Commonwealth Development Corporation (CDC), the UK government-owned development finance institution has opened offices in Nairobi and Lagos. This is in line with UK’s agenda of increasing trade ties with African countries.
According to Nick O’Donohoe, chief executive of the CDC Group, the new offices in the capital cities of Kenya and Nigeria will allow the firm to seal investments and expand their support to enterprises across the continent.
“I think we wouldn’t have committed to that number unless we thought it was doable in a way that allowed us to earn a return and have significant development impact. It does require an increase in our investment pace. That’s one of the reasons why we’ve opened a Nairobi office, why we’re opening in Lagos and looking at another couple of places… One of the things that was obvious to me is we had reached a point of evolution where we really needed to get on the ground,” he said.
Even though the firm just opened offices in Kenya, it has been around for a while. In 2016, CDC invested $140 million (Sh14 billion) in Kenya’s Athi River Mining Cement, which was in line with its guiding principle that states that all investments must have a provable development impact and ability to earn a return.
However, the investment turned out to be bad as the cement manufacturer struggled with debt and strong competition leading it to be put under administration. This in turn led to a massive loss for the CDC group to which the company’s top executive said, “We take a lot of risk, go to a lot of difficult places, and do very difficult transactions… It doesn’t mean to say we’ll make money in everything and we’ll certainly make some mistakes and hopefully learn from them.”
CDC, which was established in the 1940s, has been the guide for UK’s investments in Africa. So far the company has been able to invest in more than 30 African countries.