Weekly Investor Update (November-WeekOne-2024)

12 min Read November 1, 2024 at 5:00 PM UTC

Monday

Starlink Terminals Sell Out in Zimbabwe, Driving ISP Price Cuts

Elon Musk’s Starlink has sold out its internet terminals in Harare, Zimbabwe’s capital, less than two months after receiving regulatory approval to operate in the country.Harare joins five Nigerian cities – Abuja, Kano, Lagos, Port Harcourt, and Warri – where the service is unavailable for new orders due to high demand, according to Starlink’s website. Zimbabwe and Nigeria are the only African nations experiencing such Starlink shortages.Demand surged following Starlink’s entry in September, with customers ordering terminals directly from its website, bypassing street markets that previously sold kits at marked-up prices. The secondary market has since collapsed, and local internet service providers are reducing rates to compete.

Starlink’s high-speed, satellite-powered broadband has a growing presence in Africa, driven by demand in underserved areas. The success in Zimbabwe and Nigeria highlights a new model of direct-to-consumer connectivity, pressuring local internet providers to adjust. Starlink’s network of 5,500 satellites enables broad global access, part of SpaceX’s push to reach remote regions where traditional broadband infrastructure is scarce.

IMF Raises Sub-Saharan Africa’s 2025 Growth Forecast

The International Monetary Fund (IMF) has revised its 2025 growth forecast for sub-Saharan Africa to 4.2%, the highest since 2021, up from a previous 4% estimate.But the fundcautioned that uncertainty remains high, especially given recent social unrest tied to tough economic adjustments. IMF Africa Department Director Abebe Selassie noted that rising costs of living and austerity measures, including tax hikes and spending cuts, have fueled citizen frustration.Economic growth is expected to be uneven, with natural-resource-dependent nations growing at half the pace of others. Persistent double-digit inflation in some countries and increasing debt burdens continue to divert resources from critical development areas.

Sub-Saharan Africa’s economic growth prospects are tempered by high unemployment, inequality, and the need for rapid job creation. The IMF forecasts that 15 million new jobs will be required annually by 2030 to support the region’s youthful population, a pressing issue as social unrest grows. Addressing these challenges is essential for leveraging Africa’s potential as a future labor force powerhouse amid global demographic shifts.

Global Watchdog Takes Senegal Off Dirty Money List

Senegal has been removed from the Financial Action Task Force’s (FATF) gray list, which targets countries with heightened money laundering and terrorist-financing risks.The decision follows Senegal’s strengthened financial regulations and targeted sanctions, including new anti-money-laundering and anti-terrorism financing laws adopted in February.The move comes as Senegal works to rebuild investor confidence after a recent IMF audit revealed underreported debt and fiscal deficit figures, triggering aselloff of its Eurobondsand an S&P Global credit downgrade. These findings raised questions over Senegal’s $1.5 billion IMF program, adding to the financial strain that gray-listing typically imposes by reducing capital inflows.

With Senegal now off the FATF gray list, the country could regain investor interest despite recent setbacks. Senegal’s increased regulatory rigor aims to restore fiscal transparency, a critical step to regain trust among foreign investors and stabilize its Eurobond market, helping secure long-term capital inflows essential for growth.

Nigeria’s Moniepoint Becomes Unicorn in $110M Round Led by DPI

Moniepoint, an African fintech formerly TeamApt, secured $110 million in Series C funding that propels the Nigerian startup’s valuation to $1 billion, granting it unicorn status, per the Financial Times.This latest round was led byDevelopment Partners International’s ADP III fund, with participation from Google’s Africa Investment Fund,Verod Capital, andLightrock. Moniepoint, which pivoted from providing banking infrastructure to business banking, has raised over $180 million since its 2015 launch.Moniepointserves small and medium-sized businesses (SMBs) in Nigeria, providing services like working capital, loans, payment solutions, and business management tools. Processing over 800 million monthly transactions, with a total transaction value above $17 billion, Moniepoint has scaled rapidly, reaching 400,000 SMBs in 2022 and expanding into personal banking.

Moniepoint’s transition to an all-in-one financial platform underscores the growth potential of Africa’s fintech sector. Despite Nigeria’s economic headwinds, the fintech reported over $100 million in annualized revenue in 2022 and continues to see strong demand, processing an annualized transaction volume of $100 billion. With 90% of its business rooted in Nigeria, Moniepoint plans to use the new funding to expand across Africa. It targets SMBs with a comprehensive suite that includes digital payments, credit, and FX services. Investors like Google, QED, and BII signal global confidence in Africa’s fintech future, spotlighting Moniepoint’s profitability and regional impact as key drivers of its unicorn valuation.

Pick n Pay to List Boxer Chain in Africa’s Largest IPO This Year

Pick n Pay Stores said it will list its low-cost Boxer business on the Johannesburg Stock Exchange by year-end, aiming to raise up to 8 billion rand ($452 million) in what could be Africa’s largest IPO of 2024.With an overallotment option, the offering is expected to reach the upper end of the 6-8 billion rand range, as stated by the company on Monday. The Boxer listing is part of a broader turnaround strategy under CEO Sean Summers, who rejoined last year.Sales at Boxer rose 12% in the first half of the fiscal year, aiding Pick n Pay’s effort to attract investors. Pick n Pay shares have risen 38% year-to-date, outperforming other stocks on the FTSE/JSE Personal Care, Drug, and Grocery Stores Index. The company will retain a controlling stake in Boxer post-listing, expected by November.

The planned Boxer IPO reflects Pick n Pay’s strategic focus on strengthening its financial footing amid ongoing challenges in the South African retail sector. Acquired by Pick n Pay 22 years ago, Boxer has expanded to 500 stores and now employs 30,000 staff, half of which were added in the last seven years. Although Pick n Pay reported a 45% increase in after-tax losses to 827.4 million rand in the first half, Summers anticipates reducing these trading losses by 50% in the core Pick n Pay unit for the full year. The success of the Boxer listing could drive additional capital to sustain the company’s turnaround, setting a critical foundation for recovery in South Africa’s competitive retail landscape.

Absa Secures $150M from UK’s BII to Boost African SME Trade Financing

Absa Group, a leading South African bank, secured a $150 million trade financing facility with British International Investment (BII) to support African small- and medium-sized enterprises (SMEs) in agriculture, healthcare, and other sectors.This partnership aims to address Africa’s estimated $100-$120 billion trade financing gap, a challenge intensified by COVID-19, the Ukraine conflict, and regional supply chain disruptions. The funds will provide essential liquidity for SMEs across the continent, facilitating cross-border trade.Absa’s Mosa Tshabalala noted that the partnership with BII has supported over $1 billion in trade volumes in countries like Nigeria and Kenya over the past five years. The current $150 million facility is earmarked for markets with high trade finance needs but limited commercial funding access.

The trade financing gap in Africa hinders SMEs’ growth and economic integration due to limited access to affordable cross-border trade funds. Development finance institutions like BII play a crucial role, bridging financing gaps left by commercial banks. Trade financing supports essential cross-border transactions by covering shipping, insurance, and raw materials costs, allowing businesses to operate despite cash flow constraints. Absa’s regional presence in 12 African countries, coupled with BII’s support, positions the lender to expand its reach in high-demand areas, enabling SMEs to scale and compete internationally. As Absa and BII explore more targeted initiatives, this partnership could help foster sustainable trade development across Africa.

BRVM Ends Session Higher Driven by Gains in Nestlé, Tractafric

The BRVM stock market closed in positive territory on Tuesday with 17 rising stocks against 11 decliners. Market growth was buoyed by capitalization gains fromNestlé CI(+7.47% to 7,625 FCFA) andSociété Générale CI(+1.04% to 19,500 FCFA).Key indices posted gains: the BRVM Composite rose slightly by 0.03% to 269.07 points, the BRVM 30 increased by 0.19% to 133.69 points, and the BRVM Prestige added 0.89% to reach 113.64 points.Top performers of the session also includedSucrivoire(+7.01% to 840 FCFA), which reached its highest price in over a year. Conversely,Solibra,Setao CI, andPalm CIsaw declines of 5.76%, 2.99%, and 2.78%, respectively.

Despite a significant 86% drop in total trading volume to 1.01 billion FCFA compared to the previous day, investor interest remained strong in high-performing stocks like Nestlé CI and Sitab, which led trades with volumes of 293 million FCFA and 253 million FCFA, respectively. The BRVM’s resilience, supported by solid gains from top stocks, reflects steady investor confidence, with market dynamics indicating continued interest in the consumer and industrial sectors.

Bitcoin Price Surges Past $70,000 on US Election Speculation

Bitcoin traded around $73,000 on Tuesday, edging close to its all-time high of $73,798 as investors poured funds into spotbitcoin exchange-traded funds (ETFs)amid rising interest tied to the upcoming U.S. presidential election.Since October 11, spot bitcoin ETFs have seen net inflows of nearly $4 billion, fueling bitcoin’s ascent. Increased demand for spot bitcoin ETFs, which hold actual bitcoin, contributed to the cryptocurrency’s previous peak earlier this year.The rally lifted shares of bitcoin-focused companies, including MicroStrategy (MSTR), which hit a 52-week high of $267.89, and Coinbase Global (COIN), both reporting earnings tomorrow. Open interest in bitcoin futures on the CME also surged in October, indicating growing interest in derivatives.

Bitcoin trading activity is rising as Election Day nears, with options contracts clustered around the $65,000–$80,000 range, suggesting investor optimism post-election. Both U.S. presidential candidates—Republican Donald Trump and Democratic Vice President Kamala Harris—have engaged with the crypto community, adding to the crypto market’s momentum. Activity on Deribit suggests traders expect bitcoin to hover near record highs, highlighting the potential for spot bitcoin ETFs and derivative products to drive significant price action around the election.

Ghana’s Oyster Secures $2M to Boost Climate-Smart Agriculture

Oyster Agribusiness, a Ghana-based agri-tech firm specializing in climate-smart agriculture, raised $2 million in funding to scale its operations.Led by Pangea Africa, the funding round included Root Capital, RDF Ghana, and Sahel Capital’s SEFAA Fund, aiming to expand Oyster’s reach to more farmers and enhance sustainable farming practices to strengthen Ghana’s agriculture against climate change.Founded in 2018, Oyster supports smallholder farmers with sustainable inputs, advanced agronomic techniques, and secure market access. Leveraging tech such as seeders and drones, the company has contributed over GH¢60 million ($3.8 million) to farmers, impacting 4,500 smallholders, cultivating over 20,000 acres, and supplying 25,000 tons of produce to local and international markets.

Oyster’s growth highlights the potential of agri-tech to transform Ghana’s agricultural sector. With Ghana’s agriculture market projected to reach $3.87 billion by 2029, Oyster’s model supports the sector’s sustainability and inclusivity goals. The agritech funding landscape in Africa has been expanding, with $864.2 million raised cumulatively in 2023, emphasizing strong investor interest in climate-smart farming. Addressing the challenge of declining youth engagement in agriculture, industry leaders advocate integrating IT with agricultural skills.

Janngo Capital Closes Second Fund at $78M to Back African Startups

Janngo Capital, an African venture capital firm, has closed its second fund at €73 million ($78 million), surpassing its initial €60 million target by 20%.The VC firmattracted support from anchor investors African Development Bank (AfDB) and European Investment Bank (EIB), along with new backers such as the Mastercard Foundation Africa Growth Fund, Tunisian ANAVA fund, and Ghana’s Ashesi University endowment fund. U.S. and World Bank arms DFC and IFC also contributed.Aiming to support 25–40 startups over the next five years, Janngo prioritizes female-led ventures, aligning with its “gender equal” investment approach. Janngo has already invested in 21 startups, including Expensya, which recently exited in a ~$120 million acquisition, and Sabi, achieving $1 billion in annual gross merchandise volume.

Janngo’s success reflects rising investor confidence in Africa’s startup ecosystem, where local VC funding remains limited. Bâ emphasized Africa’s underrepresentation in global VC funding, calling for proportional access to drive economic growth. By backing diverse, high-impact startups, Janngo aims to demonstrate the region’s potential. Janngo’s investment thesis includes early-stage to Series B funding across sectors like healthcare, logistics, and financial services, with plans for additional investments supported by this latest fund’s close. The firm’s early exits highlight Janngo’s approach, providing liquidity sooner than some peers, a significant advantage amid challenging global VC conditions.

French President Macron Signs Potential $10.8B Deals in Morocco

French President Emmanuel Macron’s visit to Morocco yielded potential investment deals worth up to €10 billion, covering infrastructure, energy, and Morocco’s high-speed railway network. This marks Macron’s most economically impactful visit to the North African nation, where he highlighted Morocco’s “singular role as a gateway to Africa.”Agreements include significant roles for French firms such as Engie, Alstom, and TotalEnergies, supporting Morocco’s ambitious plans for energy and transportation. Engie is set to lead a multi-billion-dollar investment to help Morocco’s state-owned phosphate giant OCP reach carbon neutrality by 2028.Another major agreement involves expanding the Moroccan high-speed rail network with Alstom and others, aligned with Morocco’s role as aFIFA World Cup co-host in 2030. Macron also pledged France’s support for Morocco’s limited autonomy plan for Western Sahara, reaffirming France’s strategic alignment.

Macron’s visit underscored France’s intent to boost economic and diplomatic ties with Morocco amid regional tensions and strategic shifts. As Morocco positions itself as a renewable energy leader, Macron highlighted the potential for green hydrogen and energy corridors linking Morocco and Europe, cementing Morocco as a key partner. He urged European banks to reconsider their exit from Africa, arguing that such moves weaken European influence in the region. Macron also called for reforms to the IMF and World Bank, asserting the need to “reinvent” global financial systems to better reflect the interests of southern nations, signaling France’s openness to evolving multilateral governance.

Bitcoin Price Surges Past $70,000 on US Election Speculation

Bitcoin trading activity is rising as Election Day nears, with options contracts clustered around the $65,000–$80,000 range, suggesting investor optimism post-election. Both U.S. presidential candidates—Republican Donald Trump and Democratic Vice President Kamala Harris—have engaged with the crypto community, adding to the crypto market’s momentum. Activity on Deribit suggests traders expect bitcoin to hover near record highs, highlighting the potential for spot bitcoin ETFs and derivative products to drive significant price action around the election.

This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Articles do not reflect the views of DABA ADVISORS LLC and do not provide investment advice to Daba’s clients. Daba is not engaged in rendering tax, legal or accounting advice. Please consult a qualified professional for this type of service.