Africa

🇨🇫 Hundreds of Wagner fighters have arrived in the Central African Republic to secure the country’s July 30 referendum for constitutional change, the Russian Officers’ Union for International Security (OUIS) company said. The deployment comes barely two weeks after hundreds of men from the private army reportedly left the mineral-rich nation after refusing to sign contracts with Russia’s defense ministry following a mutiny against the Russian government. OUIS described the deployment to CAR as a “planned rotation.”

🌍 Egyptian President Abdel Fattah al-Sisi and Ethiopian Prime Minister Abiy Ahmed agreed to speed up negotiations to end the stalemate over the $4.2-billion Grand Ethiopian Renaissance Dam. They agreed to expedite negotiations to finalize the agreement within four months between Egypt, Ethiopia, and Sudan on the filling of the dam and its operation, Egypt’s presidency said in a statement on Thursday. Egypt has long viewed the dam as an existential threat, because it relies on the Nile for 97% of its water needs.

🇹🇿 A campus of the Indian Institute of Technology (IIT) Madras in Zanzibar, Tanzania, will admit its inaugural class in October. It marks IIT’s first campus outside of India and will be the second opening this year of a major Indian institution’s Africa site after the National Forensic Science University’s Uganda campus in April. About 25,000 African students study in India and the location of an IIT campus in Zanzibar involved both governments, culminating in an agreement signed this month. Classes will begin at a temporary site with 50 undergraduate and 20 masters students enrolling in data science and artificial intelligence degrees.

🇰🇪 Kenyan opposition leader Raila Odinga has called for three days of demonstrations to be held this week in protest at tax hikes, starting on Wednesday. Previous protests have led to violent clashes with the police. More than 300 people were arrested following violent demonstrations in major cities last week, leaving several people dead. The demonstrations come amid criticism of President William Ruto over the rising cost of living which activists say will be made worse by the tax hikes he signed into law last month. Ruto said on Friday that the planned protests would not be allowed to go ahead.

The rate at which Zambia’s economy is expected to grow in 2023, according to budget projections by its finance ministry. The pace is down from 4.7% last year due to a slowdown in its mining and energy sectors. After a long delay, Zambia has reached a debt restructuring pact with the IMF which is expected to reduce its debt load by $7.65 billion by 2026. The budget plan projects economic growth in Zambia to recover to 4.8% in 2024, 4.3% in 2025 and 5% in 2026.

Q&A: Why it’s time to bet on South Africa and Nigeria

Sim Tshabalala has been sole group CEO of Johannesburg-based Standard Bank, Africa’s largest bank by assets, since September 2017. The 161-year old bank spent most of the last two decades consolidating and selling off ventures outside Africa other than major centers including London, Dubai, and New York.

What sub-region are you most hopeful for right now?

We think that the East African bloc is the fastest growing. The main reason for that logic is the world is obviously going to slow down as a consequence of increasing interest rates in response to inflation. We think global growth will slow down. However, in East Africa they are oil importers, so they’re going to do reasonably well as oil prices come down.

The really interesting thing about East Africa is that they’re becoming more and more integrated. They’re reducing the tariff barriers and lowering non-trade barriers. It’s getting easier to move people, goods, and ideas around the region.

How do you think about the continent’s largest economy, Nigeria?

Nigeria is always exciting, but it’s particularly exciting now because orthodox policies are being implemented. But if you just take a view of what’s happening, the policy formulation from a financial management perspective is now much more apt. So that will be good for the economy.

How do forex controls in some countries affect your pan-African operations?

The availability of foreign exchange policies that central banks and governments use to manage foreign exchange is of concern because it affects investment. You make an investment but are you going to get dividends, are you ever going to be able to get your capital out?

As I’ve said, unorthodox policy results in orthodox outcomes. That’s why you have a devaluation in Nigeria. It was always going to happen and the same applies to other countries [who prop up their currencies]. The structural reforms you’ve seen in Nigeria are painful, and I think one has to have empathy and respect for people’s dignity, but they’re the right thing to do for that economy.

What are market watchers missing about your home market, South Africa?

If the electricity situation is resolved and the logistics situation resolved you could add two to three percentage points to the country’s GDP growth, based on our model.

In the next short period South Africa will in all likelihood be free of loadshedding as a consequence of more distributed power generation by municipalities, retailers, and mining companies. The IPPs [independent power producers] didn’t just happen by accident and they’re starting to come on stream. We funded a good portion of the megawatts that are under construction, so we can see when they come on stream. Our belief is that there’s now sufficient policy implementation to suggest that loadshedding will soon end.

What’s your predicted timeline?

I would say things will start to improve from August in terms of the reduction in the levels of loadshedding. I think it will take a year to 18 months to completely get rid of it and generate sufficient megawatts as those IPP projects come on stream.

So you’re optimistic about South Africa?

I’m unequivocally optimistic. The data in my view supports optimism for South Africa.

More than 750 million Africans, or nearly 60% of the continent’s population, live in countries that spend more on debt interest payments than on critical sectors including education, health, and investment. A United Nations report released this month noted that between 2019 and 2021, 25 African countries spent more on interest payments than on health. The UN’s A World of Debt report showed that while interest payments in developing countries have risen on average by 64%, African countries have seen their payments increase by 132%. Africa’s public debt hit $1.8 trillion in 2022 — but the size of the debt is not as much an issue as the rate at which it has risen. African debt has rocketed by 183% since 2010, which is around four times the growth of the continent’s total GDP in dollar terms.

→ What happened? Nigeria’s suspended central bank governor Godwin Emefiele has been charged with illegally possessing a firearm and live ammunition. They were found at his Lagos residence, according to Nigerian media house Channels and Bloomberg which both cite court documents filed by the country’s State Security Service (SSS).

Emefiele has been held since June 10 — the day after he was suspended from his post by President Bola Tinubu. The alleged firearms offenses were not listed in previous court filings. The SSS had said it was investigating Emefiele over suspicions of misappropriation of public lending programs, money laundering, and terrorism financing.

→ Why does this matter? Emefiele ran monetary policy in Africa’s biggest economy for nearly a decade by maintaining capital controls that were loved by Tinubu’s predecessor and loathed by investors. Tinubu has said Emefiele presided over a “rotten” system that enriched a few people while impoverishing most Nigerians.

→ And? The manner in which Emefiele was removed and the type of charges he now faces sends a strong message about the president’s determination to quickly move forward with his reform agenda. But political opponents have argued the president didn’t have the legal power to sack the head of the central bank. Yesterday civil society activists called on Tinubu not to wage “brutal actions against suspected political enemies.”

→ What’s next? Emfiele’s legal team is seeking bail. If found guilty, the charges carry a maximum prison sentence of five years.

— Alexis

Ghana is on course to tap into the multibillion-dollar global cannabis industry after its parliament approved a law enabling licenses to cultivate cannabis for industrial and medical purposes. The move opens up opportunities for the cultivation of cannabis for fiber, seed or medical use in the West African country. Once enacted, companies will be able to grow cannabis with no more than 0.3% tetrahydrocannabinol on a dry-weight basis. Ghana joins the list of countries where the production of cannabis is legal, including Uruguay, Canada, and Thailand.

• A sudden shakeup in Ron DeSantis’ campaign staff and media strategy after a slow start for the U.S. presidential hopeful could portend bigger changes to come.
• Elon Musk sought to recruit top talent to his new AI company with equity in the venture he claimed was already worth tens of billions of dollars.
• Twitter automatically responds to press inquiries with a poop emoji. But there is a person trying to clean up behind that emoji, working to defend CEO Linda Yaccarino’s image.

If you’re enjoying the Semafor Africa newsletter and finding it useful, please share with your family, friends, Zanzibar tech students, and Ghanaian cannabis growers. 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, Marché Arends, Alexander Onukwue, and Muchira Gachenge