A consortium of foreign and local investors have planned to construct an US$80mn shopping mall in Bujumbura, Burundi
According to regional media reports, Quality Group Ltd of Tanzania, ALFA Group of Dubai and Akagera Business Group of Burundi will construct a shopping complex that will consist of 260,000 square metres of gross leasable retail space, as well as hotels, convention and leisure facilities.
Kenya’s retail supermarket chain Uchumi is expected to take up a large space in the mall, as it attempts to expand into the Burundian market.
Construction on the Blue Tanganyika Shopping Complex will begin in early 2013 on the mall, which has been scheduled for completion within three to five years.
Officials have said that the consortium was also planning to construct a new shopping mall in Kenya within the next six months. The companies also have plans to expand their joint presence into South Sudan and Rwanda.
As a member of the East African Community, Burundi has seen a rise in direct foreign investment (FDI) from US$20mn in 2009 to more than US$100mn in 2011, according to official data. The International Monetary Fund (IMF) has said it expected the country to grow at 4.5 per cent annually.
Power shortages, inadequate human capital, high transport costs and poor credit information on borrowers have, however, created FDI bottlenecks.
A recently released report by the African Development Bank (AfDB) noted that poorly developed capital markets was the biggest challenge to private equity growth across Africa. According to the report, underdevelopment of the capital markets on the continent has limited opportunities for private equity funds, discouraging foreign investments.
The report noted that private equity activity has been confined to the Johannesburg Stock Exchange, Egypt’s Cairo and Alexandria Stock Exchanges, and Nigeria’s Lagos Stock Exchange, with other African-based bourses reporting little in private equity activity.
"The capital market has to be the primary financial regulator of the private equity sector and we are glad this is now happening in the Nairobi Stock Exchange," observed Paul Kavuma of financial advisory firm Catalyst Principal Partners.
"We are now likely to see an increase in private equity players coming to the market," he added.
Mwangi Mumero
