New Commonwealth Fund to Boost Investment in Africa
8 July 1996
The Commonwealth Africa Investment Fund, a new initiative designed to channel commercial investment to the 19 Commonwealth countries in Africa, was launched today at Marlborough House in the presence of President Nelson Mandela of South Africa.The Africa Fund is the first in a planned series of regional investment funds which are expected to be established under the umbrella of the Commonwealth Private Investment Initiative (CPII), a pan-Commonwealth venture set up by Finance Ministers in 1995 and warmly endorsed by Heads of Government when they met for their biennial summit in New Zealand last November.
Known by its acronym, COMAFIN, the Africa Fund is a private equity fund providing risk capital for equity investments in commercial enterprises. It is designed to support expanding privatised or privatising companies, new ventures and small or medium-sized private sector businesses.
The Fund was established by the Commonwealth Secretariat with the Commonwealth Development Corporation, the overseas development finance institution of the British Government. At the ceremony to launch the Fund, the Secretary-General of the Commonwealth, Chief Emeka Anyaoku, signed a Memorandum of Understanding with Lord Cairns, chairman of CDC. The Fund will be managed by CDC, drawing on its existing network of offices and development capital funds in the region.
The Fund will invest according to the twin principles of a commercial return and a positive contribution to economic development. One of the major benefits of COMAFIN will be to stimulate the flow of medium to long-term direct investment funds to Africa, without being subject to the volatility of portfolio investment in the area.
The initial value of the Fund is expected to be between US$50m and US$60m. The main investors are the CDC as well as the investment agencies of the Governments of Malaysia, Singapore (in principle), South Africa, Zimbabwe and others. Further amounts will be raised in due course from private markets.
The Commonwealth Secretary-General said: "The manner in which COMAFIN has been established demonstrates the Commonwealth's unique ability to mobilise skills and resources from diverse sources to promote socio-economic development among its member countries. It also represents the Commonwealth's commitment to fulfilling the priority attached to promoting development. I am glad that CDC's worldwide experience in investment financing will be brought to bear in the management of the Fund."
The Fund's Board of Directors includes the following:
J Y Pillay (chairman), Singapore's High Commissioner to Britain. Former chairman of Singapore Airlines and Tamasek Holdings, managing director of the Monetary Authority and Singapore Investment Corporation, and director of Overseas Chinese Banking Corporation;
David Gill, former director, Capital Markets Department, IFC, Washington, and non-executive director of several emerging market funds;
Sam Jonah, chief executive, Ashanti Goldfields Co Ltd, director of Lonhro plc and member of the Advisory Board, IFC Washington;
David Phiri, chairman of Stanbic Bank Zambia, directorships with Blackwood Hodge, Altas Copco, Trans Zambesi and others, former Governor Bank of Zambia and managing director of Roan Consolidated Mines; and
Joseph Wanjui, businessman, former chairman East Africa Industries Ltd, Nairobi (Unilever).
Note to Editors:
A press briefing on the Africa Fund will be given by the Commonwealth Secretary-General and senior officials from the Secretariat and CDC at Marlborough House at 10:30 a.m. The agreement setting up the Fund will be signed at 5:30 p.m.
The Commonwealth is a voluntary association of 53 independent countries representing about a quarter of the world's population. The Commonwealth Secretariat was set up in 1965 as an intergovernmental body to service the association. Among other things, its officials and experts advise governments on all aspects of privatisation, including policy, timing valuation and structuring. It is active in promoting privately owned and operated investment funds on international capital markets. The Secretariat will consider providing technical assistance and training to develop local management expertise and technical and marketing support for companies in which the Fund has invested.
(For further information, please contact Michael Fathers or Dharani Rethnam, Tel: 0207 747 6380/6385; Fax: 0207 839 9081.)
The Commonwealth Development Corporation is Britain's overseas development finance institution and a significant element in its bilateral aid programme. Based in London and with 24 overseas offices, CDC operates in 50 countries, primarily but not exclusively Commonwealth members. It concentrates on poorer countries and those carrying out economic reform programmes. Its purpose is to contribute to development by investing equity and loan capital in, and providing management support to, the operations of new and existing financially viable and developmentally sound businesses in the private sector. At 31 December 1995, CDC had investments totalling £1.5bn in 369 businesses. CDC will use its investment expertise in Africa to provide the Fund with deal flow, due diligence and other support.
(For further information, please contact Sean Magee, Director Corporate Relations CDC, Tel: 0207 963 3864; Fax: 0207 828 6505.)
Issued by the Information and Public Affairs Division, Commonwealth Secretariat,
Marlborough House,
Pall Mall,
London SW1Y 5HX,
United Kingdom.
Tel: 0207-839 3411;
Fax: 0207-839 9081;
Telex: 27678
96/31 8 July 1996
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