Africa

1. Tigray war costs
2. ‘Blood Tea’
3. Superstar startup shuts
4. South Africa on edge
5. Nigeria’s labor strike

Also, why some football fans can’t watch their national team play on home turf.

Hello! Welcome to Semafor Africa, where we’re weighing up the ANC’s options. South Africa’s ruling African National Congress faces a huge choice after its disastrous election performance, where it lost its parliamentary majority. It now has the unenviable task of reaching an agreement with coalition partners.

The ANC could team up with a centrist party that’s widely seen as representing the interests of an elite white minority, or populist parties that espouse Marxist ideologies. Or, put another way, the party that liberated Black South Africans from apartheid faces accusations of “selling out” its principles or jeopardizing the stability of Africa’s biggest economy. Sam Mkokeli reports in this edition on what he’s hearing from ANC insiders about the party’s fraught internal discussions over potential coalition partners.

Reporting alongside Sam on this historic election, I was struck by the sense of excitement around the vote. The electorate clearly wanted to give the ANC a bloody nose after years of electricity blackouts, high unemployment and violent crime. But, after a vote in which disgraced ex-president Jacob Zuma was the biggest star and is now calling for his successor to be unseated as a condition of any coalition deal, nobody knows what comes next. Perhaps it’s my innate optimism but, as I explained in a recent guest opinion piece for The Guardian, it would be hard for a coalition government to perform worse than the ANC has in recent years. It’s clear that the ANC’s coalition decision will not only determine the party’s future but the path taken by the entire country.

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Counting the cost of Ethiopia’s war

The amount Ethiopia needs to rebuild after the devastation wrought during the two-year war in its northern Tigray region, according to a study. The findings, alongside those of several studies exploring the consequences of conflict in the country, were presented last week. Analysis showed that the country lost 7.5% of its GDP to the conflict, while private consumption dropped by between 8.3% and 15.3%. The destruction of human, physical and natural resources, and the disruption of the normal order of businesses reached an all-time high, the experts said. The research covered the period between 2020 and 2022 and so did not include estimates for damage caused by conflicts in the Amhara and Oromia regions that have erupted since then.

A community’s fight to take back Kenya’s Lipton tea estates

THE SCOOP

NAIROBI — A community-led consortium in Kenya’s tea-growing region is fighting to stop a global private equity firm selling the renowned Lipton tea estates to a Sri Lankan conglomerate in a deal estimated to be worth tens of millions of dollars.

It comes after the consortium’s own bid to reclaim the estates failed last month.

The Nairobi-based agricultural firm Sasini was the other bidder for the Lipton Kenya estates, which include 11 plantations and eight factories in Kericho, Bomet, and Limuru counties. Sri Lankan firm Browns won with a promise to allocate a 15% stake in the Kenya operation to the community through a cooperative society.

Luxembourg-based CVC Capital bought the Lipton estates in Kenya, Tanzania, and Rwanda in 2022 from Unilever for €4.5 billion ($4.8 billion). The tea estates in Kericho, a highland town in southern Rift Valley, sit on lands from which members of the Kipsigis community were first forcefully evicted by British colonialists over a hundred years ago. In more recent years, the community has faced off with the multinational firms running the estates over layoffs due to mechanization, as well as alleged sexual abuse violations against female workers.

Two people close to the latest discussions told Semafor Africa that the Kipsigis Community Clans Organization — an umbrella group of elders, clans and cooperative societies claiming to represent over 340,000 members — had earlier sealed a partnership with London-based management consultancy firm 101 Partners with whom they formed a consortium and sought financing for the bid.

Members of the consortium claim their bid was not considered despite their willingness to match the highest offer, and that the community was not adequately consulted on the sale.

Lipton, Browns, and CVC did not respond to emails and phone calls from Semafor Africa.

“The people drinking Lipton tea should know that they are drinking blood tea,” Nicholas Kirui, a member of Kericho’s tea mechanization task force and former CEO of the Kenya Tea Growers Association, told Semafor Africa. “The land was forcefully taken from the Kipsigis people without compensation.”

A one-time superstar agri-data startup shuts down

Gro Intelligence, a startup founded in Nairobi that provides artificial intelligence-powered insights on climate risk and food production, is shutting down after failing to secure financing to continue operations.

The startup’s closure, reported by AgFunderNews last week, comes after turbulent months during which its founder and chief executive Sara Menker was removed from her position. The first of multiple rounds of layoffs began in January as Gro struggled to pay staff. Menker, an Ethiopia-born former Morgan Stanley commodities trader, was replaced by the board in February and the startup raised $10 million in March, according to the Wall Street Journal.

The shutdown ends a 10-year run, during which Gro raised over $125 million. Its most recent major funding event was an $85 million round co-led by Intel Capital, the investment arm of the American semiconductor chipmaker, in 2021.

At the time, Menker said the company saw “tremendous need” for the “market knowledge” its platform generated, fueling plans to invest in improved machine-learning capabilities and expand aggressively. In addition to its Nairobi base, Gro had a second head office in New York and an office in Singapore.

African startup closures in the past year have included logistics startup Sendy in Kenya, WhereIsMyTransport in South Africa, and 54Gene in Nigeria.

South Africa on a knife edge as ANC discusses coalition options

Leaders of South Africa’s ruling party are locked in intense talks over who to partner with in a coalition government after losing the parliamentary majority it held for 30 years.

Several senior figures in the African National Congress told Semafor Africa the talks had no obvious, easy solutions following a poor performance in last week’s general election. The party won 40% of the vote, well short of the 50% required to govern alone. That gives it 159 seats in parliament out of a total of 400.

The ANC’s National Working Committee — which oversees the party’s day-to-day operations — held a meeting on Monday as one of the first steps of reviewing the party’s electoral performance and charting a way to a coalition government, according to one of the people close to the talks.

Options included forming a government with the main opposition Democratic Alliance, which is widely seen as market-friendly, or working with populist political parties like the Economic Freedom Fighters and uMkhonto weSizwe, both of which are ANC offshoots.

President Cyril Ramaphosa’s future as head of state is a key part of the conversations because MK said his removal would be a condition of it joining the ANC in a coalition.

The 14-day window to elect the next South African president started on Monday, after the Independent Electoral Commission officially declared the election results on Sunday evening.

— Sam Mkokeli in Johannesburg

Nigeria strikes as inflation bites

Nigerians endured nearly two days of total power outage and disruption to airport operations before government workers called off a strike on Tuesday afternoon. They were demanding improved pay amidst a cost of living crisis.

The strike was led by the Nigeria Labour Congress — the largest union of government workers — with the support of sector-specific unions, including those representing electricity workers, nurses, and university lecturers.

The labor unions want a new monthly minimum wage of 494,000 naira ($330) — a 16-fold increase on the current base salary. Last week the unions rejected the government’s offer of 60,000 naira ($40). Negotiators for President Bola Tinubu’s administration late on Monday told union representatives the government was prepared to increase its offer, after which the unions met to consider the government’s commitment and suspended their strike for a week.

Tinubu’s first year as Nigeria’s president has seen inflation soar to a three-decade high of over 33%, driven in part by his removal of a subsidy on fuel. Food and fuel prices have doubled since April 2023, according to the country’s statistics agency, leading to loud discontent. The government said it will continue negotiations for a wage review, but a $330 minimum will “cripple the Nigerian economy by leading to massive job losses in the private sector,” the information minister said.

— Alexander Onukwue in Lagos

Deals

🇿🇦 South African television company MultiChoice recommended that its shareholders accept a $2.9 billion buyout offer from Canal+, the French broadcaster whose parent Vivendi already owns 45.2% of MultiChoice.

🇲🇼 Arise IIP, a Dubai developer, inaugurated a $300 million industrial park construction project in Malawi’s capital, Lilongwe, in partnership with the African Export-Import bank.

🇳🇬 West Power and Gas, a Nigerian electricity assets investor, is exploring a sale of its stake in Lagos-based Eko Electricity Distribution Co. for $350 million.

🇬🇭 Kenyan private equity firm Adenia Partners sold its stake in Ghanaian chemicals maker Cresta Paints to Uhuru Investment Partners for an undisclosed sum.

Geopolitics

🇹🇿 🇪🇹 🇰🇷 Tanzania and Ethiopia said they had signed agreements with South Korea for development financing in return for access to minerals and export market. Tanzania is set to receive $2.5 billion over the next five years, while Ethiopia signed a $1 billion financing deal over four years.

🇮🇳 🇰🇪 India’s state-owned Export-Import Bank of India opened a representative office in Kenya, and announced a $250 million increase in a credit facility to Kenyan traders. The office will serve Kenya and 10 other countries including Ethiopia, Eritrea, and DR Congo.

Governance

🇰🇪 Kenya’s flower farmers have warned that new inspection regulations by the European Union on all cut roses entering its market could dampen international demand and lead to job losses.

🇷🇼 Rwanda is set to develop a digital currency over the next two years to expand financial inclusion and streamline its financial system, National Bank of Rwanda officials said.

International Finance

🇲🇿 Mozambique’s expected $60 million from the International Monetary Fund might be delayed if the government does not commit to contain wage bill spending in 2024 to the budget law, the IMF said in a letter seen by Bloomberg.

Football fans across Africa will miss out on watching their national teams play at home in the upcoming round of FIFA World Cup qualifiers because nearly half of participating countries lack approved stadiums. This follows a move by the Confederation of African Football to bar sites which fail to meet its standards from hosting international matches. Countries forced to play in neutral venues include Kenya, one of the host countries of the 2027 Africa Cup of Nations (AFCON), Benin, Namibia, Congo, and Madagascar. Morocco has seized the opportunity to build stronger ties with African countries by offering its facilities for use by their teams, with several matches to be played in the North African nation. The push to improve sports facilities in Africa has seen countries turn to China in recent years, with the East Asian nation involved in the construction of stadiums used for past AFCON editions, including Cote d’Ivoire in 2024, Gabon in 2017, and Equatorial Guinea in 2015. It is currently leading the development of a new stadium in Kenya for AFCON 2027 and the renovation of existing facilities.

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