Tunis, 12 February 2009 – The African Development Bank (AfDB) hosted a Roundtable on the “Effect of the Financial Crisis on African Private Equity” at the Residence Hotel in Tunis.
The Roundtable was attended by 70 participants including over 20 private equity (PE) fund managers who are actively managing African Private Equity funds in which the Bank has invested. Several development finance institutions (DFIs) investing in African funds were also present. The Roundtable was an opportunity to discuss a collaborative financing platform under the African Financing Partnership (AFP).
AfDB President Kaberuka gave the opening remarks in which he stressed that, despite the challenges and resource limitations facing Africa in the present financial crisis, private equity is an asset class built for the long term and represents a strong vehicle for economic development and growth. He also reiterated that the Bank will continue to play its counter-cyclical role of investing in African nations and enterprises to spur the economic rebound. Mr. Leonce Ndikumana, Director of the Bank’s Development Research Department, gave an overview of the economic impact of the financial crisis on Africa.
The roundtable was organized around two sessions. the first session, moderated by Mr. Thomas Gibian, Chief Executive Officer, Emerging Capital Partners (ECP), discussed the impact of the current financial crisis on African private equity investments. Mr. J. Kofi Bucknor, Managing Partner of Kingdom Zephyr Africa Management, moderated the second session which focused on strategies and opportunities for adaptation to the current situation.
With tightening availability of commercial debt financing, opportunities for private equity investment in Africa abound. A number of fund managers noted the importance of diversification, not only as a key to survival but as a performance enhancement. There was a consensus that with due care to structuring and the quality of transactions, the next few years can be vintage years for private equity investment on the continent.
The participants agreed that in 6 months time, the multilateral development banks (MDBs), including the African Development Bank, should convene a broader gathering of sovereign wealth funds, African pension funds, insurance companies, regulators, and private equity funds. This would be held within the collaboration framework of the African Financing Partnership (AFP).