Africa

1. Nigeria owes fuel traders
2. Africa’s investment trends
3. Banking M&A frenzy
4. Rwanda’s genocide legacy
5. U.S. minerals warning
6. Zimbabwe’s currency reboot

Also, South Africa’s plan to grab a rhino opportunity by the horn.

Hello! Welcome to Semafor Africa. Last week, I took part in a panel discussion on the issue of economic fragility in a time of rising debt. My fellow panelists were a mix of accomplished researchers and former policy officials. They broadly agreed on the particular challenge of countries, many in Africa, needing debt to help develop but coming undone by the mismanagement or poor execution with funds in an environment that has become extraordinarily difficult due to post-pandemic disruptions.

The World Bank’s Africa Pulse biannual report, published on Monday, reiterates how the debt challenge is a long-term one for many African countries. While it notes that public debt in sub-Saharan Africa is forecast to decline to 57% of GDP in 2024 from 61% last year, the risk of debt distress remains high for more than half of African governments. Many face “unsustainable debt burdens or are actively seeking to restructure or reprofile their debts.”

In simple terms this means most African countries have less access to debt, which has become much more expensive as inflation-targeted interest hikes have taken hold in wealthier countries, but also that ongoing debt payments are “crowding out” their development spending. The bank forecasts that economic growth in sub-Saharan Africa will reach 3.4% this year and 3.8% next year as consumer spending grows and declining inflation helps households. There’s also hope that interest rate cuts in large global economies might stimulate investment growth in 2025.

🟡 Semafor is hosting the World Economy Summit next week, April 17-18 in Washington D.C. and we’re excited to host an impressive lineup of speakers at the Rising Global Middle Class session with speakers including African Development Bank President Akinwumi Adesina, U.S. Undersecretary for International affairs, Jay Shambaugh, African Finance Corp CEO Samaila Zubairu, and Gates Foundation President Public Policy Gargee Ghosh among others. You can sign up here — and if you’re there in person, please come by and say hi.

🟡🟡 You might notice we’ve had a bit of design refresh, as we aim to keep on improving. Please let us know what you think of the tweaks and how we might make it even better. Just reply to this email.

Nigeria’s petrol payments backlog

The amount Nigeria’s state-oil company NNPC owes to traders for fuel imports, according to sources that spoke to Reuters. They told the outlet that NNPC was slow in making payments, taking more than 130 days to reimburse contractors instead of the usual 90. A NNPC spokesperson denied the claims, saying the company was “not aware of any such debt nor any financial issues of such magnitude.” NNPC’s suppliers are still supplying fuel to the firm, the sources confirmed. NNPC is losing money on the petrol it sells in the wake of rising oil prices, analysts said, and the firm is Nigeria’s only importer of fuel in the wake of the government’s cancellation of a subsidy that kept petrol prices low.

Tracking Africa’s private capital deals

Private capital investment in African markets fell by a fifth in 2023 to $5.9 billion, according to a report from the African Private Equity and Venture Capital Association (AVCA). That drop-off was largely led by a fall in venture capital deals as the continent battled with economic headwinds due to high inflation and rising interest rates. It counted just 450 transactions in 2023 versus 627 a year earlier, which AVCA described as “the sharpest decline in investment volume since 2012.” Venture funding totaled $2.2 billion last year, while private equity dealmaking reached just $1.6 billion.

Nigerian bank mergers loom after regulator’s rule change

LAGOS — Nigerian banks are racing to meet new capital requirements imposed by the central bank which could trigger the biggest mergers and acquisitions shakeup in the sector in 20 years.

The Central Bank of Nigeria (CBN) ordered new capital requirements for different tiers of banks last month in a move aimed at protecting Africa’s largest economy against global shocks. They range from 10 billion naira ($7.6 million) for smaller banks, to 500 billion naira ($380 million) for those operating in other countries.

An April 30 deadline is looming for banks to announce their plans for fundraising, which the CBN said must be completed by the end of March 2026.

Access Bank and First Bank, two of Nigeria’s largest lenders by assets and customer base, have said they will raise 365 billion naira and 300 billion naira respectively, including by issuing shares to existing shareholders and through public offers in capital markets. Access also wants to raise $1.5 billion to continue an expansion that has seen it acquire or invest in banks in Kenya, Angola, Uganda, Botswana, and South Africa since 2019.

Nigeria’s last capital review was in 2004, when it increased the minimum requirement from 2 to 25 billion naira ($188 million at the time). It led to thousands of job losses triggered by a wave of mergers and acquisitions that shrank the number of banks from 89 to 25. But the reform proved to be a net positive for economic stability, coming shortly after the end of nearly two decades of military dictatorships and in the midst of debt relief renegotiations with the Paris Club of lenders.

Analysts expect a number of mergers in the coming months — albeit fewer than two decades ago. Accounting firm EY, in a note last month, said 17 of Nigeria’s 24 banks are unlikely to meet the new capital requirements.

Thirty years after Rwanda’s genocide

Rwanda is observing a national week of mourning to mark the 30-year anniversary of its 1994 genocide. Around 800,000 Rwandans were killed in the genocide, most of whom were members of the Tutsi ethnic minority.

President Paul Kagame on Sunday called out the international community for its inaction at the time, which he said allowed the 100-day genocide to happen. The killings were triggered by the death of then-President Juvénal Habyarimana, a member of the Hutu ethnic group. His plane was shot down over Kigali, and the Tutsis were subsequently blamed. Some moderate Hutus were also killed for protecting Tutsi people.

“It was the international community which failed all of us, whether from contempt or cowardice,” Kagame said after lighting a flame of remembrance and laying a wreath at a memorial site in Kigali.

Several world leaders faced criticism from Rwandans online over their wording of statements on the genocide, with a section of Rwandans demanding that it be specifically referred to as the genocide against Tutsis. Among them was U.S. Secretary of State Antony Blinken, who was criticized for his statement on X.

“I think the bigger issue here is the feeling among some (in Rwanda) that the world doesn’t always understand or properly contextualize things when talking about Rwanda, whether its discussing the genocide 30 years ago or the ongoing conflict in DRC,” Nairobi-based Rwandan journalist Lauren Ingabire told Semafor Africa. She said the ongoing conflict in mineral-rich eastern DR Congo in particular had reinforced sentiments against key members of the international community, especially the West.

Rwanda has been roundly criticized for backing M23, one of numerous armed groups battling for control of lucrative trade routes and mines in the region. Rwanda, however, accuses the DRC of supporting Hutu elements opposed to Kagame’s administration.

— Martin K.N Siele

U.S. plays catch up to China in Africa’s mining sector

The U.S. needs to make strategic changes to keep pace with the Chinese and Gulf state companies tapping into Africa’s vast mineral resources, a new report by the United States Institute of Peace (USIP) says.

USIP highlighted the United States’ near 100% dependence on “foreign entities of concern” — mainly China — for critical minerals including graphite, manganese and cobalt, which is used in the manufacture of electric vehicle batteries. Pointing to this reliance on China as a national economic and security concern, it advised a renewed focus on “commercial diplomacy” to enable the creation of new mineral supply chains around the world, including Africa.

It argued that U.S. firms could offer a more beneficial approach to mining in Africa compared to Chinese firms, whom it claimed offer “little local value” and enable corruption and human rights abuses, including child labor exploitation.

Among its suggestions was the opening of a U.S embassy in the mining city of Lubumbashi in the DR Congo, the world’s largest cobalt producer. It also called for the execution of a memorandum of understanding signed in December 2022 to establish a mining supply chain for EV batteries with DRC and Zambia, the second-largest cobalt producer in Africa and one of the world’s leading copper producers.

Other recommendations included supporting African media and civil society to drive accountability, and developing a comprehensive critical minerals strategy as part of US-Africa policy.

— Martin

Zimbabwe’s tricky currency change

Zimbabwean businesses have not transitioned to the nation’s new currency as they continue to adjust their systems, five days after the central bank introduced the sixth medium of exchange in 16 years.

The southern African nation, which has been grappling with currency crises over the past 24 years, on April 5 introduced the Zimbabwe Gold (ZiG), which is backed by 2.5 tonnes of gold and some foreign currency reserves worth about $285 million.

The government made the change following a drastic depreciation of the Zimbabwe dollar (ZWL) since its reintroduction in 2019. Banks, mobile money companies and retailers, among other businesses, put local currency transactions on hold a day after Reserve Bank of Zimbabwe Governor John Mushayavanhu announced his first monetary policy statement.

Though electronic ZiG transactions began on April 8, physical notes and coins will begin to circulate on April 30. Those holding the ZWL have been left stranded as the changeover progresses.

“You really want my comment?” said Eddie Cross, a business leader and former member of the RBZ monetary policy committee, when Semafor Africa asked him about the future of the ZiG. “The issuance of a currency is one thing, managing and supporting it is another.”

— Daisy Jeremani in Bulawayo, Zimbabwe.

Deals

🇿🇦 Canal+, which is owned by French media giant Vivendi, made a formal bid on Monday to buy all shares of South African broadcaster MultiChoice, which it valued at $2.9 billion. Last month, Bloomberg reported that South African billionaire Patrice Motsepe was in talks with Canal+ to join its bid, a move that could also help the French media conglomerate meet the country’s stringent Black ownership requirements.

🇪🇹 The Ethiopian Securities Exchange said it has raised the $11 million it needed to start operations after receiving offers of up to $26.6 million in new capital.

🇿🇦 South African investor Medu Capital bought a majority stake in Optron Group, whose business includes mining, engineering, and agriculture subsidiaries.

🌍 African tech startups raised $466 million in the first three months of this year, down 47% from 2023, according to Africa The Big Deal. Nearly a quarter of the total was raised by Moove, a vehicle financing startup.

🇰🇪 Kenya’s BURN raised $12 million to expand its clean cooking stove offerings in eight African countries. The investment was led by Canadian firm Key Carbon, and supported by Cartesian Capital, a New York private equity firm.

Governance

🇪🇹 Ethiopia’s finance ministry said on Friday the country and the World Bank signed $1.72 billion in loan agreements to upgrade infrastructure for electricity and water supply, as well as to facilitate the movement of food to markets.

🇹🇿 Tanzania’s railway authority received electric trains purchased from South Korean manufacturer Hyundai Rotem for a line that will connect the country to Rwanda, Uganda, Burundi, and DR Congo.

🇪🇭 Western Sahara said on Sunday that France’s plan to fund projects in the disputed Sahrawi regions was a “provocative” step. The statement follows a visit by France’s foreign trade minister to Morocco last week, which considers the territory part of its jurisdiction.

🇸🇱 Sierra Leone’s president declared a national health emergency on Thursday over a synthetic drug called kush which is believed to have killed hundreds and psychologically harmed drug users in the country.

Mining

🇰🇪 Kenya has started processing permits and licenses for mining and prospecting of minerals following a four-year hiatus. The country’s mining ministry said it received about 1,500 applications.

Tech

🇿🇦 Africa Data Centers began constructing a 12 megawatt solar farm in Cape Town. The first phase of the project aims to power the company’s data center in the city, with a later phase expected to power two data centers in Johannesburg.

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.

South Africa’s cabinet has approved a 10-year plan that could allow tourists to use rhino horn powder for medicinal purposes within the nation’s borders, the Financial Times reported. The National Biodiversity Economy Strategy would allow health clinics to administer traditional medicine using rhino horn for health tourists from East Asia. Rhino horn is made of keratin, a protein found in human hair, nails, and skin. It is used in Chinese medicine as a cure for fevers and snake bites. Proponents of the plan say its adoption would benefit Black communities previously excluded from the country’s white-dominated wildlife industries. South Africa is home to an estimated 80% of the world’s wild rhinos, including critically endangered black rhinos. Critics of the plan have called it a form of “extractive conservation.”

• Biden gives TSMC over $6 billion for advanced chips in U.S.
• Soros fund is building an audio empire.
• The strange bedfellows slowing a greener U.S. grid.

If you’re enjoying the Semafor Africa newsletter and finding it useful, please share with your family and friends. We’d love to have them aboard too.

Let’s make sure this email doesn’t end up in your junk folder by adding africa@semafor.com to your contacts. In Gmail you should drag this newsletter over to your ‘Primary’ tab.

You can reply to this email and send us your news tips, gossip, and good vibes.

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