Pulse #6 - Rwanda pursues nuclear; Netflix, Facebook & Whatsapp invest as Kenya counters with digital tax and returns to the AfCFTA table
The Data Room
Having already experienced a 10% decline in FDI in 2019, Africa is expected to see FDI decline by a further 25-40% in 2020, due to the COVID-19 pandemic and lower oil prices. However, state-backed partnerships and regional integration could mitigate effects.
(N5,000) is earned in COVID ‘hazard pay’ per month by doctors in Nigeria
is Kenya’s proposed tax on digital companies such as Google and Netflix
On The Continent This Week
Essential infrastructure, personal living-space & utilities
RnB singer Akon has made progress in his ambitions to build Akon City - a 2000 hectare futuristic-cryptocurrency themed city in Senegal (dubbed a “real-life Wakanda”). The awarded US based consulting and engineering firm, KE International, has reportedly secured $4bn of the estimated $6bn needed for the construction. Having secured a partnership with Senegal's state tourism agency and with plans to run entirely on renewable energy, this may provide a case study for an African ecotourism industry.
Kenya is finalising plans to impose a 1.5% tax on digital companies in Kenya (such as Google and Netflix), in a decision that could serve to make homegrown platforms more competitive. However this is likely to receive opposition from the US, based on the trade war that was sparked by France’s digital tax, and India’s digital tax resulting in caps to Indian foreign workers.
Scaleable energy access
Rwanda has ratified a deal with Russia, for the construction of the Centre of Nuclear Science and Technology. With South Africa shelving nuclear plans based on affordability, electricity generated from solar and wind being cheaper than that from nuclear, and lessons learnt from the Fukushima nuclear disaster in Japan, nuclear may not make sense for Africa as an energy solution. Perhaps the main motivation is the potential benefit to skills development and other industries including agriculture via food preservation and health via radiotherapy.
Proportional representation in politics, business and community leadership
This week, Vera Songwe from the UN reported that Africa loses $79 billion of potential revenue every year because of youth unemployment. With Africa’s youth facing 2 times the unemployment rate than adults, COVID-related unemployment is likely to be disproportionately affecting the young. Results of an 8 year program involving 70,000 youths provides lessons for addressing youth unemployment - by combining business and vocational training with mentoring and a unique ‘personal effectiveness’ module, the program enabled participants to create their own economic opportunities, increase income and generate jobs for others.
Kenya has delayed talks on a trade deal with the US until AfCFTA comes into force. Kenya’s Kenyatta and US's Trump previously agreed in February to start formal talks on a bilateral trade pact, in an effort to offset concerns about China’s expanding investment into Africa. With the US-China trade war deepening, Kenya’s decision highlights the opportunity for a coordinated Africa to strengthen its position and seize opportunities in negotiations with the superpowers.
Effective internal and regional security, and foreign policy
South Sudan's president, Salva Kiir's, and his deputy Riek Machar, have reached a deal on the selection of governors for the country's 10 states. Gaining independence from Sudan in 2011, South Sudan slid into civil war in 2013, as supporters of Kiir and Machar clashed. Having now overcome what was considered as the biggest threat to peace, this deal is anticipated to assure a continued peaceful transition of the world’s youngest nation.
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