Economy
Commercial Real Estate Funding Rises in Francophone Africa
By Dipo Olowookere
The bilingual Francoreal Property Investment Summit taking place on October 16 & 17, 2018 in Dakar, Senegal is expected to provide a platform for the region and continent’s premier real estate investors and developers to gauge opportunities in one of the world’s fastest growing zones – known colloquially as Francophone West and Central Africa, organisers have said.
Providing macroeconomic and currency stability; through the West African Monetary Union (UEMOA) regional block, this integrated and increasingly developed region has multiple competitive economic advantages according to the Chairman of BHCI, JD Diabira, the region’s first specialist commercial real estate mortgage provider and local real estate advisor, Ivan Cornet of Latitude Five.
As two of 30 confirmed high-level speakers for the forum, the two-day conference has been brought to market in partnership with Teyliom, the region’s largest investor and developer in real estate.
For Cornet, who has spent the past decade driving the development of commercial property from his base in Abidjan, Cote d’Ivoire, this forum provides a platform for local, regional and international delegates to learn, network and strike deals.
“I’ve been sharing Francophone Africa’s story at African real estate’s most significant event; the African Property investment (API) Summit for the past decade. And now, they are hosting a high-value conference backed by the largest investor and some of the most high profile names in the region,” he says.
While Abidjan has been a focus for investors due to its role as the commercial port and gateway into Francophone West Africa, Senegal’s emergence driven by its investment into infrastructure and real estate has placed it on par with its larger neighbour explains Cornet.
“A few years ago, Abidjan was the only market for outside investors, but the two-billion-dollar plus investment into Dakar’s Diamiadio City, proactive government policy moves and robust GDP figures, makes it a very attractive and stable market politically.”
The opportunity to obtain 10% yields across different sectors has made Francophone Africa attractive for Cornet compared to Europe. Despite, his successes, he believes that rapidly improving fundamentals, and particularly access to funding, will lead to a measured climb in investment.
For specialist mortgage provider, JD Diabira of BHCI (CEO), who is part of a new wave of lenders providing tailored and suitable loan structures to mostly African developers in the region – the massive demand has been welcoming and overwhelming.
“The number of bankable projects is not a problem we are bursting with projects, and we have not even engaged in much marketing outreach yet,” he says, 80% of which are locally driven.
Adding that “While the market is still modest, it is growing at a faster clip than the rest of the world and we are also seeing local institutional investors shifting away from direct equity investments and into debt-funded real estate transactions. For me, that’s a sign of new market sophistication.”
While demand remains high, access to funding remains a challenge in the market; but the difficulty is not a result of what people think, as he explains. “The lack of capital isn’t the big issue it’s made out to be,” as he points to the number of significant successful capital raises in the market.
Rather, Diabira says “It seems to us the real problem is the willingness (or not) of lenders to lend.”
The reason, he says is that local lenders have had little reason to offer mortgages; which has been attributed to the high prevalence of government bonds in the market which banks have collected 6-7% for a “plain value zero-risk bond”, he adds.
And while this “1940 ‘s style French Prefecture culture” persists, Diabira believes specialist firms and new pan-African banks entering the market will be successful in their projects and also aid in deepening the market. “Fortunately this is not a problem specialist lenders, like ourselves, have. We lend because it’s what we do, and it’s the only thing we do,” he adds.
And while the local market continues to evolve and develop driven by demand and new skills, international developers are typically funded by their countries of origin says Diabira.
“We are a local lender (albeit with a small Canadian parent), run by Africans. We are local and are more interested in getting Africans funded across the UMEOA region.”
For the host of the Francoreal Summit, API Events Managing Director KfirRusin, the event is a uniquely high-level conference and the response has been tremendous.
“The local market, together with our strong base of multi-billion dollar pan-Africa funds, private equity partners and developers are excited about this region. We believe this bilingual event will result in new partnerships and a flurry of deal making across the region.”
By Adedapo Adesanya
The United Arab Emirates has announced its decision to quit the Organisation of the Petroleum Exporting Countries (OPEC) to focus on national interests.
This dealt a heavy blow to the oil-exporting group at a time when the US-Israel war on Iran had caused a historic energy shock and rattled the global economy.
The move, which will take effect on May 1, 2026, reflects “the UAE’s long-term strategic and economic vision and evolving energy profile”, a statement carried by state media said on Tuesday.
“During our time in the organisation, we made significant contributions and even greater sacrifices for the benefit of all,” it added. “However, the time has come to focus our efforts on what our national interest dictates.”
The loss of the UAE, a longstanding OPEC member, could create disarray and weaken the oil cartel, which has usually sought to show a united front despite internal disagreements over a range of issues from geopolitics to production quotas.
UAE Energy Minister Suhail Mohamed al-Mazrouei said the decision was taken after a careful look at the regional power’s energy strategies.
“This is a policy decision. It has been done after a careful look at current and future policies related to the level of production,” the minister said.
OPEC’s Gulf producers have already been struggling to ship exports through the Strait of Hormuz, a narrow chokepoint between Iran and Oman through which a fifth of the world’s crude oil and liquefied natural gas supplies normally pass, because of threats and attacks against vessels during the war.
The UAE had been a member of OPEC first through its emirate of Abu Dhabi in 1967 and later when it became its own country in 1971.
The oil cartel, based in Vienna, has seen some of its market power wane as the US has increased its production of crude oil in recent years.
Additionally, the UAE and Saudi Arabia have increasingly competed over economic issues and regional politics, particularly in the Red Sea area.
The two countries had joined a coalition to fight against Yemen’s Iran-backed Houthis in 2015. However, that coalition broke down into recriminations in late December when Saudi Arabia bombed what it described as a weapons shipment bound for Yemeni separatists backed by the UAE.
By Adedapo Adesanya
Central Securities Clearing System (CSCS) Plc bested four price decliners on the NASD Over-the-Counter (OTC) Securities Exchange on Monday, April 27. The alternative stock market opened the week bullish during the session with a 0.03 per cent uptick.
According to data, the security depository company added N2.61 to its share price to close at N76.26 per unit compared with the preceding session’s N78.87 per unit.
As a result, the market capitalisation of the platform increased by N820 million to N2.425 trillion from N2.424 trillion, and the NASD Unlisted Security Index (NSI) gained 1.38 points to finish at 4,053.97 points compared with the 4,052.58 points it ended last Friday.
The four price losers were led by NASD Plc, which slumped by N3.80 to sell at N34.70 per share versus N38.50 per share. FrieslandCampina Wamco Nigeria Plc fell by N1.45 to N98.10 per unit from N99.55 per unit, Food Concepts Plc slid by 27 Kobo to N2.43 per share from N2.70 per share, and Geo-Fluids Plc dipped by 9 Kobo to N2.91 per unit from N3.00 per unit.
The value of securities transacted by market participants went down by 82.0 per cent to N7.4 million from N41.3 million units, the volume of securities declined by 28.5 per cent to 319,831 units from 447,403 units, and the number of deals dropped by 34.1 per cent to 29 deals from 44 deals.
Great Nigeria Insurance (GNI) Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 59.6 million units sold for N4.0 billion, and Okitipupa Plc with 27.8 million units exchanged for N1.9 billion.
Also, GNI Plc was the most traded stock by volume on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by Resourcery Plc with 1.1 billion units traded for N415.7 million, and Infrastructure Guarantee Credit Plc with a turnover of 400 million units worth N1.2 billion.
By Adedapo Adesanya
The first trading day of the week in the currency market was bearish for the Naira in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, April 27.
Yesterday, it lost N5.80 or 0.43 per cent against the United States Dollar to trade at N1,364.24/$1, in contrast to the N1,358.44/$1 it was traded last Friday.
In the same vein, the Nigerian currency depreciated against the Pound Sterling in the official market by N13.70 to close at N1,847.72/£1 versus the preceding session’s N1,834.02/£1, and slumped against the Euro by N11.56 to sell at N1,602.29/€1 versus N1,590.73/€1.
Also, the Nigerian Naira tumbled against the greenback during the trading day by N5 to quote at N1,385/$1 compared with the previous rate of N1,380/$1, and at the GTBank FX desk, it traded flat at N1,370/$1.
The poor performance of the domestic currency could be attributed to liquidity shortage at the official currency market on Monday, which came amid surging demand for international payments. At $76.50 million, interbank liquidity printed higher across 79 deals, up from the $43.572 million reported on Friday.
Nigeria’s gross external reserves declined to $48.45 billion amid a month-long decline in inflows, amid uncertainties in the global commodity market. The depletion of foreign reserves could be partly attributed to the Central Bank of Nigeria’s intervention in the FX market.
The market remains perturbed by persistent concerns over liquidity constraints, policy transparency, and weakening confidence in Nigeria’s FX market, while boosters, including oil prices, continue to look rocky due to stalled discussions and unclear ceasefire negotiations between the US and Iran.
A look at the cryptocurrency market, Bitcoin (BTC) has been rejected near $79,000 three times in eight sessions, leaving the level as the de facto ceiling of its current trading range even as major cryptocurrencies trade lower over the past day. It lost 0.9 per cent to sell at $77,003.61.
Analysts say that upcoming US Federal Reserve policy decisions and top tech firms’ earnings this week could provide the catalyst to push bitcoin decisively above $80,000.
The market also continued to weigh Iran’s interim deal proposal to reopen the Strait of Hormuz, which failed to advance over the weekend. The White House said US officials were discussing the latest Iranian proposal but maintained “red lines” on any deal to end the eight-week war.
Solana (SOL) dropped 1.8 per cent to $84.25, Ripple (XRP) went down by 1.6 per cent to $1.39, Ethereum (ETH) depreciated by 1.3 per cent to $2,290.00, Binance Coin (BNB) declined by 0.5 per cent to $625.18, and Cardano (ADA) fell by 0.2 per cent to $0.2480.
However, Dogecoin (DOGE) rose by 2.0 per cent to $0.1002, and TRON (TRX) appreciated by 0.2 per cent to $0.3242, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
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