With the economy tipped to become Africa’s fastest-growing, investor appetite is high for Ghana as one of Africa’s leading private equity firms, Advanced Finance & Investment Group LLC (AFIG Funds), has made a significant capital injection into First Atlantic Bank (FAB) to help it meet the GH¢400million minimum capital requirement.
“I believe more investors are coming into Ghana. It is no surprise that Ghana is expected to be Africa’s fastest-growing economy,” Papa Madiaw Ndiaye, Chief Executive Officer of AFIG Funds, told the B&FT at the signing in Accra.
With a pro-business government that is urging the private sector to expand its footprint across the nation and beyond, Mr. Ndiaye added that the country’s leadership has historically been well-recognised and makes Ghana punch above its weight.
“Currently, some of the forums to which President Nana Addo Dankwa Akufo-Addo is invited, inside and outside Africa, to speak at and share his views shows the way Ghana is respected.
“Sitting in Dakar, I believe a lot of Africa’s public sector leaders envy Ghana’s relations with the rest of the world; and also the fundamentals are solid, so all that Ghana has to do is sell the Ghana destination – and when I look at government currently, that is exactly what it is doing,” he said.
Ghana is tipped to lead Africa as the fastest-growing economy in 2018, with a growth rate of 8 percent as a result of increased oil and gas production – which boosts exports and domestic electricity production.
In its latest report dubbed ‘Global Economic Prospects: sub-Saharan Africa’, the World Bank forecasts that growth in sub-Saharan Africa will pick up at 3.2 percent in 2018; and Ghana will lead the economies in Africa with 8 percent followed by Ethiopia and Tanzania, which are expected to grow at 7.2 percent.
Ghana’s economic growth, which had slowed from 4 percent in 2014 to 3.7 percent in 2015, recovered to 5.8 percent in 2016 and 8.7 percent in 2017 following consolidation of macroeconomic stability and implementation of measures to resolve the crippling power crisis.
AFIG Funds has become a regular investor in Ghana over the past three years, with investments reaching almost US$50million.
The latest investment, rumoured to be around US$10million, will go a long way to shore-up the capital of First Atlantic Bank (FAB) and position it to become one of the leading financial institutions in the country.
“We are so pleased to be an investor and partner of an established bank with the pedigree of First Atlantic Bank. Over the last two decades, FAB has built a wide array of banking services for its customers, but has also built a diversified reach across all sectors of the economy. AFIG Funds Investments cements what has been a longstanding relationship between both institutions,” Papa Madiaw Ndiaye said.
“Thanks to the capacity of its board and management team, we hope that the capital we are injecting will contribute to that growth. In line with our investing principles, we do intend to be value adding investors to support execution of the bank’s growth initiative,” he added.
Managing Director of First Atlantic Bank, Odun Odunfa, noted that the capital injection is a significant moment for the bank and the entire banking sector.
“This is the first time in a long time that a private equity firm is investing in a bank in Ghana. It goes to show what we are and the business model that we run. We are not the biggest or most profitable, but we like to think of ourselves as perhaps the best run bank in Ghana,” he added.
Mr. Odunfa noted that AFIG’s investment is the first step in meeting the GH¢400million minimum capital requirement recently announced by the central bank.
He expressed confidence in the bank’s plans, that by second- or third-quarter, the stated capital will be achieved.