Investors update: March 31 2023 - South Africa’s Absa unveils $630m black empowerment plan.

South Africa’s Absa unveils $630m black empowerment plan

Highlights

• Absa Group, South Africa’s third-largest lender by market value, proposed a new plan to help boost Black ownership beyond the 25% recommended threshold.
• The transaction would constitute 7% of issued share capital and be worth as much as 11.2 billion rand ($630 million), the bank said in a statement. 
• It will also see 4% of Absa’s issued shares allocated to a perpetual Corporate Social Investment trust focused on education and youth employability support for black South Africans. The trust will receive an annual amount equivalent to 25% of Absa’s dividend.

Source: Bloomberg

Our Takeaway

Absa Group’s plan to increase Black ownership beyond the 25% recommended threshold is significant because it promotes greater economic empowerment and inclusivity in South Africa. By increasing Black ownership in the company, Absa can foster greater representation of historically disadvantaged groups in decision-making positions, as well as provide greater opportunities for wealth creation and asset accumulation among Black communities. This move may also enhance Absa’s reputation as a socially responsible corporate citizen, which could help to attract socially conscious investors and customers, promoting long-term business sustainability.

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XRP Healthcare targets Africa’s multibillion-dollar health industry

Highlights

• XRP Healthcare has launched in Africa and plans to acquire and merge privately owned healthcare establishments via its subsidiary, creating a healthcare network.
• Founded in the UK, XRP Healthcare is a pharma and Healthcare platform to be built on the XRP Ledger. XRP Healthcare Africa will be the vehicle to invest in privately owned clinics, care homes, pharmacies, and hospitals.
• In a move that will provide easier access to healthcare services and medication, the company says it is entering “pharmerging” countries to help revolutionize the healthcare industry.

Source: PRNewswire

Our Takeaway

XRP’s international expansion is timely as the African healthcare market is estimated to be worth $259 billion by 2030, and its population is set to double between 2021 and 2050 to 2.5 billion people, further requiring a solution for quality private care establishments to deal with the changing nature of burden disease. By providing users with a decentralized platform that exists outside centralized banking systems, XRP Healthcare allows for more transparent and secure transactions for those involved.

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AfDB invests $3.2m to upgrade Sao Tome & Principe’s payments

Highlights

• The African Development Bank (AfDB) has loaned the government of Sao Tome and Principe $3.2 million to develop its payment infrastructure.
• The funding will enable the Central African nation to upgrade its national switch payment system, allowing, for real-time payments through Real Time Gross Settlement (RTGS) modules, which support the clearing and settlement of country-wide retail payments.        
• That means Sao Tome and Principe’s payment system will enable instant funds transfer, just like Nigeria’s instant payment infrastructure, the Nigerian Interbank Settlement System.

Source: Zawya

Our Takeaway

Digital payments may have grown rapidly in Africa over the years but its development has been uneven, with some countries far ahead of their regional counterparts. Sao Tome and Principe is one example of the latter, and the planned upgrade is expected to increase the use of digital payment, mobile money, and other digital services in the country while also leading to a reduction in liquidity and credit risks. With the AfBD backing, we expect startups and investors to start paying attention to opportunities to digitize payments in the country.