Liberia, Sierra Leone could see Private Equity interest - CNBC Africa

Liberia, Sierra Leone could see Private Equity interest

Western Africa

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“Cote d’Ivoire is a market that we think is well positioned for growth and quite a few funds are already looking for opportunities there, Senegal as well. We also like Liberia and Sierra Leone post-conflicts, developments covering oil, their mineral resource reach,” Akindele, a partner at Synergy Capital Managers told CNBC Africa on Monday.

“The deals sizes you will see in these regions are smaller but they’re also attractive and they are areas that people should be looking into.”

Liberia, with a GDP growth rate of 8.3 per cent, has the distinction of having the highest ratio of direct foreign investment to GDP in the world and both it and, West African neighbours, Sierra Leone are yet to fully recover from civil war conflicts. 

JP Anderson, an asset management company, recently announced a 100 million dollar Private Equity fund solely created to focus on Sierra Leone, which illustrates the mounting interest in West Africa.  

“The case for West Africa is very strong – over 300 million people of which 50 per cent of them are less than 22 years old. Even though Nigeria still remains the largest economy in West Africa with over 68 per cent of the GDP, we see other economies in West Africa getting bigger in terms of participation in the commerce of that region,” said Akindele.

He also alluded to the fact that Private Equity is ‘patient capital’. It’s aimed at making money over business cycles which is what gears the fund towards growth and expansion.

“I think Private Equity actually makes a case for helping government, policy makers solve infrastructure challenges because that’s where the deals are. You are trying to put capital to try and solve various bottlenecks that you find in developing economies.”

Despite the development of these emerging economies, Akindele insists that Nigeria still remains the forerunner in West Africa.

“You have sectors that are opening up, you have policies that continue to be consistent, markets deepening, you have an emerging middle class who have appetite for consumer goods, power. We think Nigeria is still the number one spot for Private Equity,” Akindele emphasised.

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