CDC'S COUNTRY FOCUS
Our country focus is predetermined by the Investment Policy, which lists 162 countries in which CDC may invest, (the "CDC universe"), of which 48 are classified as "poorer countries" (Gross National Product per capita less than US$1,730 in 1996). The Investment Policy requires that 70 per cent of all new investments over a five-year period are in poorer countries, with the further aim that at least 50 per cent of new investments in any one year are in sub-Saharan Africa and South Asia.
This chart shows the distribution of new investments by region for the last four years. This shows wide variations from year to year, as investments are "lumpy", and a single major investment can make a significant change to the overall picture.
In each of these years, performance against the geographical investment targets was as follows:
| |
Target |
1997 |
1998 |
1999 |
2000 |
2001 |
|
% new investments in poorer countries
(5-year average) |
Over 70% |
87% |
79% |
83% |
82% |
80% |
|
% new investments in sub-Saharan Africa and South Asia |
Over 50% |
52% |
59% |
39% |
34% |
69% |
CDC's portfolio is fairly equally split between the four regions. The distribution has changed over CDC's history as we have entered new countries.
For example, we were authorised to make investments in India in 1986, and made our first investments there in 1987. India now accounts for 11 per cent of the portfolio.
REGIONAL FOCUS OF CDC COMPARED TO OTHER DE +VELOPMENt FINANCe INSTITUTIONs
The regional split of CDC's current portfolio is shown below, with South Asia and Asia Pacific shown as a single regional entity, to permit comparison with three other major development finance institutions (DFIs). CDC has a higher proportion of its portfolio invested in Africa than IFC (part of the World Bank group), DEG (German organisation) and FMO (Dutch organisation) (2001 data).
CDC'S INTERNATIONAL PRESENCE
CDC uses the following criteria to assess whether to establish or maintain an office:
— the local market for investment is buoyant, with good prospects, and CDC receives a significant number of propositions to review;
— CDC holds a significant number of investments in the country which require close monitoring until exit;
— the costs of maintaining an office base are reasonable compared to the cost of frequent visits from another CDC base (air travel and communications links in developing countries have improved significantly over the last few years).
CDC has opened and closed offices throughout its history, and has frequently serviced countries from offices in nearby countries. For example, our first investment in Uganda was in 1950 (in the Lake Victoria Hotel, Entebbe), followed by investments in Kilembe Mines and the Development Finance Company of Uganda. We did not open an office in Kampala until mid 1995. We closed the Uganda office in 2000 and continue to service the country out of our Kenya office. We are currently in the process of investing in a property project in Kampala, and continue to review other investment opportunities in Uganda.
Appendix B shows where CDC had offices over the years 1970, 1980, 1990, 1995 and today. The number of CDC offices increased sharply during the 1990s (as we opened many funds targeting small- and medium-sized enterprises in smaller countries), from 22 in 1990 to 31 today.
CDC has recently opened offices in Nigeria, Egypt, Mexico and China. We consider these to be poor countries with growing economies, which are stimulating economic activity within their respective regions. Three of these fall within the World Bank definition of poorer countries where the provision of risk capital is likely to be particularly positive.
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