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Novare to enter Angola, expand Nigerian business amid positive reforms

Novare to enter Angola, expand Nigerian business amid positive reforms
03-04-24 / Tommy Jackson

Novare to enter Angola, expand Nigerian business amid positive reforms

Johannesburg - Financial services group Novare Holdings plans to enter Angola and expand its Nigerian business to benefit from economic and political reforms that seek to accelerate growth in the sub-Saharan African countries.

Novare Equity Partners, the company's investment arm focused on real estate, is looking at retail properties for shopping malls, facilities for logistics operations, and potential manufacturing sites for the agricultural sector, according to Derrick Roper, the division's Managing Director.

President Joao Lourenco's anti-corruption measures, initiated after Jose Eduardo dos Santos's 38-year rule ended in 2017, have significantly improved Angola's investment environment. The economy will also get a boost from expanding a 1,300km railway line connecting the port town of Lobito to the Democratic Republic of Congo and the Zambian Copperbelt.

"It goes to show what positive changes can happen from an investment perspective when there is an improvement in government policy," Roper said. Any investments are only likely to be concluded in the first quarter of next year.

Novare Equity Partners intends to concentrate its investments in Luanda, leveraging its investment management, property development, and facilities management expertise. The firm, which has successfully operated shopping malls in Nigeria, Zambia, and Mozambique, aims to deliver long-term returns to institutional investors, predominantly African pension funds.

Earlier plans to expand into Angola were scuppered by the onset of the COVID-19 pandemic in 2020. Over the past five years since Lourenco took office, Roper has since seen a considerable change, highlighting improved infrastructure, reduced traffic congestion, enhanced restaurants, and the elimination of visa requirements for South Africans, creating a more welcoming atmosphere.

The International Monetary Fund (IMF) predicts Angola's $107 billion economy, with a population of 35 million, will grow by 3.3% this year, a notable increase from the estimated 0.9% in 2023. As Africa's second-largest oil producer, Angola also exports diamonds and wood.

Nigerian Opportunities

The expansion of Novare Equity Partners' existing business in Nigeria will include the installation of solar panels at its malls and other buildings. It will also use its properties as data centres and healthcare facilities. The firm has three malls in Abuja and the Novare Lekki mall in Lagos, the biggest shopping centre in Nigeria's commercial hub.

President Bola Tinubu has embarked on a series of reforms since taking office in May to spur economic growth, including firing the central bank governor and implementing measures to stop corruption. While international investors have welcomed initiatives such as relaxed currency controls and the elimination of fuel subsidies, Nigeria faces challenges such as the naira's record low and inflation reaching its highest point in nearly 30 years.

"The economic and policy environment is much more attractive now," Roper said. "The president also has a strong team."

As sub-Saharan Africa's most populous nation and a contender with South Africa for regional economic leadership, Nigeria is positioned for marginal economic growth, projected to reach 3% this year, up from an estimated 2.9% in 2023. The completion of the $20 billion Dangote oil refinery in Lagos, the largest in Africa, is expected to be a key driver of growth, transforming Nigeria into a fuel exporter and reducing dependence on imports.

Highlighting Nigeria's vast market and enormous long-term potential, Roper emphasised its significance and the compelling opportunities it offers.

Johannesburg-based Novare Holdings was founded as a small pension fund advisory in 2000 and now has more than R150 billion in assets under advice. It is planning to raise R2 billion for an impact fund that seeks to invest in agriculture and manufacturing in South Africa. The firm is Black-owned and managed and also runs a multi-management investment business and an advisory.

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