Africa

The size of a new fund raised by private equity firm Adenia Partners, its largest Africa-focused fund to date. Though most contributors to the fund are returning investors, Adenia has attracted new backers, including the U.S. International Development Finance Corp., Canada’s Findev Inc. and Norway’s Norfund. Funds were also contributed by Africa’s largest fund manager, South Africa’s Public Investment Corp., and pension funds from both Kenya and Ghana.

Ethiopia bets on property ownership offer to attract foreign investors

ADDIS ABABA — Ethiopia’s plan to allow foreigners to buy real estate in the country for the first time is the latest move aimed at opening up its beleaguered economy and attracting foreign direct investment.

Prime Minister Abiy Ahmed, who has sought to liberalize the country’s state-run economy since taking office in 2018, announced the policy shift on March 23. “We will introduce a law that will allow foreigners to own properties,” he said on state TV, but did not say when the proposed legislation would be brought to parliament.

Ethiopia previously banned foreign property ownership based on political and economic concerns. The administration that followed Ethiopia’s socialist revolution of 1974, and held power until Abiy came to power, was wary of loosening controls due to fears over any outside influence on the country’s sovereignty.

The country’s political history in recent decades, along with it being one of only two African countries never colonized by Europeans, left it out of step with other nations on the continent where real estate and lucrative franchises are often owned by a few powerful families and their foreign partners.

There were also fears that opening the real estate market could work against locals, some of whom could be priced out of the market.

Abiy had made some headway in loosening state control of the economy. For example, Ethiopia has invited international investors to take stakes in the telecoms and banking sectors in recent years, though that has had varying degrees of success.

The impending change on foreign property ownership marks a seismic shift.

“I think it has the potential to bring much needed forex into the economy,” Solomon Assefa, a local property developer, told Semafor Africa. “The luxury segment is already saturated and can use foreign buyers, but I don’t think Ethiopia is attractive enough for foreigners to procure houses compared to destinations like Dubai.”

Much of Ethiopia’s attraction for foreign investors will stem from cheap labor and the state offering subsidized electricity.

The rate of growth in new and active mobile money accounts in 2023 slowed down compared with the two years before, but sub-Saharan Africa strengthened its status as the global leader for its adoption. More than half of the world’s 435 million active mobile money accounts — those used at least once in 30 days — are in sub-Saharan Africa, a report by the GSM Association, which tracks such data, said. East Africa’s share of active accounts was down to 27% in 2023 from 58% a decade earlier while West Africa’s share rose to 19% last year from just 7% in 2013. Regulation has been a key boost in West Africa. In Nigeria, for example, regulators have licensed companies that are not mobile network operators, like the Chinese apps Opay and PalmPay, to compete with services from telecom giants MTN and Airtel. This has also been done in Senegal, leading to “significant growth in use cases,” and international remittances, the report said. In the West African Economic and Monetary Union region, the 60 million accounts opened since 2021 have increased financial inclusion from 56% in 2018 to 71% in 2022, GSMA said.

South Africa’s coal closure delay could risk thousands of lives

South Africa’s plan to delay the closure of its coal-fired power plants could result in thousands of air pollution-related deaths in the country, according to a new study.

A proposal contained in a draft of South Africa’s new energy plan would see coal plants in the country operate for 10 years longer than they were scheduled to. This would cause an increase in deaths from health problems including lung cancer, asthma and heart disease, according to the study by Centre for Research on Energy & Clean Air (CREA), a Finnish nonprofit. It said pregnant women and children were especially likely to develop these conditions. The study projected that the delayed closure of the plants could result in some 32,000 deaths.

Seven power plants generating 11.3 gigawatts of coal power were scheduled to be decommissioned by 2030. The new energy plan aims to offer a path to sustainable energy production as the country grapples with costly, widespread power outages. Between 70% and 80% of South Africa’s electricity comes from burning coal. Extending the lifespan of coal-fired power plants is seen as a way to resolve the energy crisis. CREA, however, says the plan would put people’s health at risk while also undermining South Africa’s commitment to reducing emissions as a party to the Paris Agreement.

In 2023, Eskom emitted close to 1.5 megatons of sulfur dioxide and almost 130,000 tons of particulate matter. CREA’s analysis said there could be 13,000 deaths from inhaling particulate matter, 6,100 from nitrogen oxides and a further 13,000 from sulfur dioxide. It suggested that retiring the coal plants as scheduled would prevent deaths.

— Martin K.N Siele

Senegalese President’s in-tray: Economy

Senegal’s new president Bassirou Diomaye Faye is taking over an economy that is growing at a much slower pace than in previous years, with high inflation and an absence of jobs pushing young people to seek livelihoods elsewhere, often by undertaking fatal journeys to Europe by boat.

A key part of his reform agenda will revolve around following through on his vow to renegotiate contracts for the exploration of offshore oil and gas. In his first major policy announcement, delivered in a television speech yesterday, Faye said Senegal will conduct an audit of its oil, gas, and mining sectors. “Investor rights will always be protected, as well as the interests of the state and the people,” he said.

Senegal’s economy is estimated to have grown by 4.1% last year, continuing a downward trend since 2021 when the country posted 6.5% growth. It grew at an average of 6.5% a year in the five years up to 2018.

Recent growth struggles have been attributed to shocks caused by COVID-19, the Russia-Ukraine crisis, and delays in commissioning proposed multi billion dollar oil and gas projects. But investor interest and private consumption in Senegal were also depressed by social unrest in the months preceding Faye’s election. Businesses often had to close their premises during protests last year triggered by the former government’s imprisonment of Ousmane Sonko, whose popularity was key to Faye’s victory.

Faye’s broad plan is to trigger “systemic change” in Senegal, ostensibly signaling a departure from former President Macky Sall. The now ex-president achieved high growth years through the “Plan for an Emerging Senegal,” a 2014 strategy paper for development through 2035. Faye’s inclination to build on or abandon the plan will become clearer in the coming weeks. But an assumption behind the World Bank’s projection of 8.8% growth this year and 9.3% in 2025 is the beginning of hydrocarbon production, a key pillar of the Emerging Senegal agenda.

And at a time when two-thirds of Africa’s low income countries are at high risk of sovereign defaults with $650 billion in external debt, Faye will be expected to keep a close eye on Senegal’s expanding debt stock. The country is at moderate risk of distress but public debt is estimated at over 76% of GDP.

— Alexander Onukwue

Xavier Becerra, U.S. Secretary of Health and Human Services; Raj Shah, President, Rockefeller Foundation; Andrew Steer, President & CEO, Bezos Earth Fund; Gargee Ghosh, President, Global Policy & Advocacy, Gates Foundation; Jay Shambaugh, Undersecretary for International Affairs, Treasury Department and Ani Dasgupta, President & CEO at World Resources Institute will join the Rising Global Middle Class Session at the 2024 World Economy Summit to discuss the debt burden developing countries are facing today and how governments and private sector players can foster economic growth to create greater opportunities.

April 18 | 9 a.m.-12 p.m. ET | Washington, D.C.

🇳🇬 Nigeria increased the retail price of electricity for 15% of consumers in urban areas who make up 40% of the national energy demand and are thought to be financially better off. The move aims to reduce spending on electricity subsidies by $2.6 billion and attract investors in the sector.

🇸🇴 🇪🇹 Somalia’s government has closed Ethiopian consulates and returned the country’s ambassador home following a dispute over Addis Ababa’s plan to lease coastline in Somaliland. Somalia has described the move as a “violation” of its sovereignty.

🇹🇬 Togo’s parliamentary and regional elections were on Wednesday postponed following last week’s approval of constitutional changes that replaced the presidential system with a parliamentary one, the presidency announced. A new date was not announced.

🇰🇪 🇺🇸 A new report from the U.S. government claims that corruption is to blame for American firms missing out on major contracts in Kenya, as foreign firms are more likely to pay bribes to government officials.

🇸🇩 Sudan’s information ministry suspended the work of Saudi state-owned broadcasters for a “lack of commitment” to professionalism. The Sudanese Journalists Syndicate said the decision continued intimidation of the media that has been ongoing since war broke out last April.

🇺🇬 Uganda’s top court has rejected a petition that sought to annul the country’s harsh anti-LGBTQ+ law. The court unanimously agreed to throw out the petition, something rights organizations say could spark human rights violations against gay Ugandans.

Botswana offered to send 20,000 elephants to Germany this week in response to a proposed ban on trophy hunt imports from Africa. The Southern African nation has 131,000 elephants — more than any other country in the world — and struggles to contain damage caused by the animals to people, property, and crops. President Mokgweetsi Masisi threatened to ship thousands of the animals to Europe so that Western nations could picture what it is like to live with them. “It is very easy to sit in Berlin and have an opinion about our affairs in Botswana,” Masisi told German outlet BILD. The government reversed a ban on trophy hunting in 2019 to combat exploding elephant populations.

• Capital One and Discover start their uphill battle in Washington.
• As general election heats up, Trump camp prepares to be frozen in court.
• Replit launches new product in race for AI coding assistants.

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Happy Independence Day to the people of Senegal!! 🇸🇳

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— Yinka, Alexis, Alexander Onukwue, Martin Siele, Muchira Gachenge, and Jenna Moon