Movemeback Pulse

Actionable African insight delivered to you on pulse

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.
Numbers in the Spotlight
($79 bn) is lost in Africa every year due to youth unemployment

($6bn) is the cost of Akon City - the Senegal’s “real life Wakanda”

($543 mn) fintech revenue is estimated for Nigeria in 2022 

287,385 cases
of COVID-19 confirmed in Africa (as of last week) 

Netflix subscribers in Nigeria

(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. 

Baseline healthcare & disease protection

Nigerian doctors went on “indefinite” strike over lack of ‘hazard’ pay and inadequate PPE provision, very quickly followed by Zimbabwean healthcare workers amid 50% salaries cuts. Nigeria’s monthly hazard pay of N5,000 ($12.95) pales in comparison to Ghana, which granted frontline health workers an additional 50% on basic pay from March. Having already cut healthcare spending by 40% this year, the Nigerian government must step in to prevent escalation.

High value skills development and talent repatriation

Facebook has launched ‘My Digital World’ - a program to equip the youth, teachers, parents and guardians across SSA with skills needed to navigate the digital world. However, with 89% of students lacking access to household computers and 82% lacking internet access, this raises questions of how digital literacy and skills necessary for the future can reach the poorest, particularly at a time when schools across Africa (and the world) remain closed.

Access to financial services and products

WhatsApp has launched its digital payment service in Brazil, in an effort to capitalise on emerging market popularity of WhatsApp. An attempted launch in Nigeria is widely anticipated - particularly in light of new research forecasting Nigeria’s 2022 fintech revenue at $543mn. We expect concerns to mount over whether Facebook should be granted a license to operate, the loss of government revenue, and the pursuant disruption to fintech players, should WhatsApp Pay enter Nigeria.

Home-grown digital infrastructure & platforms

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.

Exporting culture & identity

Netflix has inked a multi-title deal with Nigerian producer Mo Abudu, which will include a film adaptation of plays by Wole Soyinka and Lola Shoneyin. With only 50,000 Netflix subscribers in Nigeria, Netflix has been vocal about its interest in bringing African stories and original content to a global audience via ‘African Originals’. However, with Netflx’s prowess in legal and business matters, questions are being raised about whether Nigeria’s dated copyright laws are sufficient to protect its creative interests.

End-to-end value chain capture

As Kenya’s President plans to boost manufacturing in the country, attention has been drawn to its apparel industry - where Kenya already captures over a third of SSA’s exports to the US. Kenya will waive taxes on inputs used to manufacture baby diapers, textile and apparel, whilst the textiles industry has pushed for an extension in the ban on the importation of second-hand clothes. At the regional level, East African Community finance ministers have agreed on measures to enhance manufacturing competitiveness, including maintaining a 35% import duty rate, and maintaining an additional 25% duty on leather and footwear imports.

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.

Intra-continental connectivity, collaboration & trade

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

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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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