Can you provide an overview of Moneda Invest Africa?

Nigeria has succeeded in creating local producers which has brought wealth to the economy, but the real value that comes from the extractive segments is the value chain, and in creating this value chain, Nigeria has made little progress. 

Moneda Invest Africa (Moneda) was established to fix the problem of getting capital to micro players whose existence and growth is what will transform our country and continent. 

What can the energy industry do to support smaller Indigenous players? 

The organized private sector needs to create more pools of capital to mobilize African capital for investment in value chains. There has been some progress in mobilizing capital for upstream production, but we still have a long way to go. To see the true transformation within the economy, we have to bring capital and technical support to local communities. 

How have micro players in the Nigerian energy sector navigated currency fluctuations?  
 
In Africa, currency fluctuations are a double-edged sword where for some people it is detrimental, but for others beneficial. For example, as Moneda’s oil and gas operations are mostly dollar-based; we can raise capital in Naira and then benefit from huge upsides because our repayment source is in dollars and our repayment obligations are in Naira. However, many micro players in the industry have access to loans in Naira, but their obligations and executions are in dollars, and they cannot manage that volatility and end up in trouble. They have good contracts and opportunities, but negotiating their debt puts them in a precarious situation, and many players have gone out of business due to this mismatch. 

We are trying to drive the conversation towards how to get more Africans involved in the investing side. Looking at Sub-Saharan Africa, you will find pension funds with approximately 70% of their capital invested outside of Africa, demonstrating low confidence in local markets.

As half of our business is technical, we can take on clients and transactions that banks may see as too risky, and we walk with our partners on their growth journey to the point where they do not need us anymore and can obtain financing from the banks. While banks are financing businesses in the upper segments, 80% of our marketplace is in the lower segment and cannot access bank financing. Moneda’s core mission is to support the small-mid players to get to the upper segment of the marketplace where they will have access to bank finance and can have an exponential impact on value chains. 

Which African jurisdictions outside of Nigeria have a lot of opportunities in energy space? 

Everyone knows about the amazing story that is the Namibian oil and gas revolution. They are interested in getting resources out as quickly as possible with minimal stress, and would rather give contracts to Western companies that have a track record. In this, the African country loses the real benefit of the resource. 

Our proposition to the Namibian government, which we are happy was accepted, was to enter a JV agreement wherein Moneda acts as a financial and technical partner for local companies. Our track record in financing transactions of up to US$200 million over the last five years meets the criteria for being awarded contracts, and thus, under their JV with us, local companies can meet the tenders and be awarded the contracts from the IOCs. With the execution of contracts, more capacity is being built, and small local players can start to enter the upper segment of the marketplace. What we are doing in Namibia is an experiment, but one that we think will be successful and easily then replicated in other emerging markets in Africa.

What are Moneda’s objectives for 2024 and beyond? 

Moneda will be opening an office in South Africa, intended to cater to the growth happening within the Southern African region, and we are launching a half-a-billion dollar credit fund which will be managed out of this office. From our Office in South Africa, we aim to raise capital globally, primarily African capital.