“As Africa’s biggest economy, ABAX sees the Nigerian market as dynamic and promising” -Arlove
Tell us about abax and its offering to Nigeria
ABAX is an international provider of integrated corporate, investor and businesses services. We see ourselves as a business enabler, providing our clients with outsourced expertise in corporate administration, compliance and business support functions that allow them to concentrate on what they do best, building their businesses. We have over the past 20 years built specialist expertise in structuring and administering cross-border investments in emerging markets. We are primarily focused on Africa, delivering a host of solutions to multinationals and funds investing on the continent across a wide range of sectors. We are headquartered in Mauritius where we are licensed by the Financial Services Commission and also operate offices in India, Kenya, Singapore, South Africa and United Arab Emirates.
ABAX qualified professionals are able to offer a full array of services including investment structuring, company and fund formation and administration, corporate finance advisory, outsourcing, business and technology services, corporate immigration and intellectual property services. Our client base is essentially from the US and Europe, investing in Asia and Africa, as well as business across emerging markets, mainly intra-Africa and Asia to Africa business.
Why do you think this expertise will be relevant to Nigeria?
Nigeria is now Africa’s biggest economy. As such at ABAX, we see the Nigeria market as being very dynamic and promising as evidenced by the growing interest it is attracting from international investors and funds on the one hand. On the other, there is also a lot of Nigerian corporates moving beyond borders and looking to do business outside of Nigeria. The thrust of ABAX is to provide value-added services to companies involved in cross-border operations. In reference to Nigeria, we see that happening in two ways. First, a number of Private Equity funds and multinationals currently are investing in Nigeria as well as in a number of other territories; typically, it is a scenario where investors will be looking for a safe and competitive jurisdiction to hold their pan-African investments, one also where there is ease-of-doing business, no exchange control and proven expertise in fund and investment administration. Second, as Nigerian corporates look to invest abroad, they may also be looking for a safe, competitive and reputable investment-holding jurisdiction, especially if these investments are likely to be displayed over more than one country. For such pan-African inbound or outbound investments, Mauritius, for the intrinsic qualities of its international financial centre, comes out as a natural choice making it the premier financial services centre for Africa. At this point, I must also stress that ABAX equally offers investment structuring and holding solutions from Dubai where we have an office. We are thus able to bring on the table solutions from two of the main structuring platforms being used for Africa, which are Mauritius and Dubai.
Is the presence of large international corporations in the Mauritius’ jurisdiction something that can be leveraged on?
Definitely and it was a point I was coming to as a third illustration of how ABAX can help. As the premier financial services centre for Africa, there is already a large number of Multinational Corporations and Private Equity funds present in Mauritius and with whom Nigerians could be doing joint ventures, getting finance from, identifying technical partners, etc. Mauritius is indeed a meeting place for businesses with an African focus. At ABAX, we have a Corporate Finance Advisory function which precisely looks at matching investment projects with the availability of funds that we administer. We currently administer client assets worth US$16 billion.
You mentioned the intrinsic qualities of the Mauritius jurisdiction. Can you be more specific about this?
Yes, let me take a concrete example, actually a business case drawn from one of our clients whose Africa operations we have helped to restructure by making use of the advantages and qualities of the Mauritius jurisdiction.
The client operates in the sphere of finance and mobile telephony. The technical platform was developed in Africa, involving significant amounts of intellectual property. The group has started to sell in a number of African countries and has now, plans to cover the whole continent and, soon after, the Asian market. The operations are completely IT-based with the possibility of consolidating a number of processes in one central location.
The setting up of headquarter services in Mauritius for these operations will allow the company to recognise revenue in Mauritius such as technical and management fees, royalties, commissions and interests from loans from the operating subsidiaries, and building up a solid balance sheet that will allow the company to finance debt from international banks present in Mauritius. At the same time cost efficiencies can be achieved with the group setting up a shared services centre in Mauritius for finance & accounting, payroll administration, its technology platform, legal services and handling customer relations. Its Intellectual Property rights are well protected by Mauritius’ IP framework.
Additionally, the company may even look to develop its services on the local market by teaming up with existing telecommunication providers. In the longer run, the Group may consider a listing on the Mauritius stock exchange to finance its growth as it looks to replicate its business model in India. For all these reasons, we are looking at helping this client structure in Mauritius and optimising shareholder value.
In the business case described above, the choice of Mauritius is guided by a number of considerations such as ease of doing business and governance; people with experience in finance, law and technology; availability of finance from banks that have excess liquidity; absence of exchange control and ability to do business in any currency; low operational costs in relation to labour, rental of offices and tax; and the fact that we are totally bilingual in English and French. Mauritius is a real economy of 1.3 million people with a diversified GDP base where manufacturing accounts for 20% of GDP, financial services 10%, ICT and BPO 8%, hospitality 8%, and so on. It is not a tax haven with only low taxes, absence of transparency and most of the economy being driven by only financial services.
Mauritius has been very successful as a conduit for investments into india. Is this proven expertise something that can be beneficial to Nigeria?
You are right in mentioning this. Indeed, Mauritius built itself a solid reputation structuring investment flows into India. Over the last decade, Mauritius accounted in fact for close to 40% of all inflows to India. This has given us considerable expertise and provided international investors including recognised Development Finance Institutions with the comfort required in the jurisdiction. Parallels can indeed be drawn in several ways with Nigeria. Nigeria’s development is today on a path that is very similar to that of India. These two emerging economies show the same population dynamics and a comparable economic fabric. The same investors from Europe and the US who have been investing in India may now be the ones investing in Africa including in Nigeria. The comfort element of using Mauritius as a structuring platform and being accompanied by an experienced partner like ABAX is therefore also relevant to the case of Nigeria.
Additionally, we at ABAX have been working with India for so long that we can actually help to identify Indian companies which would be keen to partner with or invest in Nigerian companies and/or provide assistance to grow in sectors they are familiar with.