Regional private equity investment is helping support and lead regional integration, Citadel Capital Managing Director Karim Sadek tells government and private sector officials at the 4th COMESA Investment Forum in Dubai
Karim Sadek, Managing Director of leading Middle East and Africa private equity firm Citadel Capital, joined a distinguished group of industry leaders at the 4th COMESA Investment Forum’s round table Bloomberg TV Debate: Positioning COMESA on the global trade platform.
The featured panel assessed the Common Market for Eastern and Southern Africa (COMESA) countries’ growing role in global trade and the success of broad, coordinated efforts to spur greater integration, higher local production and more competitive international trade.
“Regional integration is fundamental to Africa’s development,” said Sadek, whose firm controls investments of US$ 8.6 billion spanning 14 countries and 15 industries. “The story of emerging Asia is instructive. With around half of exports remaining in the region, compared to Africa’s intra-regional trade of just under 10%, Asian nations have found that regional integration allows widespread national development a better strategic positioning in the global economy. This regional trade is backed by significant political will and coordination — and we are now seeing similar developments among African nations. This brings a great deal of optimism to the private sector, which must partner with governments to invest capital in the fundamental building blocks of local economies.”
Speaking at a second panel, held at the Madinat Jumeirah in Dubai on 23-24 March 2011 called “Rail: Key Drivers for Investment,” Sadek highlighted the importance of investment in transportation and logistics.
“Economic coordination is a key first step, but logistics remain a challenge. While our governments are developing the trade frameworks, the private sector continues to play a big role in funding the transport infrastructure that will make it faster and cheaper to move goods around the region and to key global export hubs. Rail is particularly efficient, and under-investment in this sector has dramatically diminished volume on the rail lines connecting COMESA nations.”
Freight shipments on the four rail systems of East Africa, Sadek pointed out, stand at less than 5 million tonnes annually — less than half the traffic of 1970 — according to a 2008 study backed by the East African Community.
Together with Nairobi’s TransCentury, Citadel Capital has led investment in the vital national railway of Kenya and Uganda and are implementing the first phase of a US$ 287 million plan to upgrade both infrastructure and rolling stock of the Rift Valley Railway, a critical element of the East African rail network that links the port of Mobassa on the Indian Ocean to Kenya’s capital Nairobi and to Kampala in land-locked Uganda.
“Today, Africa’s governments are in far better fiscal shape than in the past,” Sadek said. “Government debt as a percentage of GDP has fallen from an average of more than 80% in the 1990s to less than 60% today. Still, the costs of necessary transport infrastructure build up alone — not considering the enormous demands of other infrastructure segments — is a sizable burden. It is crucial that private equity and other investors assume a stake in this development.”
Citadel Capital (CCAP.CA on the Egyptian Stock Exchange) is the leading private equity in the Middle East and Africa. Citadel Capital focuses on building regional platforms in select industries through acquisitions, turnarounds, and greenfields executed via Opportunity Specific Funds. Citadel Capital’s 19 OSFs now control Platform Companies with investments worth more than US$ 8.6 billion in 14 countries spanning 15 industries, including mining, cement, transportation, food and energy. Since 2004, the firm has generated more than US$ 2.5 billion in cash returns to its co-investors and shareholders (on investments of US$ 650 million), more than any other private equity firm in the region. Citadel Capital is the largest private equity firm in Africa by PE assets under management (2004-2010, as ranked by Private Equity International). For more information, please visit www.citadelcapital.com.
For more information, please contact:
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