About the report
David Schwimmer, CEO, London Stock Exchange Group
It gives me great pleasure to welcome you to the second edition of London Stock Exchange Group’s report, Companies to Inspire Africa. This pioneering report identifies Africa’s most inspirational and dynamic private, high-growth companies to a global market.
We publish this report as it is our belief that these firms, and high-growth firms like them, are crucial to the future of the African economy, capable of driving transformative economic growth in their home countries, Africa and beyond.
There are 360 companies from 32 different countries across the continent represented in this report, boasting an incredibly impressive average compound annual growth rate of 46%, up from 16% last year. On average, each firm employs over 350 people, with an average compound annual employee growth rate of 25%.
A diverse range of industry sectors feature, painting an encouraging picture of the future of the African economy. Consumer Services, Industry and Agriculture are the three biggest sectors, between them making up over 50% of the companies featured. Technology & Telecoms, and Financial Services together represent over 25% of firms, while Healthcare & Education and Renewable Energy also feature strongly.
It is also very encouraging that 23% of the senior executives of the companies featured are female, a near doubling from 12% in last year’s report.
The growth rates and sector diversity of the firms featured highlight their potential to transform the African and wider economy and become the big global job creators of tomorrow.
At LSEG, we are determined to help realise that potential. From the building of the great US railways in the 19th century, to global oil and gas exploration in the 20th century, to creating a worldwide low-carbon economy today, we have always been at the forefront of financing the great global economic shifts of the day. Sitting at the heart of global financial markets, LSEG has a connection with Africa stretching back to the 1930s.
While capital markets have long been associated with larger companies, 23 years ago we did something different, launching a capital market specifically for high-growth-potential companies, AIM. It is now the most successful global growth company market in the world and has raised over £110bn for nearly 4,000 companies in little over two decades.
In 2012, we launched our pan-European business development and capital raising programme for high-growth firms – ELITE. By 2015, it had expanded into Africa. Today, we are proud to research and publish reports like this – designed to identify high-growth-potential firms to a global investor base.
Patient capital allows firms to focus on innovation and growth, rather than having to service a debt repayment schedule or adhere to strict covenants typical of traditional lending, which can, for example, limit the scope to react quickly to investment opportunities.
The firms listed in last year’s Companies to Inspire Africa report have already realised significant progress and achievements in the last 12 months in a variety of ways, including pursuing IPOs and issuing bonds to grow, while some have also undertaken cross-border expansion, both within the African continent and globally.
This echoes our own experience in African capital markets. Over 100 companies and nearly 40 African bonds are now listed on London markets, gaining access to a global investor base. In 2018, we saw issuances from Nigeria, Kenya, Egypt, Angola and Ghana as well as corporates such as Seplat, Absa Bank and FirstRand Bank. The year also saw the launch of Vivo Energy, both the largest African IPO in London for a decade and the first company from the Companies to Inspire Africa report to float on London Stock Exchange.
LSEG also has a number of valued technology partnerships with stock exchanges in African countries. As well as giving dynamic African firms access to a global investor base, it is fundamental to develop African financial market infrastructure itself.
We look forward to continuing to work with African governments, companies and financial market participants to develop domestic capital markets further, offering an additional funding channel and supporting entrepreneurship, infrastructure, green investment and economic growth.
At the end of 2018, our LSEG African Advisory Group published a series of recommendations on financial market infrastructure in Africa, with a particular focus on SME finance, which should further develop and support this ecosystem.
The UK has a proud and established record of supporting development goals in Africa and around the world. I was honoured to accompany the Prime Minister on her trip to Africa in August 2018, to see first-hand the vibrant potential of African SMEs.
We agree with the UK Government that a greater focus of supporting development goals should be enabling greater global investment into the African growth story. At LSEG, we stand ready to play our part.
I would like to thank our research partner Asoko Insight, whose expertise has underpinned this report, as well as our partners African Development Bank Group, CDC Group and PwC, who have supported both the last edition of this report and this one. I must also thank this year’s sponsors Instinctif and Stephenson Harwood, whose valuable support helped make this report possible.
Contributions from The Rt Hon the Lord Boateng PC DL, Christian Chammas, CEO of Vivo Energy, Judith Karl, the Executive Secretary of United Nations Capital Development Fund, Melanie Hawken, the Founder and CEO of Lionesses of Africa Public Benefit Corporation, and Emma Wade-Smith OBE offer real insight and are a testament to their expertise in supporting African SMEs.
I would also like to extend my personal thanks to the UK Prime Minister, the Rt Hon Theresa May MP, and the President of Kenya, H.E. Uhuru Kenyatta, whose mission to develop African SMEs is so vital, for their support and contributions to the report.
We hope you enjoy reading the report and are inspired.