Pulse #27 - A Global Race: Bezos backs African fintech, Russia's new naval base, Huawei increases its coverage, whilst Britain spends on archaeology
The Data Room
Africa is making progress towards universal energy access - with 54% of the population having access to electricity in 2019 vs. 42% in 2015. However due to population growth, unless trends change, Africa will be home to 90% of the world’s people living without electricity by 2030, continuing to impact quality of life, business growth, and sustainable development. In a recent survey, 41% of firms said electricity was a major constraint to their operations - the highest of any region in the world. On average, African enterprises lose 25 days of economic activity per year due to issues with electricity access.
Numbers in the Spotlight
($30mn) has been raised by African cross-border peer to peer payments startup, Chipper Cash, including backing by Jeff Bezos
($4mn) will be spent on the most extensive archaeological dig to uncover the Kingdom of Benin, with the help of the British Museum
(3.4mn) in remote communities are expected to benefit from increased mobile communication coverage, via Huawei’s Rural Telephony Project, in partnership with the Ghanaian Government
of Africa’s population had access to electricity in 2019
of Covid-19 deaths in Africa are linked to diabetes
is the approximate cost of fully charging Nigeria’s first 100% electric car - the "Hyundai-Kona"
Proportional representation in politics, business and community leadership
Clashes with the police have left at least 37 people dead in Uganda, after protests erupted following the arrest of presidential hopeful, Bobi Wine. The 38-year-old music star was detained on Wednesday before a rally, accused of violating electoral guidelines restricting rallies to 200 people to curb Covid-19. Wine, Uganda’s self-declared “Ghetto President”, has used his music for "edutainment" (entertainment that educates) - speaking to mostly young people against corruption and injustice at the hands of Uganda’s leaders. As Wine continues to campaign to unseat President Yoweri Museveni - who is seeking a 6th term in office to add to his already 34 years - his arrest has increased global coverage of yet another movement by Africa’s youth against an incumbent system.
Effective internal and regional security, and foreign policy
Russia plans to build a naval base on Sudan’s Red Sea coast, with space for 300 personnel and up to four warships, including nuclear-powered vessels. Moscow is a major arms supplier to Sudan, Egypt, Algeria and Angola, has strong defence ties with the Central African Republic, and has invested in mining, oil and nickel mines across the Continent. The deal will stand for 25 years, and give Russia the right to transport “weapons, ammunition and equipment” via Sudan’s ports and airports. This marks a continuation of Moscow building stronger ties with Africa in an effort to renew its global geopolitical clout. It may be a blow to the USA, who just last month removed Sudan from their list of state sponsors of terror (at a cost of $335mn to Sudan).
Access to financial services and products
African fintech startup, Chipper Cash, has raised $30mn in a Series B funding round that includes Amazon CEO Jeff Bezos’s personal VC fund. Founded in 2018, Chipper Cash offers mobile-based, no fee, peer-to-peer payment services in Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya, and processed over $100mn in payments (as of June 2020) from 3mn users. With 66% of SSA’s population still unbanked, fintech is Africa’s highest-funded sector, attracting over 50% of startup funding in 2019. Africa's already booming crypto-currency trading (popular as a workaround to weak local currencies and complex money movement rules) may see further gains, as Chipper Cash aims to expand into crypto-currency trading options.
Baseline healthcare & disease protection
The World Health Organisation has found that nearly 1 in 5 Covid-19 deaths in Africa are linked to diabetes. Africa has experienced a 6-fold increase in diabetes cases, from 4mn in 1980 to 25mn in 2014, with around 60% of people living with diabetes undiagnosed. With changes in diet and an increased sedentary lifestyle causing an increase in diabetes risk factors such as obesity (which is now as high as 27% in Seychelles), diabetes is a ticking time bomb in Africa. Cases are expected to increase to 45mn by 2045 in SSA at an annual cost of $17.4bn (up from $9.5bn in 2019). A coordinated multi-sectoral approach is needed, including increasing access to basic diagnosis and monitoring equipment, and lifestyle habits education.
Home-grown digital infrastructure & platforms
Safeboda, the Ugandan-founded bike-hailing startup, will halt operating in Kenya, citing a fall in boda transportation due to Covid-19. Safeboda launched in Kenya in 2018, onboarding over 4,000 bodas and completing millions of rides. It expanded into Nigeria in March 2020. With 1.4mn riders completing 22mn rides a day (15 per bike), boda bodas play a crucial role in Kenya’s economy. Thus, speculation is rife that driver inconsistencies caused Safeboda’s downturn before the Covid-related fall in demand began, as high discounts via the app apparently led to drivers refusing to take rides. With ride-hailing giant Uber, never making a profit since it began operations 12 years ago (despite a $90bn valuation), Safeboda’s Kenya exit also calls into question whether local players have large enough pockets to weather any fluctuation in revenue, and compete with their foreign owned rivals.
High value skills development and talent repatriation
2,500 Micro Small Medium Enterprises (MSMEs) in Rwanda will receive free business skills training to aid in their post Covid-19 bounce-back, via a program organised by the Rwanda Development Board and African Management Institute. MSMEs are crucial to growth in Africa, accounting for over 90% of businesses and over 80% of employment; however the SME sector experiences an annual financing gap of over $136bn (prior to Covid). With Africa’s population expected to double in 25 years, MSME survival and growth has global implications, as they contribute to establishing a new middle class, and fuelling global economic growth via demand for goods and services.