Private equity up in Africa

TANGIER - Business-friendly reforms in some north African countries are prompting more local firms to seek expertise and funding from abroad, creating opportunities for private equity in the region.

TANGIER - Business-friendly reforms in some north African countries are prompting more local firms to seek expertise and funding from abroad, creating opportunities for private equity in the region.

Several capital investment funds focusing on the southern Mediterranean began operations this year despite the global financial turmoil, encouraged by economic growth rates of 3-5percent and moves by governments to ease flow of capital.

Industry figures meeting at a Mediterranean investment forum in the Moroccan city of Tangier said global private equity players had begun to take note but were still hesitating.

Inward capital investment activity had fallen to less than half the level before the crisis, said Nasreddine Dekli, senior manager of International Maghreb Merchant Bank.

Yet demand for equity finance is still strong in countries like Tunisia, Morocco and Egypt, partly because tax breaks, cut price land deals and new free trade zones are encouraging companies to shift operations to the region.

Delegates at the Euromed Capital Forum said the global downturn had not interrupted a trend for north African family-run firms to seek foreign expertise and capital to grow.

Aziz Mebarek, a partner in Tuninvest, said his funds had $600million (about R4,4million) invested in the Maghreb and sub-Saharan Africa.

On Friday, French state investor CDC launched a fund of funds, Averroes II, focusing on the southern Mediterranean.

Algeria, seen as tough for foreign investors outside the dominant energy sector, announced its first capital development fund set up by bank BEA in cooperation with Portugal's Banco Espirito Santo and French capital investment group Siparex.

Barriers to trade and investment across the region have stymied integration. - Reuters

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