The rapid growth of private equity in Africa will be underlined today as Kingdom Zephyr announces it has raised $325m for its latest pan-African buy-out fund with the backing from Prince Alwaleed Bin Talal, the Saudi billionaire. Africa accounts for only a tiny proportions of the global private equity market and remains a no-go zone for many of the biggest US and European buy-out groups.

However, the fundraising by Kingdom Zephyr highlights how- in spite of occasional setbacks such as Kenya and Zimbabwe-the spread of stable democracy and rapid economic growth is encouraging the rise of private equity across the continent. Private capital flows to sub-sharan Africa, including foreign direct investments portfolio flows and loans, reached $53bn last year, a four-fold increase since 2000,according to the International Monetary Fund.

Kingdom Zephyr, which has offices in Accra, Johannesburg, New York and London, invest in mid-sized African companies that are expanding across borders and have the potential to become regional market leaders.Price Alwaleed, whose Riyadh-based Kingdom Holding owns big stakes in Citi-group and News Corporation, has agreed to provide half the funds for Kingdom Zephyr, which aims to raise $500m for its latest fund. This would more than triple the $122.5m it raised after its creation in 2003 as a joint venture between the Saudi prince and Zephyr Management, a New York asset manager that also has funds in Mexico, India and for US distressed debt.

Kingdom Zephyr’s best known investment so far was a small stake Celtel, the Pan-African mobile phone operator that became the poster child for private equity on the continent when it was sold to MTC of Kuwait for $3.36bn in 2005. It has also invested in financial services, such as United Bank for Africa, a Nigerian bank that is the 13th.

Largest in Africa, and Micro Provident, a Botswana-based consumer lender that operates in UgandaTanzania, Zambia and Swaziland. What is happening in Africa, which has been largely unnoticed by the rest of the world, is that consumption patterns are changing rapidly according to the Managing Partner of Kingdom Zephyr. This reflects a growing middle class in most countries, the effect of globalization, rising disposable incomes and significantly improved communication channels, primarily mobile phones, television and the internet. The commodities boom, driven by fast growing demand from Asia, was also driving rapid economic growth in Africa.

The democratic governance and economic evolution is progressing quite nicely in Africa, with few occasional exceptions. According to Kingdom Zephyr each of their investments will have country diversification within their own operations, so it will not be too negatively affected by developments in any one country. Kingdom Zephyr, which has tripled its investment on the continent in its first two exits, and ha raised money for its new fund from wealthy US families, the World Bank’s International Finance Corporation and the Development Bank of South Africa. (Courtesy of the Financial Times)

Business fraud on rise amid credit crunch

Fraud in UK business mounted in the first half of the year as the economy grappled with the fallout from the credit crunch.

Fraud cost UK businesses more than 705 million Pound Sterling in the last six months, a 74% increase over the same period last year, according to a report released today by the accountants BDO Stoy Hayward.

Finance and insurance sectors were worst hit, with reported fraud costing 636 Million Pound Sterling more than 90% of total reported fraud and a 15-fold increase on the first six months of 2007. The problem could get bigger still, as, the report warned. What is really scary is that these figures do not even include losses that may have been incurred by rogue traders according to Simon Bevan, head of Fraud Services at BDO Stoy Hayward. When you add in the fraud that is not yet been uncovered, or which businesses have discovered but do not wish to expose, the real cost to UK industry could be much, much higher.

Mr. Bevan warned the problem of business fraud was certain to grow. Senior executives at British businesses are becoming increasingly concerned about fraud risk as the credit crunch bites. The warning came as the latest Financial Services Survey from the CBI and PricewaterhouseCoopers showed the effect of the credit crunch on the sector had worsened in the last three months. (Courtesy of the Financial Times)

Genetically modified food is touted as necessary to save the world from starvation and bring untold benefits. But do we know enough about it to eat it right now?

The debate over the genetic modification of the food we eat, rages on.

On one side we have the corporate entities who have invested heavily in the science of GMO's (genetically modified organisms), the farmers and producers who have been sold on the idea of including these engineered items in their planting and production regimes, many of the world's governments who have been heavily lobbied by the corporations and a variety of people from all walks of life who have been convinced by all the hype and publicity that has been put out in support of the whole concept of genetic engineering.

On the other side we have a large proportion of the consumer base who are afraid of what they perceive to be the untried and untested products they are being forced to eat because, in many places including the USA, there is no mandatory requirement to label products that are genetically modifed or contain genetically modified ingredients; an ever growing group of scientists who believe that there is insufficient data available for anyone to say that these products are safe; doctors who remember the horrors of Thalidomide and a very powerful group of environmentalists who fear for the long term future of the planet if science they believe to be against Nature, is allowed to continue unchecked.

Those in favour of genetic modification make a number of claims to support their contentions that this is a necessary route to follow for the good of everyone on the planet.

1. Genetically modified crops such as corn, soy and wheat will require less use of chemicals currently employed to increase growth and yield, keep down weeds and destroy predator insects.

2. The promised increased yields of these types of crops will mean an end to starvation in the Third World and increase their ability to grow more of their own crops.

3. There has been sufficient research carried out to give assurances that there is no danger to the human race from the use of genetically modified foods.

4. Only by using GM crops can the world hope to keep pace with the population growth and its consequent need for ever increasing quantities of foods given that genetic modification will allow crops to be grown in conditions that would, otherwise, be too adverse for year round cultivation.

The pro GM group have enormous amounts of financial resources and political clout and have, therefore, been able to get their case across in a far more decisive manner than their opponents.

Those opposed to the use of genetic modified food or food ingredients or those who, at least, feel there should be far more research carried out make a number of counter claims.

1. The very methodology of creating GMO's is not a precise science and is usually achieved by injecting a lump of one piece of living material into another piece of different living material. The ‘carrier' for this could even be one of the e-coli bacteria.

2. There has been insufficient time given to researching the possible dangers and there is at least one instance of a genetically modified product - L-Trytophan - causing death and disability.

3. There is no evidence yet available that supports the claim of greater yields or less use of chemicals. Indeed, they claim, results are showing quite the opposite effect.

4. Some of the proposed products are unnecessary.

5. If the corporations really believed their GM products to be safe they would not oppose labeling as vehemently as they do.

The general public - the consumers - are divided between the very vociferous and the silent, though in Europe, the pressure from consumers has made governments rethink policy about GM foods and has resulted in legislation requiring labeling of all foods that are entirely genetically modified or contain genetically modified organisms. This has, in turn, led to many of the leading supermarket chains declaring a non GM philosophy and refusing to stock any items that have any degree of genetic modification.

In North America, the public have not yet fully woken up to the whole question and so the pressure is not yet as great as in Europe. However, there are significant signs that the pressure is building and McCains have recently declared that they will no longer use genetically modified potatoes in their products and two Natural Food supermarkets chains in the USA have declared in favour of no GM products.

The trend, of the public at least, seems to be towards caution and wanting to know. The pro GM lobby need to pay heed of this. Those opposed need to ask whether their actions will, in any way, prolong problems in parts of the world where food is not readily available from the shelves of a store.

There is still much research, talking and debating to be done. For now, each person must make their own decisions in terms of whether they will eat these products and face the risk the anti lobby claim exists or whether they will do everything possible to avoid these products at least until there is more, reliable, information available.

You must decide.