This week in Africa: Everything you need to know
15 min Read June 2, 2023 at 12:33 PM UTC
Welcome to our weekly recap where we share the most important news from the African Tech Ecosystem 🌍.
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Africa’s largest economy has a new president
- On Monday, Bola Tinubu was sworn in as president of Nigeria, Africa’s biggest economy by gross domestic product, population, and technology funding.
- The ceremony followed a disputed election as the new leader faces pressure to quickly improve economic and security conditions.
- Two of Tinubu’s main opponents in the February election are challenging his victory on the basis of fraud claims. A tribunal will start on Tuesday to hear their main arguments, with a ruling not expected before September.
For all its richness in human and natural mineral resources such as oil, Nigeria is currently grappling with a struggling economy with record debt, shortages of foreign exchange and fuel, a weak naira currency, near two-decades-high inflation, skeletal power supplies, and falling oil production due to crude theft and underinvestment. A raft of protectionist economic policies and foreign currency interventions have also spooked investors. A former Lagos state governor, Tinubu has promised to be a better steward of the economy.
Morocco’s PrestaFreedom raises $1.1m from Azur
- Morocco-based home services marketplace PrestaFreedom has raised $1.1 million from Azur Innovation Fund.
- Founded in 2020 by Majid Bensilmane, PrestaFreedom offers a host of home maintenance services on a monthly and weekly subscription basis. The startup claims to have one thousand returning customers.
- With the recent funding, PrestaFreedom plans to invest in its logistics and technology development to fuel the growth of the company while accelerating geographical expansion plans to several African markets starting next year.
From fast food to personal transport, entertainment to e-commerce, and logistics, more products and services are being provided via an on-demand system that leverages smartphones and the internet. Though Africa is a bit behind the curve when it comes to on-demand services, a number of startups—like PrestaFreedom, SweepSouth, WumDrop, OrderIn, EdenLife, etc—have emerged looking to drive the trend and are so far enjoying strong consumer adoption, in part driven by the changes to consumer behavior triggered by the Covid-19 pandemic.
Ethiopia inches closer to getting its own stock exchange
- Ethiopia’s Ministry of Finance, Ethiopian Investment Holdings, and FSD Africa are working together to establish the Ethiopian Securities Exchange (ESX).
- Once established, the ESX will become the 30th exchange on the continent. At least fifty companies, including banks and insurance companies, are expected to list at the launch of the exchange.
- The exchange is designed to provide a fundraising platform for small and medium-sized enterprises, which are the backbone of the Ethiopian economy. It will also offer a platform for the privatization of Ethiopia’s state-owned enterprises.
Source: FSD Africa
The establishment of a securities exchange, the first in the Horn of Africa nation’s history, through such a public-private partnership will usher in a new era for the financial industry and the economy as a whole. More so, for the previously state-controlled economy, however, a securities exchange would represent a significant milestone in the government’s bid to open up major sectors (such as telecom and banking), a process that kicked off as far back as 2018.
Africa to become the second-fastest growing region after Asia
- Africa is set to be the second-fastest growing region in the world after Asia in 2023-24, demonstrating the resilience of its economy despite dealing with multiple global shocks.
- But the projected growth will depend on global conditions and the continent’s ability to bolster its economic resilience, the African Development Bank’s 2023 African Economic Outlook report has found.
- The report forecasts that Africa will consolidate its post-Covid-19 pandemic recovery to 4.3% GDP growth in 2024 from 3.8% in 2022. Some 22 countries will record growth rates above 5%.
Monetary tightening in the United States and Europe has led to rising interest rates that have compounded debt service payments for African countries and other emerging and frontier markets. While the general outlook for the African economy remains largely positive, governments in the region will need to do more to steer their respective economies successfully through the ongoing storm, taking a raft of measures that include mobilizing more domestic resources and restructuring debt to withstand global headwinds.
GoGlobal expands presence to help multinationals find African talent
- GoGlobal, a leading Employer of Record (EOR) is expanding its global footprint with the launch of on-the-ground offices in 18 African countries.
- The company provides end-to-end recruitment solutions to multinational companies (MNCs), enabling them to build their teams in Africa.
- The expansion now allows GoGlobal to offer local coverage in one-third of the continent, positioning the company as a key player in supporting global companies expanding into Africa.
For companies looking to expand globally in industries such as technology, agribusiness, NGOs, financial services, construction, and engineering, Africa offers immediate opportunities, with an impressive mix of a growing population, a pool of talented professionals, promising economies, robust infrastructure development, and investor-friendly policies. But finding the talent to match their needs can be difficult, and that’s what GoGlobal aims to solve. By tapping into Africa’s vast talent pool, MNCs benefit from a dynamic workforce, gaining access to localized insights and cost-effective operations.
ARM Labs, Techstars open applications for Africa accelerator
- Applications have opened for the 2023 ARM Labs Lagos Techstars accelerator program, which will invest up to $120,000 in early-stage startups based in Africa.
- The program is organized by Techstars, the most active pre-seed investor in the world that provides access to capital, programming, and connections to early-stage entrepreneurs, in partnership with ARM Labs, a Lagos-based innovation program.
- Following the success of the inaugural program in 2022, the program plans to support startups building innovative companies across FinTech, Mobility, E-commerce, and TalentTech.
One of the defining trends of Africa’s venture capital landscape in 2022, per a Briter Bridges report, was a notable growth in the early-stage support framework available to startups on the continent, involving angel networks, seed funds, and accelerator programs. Accelerators, incubators, and pitch competitions provide crucial access to capital and mentorship to startups, and the benefits of this in the African startup landscape—which is playing catchup to ecosystems in advanced economies—can’t be overstated, especially in times of economic uncertainty.
Nigerian equities, bonds rally on economic reform promises
- Nigeria’s dollar bonds and equities rallied after the new president Bola Tinubu said he will end the nation’s $10 billion fuel-subsidy program and adopt a uniform exchange rate.
- Debt due in 2047 jumped 1.6 cents on the dollar to 66.23 in London, heading for the biggest advance in a month while bonds due in 2049 gained 1.7 cents, and those maturing in 2051 advanced 1.9 cents.
- The NGX 50 Index, which comprises the nation’s biggest companies, has surged 5-7% after the speech, sustaining the positive momentum from last week with key stocks in the banking sector catching the eye of investors.
Nigeria’s Tinubu inherits a struggling economy with record debt, forex and fuel shortages, a weak naira currency, nearly two-decades-high inflation, skeletal power supplies, and falling oil production due to crude theft and underinvestment. Much of this was driven by protectionist policies and foreign currency interventions under his predecessor Muhammadu Buhari, which spooked investors all through his eight-year tenure. But the new leader has vowed to expand the economy by at least 6% a year, lift barriers to investment, create jobs, and unify the exchange rate, while also tackling rampant insecurity, creating a positive outlook for Africa’s largest economy.
AFC secures $625m from new Middle East and Asia-based lenders
- Africa Finance Corporation, the leading infrastructure solutions provider on the continent, has secured a $625 million syndicated loan with new lenders from the Middle East and Asia.
- The transaction was upsized from an initially planned $500 million following an oversubscription of 61%, reflective of the strong demand from investors. Gulf Bank, National Bank of Ras Al-Khaimah, China CITIC Bank Corporation, Qatar National Bank, Doha Bank, and Industrial Bank of Korea Limited joined the syndicate as first-time lenders.
- This funding testifies to an increasing global interest to capture Africa’s infrastructure opportunities and AFC’s creditworthiness in a challenging macroeconomic environment.
Africa presents a massive infrastructure investment opportunity with a current investment gap of over $150 billion per year. The continent is home to some of the fastest-growing economies in the world, with a combined GDP of $2.3 trillion and a population of 1.3 billion people. But only 60% of the population has access to basic electricity, among other infrastructure challenges. With funds like the AFC initiatives and a growing middle class, investors from across the world are showing increasing interest in Africa’s infrastructure market, which is poised for substantial growth in the coming years.
Moroccan healthtech DataPathology raises $1m from Azur Fund
- Morocco-based healthtech startup DataPathology has raised $1 million from Azur Innovation Fund.
- Founded in 2020 by Mohammed El Khannoussi and Hicham El Attar, DataPhathology aims to deliver quick and accurate pathological diagnosis for patient care using technologies such as AI.
- On the back of the recently-acquired funds, the startup, which raised a $196,000 round from Witamax a year and a half ago, plans to expand its network of laboratories in Morocco and Africa and improve its proprietary capabilities to increase the volume of data processed into its platform.
DataPathology presents one of the innovative uses of AI in Africa, where AI-focused tech startups are springing up and increasingly attracting VC dollars to serve several industries, including financial services, logistics, healthcare, and consumer goods (FMCGs). Earlier this year, Germany’s BioNTech SE announced its acquisition of InstaDeep, a Tunis-born AI startup, for up to $680 million. Egypt-based Instabug and Synapse Analytics raised $46 million and $2 million respectively last year and we anticipate even more investments in AI-driven solutions this year.
Nigerian equities post impressive monthly gain in May
- The Nigerian stock market delivered an impressive performance with a gain of 6.42% in May, outperforming other markets in Sub-Saharan Africa per Nairametrics findings.
- Market confidence was boosted by President Tinubu’s inauguration and promises of extensive reforms, including the removal of a costly fuel subsidy and the unification of the country’s exchange rate.
- Analysts say investors should remain cautious, however, as historical data shows June has been a challenging month for Nigerian stocks, emphasizing the importance of prudent investment strategies and diversification.
Equity trading on the Nigerian Exchange Limited (NGX) finished the month of May in the green territory as the NGX All-Share Index appreciated by 6.42% to close at 55,769.28 index points. Similarly, Nigeria’s main shares index, which has been on the low profile, on Tuesday, May 30 soared to its single biggest daily gain in about two years as investors cheered the president’s inauguration speech. The index rose 5.2%, representing about 81% of the month’s total gain as financial markets in Africa’s biggest economy welcomed the smooth handover to a new government after closely fought elections.
Uganda’s Zofi Cash raises $1m pre-seed funding to scale
- Ugandan fintech startup Zofi Cash has secured $1 million in pre-seed funding to double down on its payday services for salaried workers.
- An instant salary advance platform, Zofi Cash offers employees early access to wages, ensuring that people have the financial resources they need to take care of immediate needs without waiting until the end of the month.
- The funding was raised from a single investor in Advancly, a business-to-business financing company with a presence in six African countries and has invested in several African fintech startups, such as Kenyan ventures LipaLater, MarketForce, and Pezesha.
Source: Disrupt Africa
In Africa, over 70% of the workforce is paid every 30 days. By living paycheck to paycheck, the 30-day pay cycle keeps 40% of them in an unending debt cycle as they struggle to match their income to daily expenses, emergencies, and opportunities. In addition, African businesses have historically struggled to provide solutions for employees to access daily salaries due to legacy payroll processes, lack of available cash flow, and other factors. These thus make on-demand salary access a huge market opportunity in Africa, and startups like Zofi, Earnipay, Workpay, and Zuberi are looking to capture it.
Kenya gets two new digital innovation hubs from Diageo, GIZ
- Global drinks company, Diageo Plc, plans to host the newly launched Africa Digital Hub in Kenya, from where it will serve key markets including Kenya, Nigeria, South Africa, and Ghana.
- Similarly, The GIZ Digital Transformation Centre (DTC) Kenya, in collaboration with the GFA Group, plans to establish and operate a Green Digital Innovation Hub (gDIH) in the East African nation.
- The developments come as Kenya continues to emerge as a favorite innovation destination for global tech giants, thanks to mobile penetration, tech innovation, and an emerging middle-class population.
Africa is a huge market for mobile digital services given the relatively high mobile phone penetration. Already, the continent accounts for between 65-70% of the world’s more than $1 trillion mobile money value. With the majority of activity and transactions in Africa still offline and manual, there remains a massive under-tapped market, and initiatives such as digital innovation labs are crucial to helping startups and innovators capture this.
Mastercard seals $45m partnership to manufacture vaccines in Africa
- The Mastercard Foundation has signed a $45 million partnership with Senegalese Institut Pasteur de Dakar (IPD) to train young Africans in vaccine manufacturing and production.
- The partnership, named MADIBA (Manufacturing in Africa for Disease Immunization and Building Autonomy), will establish a training center where young Africans especially women will be trained in the skills of vaccine production, research, and distribution.
- The deal comes against the backdrop of vaccine shortage and inequality experienced at the height of the covid-19 pandemic. It also aligns with the African Union’s vision of meeting 60% of vaccine needs in the continent by 2040.
At the outset of the recent global pandemic, Africa, like other poorer regions, was left without adequate vaccine supplies, highlighting the need to develop its own production. The continent imports more than 70% of all the medicines it needs, gulping $14 billion per year. Bolstering local capacity should serve as a major boost to the health prospects of a region that has been battered for decades by the burden of several diseases and pandemics such as Covid-19, but with very limited capacity to produce its own medicines and vaccines.
Africa needs 10m housing units annually to meet rising demand
- President of the African Federation of Construction Contractors Associations (AFCCA) Hassan Abdelaziz has stated that Africa needs 10 million low-cost housing units annually to meet the increasing population growth.
- Foreign companies are currently investing in these projects to reap huge returns, he says, especially as they bring their equipment, labor, and all building materials for projects.
- Abdelaziz added that major alliances and blocs have been established between Egyptian and African contracting companies to develop many major projects in Africa, highlighting the need to rehabilitate African contracting companies.
Africa’s size and urban population are growing, leading to increased demand for housing. Between 2011 and 2020, the continent added more than 300 million new people. That 35% growth took its share of the global population to 16% with more Africans—nearly 200 million—moving into urban areas. For investors with deep pockets, Africa’s housing and real estate sector offers many prospects with market opportunities in serving rising middle-class consumers who are increasingly demanding all-inclusive, high-quality living as well as low-income populations in need of low-cost residential apartments.
AfDB invests $20m in infrastructure private equity fund
- The African Development Bank (AfDB) Group has approved an equity investment of $20 million in the Africa50 Infrastructure Acceleration Fund I, in support of its target to mobilize private capital for infrastructure across the continent.
- The Fund plans to mobilize up to $500 million for investment and value creation in strategic infrastructure sectors and is sponsored by Africa50, an infrastructure investment platform established by governments and AfDB.
- Africa50 brings infrastructure project development and financing under one umbrella and has a strong track record of investments in the private sector and of projects undertaken under a Public-Private-Partnership framework.
Africa presents a massive infrastructure investment opportunity with a current investment gap of over $150 billion per year. The continent is home to some of the fastest-growing economies in the world, with a combined GDP of $2.3 trillion and a population of 1.3 billion people. But only 60% of the population has access to basic electricity, among other infrastructure challenges. With funds like the AfDB-backed Africa50 Infrastructure Acceleration Fund I and a growing middle class, the continent’s infrastructure market is poised for substantial growth in the coming years.
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