Despite a recent drop in global oil prices and an economic slowdown in some African countries, growth across the continent remains resilient. Africa continues to offer more investment opportunities than ever before: Gross domestic product growth in Sub-Saharan Africa has increased by more than 5% in the last year, and it is home to six of the world’s 10 fastest-growing economies of the last decade. The value of foreign direct investment projects has seen a dramatic upswing with job creation surging.
The Morgan Lewis finance and restructuring team is positioned to help clients pursue the opportunities offered by this vibrant continent. We have worked with financial institutions and borrowers in the full spectrum of finance and restructuring matters across Africa. Our capabilities cover all major sectors, including energy, financial services, infrastructure, manufacturing, and retail. Examples of projects include representing the project sponsors in connection with the financing of an $8.5 billion Angola liquefied natural gas project; advising a rare-earth mining company in a $90 million offering of convertible bonds; representing a French global conglomerate in the equity financing of a Namibian copper smelter; and representing the lenders in the financing of a power station in Uganda.
In December 2015, Morgan Lewis sponsored a two-day Global Africa Investment Summit in London, where London partner Olivier Chambord, who represents a variety of global energy clients in project development, mergers, acquisitions, and disposals in Europe and Africa, presented on a panel called “Investment Trends in African Infrastructure.”
London partners Bruce Johnston, Chris Harrison, Stephen Walters, and Olivier took time to discuss the challenges and opportunities of investing in Africa and the ways we assist clients to unlock the continent’s potential.
Tell us more about the Morgan Lewis team that assists clients focused on and participating in Africa’s tremendous growth?
We have teams throughout Europe, the Middle East and Africa (EMEA), the United States, and Asia working on transactions in Africa. As investment comes from companies in Europe, North America, the Middle East, and Asia, we leverage our office globally to help them. Our French lawyers in London and Paris focus on francophone Africa.
Where do you see the biggest investment opportunities in Africa for clients in the next year and what are the top challenges clients face when looking to invest anywhere in the continent?
The biggest investment opportunities will be distressed business. Falling commodity and oil prices pose challenges to many companies operating in Africa. Many of the economies are focused on exports of commodities. This could mean more insolvencies and workouts. To quote Warren Buffett, “only when the tide goes out do you discover who’s been swimming naked.”