South Africa’s Public Investment Corp., the continent’s largest money manager, invested $50 million in Smile, according to a statement from the company Tuesday.
Public Investment Corporation (PIC) – the Government owned fund manager – had earlier invested $270 million investment in Camac Energy Inc, an oil explorer with mostly Nigerian operations which trades on the Johannesburg Stock Exchange (JSE), as well as bought a 1.5 percent stake in Dangote Cement Nigeria’s largest company worth $289 million.
It seems a lack of strategic thinking by Nigerian officials from regulators, legislators and the finance ministry has led to foreigners becoming the major beneficiaries of Nigeria’s wealth as oil companies, and Telco’s with major operations in the country mostly list their shares offshore, depriving Nigerians of the ability to participate in wealth creation through capital gains.
Africa accounted for 12 percent of dividend inflows into South Africa in 2012, up from 2 percent in 2002.
Smile Telecoms Holdings which is incorporated in Mauritius, ( with majority South African and Saudi Arabian shareholders offers wireless Internet access in Nigeria, Tanzania and Uganda, raised $365 million in debt and equity financing to develop faster connections and extend broadband services.
The company plans to increase the number of its African broadband customers by more than 10-fold to 1 million before 2017, Chief Executive Officer Irene Charnley said in an interview on Tuesday. She declined to disclose Smile’s revenue.
It is clear that Nigeria’s equivalent of the PIC its NSIA or sovereign wealth fund (SWF) should also have invested in Smile as the company looks set to grow fast into another MTN on the back of the fast growing demand for broadband and data services in Nigeria.
“Fixed-line infrastructure in Africa is non-existent; especially in countries outside of South Africa. We will have national coverage of 4G mobile wireless broadband in each of our markets. The take-up is very, very, very fast,” Charnley, a former MTN Group Ltd. executive, said.
The company plans to have positive earnings before interest, taxes, depreciation and amortization before the second quarter of 2016 and will probably seek an initial public offering in 2019, Charnley said.