Africa’s Top 250 Companies: Southern Africa

Africa’s Top 250 Companies: Southern Africa

The Top 25 Southern African by market value are all South African, so as always we include a regional Southern African table that excludes the continent’s biggest companies. Although it ranks much lower in terms of daily trading, the Johannesburg Stock Exchange is the 18th biggest bourse in the world by constituent market capitalisation and totally overshadows its neighbours.

For the first time, we have decided to include Mauritius within Southern Africa, as it has stronger economic ties with Southern Africa than with the Eastern African region, where we previously placed it. Governments and business leaders of other countries in Southern Africa may argue that they cannot hope to compete with South Africa in terms of large corporations but they might be surprised to learn that the two biggest firms in the region both come from tiny Mauritius.

Mauritius Commercial Bank takes top spot with an increase in market value from $1.7bn to $2bn since our last survey. Second-placed State Bank of Mauritius has also increased in value, from $1.2bn to $1.3bn over the same period.

Both of the Mauritian banks have also enjoyed big rises in profits. MCB’s pre-tax profit for the first half of financial year 2013-14 increased by 12.4% to R2.99bn ($98.68m), on the back of a 9.3% increase in fee and commission income. The company partly attributed the rise to regional trade financing and loan facilities.

State Bank of Mauritius announced a 13.6% rise in pre-tax profits for the 15 months to the end of September to R4.7bn ($153.85m). The bank is in the process of changing its reporting period. The company is still planning its expansion into continental Africa.

The IMF believes that Mauritius is on course to become a high-income country in a matter of years. While forecast average growth of 4% over the next three years is hardly spectacular by current African standards, it is relatively high in comparison with other, more prosperous countries.

Another two companies from the island nation are included in our regional survey, while the remaining places are shared around the region. There are seven Zambian companies in the Top 25, six from Botswana, five from Namibia, two from Zimbabwe and a single Malawian entrant.

There are still, however, no companies in our table from either Angola or Mozambique. If properly managed, Mozambique’s rapidly increasing commodity exports should help to diversify the national economy. Apart from LNG investment, which was discussed in the overview, the country is set to become one of the world’s 10 biggest coal exporters. Vale and Rio Tinto are both developing coal projects with production capacity in excess of 10m tonnes a year and Tete Province should yield 50-100m tonnes a year within a decade if sufficient transport capacity is put in place.

The highest-ranked company from continental Africa in the region is First National Bank of Botswana (FNB). Non-interest income increased by 4% and customer deposits by 7%. Over the past year, the company has invested heavily in new electronic channels, adding to short term costs.

Chief executive Lorato Boakgomo-Ntakhwana commented: “We have witnessed the lowest interest rate environment seen in 20 years with the bank rate cut by 200 basis points. This reprieve in interest rates has led to an expansion in credit growth driven by the retail segment. Loans are also more affordable to the consumer. Annual credit growth in this segment remained high at 26.7% as compared to total credit growth of 18.2%.”

Zimbabwe seems to be as far away from economic recovery as ever. Indeed the number of Zimbabwean firms in our Top 25 has fallen from five last year to just two in our 2014 survey.

Following years of hyper-inflation, the country is currently experiencing the opposite end of the inflationary scale. Consumer prices fell by 0.5% in February and then 0.9% in March. Investors and consumers are reluctant to spend while they know that prices will be lower in the months to come. Official figures revealed that consumer sales fell by 30% in February. Both licit and smuggled imports are generally far cheaper than locally produced goods.


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Written by African Business Magazine

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