Africa

➚  Buy: Nigeria’s tech fund. The Nigerian government this week unveiled a $618 million fund to invest in digital technology startups as well as film and music projects by citizens aged between 15 and 35. The African Development Bank will contribute $170 million to the fund and the French development agency will provide $116 million. The Islamic Development Bank and Nigeria’s government are expected to contribute $70 million and $45 million respectively.

➘ Sell: Chipper Cash. The pan-African fintech startup is considering a sale, according to a Bloomberg report. The news came days after the company disclosed its exposure as a customer and portfolio company of the troubled Silicon Valley Bank. The company has endured a rough few months since its unicorn valuation was slashed last year. It has shed 150 employees in two rounds of layoffs, the most recent being in February.

🇿🇲 A Chinese consortium will upgrade the 327-kilometer Lusaka-Ndola Dual Carriageway in Zambia for $650 million over three years. The Macro Ocean Investment Consortium will use a public-private partnership model to recoup its investment for a period of 22 years in the tolled road that carries almost all road-bound mineral exports from the Copperbelt region towards neighboring Tanzania.

🇿🇦 The National Clothing Retail Federation of South Africa and the Southern African Clothing and Textile Workers’ Union have lodged complaints against Shein, one of the world’s biggest online fashion retailers. They claim the Chinese company has exploited tax loopholes to gain an unfair advantage over competitors in South Africa. Shein has been accused of distributing its items in small packages of lower value to avoid paying import taxes. The company says it is committed to complying with local laws and regulations of the markets in which it operates.

🇺🇬 Uganda’s “first son” Muhoozi Kainerugaba announced yesterday (March 15) that he will stand for the presidency in 2026, officially joining the race to take over from his father President Yoweri Museveni who has ruled the country for 37 years. But the controversial  48-year-old general, who tweeted his intention, soon deleted those tweets but still retweeted reactions to them. It is the first time he has given a timeline for running for the highest office in the land.

🇷🇼 Rwanda this week received mobile mRNA vaccine production units by German pharma company BioNTech dubbed BioNTainers. BioNTech is developing a facility expected to produce up to 100 million mRNA vaccines per year. The company is also expected to conduct trials on vaccines for malaria and tuberculosis.

The total number of COVID-19 vaccine doses that logistics company Zipline told Semafor Africa it has delivered using drones in Ghana since March 2021. The company said it has delivered around 8 million vaccines worldwide. Zipline this week unveiled a home delivery platform that it claims can deliver items up to seven times faster than automobile delivery.

Ethiopia’s wheat exports risk food crisis

THE NEWS

ADDIS ABABA — Ethiopia has been exporting wheat to boost its dwindling foreign currency reserves, raising concerns that it could deepen a looming food crisis.

The country is among a number of nations in the Horn of Africa on the brink of famine after five consecutive failed rainy seasons. U.S. Secretary of State Antony Blinken on Wednesday, during  a visit to the capital Addis Ababa, announced more than $331 million in humanitarian aid would be provided to Ethiopia this year to help people affected by drought, food insecurity and conflict in Ethiopia.

Despite its food crisis, Ethiopia’s government began exporting wheat to drought-affected neighboring nations last month after signing a $200 million deal with the World Food Programme in February to supply the crop to the humanitarian organization.

But the import-dependent country is also grappling with a foreign currency crisis.The International Monetary Fund says the country’s foreign exchange reserves can finance less than one month’s worth of imports.

Aid agencies have appealed to international donors to help Ethiopia avoid a famine but Prime Minister Abiy Ahmed’s government says it has enough wheat to feed the country’s 120 million people and meet its export obligations.

Others fear the impact of exports. “The intention to export wheat while millions of Ethiopians are going hungry and making a full-blown PR campaign about the intended export shows the utter disregard Abiy’s administration has for Ethiopian citizens,” said Hone Mandefro, advocacy director of the Amhara Association of America group which has long been critical of the current government.

Alemayehu Geda, an economics professor at Addis Ababa University, described the policy to export wheat in the midst of a potential famine as “unethical”.

SAMUEL’S VIEW

Ethiopia’s government is balancing two big problems — a faltering economy and the risk of famine which, according to the United Nations, threatens 24 million people.

The country is sub-Saharan Africa’s biggest wheat producer but yields have not kept pace with population growth. Ethiopia had been importing around $600 million worth of wheat annually until harvesting changes in the last three years improved yields. But Ethiopia did not import wheat last year and the government has committed to becoming a net exporter.

The export push is part of a plan to get forex the country desperately needs to import goods, while hoping that the crisis predicted by humanitarian experts fails to materialize.

The two-year civil war in the northern Tigray region, which ended in November, has slowed the country’s ambition of becoming a middle income nation by 2025. With external debt mounting for years, the economic downturn is compounded by rising debt servicing costs. Ethiopia owes more than $29 billion to external creditors, according to the finance ministry.

Last year Ethiopia imported goods valued at $18 billion, while it only managed exports worth $4 billion. In addition to maturing debt and dismal foreign exchange inflows, the cost of recovering from the devastation of the war requires more than $20 billion.

With a lukewarm reception from the IMF, Ethiopia is once again turning to China to come to the rescue of its ruined economy and salvage key infrastructure damaged in its civil war. Most recently, a senior delegation led by Finance Minister Ahmed Shide was dispatched to Beijing late last month amid growing concern that Ethiopia may default on its mounting debt.

ROOM FOR DISAGREEMENT

“Ethiopia has the capacity to feed its population and produce marketable surplus that goes to the global market,” said Mandefro Niguissi, chief executive of the government-run Ethiopian Agricultural Transformation Agency.

Mandefro, whose agency’s remit is to improve efficiency in the agricultural sector, said authorities estimate that 87% of wheat produced by Ethiopia’s farmers is consumed locally, leaving a 15 million quintal surplus. “The plan is to sell 10 million and keep the extra 5 million as contingency,” he said.

THE VIEW FROM GENEVA

Lawrence Haddad, executive director of the Global Alliance for Improved Nutrition, said international donors should set up a fund “to invest seriously in making the food systems of the Horn of Africa more resilient and less affected by shocks,” while also addressing immediate emergency food needs. “Treatment without prevention leads to exhaustion of donors and suffering of people,” he said.

NOTABLE

• At a meeting of the African Union in February, Ethiopia’s Prime Minister Abiy Ahmed told delegates: “Not only will Ethiopia feed itself; we are confident that we can strongly contribute to global food supplies through exports and otherwise.” He said the country has been working diligently to enhance agricultural productivity in the past four years with the launch of initiatives including one that encourages small-holder farmers to farm in clusters that enable them to benefit from irrigation and mechanization.
• Ahead of the U.S. secretary of state’s visit, Ethiopia asked the Joe Biden administration to reinstate its duty-free access to the US market, arguing that “exceptional circumstances” warrant an immediate re-examination of its suspension from the African Growth and Opportunity Act (AGOA) program.

The largest concentrations of digital businesses in Africa are in Nigeria, Kenya, and South Africa, according to a World Bank report. It argues that digital transformation is necessary for job growth and productivity in Africa. The three countries are also among the top 15 worldwide for digital business density, the World Bank says, thanks in part to their significant market size and residents’ purchasing power for digital services. This produces a kind of virtuous cycle: countries with higher digital business densities tend to be favored by prospective innovators as the preferred destinations for setting up a digital business. Investors, naturally, will pursue those innovators where they set up.

The most competitive Lagos election since 1999

→ What’s happening? Nigerians will vote for state governors on Saturday, three weeks after the presidential election. The fight for Lagos — the political base of president-elect Bola Tinubu, is the most significant contest.

In a major upset, presidential candidate Peter Obi of the relatively small Labour Party amassed more votes in Lagos than Tinubu. The latter was Lagos state governor from 1999 to 2007 and has handpicked all of his successors. Current governor Babajide Sanwo-Olu is seeking re-election but faces stiff competition from Labour candidate Gbadebo Rhodes-Vivour, an architect and activist. Abdul-Azeez Olajide Adediran, an entrepreneur representing the main opposition People’s Democratic Party, is the other leading candidate in the most competitive Lagos gubernatorial election in a generation.

→ What’s at stake? Losing Lagos could erode Tinubu’s influence in his home state, the main source of his political and financial power. A Labour Party win could enable it to create a base in an economic and cultural hub of over 20 million people.

→ Why does Lagos matter? Nigeria’s commercial hub generates the most revenue in Africa’s largest economy. The country’s financial center has a vibrant tech sector, the continent’s biggest deep seaport and is home to the Nollywood film industry. Africa’s richest man Aliko Dangote is also building a multibillion-dollar oil refinery in the state which has the ninth largest economy in Africa.

→ Alexis’ view: The Labour party has garnered strong youth support by tapping into activist networks born during the #EndSars protests of 2020. It could emerge as a credible political force nationally if it wins and uses Lagos as a template for its policies. But it will be hard to unseat the APC which, through Tinubu, controls a network of influential trade unions and business leaders. The campaign has already been marked with unusual ethnic chauvinism and intimidation with fears election day will be tinged with vote buying and violence.

— Alexis

Claude Grunitzky is CEO of venture firm Equity Alliance and founder of True Africa as well as the host of its Limitless podcast. He founded Trace magazine in the 1990s and later co-founded Trace TV.

• When the African Development Bank launched a $1.5 billion emergency food production facility last May it was supposed to benefit 20 million smallholder farmers across the continent. African Arguments explains that the program’s certified seeds and increased access to fertilizers was intended to address the more than 30 million tons in food shortage arising from the Russia-Ukraine war and a prolonged drought. However, the program entrenched an overreliance on chemicals and commercial inputs, which became a business opportunity benefiting major agrochemical corporations.
• The Africa-China relationship is evolving as the world’s geopolitical forces become more multipolar, explains Kenyan development economist Anzetse Were in Project Syndicate. Key to that evolution is a combination of “Africa’s public-debt distress, China’s changing approach to development finance, a deepening focus on soft power and diplomatic relations on both sides, and the changing composition of African economic interests,” writes Were.
• Layoffs have dropped many Nigerian tech workers into an uncertain job market. The comfort guaranteed by huge salaries has been replaced by long periods of unemployment and status anxiety. “It became very hard when I was running out of savings and rent was coming,” one laid-off tech employee told Rest of World, capturing the mood of workers struggling to adjust to a trend of layoffs that is still ongoing.

A new documentary launched this week at South by Southwest (SXSW) in Austin, Texas, explores the history and impact of the French Treasury-backed CFA currency on the economies and people of 15 West and Central African countries. Fighting Back Against Monetary Colonialism, which is sponsored by the Human Rights Foundation, uses animation to capture the work of Togolese activist Farida Bemba Nabourema, a self-described anti-CFA campaigner. Nabourema pushes back at what she sees as the hypocrisy of France and its Francafrique pact with African leaders, which has enabled it to maintain influence in the region.“The West is busier portraying other world powers such as Russia or China as being predatory when one of their own, France,  has been doing far worse in Africa for decades,” Nabourema tells Semafor Africa.

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— Yinka, Alexis, Alexander, and Muchira