African countries begin vaccine drive in earnest
March was a key milestone for global vaccination efforts and Africa was no exception. To date over 28 African countries have initiated vaccine rollouts in some form. Coverage remains uneven with states resorting to a mixed approach in securing sufficient supplies. The primary source is the Covax facility, an initiative spearheaded by developing nations for equitable access, and is supported by the Covid -19 African Vaccine Acquisition task team and bilateral agreements between African governments, corporations, and foreign donors. The most widespread vaccine variant currently in use has proven to be the Oxford/AstraZeneca AZD1222, which has been supplied to no less than 17 African states. Next is China’s Sinopharm vaccine which has been distributed in eight countries, with other variants produced by Moderna, Johnson & Johnson and Pfizer also being evident but more sporadically. Progress on actual vaccinations vary greatly throughout the continent, with Morocco having already inoculated 6.6 million whilst other countries like Egypt have only reached a few thousand.
Sources: World Health Organisation, Our World In Data; 2021
Fintech firm Flutterwave heading for the big leagues amid
Paypal partnership and possible US listing
African fintech firm Flutterwave has made considerable strides this month with a sizable cash injection and a new partnership with e-commerce giant PayPal. This has led to the company’s executives mulling over a potential US listing. Flutterwave received a further US$170 million in funding to expand its customer base, pushing its market capitalisation past US$1 billion. The company has also signed an agreement with PayPal which will enable the customers of the US giant to purchase from African-based vendors signed up to the African payment provider’s service. Flutterwave was founded by San Francisco based Nigerian expats in 2016 and has since grown into a reliable partner for multinationals seeking to expand their payment offerings to new markets.
Thoughts turn to succession as Tanzanian president
Following a protracted period of ill-health, Tanzanian president John Magafuli has passed away. International observers have called for calm and a smooth transition of power as former Vice president Samia Suluhu Hassan is sworn in as the country’s first female leader. Hassan faces a difficult battle ahead of her in deciding on an interim governance strategy in a country which has become increasingly synonymous with authoritarian and economically interventionist policies under Magufuli. Though popular for his stance against corruption, Magafuli’s regime marginalised opposition factions and parties, silenced journalists, and critics, and played an active role in hampering the country’s economy by handing out strategic contracts to political allies. Magafuli was best known as the continent’s foremost coronavirus sceptic, which served to hamper healthcare efforts in the country.
Rwandan President Paul Kagame shakes hands with John Magufuli at the latter’s inauguration ceremony in 2015. The Tanzanian “Bulldozer” would go on to earn the reputation as being both a decisive and a dictatorial leader.
African Oil and Gas in upswing as operations
and investment flow restart
The prolonged down period that started in 2020 led foreign investors to withdraw or delay final investment decisions on oil and gas projects. However, a number of developments in March point to a gradual return to activity. The Nigerian government announced that it would be spending US$1.5 billion on the rehabilitation of the Port Harcourt refinery, while also signing 5 MOU’s with Morocco to collaborate on initiatives in the hydrocarbon, agriculture, and chemicals sectors. Looking east, though the construction of the new US$3.5 billion East African Oil Pipeline is set to commence, over 260 civil society groups worldwide have petitioned against the project, leading France’s Total and South Africa’s Standard Bank to the discussion table in easing local and international concerns. Further south in Mozambique, global logistics company Grindrod noted in March that it hopes to soon complete construction of a key logistics hub in serving the needs of planned oil and gas facilities in the region.
East African geothermal industry sees new entrant in
Djibouti state company
The world’s most dynamic geothermal market will soon witness the entry of a new player. The government of Djibouti announced in March the establishment of its own national geothermal energy engineering company, the Red Sea Drilling Company. The state-owned entity will not work to exploit the country’s own geothermal power reserves initially but will rather seek to cultivate the training of local technicians and engineers. According to spokespeople the company will work to first develop its skills in water drilling before moving on to large-scale geothermal projects. The government hopes for the company to eventually become a regional player involved in drilling operations in Kenya, Ethiopia and even Somalia. The east African region’s unique geological makeup places it as a world leader in the global renewables industry, with the potential to meet the energy needs of countries in the region, aspiring to increase the installed capacity of geothermal energy to over 2,500MW by 2030.
Emergency power contracts and grid expansion plans sees South African power sector introduce new suppliers
The so-called Risk Mitigation Independent Power Producer Procurement Plan closed in late December last year and attracted a total of 20 bid responses, eight of which were selected for a final generation total of 5,117MW to be introduced into the grid by August 2022. One successful bidder was Turkish company “Karpowership” which will supply South Africa with three floating facilities for adding emergency power into the grid. Other bids included more sustainable long-term projects such as the innovative Oya Energy Hybrid facility at Matjiesfontein. This one-of-a kind setup combines wind, solar and battery storage, and will produce 128MW of power, falling into one of three “renewables development zones” earmarked by the government toward reducing the country’s dependence on coal power. According to research the country is one of the most suitable for a holistic renewable energy mix, with some estimates suggesting that offshore wind turbines alone could supply up to 800% of energy needs.
Sources: IRENA, Statista, Engineering News; 2021
South Africa, Egypt eye launches of new smart cities
Two smart city developments made waves over the course of March as Egypt eyes a move to a new complex outside Cairo, and South Africa announced its long-term plan for three new cybertropolises. The Egyptian government is hoping to soon finalise construction for its new smart city simply dubbed the “New Administrative Capital”. Designed to operate away from the cluttered cityscape of Cairo, it will feature universities, leisure facilities and a diplomatic quarter, and is projected to house 6 million people. The government will take occupancy in the coming months and once the current electric train and monorail constructions are complete, the city will be officially opened. South Africa for its part too has announced the construction of three new smart cities to take place in the coming years, with each set to be located close to important transport hubs such as Lanseria Airport, the Durban Airport and the Mooikloof region east of Pretoria.
The CBD of Egypt’s new administrative capital under construction in Oct 2020. Aside from key amenities the city will reportedly boast 90 square kilometers of solar energy farms, an electric railway link with Cairo and a new international airport. Image courtesy: Youssef Abdelwahab/UNSplash
SAA looks to end business rescue process with solvency assured but future still uncertain
Struggling air carrier South African Airways has gained a new lease on life after news surfaced that its business rescue process has successfully concluded with the company now being ‘both solvent and liquid’. The practitioners’ achievements are quite phenomenal, with negotiations with concurrent creditors having reduced the airline’s liabilities from US$2.3 billion to US$153 million. This has however come at a heavy cost for the company’s workforce who saw their numbers decline from 4 700 to 1 000 after voluntary severance packages were negotiated. There’s still a long road ahead before the airline flies again with creditors still needing to elect a figurehead to lead the implementation of the rescue plan, which will cost around US$686 million. Thereafter, the company will need to find new investors which in itself will be a difficult feat in a precarious global environment for the aviation industry.
Sources: Bloomberg, News24, International Air Traffic Association, Engineering News; 2021
Farmcrowdy and other platforms exit Nigerian crowdfunding market as regulations tighten
March saw a shakeup in the Nigerian tech space as some established players, including Farmcrowdy, moved to leave the crowdfunding space in the face of new regulations. Crowdfunding as a source of investment has become immensely popular in a country where bank loans are difficult to come by. Agricultural startups were particularly successful and platforms such as Farmcrowdy and ThriveAgric emerged to cater for their needs. However, these platforms suffered from a lack of regulation which made them easy to abuse by financial fraudsters. Proposed changes suggested by the Nigerian Securities and Exchange Commission in April 2020 are now coming into effect, placing strict new requirements for crowdfunding platforms to adhere to. Companies without transparent ownership will no longer qualify for crowdfunding and firms will have limits on how much they can raise. Crowdfunding platforms themselves will have to register as intermediaries and are now also obligated to perform due diligence around those that use their services.
IMF in talks with Zambia as court rejects state attempts to seize CEC
The International Monetary Fund (IMF) announced early in the month that some progress had been made regarding the negotiation of a debt relief programme for Zambia, though it cautioned that some obstacles remained. The country has served as a textbook case for the continent’s debt crisis, even prior to the Covid-19 pandemic, with some US$6 billion owed to Eurobond holders and Chinese state entities. A standstill in negotiations between stakeholder groups made restructuring impossible until Zambia approached the IMF’s Common Framework for Debt Treatment for debt and Covid relief in 2020. International concerns of potential nationalisation of local mines in curbing the growing debt levels have also been slightly abated by the Zambian High Court’s decision not to allow the state to seize CEC, a local independent power producer, which had been expropriated from the mining industry during the peak of Zambia’s financial woes last year.
Adams.Africa Advisory comprises an expert team with first-hand experience and knowledge, offering clients a diverse range of critical service offerings.
We can assist you with all your legal and research requirements in Africa. Contact our team of industry experts at Adams.Africa Advisory to find out more.