Movemeback Pulse

Who were the winners of Africa’s venture capital market in 2020? Amidst a global pandemic, Africa remained the fastest growing venture capital (VC) market in 2020, with a 44% increase in equity rounds, despite a 29% decline in total funding. Whilst Fintech remained the top winner with 25% of funding, Enterprise, Agritech, Logistics & Mobility, and Healthtech also performed well. But further data disaggregation reveals a concentration of funding in a few countries. Fintech investment was largely concentrated in Nigeria (38%), Egypt (28%) and Ghana (13%). About 79% of Agritech went to Kenya alone, whilst nearly half of Enterprise funding went to South Africa. Egypt monopolised funding in Logistics & Mobility, and Edtech with half of the investment in these categories going to the land of pharaohs.

EU seeks to directly impact African security. In changing its peace and security financing to Africa, the EU is empowering Brussels to bypass the African Union (AU) and directly pay for national and sub-regional military initiatives. For 16 years, the EU has channelled this sort of financing, about €2.9bn (about $3.5bn) between 2004 and 2019, through the African Peace Facility (APF) jointly run with the AU. The new strategy also empowers Brussels to finance lethal equipment for African armies. This will equally enable the EU to finance security initiatives of member states and increase support for multi-state military plans. The change follows concerns about Addis Ababa’s use of EU money for peacekeeping. Brussels nonetheless needs to conduct thorough risk assessment before financing military training and equipment for African armies and avoid equipping fragile states. Such a move also raises concerns about neo-colonialism. 

Baseline healthcare & disease protection

Oxford/AstraZeneca vaccine stumbles against South African Covid-19 variant: What next? Oxford/AstraZeneca’s Covid-19 vaccine will no longer be used by eSwatini (Swaziland), while South Africa has halted its rollout. The decision by the Southern African countries came after a trial showed the vaccine gave minimal protection against mild-to-moderate Covid-19 caused by the more contagious South African variant - also found in Botswana, Ghana, Kenya, Comoros, Zambia and 24 non-African nations. Countries hit hard by the variant are now confused by conflicting advice from WHO and CDC. While CDC advises significantly affected countries to seek alternatives, WHO tells nations to use the vaccine, arguing “it may not be able to stop some cases, particularly mild cases, but it is able to stop severe cases.” Although only South Africa and eSwatini have made the difficult decision, other countries will have to do so soon, particularly as 500mn of the 670mn doses African nations have ordered through the AU are from Oxford/AstraZeneca. 

Access to financial services and products

Why is Nigeria turning away from cryptos? As Tesla invests $1.5bn in bitcoin, Nigeria’s Central Bank (CBN) is banning transactions in crypto currencies and freezing all associated accounts. The CBN blames cryptos for facilitating illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion. Commentators, however, say the central bank of Africa’s largest economy could be banning cryptos because organisers of #EndSARS accepted Bitcoins for funding the protests after the government allegedly blocked local payment platforms for collecting donations. Nigeria is the World’s second largest Bitcoin market after the US, and has traded 60,215 bitcoins, valued at more than $566mn in the last five years. Amidst existing forex shortages and restrictions, this crypto crackdown is likely to further harm revenues of businesses that also use digital currencies for imports. 

Proportional representation in politics, business and community leadership

Can the appointment of ex-rebels to new Sudan cabinet bring lasting stability? To build political consensus and achieve sustained stability, Sudan's Prime Minister Abdalla Hamdok has appointed seven ex-rebel chiefs as new ministers, including veteran guerrilla leader and economist Gibril Ibrahim, who played a major role in the Darfur conflict. The new, expanded cabinet results from a 2020 peace deal signed with some rebel groups; it aimed at ending conflicts, awarding rebel groups posts in transitional institutions, and resetting the clock on a 39-month transition to elections. The cabinet is, however, gender imbalanced, and whilst it reflects political and regional diversity, it could result in difficulties in reaching consensus and building a shared vision for governance. Conflict has plagued Sudan for decades - killing over 1.7mn people and displacing more than 2mn. 

Intra-continental connectivity, collaboration & trade

Jumpstarting African economies: $500bn is the magic number. Africa needs at least $500bn to push the wheels of economic recovery after the devastating impact of Covid-19, finance ministers have told the IMF. In a virtual meeting recently convened by UNECA and IMF, a group of finance ministers asked the lender to alleviate Africa’s debt burden and provide much-needed liquidity through special drawing rights, concessional financing, prolonged suspension of debt servicing, and better access to financial markets. UN estimates that African economies could contract by up to 7.8%, coupled with 5% public revenue losses and a 17% fall in merchandise exports through the period of Covid-19. Although debt relief and debt reduction could partially aid economic recovery, Africa ought to emphasise reforms to increase revenues, improve expenditure and manage debt to attract more private investments. Sub-Saharan Africa’s debt is at least $583bn as of 2018.

Home-grown digital infrastructure & platforms

African electronic music finds home on Apple Music. Lovers of Africa’s rapidly growing homegrown electronic dance music can now access the work of top artists in one place, after Apple Music launched a new platform curating playlists of its sub-genres ranging from the funky techno-inspired Gqom, to the house music variant Kwaito. Named Isgubhu, the Zulu word for “beat,” the platform debuted with the ‘Isgubhu Voices’ playlist, curated by South African DJ and producer Black Coffee. The launch of Isgubhu is part of Apple Music’s strategy to expand in the African music streaming market. Isgubhu is now available in 37 African countries. But the move raises concerns about the growing influence of foreign players over what, when, where, how and by whom crucial aspects of African culture are produced, distributed and consumed.

High value skills development and talent repatriation

Making Africa safe online. The internet is fraught with various forms of cybercrime - phishing, identity theft, hacking, spreading hate and inciting violence, distributing child pornography, and grooming among others. The rapid adoption of online culture, especially during the regime of Covid lockdowns, have created new avenues for cybercriminals to exploit internet users. To protect those most vulnerable to cybercrime across Africa, Google is teaming up with 26 non-profits and social enterprises in Kenya, Nigeria and South Africa to combat online vulnerabilities, disinformation and extremism aimed at children, the youth, families, schools and small and medium-sized businesses. Under the arrangement, Google will award $100,000 to each organisation. While this is a reasonable step in the right direction, more investment is needed to reach all 525mn users of the internet in sub-Saharan Africa.

Exporting culture & identity

Could Africa’s top music awards be cancelled this year? MTV Base, the 24-hour music channel, is postponing the 2021 MTV Africa Music Awards (MAMAs) - the Continent’s most prestigious awards for the music industry. The awards were scheduled for February 20 in Kampala, Uganda. While the announcement by MTV didn’t clarify to what date and why the awards were postponed, local analysts attribute it to the political fallout from the just-concluded Ugandan presidential elections that have been marred by violence, alleged human rights abuses and internet outages. Sustained online campaigns had called for the awards show to be cancelled, citing the post-election confinement of presidential candidate Bobi Wine, also a musician. With the MAMAs being aired annually to a global audience, Uganda’s internet “issues” are now causing global repercussions for Africa’s music industry. MTV’s decision shows how such acts of political expediency can negatively impact Africa’s image and leisure industry, one of the top forex earners.

End-to-end value chain capture

Why African countries want national carriers despite losses. Burundi’s national carrier is set for another take off decades after emergency landing, while Air Namibia has landed into obscurity due to unprofitability. Such is the paradox of Africa’s aviation industry. Still, Zambia, Ghana, and Uganda are among other countries in various stages of reviving their defunct national airlines that collapsed decades back. So could national pride and a desire to show a level of development be the reason behind (re)starting national carriers, despite the Continent’s aviation industry making a net loss of $800m in 2017? If well managed, a national carrier can actually boost tourism and economic growth, and turn in a decent profit - as has Ethiopian airlines, Africa’s largest carrier. The air industry in Ethiopia supports 1.1mn jobs and accounts for 5.7% of the country’s GDP.

Essential infrastructure, personal living-space & utilities 

A surprise in Africa: Air pollution falls as economies rise. Rapid economic growth is often associated with increased air pollution; but a new study shows that one of Africa’s fastest growing regions is bucking this trend by becoming less polluted. Levels of dangerous nitrogen oxides - by-products of combustion - in the northern part of sub-Saharan Africa were found to have declined sharply as wealth and population in the area increased. Researchers attribute this rare occurrence to the fact that an increase in pollution from industry and transportation in the area studied (from Senegal and Ivory Coast in the west to South Sudan, Uganda and Kenya in the east) was offset by a decline in the number of fires set by farmers. Bush burning is the cheapest and most efficient method African farmers use to clear land for farming. But these findings shouldn’t make authorities complacent, especially as pollution through industrial activity is likely to rise to meet the consumption demands of Africa’s growing population, expected to hit 2.2bn in 2050. 

Scaleable energy access

Renewables surge causing environmental and rights decline. As your mobile phone and laptop power on, a cobalt mining community is slowly powering off in Africa. Crucial to the shift from fossil fuels to renewables is the intensified use of rechargeable batteries to power electric vehicles and electronic devices. Ironically, this shift carries its own risks of additional environmental harm and abuse of human rights in Africa and the rest of the global south, according to a new study. The rechargeable lithium-ion batteries contain minerals such as lithium, cobalt and nickel. Poorly regulated industry practices mean that the adverse effect of the battery boom such as ecosystem destruction and human rights abuses are felt by communities in mineral-rich areas like the cobalt-mining region of the DRC, which produces over 60% of the world’s cobalt. More than 60 international organisations want businesses and governments to tackle product design, operation and waste management, accountability for clean-up and remediation in the battery supply chain.

The day Nelson Mandela walked out of prison