News Column

U.S. Firm to Invest in Ethiopia

June 6, 2014

Zerihun Getachew

A U.S. private equity firm, KKR has made its first foray into Africa investing 200m USD to buy a stake in an Ethiopian rose growing company, Afriflora. The maiden deal underscores the growing appeal of investing in the region on the back of a virtuous cycle of strong economic growth and improved governance over the last decade and a half that many have called "Africa rising".

The continent is the world's second fastest growing region, only behind developing Asia. KKR is investing in Afriflora, an Ethiopian company which says it "cultivates, produces and sells sustainably grown roses" for the global market.

The deal will help the company to "fund expansion plans", according to one person familiar with the deal. Although Ethiopia's fast-growing economy is still protected from foreign investment in several key sectors, including finance, telecoms and retail, private equity investors seeking ways into the continent's second largest market - at 90m people - have made several deals in sectors including in cement, coffee, wine and biscuits. The country started its first rose farm in 2000.

Boosted by government loans, exports rose quickly from 1.4m USD in 2002 to more than 250m USD within a decade.Although Africa still attracts a tiny proportion of the world's private equity money, interest in the region has grown significantly. The African Development Bank forecast that the continent will see record foreign inflows of 84.3bn USD this year, surpassing the record set in 2012.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: AllAfrica

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters