Investors update: May 16 2023 - Africa’s leading telcos to invest over $1bn in fiber cable

Africa’s leading telcos to invest over $1bn in fiber cable

Highlights

• MTN Group, Africa’s biggest mobile-phone operator, plans to build a $320 million inland fiber cable to connect ten countries, as telecommunications companies push to expand service to the continent’s growing population. 
• Similarly, Vodacom plans to expand its fiber business, pending the Competition Commission’s approval of its $693 million deal with Remgro. Through the deal, Vodacom plans to expand its fiber offering into some of its other operating countries, including Tanzania and the Congo. 
• Despite the major investments by the two South African telco giants Telkom currently dominates the fiber industry in the country through its subsidiary, Openserve.

Source: Bloomberg

Our Takeaway

Africa’s telecommunications industry has witnessed rapid growth over the past two decades while playing a key role in shaping the continent’s economy. Much of this growth is driven by some deregulation of the sector, a large young population increasingly adopting mobile voice and data services, and massive investments in network infrastructure by dominant multinational operators. By 2025, the contribution of the mobile industry to Africa’s GDP will grow to almost $155 billion from $138 billion in 2021 while the region will add nearly 100 million new subscribers, with industry leaders like MTN set to rake in huge revenues.

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Morocco’s Chari secures second investment from Plug & Play

Highlights

• Morocco-based B2B e-commerce platform Chari has secured a second round of investment from Plug and Play. The amount invested was not disclosed. 
• Plug and Play’s investment in Chari is part of its inaugural cohort in Morocco in partnership with the Mohammed VI Polytechnic University and Startgate.
• Founded in 2020 by Ismael Belkhayat and Sophia Alj, Chari, an e-commerce platform for FMCG products, lets retailers purchase large quantities of inventory items directly from suppliers. Last February, Chari raised $1 million from Orange Ventures.

Source: Wamda

Our Takeaway

African markets, though diverse, have some common themes, one of which is the largely fragmented FMCG space. Often, both local and multinational manufacturers do not have visibility and control over their own distribution channels while distributors have to deal with discrepancies in prices and inefficient logistics. Chari, like many startups in the B2B e-commerce space in Africa such as Nigeria’s TradeDepot and Egypt’s Capiter, has built digital products to address these bottlenecks in the crucial sector.

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Dangote Industries readies to open Africa’s largest $14bn refinery

Highlights

• Following years of delays and regulatory hurdles, Dangote Industries Limited is preparing for a ceremonial opening this month at its Lekki Refinery in Lekki, Nigeria, which will be the biggest refinery in Africa. 
• The company expects the facility’s crude distillation unit (CDU) will begin commercial operations by the end of June. 
• More than $14 billion worth of active projects are reportedly ongoing at the Lekki Refinery, which accounts for just less than half of the total investment in all active refining projects across Nigeria.

Source: ABC

Our Takeaway

The Dangote refinery holds immense relevance to Nigeria’s economy as it signifies a major shift towards self-sufficiency in petroleum products for the nation. By refining crude oil locally, Nigeria can reduce its reliance on costly fuel imports, preserve foreign exchange reserves, and bolsters growth while potentially becoming a key exporter of refined petroleum products. The Lekki facility is expected to increase Nigeria’s refining capacity to 3.24 million barrels per day (BBL/d). More so, its single, 650,000-BBL/d CDU will be the biggest in the world, by capacity.