PIC prioritises West African investment

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“We have broken up the continental economy into five parts, predominantly driven by opportunities. We have the North, West, East, Central and Southern. Effectively we’re looking at sub-Saharan Africa,” PIC chief executive Elias Masilela told CNBC Africa.

“We have prioritised the West African side of the economy because of the higher growth potential. It will help us to reach our objective much quicker – if West Africa grows faster than we expect, we can end up with a [more] robust continental economy. The recent conclusion that Nigeria is now bigger than South Africa is actually a ‘big tick’ to what we’re trying to do.”

Masilela indicated that the PIC, which is wholly owned by the South African government, aims to invest mainly in the private equity space and hopes to create new and growing markets as well.

“It’s an established fact that continental markets still need to go through development. One of the indicators we look at when we look at financial markets is the capital markets. You have countries that don’t have stock markets, you have countries that don’t have robust banking systems – that means there’s a lot that needs to happen on that front,” he said.

“From a PIC perspective, given that the bulk of our investments is going to be in the private equity space, we have an interest in seeing the development of those financial markets. We can’t do it alone as the PIC – we need partners to be able to do that. We need the host economies to recognise that. One of our partners in this case is the Johannesburg Stock Exchange.”

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He also stressed the PIC’s interest in the rest of sub-Saharan Africa and explained its reluctance to allocate too many resources to Southern Africa.   

“Next on the list is East Africa, driven predominantly by Kenya. Then it’s Central Africa. The Southern part of Africa has been allocated the lowest resources simply because of their proximity to the South African financial markets. Our view is that countries and companies within the SADC space can access other capital other than GEPF capital,” Masilela said.