The $178 billion Singaporean Wealth Fund is aggressively stamping its footprint in Africa, strategically positioning itself to be at the forefront of a brewing economic boom on the horizon.
The current exponential growth being witnessed across African economies has got investors worldwide seeking to take part in the continent’s emergence. As a result, the African economic landscape is dotted with more and more wealth funds and investment companies, one of which is Temasek Holdings, the Singaporean sovereign wealth fund.
Incorporated by the government in 1974, ownership and management of the government’s investments on a commercial basis were transferred to Temasek to allow the government prioritize policy making. Among these investments were the Economic Development Board’s stakes in local and foreign private investment sectors and the companies acquired or established by the government.
Upon inception, its primary objective was to contribute to Singapore’s economic development, industrialization and financial diversification by nurturing effective and commercially driven strategic investments in and outside Singapore.
Over the years, the wealth fund has studded, with investments, just about every region globally, forking out billions of dollars on assets across Europe, the Americas and Asia. The new and fruitful front for Temasek’s strategic investment however is Africa, which is described by Temasek’s spokesman Stephen Forshaw as full of opportunities. According to Stephen, Africa offers opportunities that are “consistent with the themes that drive our investment approach”. “We are very interested in Africa, (it is) a new market for us” he enthused.
Africa has become increasingly attractive to Singapore, and about 50 Singaporean companies have accumulated roughly $16 billion worth of investments across the continent as of 2012. Temasek, unsurprisingly, has not been left out in this development.
Temasek has made countless major portfolio investments in African companies and economic sectors. The wealth fund holds a varying percentage of shares in African companies from as high as 100 percent to as little as 10 percent. Also a number of Singaporean companies in which Temasek is a main stakeholder, have recorded more activities and investments in African countries.
Oppenheimer family was one of the first companies to team up with the wealth fund in 2011. The joint venture named Tana Africa Capital, was worth $300 million and was focused on agriculture and food processing. Temasek, in this joint venture invested in Promasidor, based in South Africa and operating in nine African countries and Regina, Egypt’s second largest pasta producer.
The tenth largest sovereign wealth fund globally is also one of the largest shareholders in Seven Energy, an oil and gas group based in Nigeria, after paying $150 million. The deal comes only five months after it spent $1.3 billion through Pavilion Energy – a company in which it holds a 100 percent stake – to acquire a 20 percent share in several gas fields in Tanzania controlled by London-listed Ophir Energy.
In Africa’s largest flotation in more than six years, Seplat, a Nigerian homegrown oil company, recently raised $500 million from Temasek. Olam, a Singaporean Agribusiness company in which Temasek owns shares, runs palm oil and rubber plantations and grows coffee and sugar in over 10 African countries. Indian-headquartered telecommunication giant, Bharti Airtel Group, in which Temasek owns a significant stake – has made giant strides in the African ICT space, expanding operations in over 17 local countries.
In the few short years since its first foray into African economies, Temasek had been able to cut across a wide array of sectors and countries. As of today, it is practically impossible to compile a concise list of the major players in African economies without the mention of Temasek and its influence upon these economic sectors.
In the financial sector, Standard Chartered Plc, a British multinational banking and financial services company headquartered in London but operates countless branches all over Africa has the Singaporean fund as a key partner. Temasek further holds indirect or silent interests in a host of other companies and sectors, a damming confirmation of its fledging relationship with emerging continent.
In the last decade, trade between Africa and Singapore has more than trebled according to statistics from the Southeast nation. This has been largely propelled by the fund’s interest in leading the investment front for the island nation. (VENTURES AFRICA)