Investors update: May 29 2023 - Africa’s largest economy has a new president.

Africa’s largest economy has a new president

Highlights

• 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.

Source: Reuters

Our Takeaway

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.

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Morocco’s PrestaFreedom raises $1.1m from Azur

Highlights

• 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.

Source: Wamda

Our Takeaway

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.

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Ethiopia inches closer to getting its own stock exchange

Highlights

• 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

Our Takeaway

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.