Category Archives: nigeria

Zenith Money Market Fund

The initial public offering of the Zenith Money Market Fund closes today.

Here’s a peek at the prospectus from which comes from asset management wing of Zenith, Nigeria’s biggest bank by revenue and assets. Others in the top ten would include FBN Holdings, United Bank for Africa (UBA) Access Bank, Guaranty Trust Bank, Diamond Bank, Ecobank Nigeria, Fidelity Bank, Union Bank and Skye Bank

  • It was to run from September 25 to October 13 – (but seems to have been extended  October 27)
  • The offer aims to raise 1 billion Naira (approx. 295 million Kenya shillings) and the minimum investment to join is 10,000 Naira (approx. $28 or Kshs 2,940)
  • The fund manager Zenith Assets Management also managers other funds – Zenith Equity Fund, Zenith Ethical Fund, and Zenith Income Fund.
  • Zenith Managers has 298 million Naira in assets (down from 352 million) in 2015 and 857 million in 2013. They had a profit of 20 million Naira in 2016 (down from 67 million in 2015) as personnel cost doubled in 2016
  • It is an open-ended fund in which the fund manager will own 5% and an investment committee will advise and guide the Fund Manager on investment decisions.
  • The asset allocation of the fund will be treasury bills and short-term government securities (25-100%), and other money market securities (10-75%)
  • The fund trustee is Vetiva Trustees, custodian is Stanbic IBTC Bank, and auditors are
  • For the issue, costs are estimated to be Naira 20.2 million (about 2%). Rating agency is Agusto & Co and Reporting accountants are Pro Edge Partners
  • The fund will attract an annual 1% management fee.
  • For the money market fund, Zenith projects to have assets of 1.5 billion Naira at the end of 2017, and 3.9 billion in 2019 and on to 12 billon in 2021.

Also see

Atlas Mara Prospectus Peek

Atlas Mara is selling 44.44 million new shares at $2.25 each to raise $100 million. Atlas Mara is acquiring 13.4% equity in Union Bank Nigeria (UBN), from Clermont Group for $55 million, increasing its stake to 44.5%.

This offer aims to raise $30 million from Fairfax Africa (a Canadian investment holding company that is listed on the Toronto Stock Exchange) by selling them 13.33 million shares at $2.25 each. Fairfax will also sign up for $100 million of mandatory convertible bonds due in 2018. It is intended that the funds raised from the issue of the mandatory convertible bonds will be used to fully fund the UBN purchase and the remainder be used to fund the bank (expansion of the market, treasury and fintech business lines and product offerings) and participate in the UBN rights issue.

Atlas Mara is a company incorporated in the British Virgin Islands (largely a tax-free territory – no income, withholding or capital gains taxes) and is the holding company for a group that provides bank and financial services across sub-Saharan Africa which they intend to disrupt. Atlas Mara was formed in November 2013 by Atlas Merchant Capital LLC and the Mara Group, led by Robert E. Diamond Jr. and Ashish J. Thakkar, respectively. In 2016, Atlas Mara had $2.7 billion assets and $ 9 million profit in 2016.

Africa footprint: Besides UBN, they also own 100% of Finance Bank of Zambia (the 5th largest bank in Zambia, serving 2 million people), and 62.1% of Banque Populaire du Rwanda (swelled by a merger with BRD Commercial Bank). Also ABC Holdings – Botswana (owned 62.13% by the Company and 37.87% by Atlas Mara Financial) owns 100% of African Banking Corporation Zambia, 100% of ABC Holdings (Zimbabwe), 68% of Tanzania Development Finance Corporation, 97% of African Banking Corporation of Tanzania, 100% of African Banking Corporation of Mozambique SA, and 100% of African Banking Corporation of Botswana

Atlas shareholders are Guggenheim Partners Investment Management (11.22%) Wellington Management Company, LLP (9.91%) Owl Creek Asset Management, LP (7.99%), Trafigura Holding (6.23%), UBS Asset Management: O’Connor (8.10%) Janus Capital Management LLC (3.92%). Of the founders, Atlas – AFS Partners LLC has 0.5% and Mara Partners FS has 0.13% while Mr. Diamond beneficially owns 1,000,000 Founder Preferred Shares and Mr. Thakkar beneficially owns 250,000 Founder Preferred Shares.

UBN is a mid-tier bank with about 3% market share of assets and loans and deposits in Nigeria. It was established in 1917 and rescued from insolvency in 2009 along with other banks. It now has 3 million customers, 900 ATM’s and 414,000 mobile banking users and, in 2017, UBN  signed agreements with Visa and MasterCard

UBN Plans: While Atlas Mara is not going for a majority stake in UBN (though they may choose to do this), they will;
– Push UBN to be a leading Tier II bank in Nigeria
– This will be done using fintech and treasury initiatives
– They will use UBN to secure more lending
– After 2019, they will push UBN to be a Tier I bank by acquiring another Nigerian bank

Risks facing UBN: Nigeria has recently experienced significant depreciation of the Naira, inflation and economic recession. Also, UBN’s loan book is exposed to the oil and gas sector which comprises 47% of its lending. Also, there is currently a 12.9% free float of UBN’s shares, which is below the mandatory 20% free float requirement prescribed by the Nigerian Stock Exchange Listing Rules.

Fees: $1.9 million will be paid to Atlas Merchant Capital LLC, the investment fund co-founded by Bob Diamond, upon completion of the transaction.

The deal deadline is 29 August.

Extracts from the Atlas Mara prospectus.

EDIT August 30 Atlas Mara is pleased to announce the closing of the offer period for the recently launched Placing and the Open Offer on 29 August 2017. The Placing and Open Offer, together with the recently announced strategic investment from Fairfax Africa (comprising a Mandatory Convertible Bond and a Firm Placing) constitutes “the Strategic Financing”. The Strategic Financing will support Atlas Mara’s growth initiatives in the acquisition of additional equity interests in Union Bank of Nigeria Plc (“UBN”) and scaling up the Markets and Treasury and Fintech business lines. ..Bob Diamond, Chairman of the Board of Atlas Mara, said: “We are thrilled to have Fairfax Africa as our long-term partner. This transaction puts Atlas Mara in a very strong position to deliver on our strategic goals. We remain focused on execution and delivering on cost discipline and profitability.”

RwandAir Airbus A330

After almost three hours winding through about a dozen checkpoints and queues inside Murtala Muhammed International Airport in Lagos, it was quite a pleasant sight to get to see daylight and planes lined up.

Three days before, Rwandair flight 200 from Kigali to Lagos was operated by a B737-700 and 201 from  Lagos to Kigali was also meant to be on a similar aircraft, but parked in at the gate  was an  unusually large Rwandair plane.

RwandAir recently acquired an Airbus A330-200 (christened Ubumwe) and with another Airbus A330-300 due in November, they are making a big splash about the planes. The new aircraft even featuring in minister’s speech in Lagos and on TV and newspaper advertisements about Rwandair connecting Africa (never mind that Ethiopian, KQ, SAA, Arik have had similar wide-body twin jets for a decade).rwanda-a330-2

On this day, many of the electronic systems at the Lagos  airport were down, and virtually everything was done manually, with boarding passes written by hand. At check-in, I had asked for an aisle seat and the man at the counter nodded in acknowledgment, but when I looked at my boarding pass, my seat number was “F/S” – as was everyone else’s – this meant “free-seating”.

The airline staff at the boarding gate first ushered in the passengers who were in business class, and this included Clare Akamanzi,  Head, Strategy & Policy Unit, Office of the Rwanda President, who had been down in the queues, and gone through the whole laborious check in process like an ordinary passenger, including having her suitcase opened, then wrapped for security purposes. The airport staff said she was a Minister but clearly she did not behave like any minister they might have seen.

Other passengers were then allowed on board, with through the jet bridge that had been placed at a mid-cabin door and were then directed to pick any seat in economy class. The new plane has two large economy class cabins, a small premium economy one, and a business one near the front, for a total capacity of 274 passengers. Everyone in economy flopped into a seat relieved at the abundance bin space and many empty seats on the flight.

Points about the flight, using this borrowed format (via AU traveller)  

Airline review: RwandAir economy class, Lagos to Kigali

The airline operates a dream miles program on a visa card, but this was only my first round trip with RwandAir. The airline is also not part of any miles alliance partnership now.

rwanda-a330CLASS: Economy, window in the third row of the second cabin.

DURATION: 4h 30m.

FREQUENCY: WB 201 between Lagos to Kigali is 4X a week: Mon, Wed, Fri, Sun  (12:00 17:30)

THE SEAT: The configuration here is 2-4-2 in both economy cabins and many of the seats were empty. All the seats have personal touch screen entertainment displays, with light and flight attendant controls. There is also a USB  charger next to the screen.

ENTERTAINMENT: The touch screen system was quite nimble. My first set of headphones, given out after take-off did not work, but the second one did. You touch the screen and pick out  movies, TV clips, and games. The selection is rather thin, and you have to pause to escape from a menu but the system is nice once you’re used to it.

The touchscreen menu options are in 6 languages – English, Kinyarwanda, French, Swahili Arabic, and Mandarin?/Chinese. There were other menu options like gambling games, a kids selection with games and movies and a music selection – with pop hits, African, Classical etc. I flipped back and forth between “Batman vs. Superman” and “Avatar” movies, and the system allows you to resume from where you left off in any movie or game.

BAGGAGE: This was dictated by Murtala airport where there is an elaborate  but time-consuming luggage procedure of weighing, tagging, scanning, searching physically, then wrapping the bags . A friend who had flown in from Kigali with two small backpacks was now told he could only carry one bag on board and check the other one as luggage on this RwandAir flight. We all lost our luggage and filed reports in Nairobi and the luggage has just been delivered (two days later).

COMFORT: Both the RwandAir legs between Lagos and Kigali are afternoon flights that arrive in the evening and match morning arrivals and night departures from Kigali, Rwanda.

SERVICE: The flight took off about twenty minutes late and there were several apologies made during P/A announcements to passengers.  In addition to the entertainment system, there is a Wi-Fi service on board though I was not able to connect. But @LucyMbabazi did on the very next RwandAir Airbus A330 flight and she happily reported on that, and other niceties  like a  massage chair. lucya330biz

 FOOD: There was a chicken or beef option with lunch about an hour into the flight.  The crew had two meal services sessions, one with the meal, a beverage before touchdown from which they did not deviate . They were rather stingy and would not add an extra beer, unlike the crew on the earlier RwandAir 737 flight. They also serve Rwandan coffee or tea. The meal serving trays are rather small, and you find yourself placing wrappers and utensils in your lap as you peel and eat.

ONE MORE THING: On landing in Kigali, RwandAir ground staff knew that there were late passengers connecting on  to other flight and they gave them priority with simultaneous  immigration and check-in e.g. for Entebbe, Johannesburg and Nairobi They had even pre-printed boarding passes for some passengers, and called them up by name to rush them through to the next flights –  nice attention to detail!


Some facilities are different about the  plane and that may mean they may have some breakages e.g with the bathroom doors that fold in the middle to open, rather than swing out (many passengers pushed and pulled them) and the headphones have a jack you fold in half to insert and use) .

THE VERDICT: Nice RwandAir flight on the new aircraft. The crew was probably testing out the new A330 and wanted to be efficient with a minister on board.

Guide to Lagos

Guest post by MVQ

Intro: Lagos is not the most tourist-friendly city in the world but it does provide a good taste of West African culture and is a “must see” destination for anyone looking to do pan-African business. As locals will tell you, there aren’t many sites to see, there are only a few beaches that are tourist-friendly, and the congestion can be quite overwhelming. But if you can get over that, you are in for a cultural treat, an enviable nightlife, and a peek into one of the most dynamic African markets.

Getting There: I took the KQ flight from Nairobi to Lagos and it was actually quite nice and relaxing. Lagos’ airport is a blast from the past, it appeared as if it hadn’t been updated in decades and upon entry the only sign of modernity is a large monitor with adverts near customs.

The customs process though was surprisingly efficient. Mine was the only flight to have arrived at the time and there were 5 customs counters, with 3 for non-citizens that moved fairly swiftly. You need to get a Nigerian visa in advance to get through customs (give yourself 2 weeks to get the visa, as you must hand over your passport, pay ~$100 for US/UK, $50 for other countries, and prove that you have a destination in Nigeria.) You will also need a yellow fever card

To my surprise I was able to get through customs in about ten minutes – and based on the reaction of my friends though, this is a rare occurrence. Apparently customs is a major pain and you must pay for expedited service (there is some rumor that the expediters and the customs agents may be in cahoots.)

Despite not wrapping my luggage, it came out in one piece. Later I was warned by frequent travellers that Lagos airport is one of the more risky destinations for “open” luggage, so my advice is to try to get your luggage shrink-wrapped before flying into Lagos.

Getting Around: When I got out of the airport, the cab drivers were quite aggressive, and I ended up riding in to the city with a friend. My advice is to try to get your contact in town to send a car for you to avoid the aggressive cabbies. If you can’t get a car, then you should expect to pay 5,000 Naira for the 30 minute to an hour long ride into the city.

When in the city the best way to get around is via a car service or taxi. Try to link with a reliable driver, and for newcomers, Red Cab is generally a pretty safe option. Each cab ride should cost you between 2-3,000 Naira ($13-20) if traveling in the Lekki, VI, Ikoyi, or Yaba areas, and you should clarify the price up front.

Do not walk around by yourself at night and take caution during the day, and look out for the Okadas, (“kamikaze moto taxis”) which are the fastest, but most dangerous means of transport around Lagos.

Communications: The best way to communicate is via mobile phone, and you can buy a SIM card for prepaid minutes upon arrival. Most people here have two phones from different carriers as the services are known to go out every now and again. I signed up with MTN and was reasonably happy with it; I plugged it into my Ideos Android phone and used the prepaid airtime for voice, data, and to create a wifi hotspot for my laptop. Other major players are Airtel (Zain), and Etisalat.

Hotels: The hotels in Lagos are very expensive as the mid to high end hotel market is sparse. The Sheraton Four Points, Radisson Blu, Southern Sun, Eko, and Federal Palace are probably the most tourist friendly and range in price from $300 to $600 per night.

Getting Around: The people in Lagos are fairly aggressive, but they all mean very well and are generally quite kind. I found that I received amazing hospitality from friends and colleagues in Lagos. The Nigeria pride is real!

English is the primary language in Lagos, though you do hear Pidgin, Hausa, Yoruba, Ebo, and other languages. The best paper to get while here is “The Punch” – and , though there are about 4 mainstream papers, expect about half the pages to be filled with full page ads and “congratulatory” statements about public officials.

Food & Bars: You must try the local food when in Lagos, and specialities like Fufu, Melon Seed, Okrah Soup, Suya, and Pepper Soup are staples. If you like spicy food then you will love the food in Lagos.

Star beer dominates, and you can get a large bottle for 800 Naira ($5.) I strongly recommend Star over Gulder (the other local favorite), as it has a good taste and is fairly ubiquitous.

Electricity: Be warned – power transmission is very unpredictable in Lagos. Even in the most affluent neighborhoods one power outage a day is not uncommon and some areas will go for weeks without power. After the first two outages you will get used to it – just make sure that your phone, laptop, etc. are always charged up!

Summary: Overall, Lagos is a great experience. The frenzy, the opulence, the fashion, the food, the traffic, the beaches, the hospitality, and the excitement are all palpable. Enjoy your trip!

Local Content, Conversation & Branding in Africa

Late in 2010, TNS released a Kenya digital study as part of a three month study of the habits of online Africans; In Kenya it involved 800 interviews – 400 online, 400 face-to-face and tried to answer various questions like – Who is online? What are people doing online? How can brands connect? What messaging/digital communication channels are best?

Some findings included:
– Internet penetration: Kenya & Uganda is 10%, Tanzania is 1.6%, Nigeria is 29%, Egypt 22%, South Africa 11%. In local capitals – 49% of Nairobi residents have tried the internet, 53% in Kampala, 31% in Dar es Salaam (and 42% & 49% in Mombasa & Arusha respectively) for an average of 45% of EA urban nationals
– Cyber café are the primary mode (67%) of access Internet in Sub-Saharan Africa, but in Kenya its the mobile phone (60%)
– Many people started using Internet in last two years and are on a learning curve; Companies need to make sure they educate the users on how to use their sites more effectively. This is compared to countries like Japan which has high internet penetration but low interest (its a part of life, no longer exciting)
– In terms of daily media access, digital is still lower than conventional media – so companies/brands have to continue with old media; Also radio is very important, compared to global where radio trails TV
– Top e-mail sites: Gmail Yahoo, Facebook, MSN
– Top social networks: Facebook Google Yahoo Youtube
– Top knowledge sites: Google Wikipedia Yahoo DailyNation
– Top news sites: Google BBC Standard DailyNation
– Top multimedia sites: Youtube Google CapitalFM Facebook
– Very few people (7%) say they are shopping online
– Kenyans (and Africans) want to do more activities online – like internet banking, pay utility bills, watch TV, make travel bookings, submit taxes, advertise online. This will become an annual study by TNS to monitor trends in the online space.

One of their partners, VML (Kansas, US) also did a complementary study on digital monitoring of some Kenyan and African brands over several months this year using SEER ecosystem to find a link between bloggers and brands. They looked at mobile companies (Orange,Safaricom,Yu), countries as brands (Kenya,Nigeria,South Africa) and banks (Stanbic,Ecobank)

Some findings:

Mobile: Orange is way ahead of everybody else (846,000 mentions with 92% positive) but may have little to do with Kenya (more the international Orange brand)
– Safaricom had 11,000 conversations online, with people talking about the business, Michael Joseph (outgoing CEO), but not about products & prices. 66% was positive, and this varied from month to month, with some negative on their customer service and competition/regulation.
– Most intriguing – the bulk of conversation abut Safaricom does not happen in Africa – it’s highest in US, UK, Germany. In Africa, there is some conversation in Kenya, Uganda, and South Africa – and in Kenya its associated with 4 blogs (Kenyanjobs, siku-moja, bankelele, kenyaprincessproject)

Banking: Ecobank has 5000 mentions, and Stanbic 900 mentions – but Ecobank spiked as a result of an unrelated Ecobank twitter account in Japan (not Africa) while for Stanbic it was due to coverage of a cricket tournament in Zimbabwe
– The highest conversation about Stanbic is in UK, while for Ecobank its in the US,
– These are very few conversations about banks or their business, and these are happening mainly outside Kenya and Africa (Ecobank is associated with this blog on the strength of a couple of blog posts about the bank’s 2010 AGM in Nairobi)
– There is an opportunity for banks, to engage, and not just about Internet banking products.

Tourism: Kenya tourism conversation is 81% positive, 16% negative – (jambo ad annoyed people on the net) – and again a lot of conversation in UK and US.
– While Kenya gets good conversation given the budget they spend, Kenyan tourism only get as much positive conversation as Nigeria – showing a need for more positive content creation and engagement online.
– Concern that despite the natural beauty of Kenya (wildlife, beaches, scenery), 0% is taking place on photo or image sites – a missed opportunity to create visual content.

– Very little conversation about African brands is originating in Africa, and there are opportunities for links to be created either with influential blogs, or social media etc.
– Complaints cause large spikes in conversation
– Companies need to monitor online conversation, beyond press clippings
– Companies need to incorporate digital plans in their branding exercise