readily see in him a personality whose life is characterised by remarkable, legendary, and exemplary feats.

A thoroughbred attorney and oil and gas exploration executive, before his appointment as NDDC Board Chairman in November 2023, Ebie had served as Delta State Commissioner for Basic and Secondary Education and later, Secretary to the State Government.

Private and public sector stakeholders share common, refreshing commentaries about Ebie’s eventful and impactful 55 years on earth and his salutary accomplishments.

The common denominator, however, is that this “birthday boy,” this illustrious son of the Ika ancient kingdom who had contributed immensely to the realisation of the Smart and Stronger Delta agenda of the Governor Ifeanyi Okowa administration”, is worthy of commendation, emulation, and celebration as he turns 55 today.

Late American President John Quincy Adams was probably talking about Ebie when he argued that “If your actions inspire others to dream more, learn more, do more, and become more, you are a leader.” Indeed, in Ebie, you see a man whose knack for hard work, honesty, integrity, purposefulness, and excellence has been a source of inspiration to his subordinates and admirers.

His amiable and genial attributes, his traits of transparency and rock-solid integrity, as well as his goal-orientated nature, are arguably traceable to his grandfather, who was the first ordained reverend of the Anglican Church in the Ika nation, and whose two sons later became ordained reverend gentlemen themselves.

As Commissioner for Basic and Secondary Education from 2015-2019, for instance, Ebie achieved unprecedented set goals, which included the massive renovation and rehabilitation of schools and the revamping of grassroots sports through the Zenith Bank Delta Principal’s and Headmaster’s Cup.

In 2019, he achieved a record-breaking and, of course, the transparent recruitment of 1,000 teachers, posted across secondary schools in the state. This merit-based and high-level transparency recruitment exercise made it possible for most of the beneficiaries to scale through without knowing anyone in the ministry or government.

In recognition of his rare attributes, then Governor Okowa made the following elegant statement about Ebie during his inauguration as SSG: “Mr Ebie is a fine gentleman who served meritoriously as Commissioner for Basic and Secondary Education in the first tenure of his administration. His civility, analytical intelligence, communication skills, and diligence are essential qualities needed for the office of the SSG.

In addition to these, modern statecraft, with all its complexities and challenges, requires team players, proactive leaders, and men with a large appetite for work. Mr Ebie meets these criteria, and I am convinced that he is well equipped to enrich the social, political, and economic narrative of our dear state.”

In just one year as NDDC Board Chairman, the Board under his leadership has turned not just the Commission round for the better but also the entire Niger Delta region through purposeful and result-orientated superintendence.

Today is not just Ebie’s birthday but also the dawn of a new year for him, the beginning of another cycle of 365 days of rendering quality, humane, deliberate, intentional, and transformational service to Nigeria and the people of the Niger Delta in particular.

Happy birthday, sir!

Utomi, a media specialist, writes from Lagos, Nigeria. He can be reached via [email protected]/08032725374.

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Kaolin Mining in Nigeria and Processing into Pharmaceutical Grade Kaolin with Export Potential

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Kaolin mining

By Anaekwe Everistus Nnamdi

Kaolin, a versatile and valuable industrial mineral, holds significant promise for Nigeria’s mining and industrial sectors. Its wide-ranging applications, especially in the pharmaceutical industry, present an untapped potential for mining and processing into pharmaceutical-grade material for both local use and export.

Kaolin, or china clay, is a soft, white clay primarily composed of kaolinite. It finds applications in ceramics, paper, paint, rubber, and plastics. In the pharmaceutical industry, it serves as an excipient, binder, and coating agent for tablets, underscoring its economic significance. Pharmaceutical-grade kaolin is a premium product, requiring high purity levels and strict processing standards.

Nigeria boasts substantial kaolin deposits in states like Adamawa, Katsina, Ogun, Ondo, and Ekiti, with reserves exceeding two billion metric tons. Despite this abundance, the potential of kaolin mining and processing remains underutilized due to limited investment, inadequate infrastructure, and technological challenges.

The local demand for kaolin, particularly in pharmaceuticals and cosmetics, is on the rise. As Nigeria’s pharmaceutical sector grows, fueled by an increasing population and higher prevalence of chronic diseases, the need for high-quality pharmaceutical excipients like kaolin is set to surge. Beyond pharmaceuticals, kaolin is essential in toothpaste, cosmetics, and agrochemicals, further diversifying its domestic applications.

Globally, the kaolin market was valued at USD 3.09 billion in 2022 and is projected to reach USD 4.90 billion by 2030, growing at a compound annual growth rate (CAGR) of 4.59% from 2023 to 2030. The rising demand across industries such as paper, ceramics, paints, and rubber drives this growth. Construction activities worldwide also contribute to the expanding market, aligning with the growing global population’s needs.

Pharmaceutical-grade kaolin represents a niche yet high-value segment of this market. Major importers include the United States, Germany, Japan, and South Korea, where stringent regulations require high-quality raw materials.

Nigeria’s strategic location and trade agreements with African and international partners position it as a potential supplier. Investments in mining and processing infrastructure could enable Nigeria to compete globally, leveraging its vast reserves and cost advantages.

Trends in the Kaolin Market

Increased Demand for High-Purity Kaolin: The pharmaceutical and cosmetic industries are driving the need for ultra-fine, high-purity kaolin that meets regulatory standards.

Sustainability in Mining: Emphasis is growing on sustainable practices, minimizing environmental impact, and benefiting local communities.

Technological Advancements: Innovations in processing technology improve beneficiation efficiency, meeting stringent global standards.

Local Value Addition: Many governments encourage local processing industries to reduce reliance on raw material exports.

Processing pharmaceutical-grade kaolin involves a series of meticulously controlled stages. The first step is mining and beneficiation, which includes extracting kaolin and removing impurities through processes such as washing, sieving, and magnetic separation.

Next, calcination is employed to heat the kaolin, removing moisture and enhancing its chemical and physical properties.

This is followed by grinding and micronizing, a critical phase where the kaolin is refined to achieve the ultra-fine particle size required for pharmaceutical applications.

Finally, quality testing is conducted to ensure the product meets stringent international pharmacopoeia standards, guaranteeing its suitability for high-value uses.

Modern processing plants in Nigeria could significantly boost the local value chain, create jobs, and reduce dependency on imported pharmaceutical-grade kaolin.

The Nigerian mining sector operates under the Minerals and Mining Act of 2007, which provides the legal framework for activities. Key provisions include:

Licensing: Companies require licenses, such as Exploration Licenses, Mining Leases, and Small-Scale Mining Leases.

Environmental Compliance: Operations must adhere to environmental regulations, including conducting Environmental Impact Assessments (EIAs).

Community Engagement: Companies must engage host communities and deliver socio-economic benefits.

Additionally, the National Agency for Food and Drug Administration and Control (NAFDAC) oversees pharmaceutical product quality, including raw materials like kaolin. Compliance with NAFDAC standards is crucial for local producers targeting the pharmaceutical market.

Kaolin mining and processing offer Nigeria an opportunity to diversify its economy, reduce import dependency, and boost foreign exchange earnings. Investments in infrastructure, technology, and regulatory compliance can unlock the full potential of Nigeria’s kaolin reserves.

As global demand for high-purity kaolin rises, particularly in the pharmaceutical sector, Nigeria’s strategic position and abundant resources make it a key player in the industry’s future.

Anaekwe Everistus Nnamdi is the founder and Market Research Analyst of Foraminifera Market Research Limited, Lagos and can be reached via [email protected] or +234 8033782777

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