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Africa 2020 Presents Exciting Opportunities for Asset Managers- PwC

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New research from PwC predicts that traditional assets under management (AuM) in 12 markets across Africa will rise to around $1,098 billion by 2020, from a 2008 total of $293 billion.

This represents a compound annual growth rate (CAGR) of nearly 9.6%. Traditional asset management, in particular the mutual fund industry, is expanding aggressively across Africa.

This will largely be driven by a number of factors: economic growth and the subsequent rise in wealth will boost the demand for pensions and life insurance products, the demand for retail investment funds will consequently increase, and the widespread adoption of technology will make delivery of new products cheaper, bringing more consumers into the formal financial sector.

The report, Africa Asset Management 2020, is an in-depth study which examines the asset management industry across 12 African countries which have financial markets of varying levels of development.

The countries, which represent a sample from Northern, Eastern, Western and Southern Africa, were assessed by a range of relevant indicators in order to capture their true investment potential.

The countries were categorised into three groups: advancing markets, promising markets, and nascent markets.

In addition, the report outlines and analyses the future game changers for investment into Africa as a whole as well as addressing the impacts for these specific markets.

Speaking on the trend, Ilse French, PwC Africa Asset Management Leader, said,  “As Africa has entered the 21st century, economic growth has surpassed expectations and stimulated investor interest across a broad range of asset classes. Although the fund industry in Africa is, in most countries, still developing and has much to prove, global and local asset managers are likely to become more active as the industry continues to flourish.”

PwC also predicts that the global rise in the volume of investable assets which has taken place over the last two or three decades is set to continue to increase in the future and investable assets are set to be significantly higher in 2020 than today.

Also, a recent research conducted by PwC projects that global AuM will rise to around $101.7 trillion by 2020.

Although Africa is a small part of the global industry it is a region that is experiencing significant growth.

It is interesting to note that retail investors form a small proportion of investors in asset management in Africa.

However, the report suggests that the number of retail investors in these markets could be increased by way of education about products, encouragement of a savings and investment culture, and overall economic growth.

Capital Markets in Africa

Capital market regulation varies widely across Africa as legislation and regulatory structures differs between countries, reflecting both market and varied historical conditions.

In some countries, capital market regulations falls under the realm of the central bank, while in others they are under the auspices of the independent regulatory commission.

Although the GDP growth rate in Africa is on the rise, the savings and investment culture has not yet caught up and for the most part, capital markets remain small and illiquid.

Regulations to boost the capital markets are under discussion in some countries, such as encouraging pension funds to invest in locally listed companies.

Investors and Distributors

All parts of the financial services sectors are expected to continue to expand to 2020 and beyond, but bank assets will wane in the coming years as competition is fuelled by new entrants and regulatory reforms.

A number of banks have set up their own asset management subsidiaries in a bid to push their own proprietary products.

Some of these banks are also seeking cooperation with foreign asset managers to promote their African investment strategies in other parts of the world in exchange for promotion of other asset managers’ investment strategies in Africa.

Banks have the best distribution network and they will likely remain the main distributors in the future.

The pension fund sector in the 12 countries in this study has grown steadily from 2006 to 2014 and is expected to continue to grow considerably.

As these economies mature, pensions are becoming more significant as a part of the financial services sector, although many countries still have no private pension schemes.

However, change is underway with Mauritius and Ghana serving as examples of countries that have created three pillar pension schemes encompassing a third tier of voluntary schemes for middle class workers.

The insurance industry is also growing but, Africa has a low average penetration rate of about 3.5% of GDP, with the exception of South Africa which is over 15%.

As with pension funds, insurance companies outsource part of their asset management to third parties.

Private Investment

Currently private equity (PE) investment is the most interesting form of investment for foreign investors as a result of illiquidity in the capital markets.

But the lack of availability of exit options remains a concern for potential private equity investors in Africa.

Infrastructure is also considered to be a major opportunity for investment. The World Bank has estimated that an annual spending of $93 billion would be required to achieve national development targets in Africa and close the infrastructure gap.

Many African countries have taken longer to catch up on infrastructure and the recent economic uncertainty further underscores the need for a massive need to overhaul Africa’s infrastructure.

Game Changers: Global Megatrends

“Significant global and continent megatrends, we refer to as the ‘game changers’, will also help drive the market and create future opportunities,” said French.

“Africa’s demographic dividend, its growing middle class, its increased use of technology, and its rapid urbanisation will all have a part to play in the development of the asset management industry in Africa.”

Demographic Dividend

Africa currently represents 15% of the world’s population and 3% of the world’s GDP and less than 1% of the world’s stock market.

But that is changing. “There will be diverse opportunities and these will be different to those in the developed world,” added French. Africa’s population growth and the resulting demographic dividend could boost economic growth.

Investment is necessary in some industries in order to create labour productivity and economic diversification, and reduce poverty rates.

If policies are implemented to create enough employment for the enlarged workforce, the falling dependency rates should increase both savings and investment and create a substantial demand for savings products.

Growing Middle Class

Africa’s middle class has increased substantially over the past decade. Standard Bank’s report on the middle-class in Africa indicates that Nigeria will add 7.6 million middle class households by 2030, while Ghana will add 1.6 million.

The middle classes are associated with a great emphasis on education and saving. This will increase demand for sophisticated financial services and investment products such as retail investment funds, thereby significantly boosting the asset management industry.

Increased Use of Technology

Technology is increasingly changing the face of Africa. Mobile financial services have taken off as larger portions of the population access the web by way of mobile devices compared to fixed line internet.

Mobile technology is also enhancing financial services across Africa by way of a non-banked model and a banking model.

However, data security may become a key concern in the future requiring closer collaboration between telecoms and financial regulators.

Urbanisation and Infrastructure

Poor infrastructure in Africa is an impediment to economic growth and improvements in this area are required.

PwC research suggests that infrastructure spending in sub-Saharan Africa will exceed $180bn by 2025.

The shortfall in government funding creates opportunities for private investors to get involved either through direct investment or public-private partnerships.

Currently Africa’s urban population is increasing by 1.1 percent annually and is expected to have a major impact on real estate and infrastructure by 2020.

In addition, PE is growing across Africa. Although the majority of deals are small in size, it seems likely that deal size will grow to be more in line with other emerging markets as their economies and regulatory frameworks develop.

Development of the African Financial Services Industry

The 12 countries in this study vary from those with extensive legislative frameworks, such as South Africa, to those in much earlier stages in the development of their regulatory frameworks, such as Angola.

Regulatory reform is likely to boost economic growth and stimulate investor appetite. Changes to regulations to pension funds in particular could have an effect on the asset management industry as public pensions are usually the largest institutional investors in many African countries.

These changes include allowing pension funds to invest in a wide range of assets or the establishment of a three tier pension system.

In addition, sovereign wealth funds (SWFs) can fill existing funding gaps until the legal frameworks of African countries develop sufficiently to make them appealing to other investors.

“As large institutional investors, SWFs could provide a considerable boost to the asset management industry in Africa, particularly because they are long-term investors who seek stable returns,” added French.

The fact that most of the funds use a proportion of their assets to make impact investments domestically or regionally suggests that they will become big players in local markets.

“As asset managers look for new investment channels and competition becomes increasingly intense, understanding the characteristics of the local markets will be crucial to grasp the potential of this final frontier,” concluded French.


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Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

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Samsung Launches the Incredible Crystal UHD TV

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TV has become a massive part of our lives from those must-watch series to the sports matches that have us glued to the screen. World-renowned for pioneering innovation in this popular category of technology, Samsung has now launched Crystal UHD TV.

Featuring Samsung’s cutting-edge Crystal Display, the new Crystal UHD TV will bring high-resolution content to life in a whole new way, delivering a viewing experience like never before in a mainstream UHD TV.

Controling all function with Voice Assistant and enjoying multiple contents on one screen with Multi View are just some of the welcome advancements on this incredible TV.

“Samsung TV has been constantly paving the path for technological innovations by offering consumers a new TV experience and a future for global TV industry. This is the core driving force that makes Samsung No. 1 TV for 14 consecutive years. Crystal UHD builds on this success in ways that people will truly love.” said Dudu Mokholo, Chief Marketing Officer at Samsung Central Africa.

Crystal UHD is the purest form of picture quality with 1 billion rich and vibrant colours with guaranteed crisp and vivid images time over time. Its features include:

Real 4K UHD Resolution – 4K UHD TV goes beyond regular FHD with 4x more pixels, offering your eyes the sharp and crisp images they deserve. See it like you’re really in the scene.

Lifelike colour expression – Immerse yourself in the picture with a wider range of colour. Dynamic Crystal Display delivers lifelike variations so you can see every subtlety.

Crystal Processor 4K – Experience picture quality that moves you, made possible by a single chip that orchestrates colour, optimises high contrast ratio, and masters HDR.

See the picture, not the TV – A sleek and elegant design that draws you to the purest picture. Crafted with an effortless minimalistic style from every angle and a boundless that sets new standards. You will see only the most immersive cinematic experience ever.

Get what you want just by speaking up – Everything is so much easier with voice control. Now you can quickly access favourite content, get answers, and even control your TV and other connected devices around your home. Just tell it what you want.

See multiple contents at the same time – Multi View splits your TV screen in two, putting the content you’re watching on one side, and mirroring your mobile screen on the other. This means you don’t have to look away from the TV screen to glance at your phone anymore.

Get gaming faster – Get into the game faster with Game Enhancer, which optimises your screen so you have more control with barely noticeable input lag. Experience smooth gaming in its most impressive form without motion blur and judder.

Decorate your space with your favourite photos  – When you project your favourite photos onto the TV screen, the TV itself blends into your décor elegantly. You can lay out multiple photos in a beautiful collage or place them in a slide show for to keep the visual fresh and on point.

Clean up the clutter – Samsung UHD offers a neat solution for keeping all your TV cables tidy, hiding them away right in the stand. This helps you reduce your clutter so you can fully enjoy your TV’s beautiful design.

Samsung Crystal UHD clearly does what many TVs cannot, in the most amazing ways.

The Crystal UHD TV is now available at various retailer stores and retailer online pages. For extra peace of mind, Crystal UHD TV comes with a 24 month warranty.


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FG to Boost Artificial Intelligence

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Federal government on Tuesday announced that it has developed initiatives for the adoption of Artificial Intelligence technology in Nigeria.

FG to Boost Artificial Intelligence

 

The establishment of a Centre for Artificial Intelligence and Robotics in Nigeria (CFAIR) is also expected soon.

The National Information Technology Development Agency (NITDA) said that AI applications enable innovative solutions, improve risk assessment, better planning, and faster knowledge-sharing.

Abdullahi Usman Gambo, director of IT Infrastructure Solution, NITDA, spoke at a workshop in commemoration of International Day for Universal Access to Information (IDUAI) organised by the United Nations Educational, Scientific, and Cultural Organisation (UNESCO).

He noted that AI would open up opportunities for access to information and also help to achieve the Sustainable Development Goals (SDGs) set by the United Nations (UN) in the 2030 Agenda.

Gambo said: “Artificial Intelligence is poised to revolutionize the way we go about our daily lives – from governance to business, legislation to medicine to defence, etc. We can all agree that AI is humanity’s new frontier.

“We have developed initiatives for adoption of emerging technologies such as AI, strengthen cybersecurity, digital skills for digitally excluded citizens while enhancing the regulatory and market environment to increase access to ICTs, and promote seamless access to information.

“We believe AI and associated emerging technologies will completely enhance the speed, efficiency and effectiveness of information gathering during the exchange of data or the ways of communication,” he said.

Delivering his paper, Yushau Shuaib, publisher of PRNigeria, described access to information as the right of the citizens to accurate, transparent, and timely facts and figures.

The former National Emergency Management Agency (NEMA) spokesman stated that governments at all levels have obligations to communicate with people, while the public has the right to know and criticize authorities through constructive engagement.

The media executive, however, appealed to Nigerians not to use social media platforms for fake news dissemination.

“The merits of new media on affordability, accessibility and instant delivery are occasionally marred by the fact that social media is sometimes used to spread fake news”, he said.

Shuaib called for collaboration of stakeholders in ensuring appropriate legislation through public awareness campaigns in order to improve access to universal information.


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Samsung Unveils Technologically Advanced 2020 Consumer Products

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Samsung Electronics Nigeria has unveiled its 2020 consumer products range. The launch which held in Victoria Island, Lagos showcased the latest in its revolutionary and innovative QLED and Crystal UHD Television Series  along with Wind Free Air Conditioners, Side by Side Refrigerators and Drum Washing Machines.

Keeping with its resolve to utilize its transformative ideas and technologies to shape the future and inspire the whole world, Samsung has once again demonstrated its determination to continuously redefine the living space and entertainment of its customers.

According to Mr. Caden Chiyeon Yu, Managing Director, Samsung Electronics Nigeria, “QLED uses exceptional and revolutionary technology which offers an unparalleled visual and auditory adventure from the comfort of your living room. QLED series is available in 4K or 8K and from 58″ to 98”, and was designed with options to fit any space and budget”. For Crystal UHD Television, Mr. Yu said, with cutting-edge Crystal Display, the new Crystal UHD TV will bring high-resolution content to life in a whole new way, delivering a viewing experience like never before in a mainstream UHD TV.

Also showcased at the launch were the new Windfree Air Conditioner, Drum Washing Machines and Side by Side refrigerators. The Windfree Air Conditioner is designed specially with the latest technology to provide coolness in quick time while ensuring that users don’t experience any chills through out its use. It also has an in-built digital inverter which reduces energy consumption by 73 percent. .

The newly introduced drum washing machine of 2020 from Samsung is very efficient and is built with eco bubble technolgy which allows it to provide cleaning of very dirty garments or clothes without the use of water.  Futhermore, the new Side by Side Refrigetor was built with Spacemax technology which has enabled  Samsung to offer more spacious interior without increasing the external dimentions or compromising energy efficiency.

Also speaking at the event, Mrs. Oluwaremilekun Adesola-Ogunsan, Head, Consumer Electronics, Samsung Nigeria stated that “Samsung understands the economic diffulties currently being experienced in the country and has consistently produced pocket friendly premium consumer products. We are very consistent in our approach as we understand that our customers like the good things of life and we have provided that without compromising our standards”. “So I can say boldy that there is a Samsung for everybody regardless of your income stream” She added.

In 2019, the Samsung consumer range of products received universal praise for its innovative quality and design and numerous pioneering features. This year Samsung has added even more beneficial features which its customers will appreciate in great deal.

 


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