MANOCAP

 

SIERRA FISHING COMPANY


The benefits of being on the ground

ManoCap, a private equity firm founded in Freetown in 2005, has a clear belief in the opportunities for investment in Sierra Leone. It is also well-placed to assess the challenges that investors are likely to face.

In ManoCap’s view, a key difficulty lies not in producing a compelling business plan – which is relatively straightforward, given the country’s natural advantages and openness to investment – but in executing the business plan effectively. This requires competent local management and robust financial controls.

A good example is ManoCap’s investment in Sierra Fishing Company (SFC), Sierra Leone’s largest fish supplier. The investment case for Sierra Leone’s fishing sector is clear: 80 per cent. of Sierra Leone’s protein intake comes from seafood, and the country’s deep-water location provides an ideal platform.

The seafood trade relies on the daily catch, and therefore involves a very fast turnover both of product and of cash. This makes it critical to monitor inventory and cash at all times. By working closely with SFC and ensuring oversight of its financial functions, and investing in SFC’s distribution networks across the country, ManoCap has seen SFC’s revenues double over five years. In the meantime, the cost of fish to the consumer has fallen, and SFC has grown its employee numbers. SFC is now looking to expand its business further.

SPLASH MOBILE


The value of local networks

SFC’s network of fish depots throughout inland Sierra Leone also demonstrates the value of a strong local network. ManoCap has in fact invested directly in Sierra Leone’s networks, via Splash Mobile Technologies. Splash was Sierra Leone’s first mobile payment system. In a country with limited banking infrastructure, a technology which reduces the risk, cost, and time of everyday transactions makes a great difference.

This was particularly true during the Ebola outbreak. Businesses and consumers faced huge difficulties, as movement around the country was heavily restricted. The Splash network provided a virtual banking system that helped keep the consumer economy functioning. It also played an important role in the medical response to the outbreak: hazard pay to health care workers was essential in ensuring health facilities stayed open, something that was only possible due to the mobile payment network Splash enabled.1

 

The Splash network has now grown to around 200 payment points across the country, and Splash is working to increase this to 1,000. Although the cost of Ebola has been terrible, the co-ordinated response from the public and private sectors demonstrates the robustness of Sierra Leone’s human infrastructure, and suggests that Sierra Leone’s economy is well-placed to recover.

LOOKING AHEAD

ManoCap continues to source investments in Sierra Leone, and has a positive outlook on the country’s prospects. The team cautions that investing in Sierra Leone – and making an investment successful – is not easy. But with commitment and patience, Sierra Leone can be a very attractive investment climate.


 1. See http://blogs.ft.com/beyond-brics/2015/06/18/what-can-business-do-in-the-face-of-a-public-health-crisis/ for more details.

 

ABOUT MANOCAP

ManoCap operates in Sierra Leone and Liberia, investing growth capital in small and medium-sized businesses. It aims to deliver attractive returns to its investors while enhancing economic growth in its countries of operation. Being based in Freetown, ManoCap is able to provide support both via capital investment and through close ongoing working relationships with investee companies.