Africa

➚  Buy:Tanzania mulls a digital currency. The East African country’s central bank said it is at the research stage of plans to float a digital version of its shillings. The bank is wary that only a few countries have fully launched a central bank digital currency (CBDC) and that several more nations have canceled their CBDC adoption due to structural and technological challenges in the implementation phase. It said it has adopted a “phased, cautious and risk-based approach” to adopting a CBDC.

➘ Sell: Tanzania’s closed skies. It will take five years before Tanzania opens its aviation market to foreign airlines that transit through the East African country, its permanent secretary for transport told a local paper. The country’s officials and airlines insist their priority remains enabling local stability, not the African Union’s open skies dream of a single market for air transport.

The total amount of export revenue Turkey generated from Africa in 2022. This was a 12.3% increase over 2021 and accounted for about 8.6% of Turkey’s exports, according to data from the Turkish Exporters Assembly. Turkey’s foreign minister began this year with a five-country African tour, visiting South Africa, Zimbabwe, Rwanda, Gabon, and São Tomé & Príncipe.

Economic growth in sub-Saharan Africa is expected to come in around 3.6% this year, which is essentially flat from 2022, according to the World Bank’s latest projections. The sub-region’s growth will be hampered by policies intended to curb inflation and manage ballooning debts, such as interest rate hikes and subsidy cuts. A “sharp slowdown” with key trading partners, particularly China, is also expected to curtail growth.

It is also being weighed down by the continent’s biggest economies. Nigeria is expected to grow by just 2.9%, barely outpacing population growth, while South Africa will weaken to an anemic 1.4%, hurt by political uncertainty, high unemployment and worsening power cuts.

Oil and gas production will propel Senegal and Niger to being the fastest growing countries in the region while DR Congo is expected to be boosted by an expansion in mining production, even as commodity prices decline.

Zambia’s AI mining hopes are raising familiar concerns

THE NEWS

LUSAKA, Zambia — A $150 million investment in a Zambian copper mine by a company backed by Bill Gates and Jeff Bezos reflects rising demand for metals used in electric vehicle batteries — but experts question how much locals will benefit.

KoBold Metals, a U.S. exploration company that uses artificial intelligence and machine learning to identify battery metal deposits, is making the investment in the undeveloped Mingomba mine. KoBold’s investors include a fund founded by Gates, and backed by other billionaires including Bezos, Michael Bloomberg, Jack Ma, and Richard Branson.

Zambia’s Minister of Mines and Minerals Development Paul Kabuswe welcomed the investment, which was announced during the U.S.-Africa Leaders summit in December. “Investment has started flowing in, that’s what will trigger economic growth,” he said.

ZANJI’S VIEW

The government is basking in the glow of the Kobold Metals deal, but the Zambian people who remember Zambia’s past mining ventures — and the unfulfilled promises that came with them — have not joined the celebrations.

“What will Zambians get from this in terms of tax revenue? Decent jobs? All this information is not revealed,” said mining analyst James Musonda, who expressed concerns about the apparent “lack of benefits.”

The copper mining industry is one of Zambia’s biggest sources of revenue. It accounts for more than 70% of export earnings and contributed 42% of all government revenue between January and August 2022. Yet more than half of the population still live on less than $1.90 a day.

Economic analyst Trevor Hambayi told me Zambia needs to learn from past mistakes to realize the potential offered by its natural resources. He said the country can’t just hope the proceeds of taxes on foreign exploration companies will benefit the country.

Zambia, like many African countries, has previously agreed mining contracts with investors that include huge tax concessions, severely limiting the revenues generated.

Mining has also been linked to deforestation and water pollution in Zambia.

ROOM FOR DISAGREEMENT

The government of President Hakainde Hichilema is gambling that Zambia can take advantage of the United States’ new prioritization of green energy and its stated desire to wrestle control of clean tech’s global supply chain from China — particularly for electric vehicle batteries.

Despite longstanding concerns stemming from past unfulfilled promises with its mining industry, the hope this time is that Zambia, along with neighbor DR Congo, will finally move up the value supply chain and maybe even one day manufacture major battery inputs to generate multiples of previous revenues and jobs compared with simply being a raw material exporter.

A key step in that ambition was the signing of a memorandum of understanding (MoU) between the US and both African countries last month to explore ways to develop an electric-vehicle value chain together.

THE VIEW FROM RUSTENBURG

The use of artificial intelligence has enabled faster identification of large mineral deposits and improved safety, said Martin Loock, who has worked in South Africa’s mining industry for 15 years and set up an AI-focused consultancy two years ago. He said the data amassed through machine learning has improved productivity and caused a “boom” in investment in mining in Africa which he expects to continue over the next few years.

“Artificial intelligence is going to revolutionize the mining industry in the next two years and we’re going to see a lot more investment,” said Loock, founder and managing director of AI Mining Africa, a consultancy in Rustenburg, South Africa, that advises companies.

Loock said mine operators in South Africa, DR Congo and Zimbabwe were leading the way in the use of AI on the continent.

🇬🇭 Ghana’s government and trade unions last week agreed to increase the salaries of all public workers by 30%. It comes weeks after the West African country agreed a staff-level agreement with the IMF for a $3 billion support package. The cedi was among the world’s worst performing currencies last year and inflation rose to a 22-year high of 54% last month.

🇺🇲 U.S. Treasury Secretary Janet Yellen will visit Senegal, Zambia and South Africa over the next two weeks. The visit is the latest step in Washington’s bid to strengthen ties with Africa. U.S. President Joe Biden, Vice President Kamala Harris and Trade Representative Katherine Tai are also expected to travel to the continent this year.

🇨🇩 DR Congo is looking to harness methane deposits in Lake Kivu to supplement its electricity needs. It has chosen American firm Symbion Power to undertake a $300 million project that will produce 700 megawatts of electricity in more than 50 years, Bloomberg reports.

One Good Text with...Peju Alatise

Peju Alatise is a Nigerian artist whose work spans sculptures, paintings, and film.

Nigerian fintech unicorn Flutterwave is  looking to buy a UK fintech startup called Railsr, as reported by British broadcaster Sky News last week. We’ve followed up but so far no one’s talking at Flutterwave. A couple of insiders have hinted that discussions have happened, though one influential Flutterwave advisor told me “this is the first I’m hearing about it.”

At the end of last year we predicted that some well-funded African startups would look beyond the continent for deals to break into new markets. Africa’s most valuable unicorn has certainly been well-funded, raising some $475 million since 2016.

Railsr, which specializes in embedding financial services in non-finance platforms, could be an opportunistic acquisition. The troubled London-based startup is reported to be dealing with financial and leadership challenges over the past few weeks despite raising $46 million in debt and equity just four months ago.

— Yinka

• The sight of Chinese workers on construction sites has become ubiquitous in some African cities. Democracies are more likely to force Chinese firms to hire locally due to their fear of opposition being stirred up over the loss of jobs to foreigners, argue two academics in a study. Autocrats are more likely to use Chinese workers to  bolster the “performance-based legitimacy” of their regime, they say.
• French President Emmanuel Macron has shifted the narrative of Françafrique — the concept of France’s influence over its former colonies in sub-Saharan Africa — by recruiting African intellectuals, writes Mathijs Cazemier in Africa Is a Country. Macron has touted the idea that power dynamics now favor African countries while imposing “a new form of intellectual soft power,” writes Cazemier.

Sudan’s young archaeologists dig deep for inspiration

The image of archaeologists working in Africa is out of date. These days, the people unearthing Sudan’s ancient history are young locals rather than middle-aged male Westerners. That change comes at a time when the West is reckoning with the plundering that took place in the colonial era and, in some cases, responding to calls to return stolen artifacts. “It is very important that Africans do African archaeology,” Sabrine al-Sadiq, a 24-year-old female archaeology student at Khartoum University, tells the UK’s Guardian. “The idea that people from the West know best is changing.”

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— Yinka, Alexis, and Alexander