AFRICA'S TOP 10 STORIES:
DECEMBER 2020
November heralded the announcement of several promising developments for Zimbabwe, which could see the economy begin to move in a positive direction. Early in the month, it was announced that preliminary construction works on the 2400MW Batoka Gorge hydroelectric dam, which will be developed in collaboration with the government of Zambia, have begun. This cross-border hydroelectric project is expected to generate 10,215GWh of electricity a year to be shared between both countries. In the mining space Bravura Holdings, owned by Nigerian billionaire Benedict Peters, has noted plans to develop a platinum mine in Zimbabwe. The country has the world’s third-largest platinum group metals reserve and further investment into the mining sector could ignite its stagnant economy. In parallel to this in the hydrocarbon space, Invictus Energy, an Australian oil and gas exploration company, has commenced field operations in the Muzarabani prospect in preparation for the drilling of two test wells. Zimbabwe has high prospects for oil and gas discoveries as an additional economic driver of development.
Sources: Zimbabwe Chamber of Mines, International Hydropower Association, 2020
November has proven to be a busy month for logistics developments as key partnerships were established between various service providers. Early in the month, UK-based Pentagon Freight Services, and Swiss-based TLC SA Transportation Logistic Consulting announced the formation of a strategic alliance, which looks to leverage TLC’s global logistical expertise and Pentagon’s extensive office network to benefit logistics across Africa. The partnership will allow both companies to establish themselves in the African energy, resources and infrastructure sectors. In South Africa, bidorbuy, an online shipping and auction marketplace, has partnered with uAfrica.com, a technology company that assists online merchants with omnichannel solutions. The partnership will launch ‘bidorbuy shipping’, which will provide a centralised and easy-to-use facility to source quotes from courier companies and offer the most competitive rates. In parallel, Lori Systems, a Kenyan logistics start-up, has secured investment from Imperial Logistics. The investment will allow Lori System’s to expand and offer its services across Africa.
An Imperial Logistics truck transporting goods. Lori Systems Kenya have partnered with Imperial Logistics in order to expand and offer its services across Africa. Image courtesy: Trevor Plackett/Flickr
MOROCCO INVESTS IN DESALINATIONPLANTS TO CURB INCREASING WATER SCARCITY
Several water developments took place in Morocco during November, relating to new desalination plants. The North African country announced the construction of the largest seawater desalination plant in Africa, in Casablanca. The project will have a budget of US$1.1 billion and is set to function with a capacity of over 300 million cubic meters. Concurrently, the Moroccan government has received a US$5.9 million loan from Spain for the construction of two seawater desalination plants in the towns of Assa-Zag and Moulay Brahim. These new desalination plants form part of Morocco’s ongoing strategy to curb water scarcity in the country. In 2020, Morocco’s water reservoirs have taken significant deficits due to various reasons, including the impact of climate change, which have positioned desalination plants as a strategic solution to future water scarcity challenges. Desalination would provide accessible water to the country’s population as well as water for use in agricultural irrigation.
NEW DATA CENTRES AND GLOBAL CERTIFICATIONSPUSH FORWARD DIGITAL TRANSFORMATION
As digitalisation has proliferated over the course of this year off the back of the global Covid-19 pandemic, the emphasis on establishing strong infrastructure for digital transformation has grown considerably, especially in the context of data management facilities. In November, Telecom Egypt announced the construction of the country’s largest international data centre facility, to be commissioned in early 2021. The project is in line with Egypt’s efforts to develop its IT infrastructure and digital services, as well as contribute to the regional digital transformation. On the southern tip of the continent in South Africa, Teraco, a carrier and cloud data centre provider, announced construction of a new hyperscale data centre, known as JB4. The centre will enable global cloud clients to service and reach sub-Saharan markets and is expected to be the largest data centre in Africa. Alongside these developments, data centres in Kenya and Uganda have received the Uptime Institute’s Tier III certification confirming that their data centres are operating at the global standards.
SOMALILAND AND SOMALIA SEE UPTICK IN PORT INFRASTRUCTURE DEVELOPMENT
In a positive holistic move for the horn of Africa both Somaliland and Somalia are set to welcome investments to port infrastructure. The breakaway state of Somaliland has secured a partnership with Trafigura, a Swiss commodities trader, to supply hydrocarbons and upgrade the Berbera port. This adds to the investment in 2018 by DP World, an Emirati port operator, who conducted a US$442 million expansion of the Berbera port. Trafigura’s investment will go towards infrastructure modernisation to increase storage capacity and allow for larger ships at the Berbera Oil Terminal as a way to improve the quality and reliability of refined petroleum product supply into Somaliland. The port investment could see an uptick in regional and international trade thus providing a boost to the country’s weak economy. Likewise, in Somalia a new port will be constructed in the town of Hobyo. The Hobyo Port will have geostrategic interest because of its proximity to the Bab el-Mandeb Strait, a vital sea crossing, thus benefiting the local population with trade.
Sources: AfDB, 2014; Tralac, 2019; World Bank, 2018
INNOVATIVE MOBILE STREAMING SERVICES LAUNCHED INSOUTH AFRICA AND EGYPT TO PROVIDE USERS WITH A NEW WAVE OF ENTERTAINMENT
South Africa and Egypt’s entertainment industries are primed for a new look with the launch of new mobile streaming services. Telkom, a South African telecommunications provider, has partnered with the South African Broadcasting Corporation (SABC) to launch a new streaming channel, TelkomONE, which will house the SABC’s local television and radio offerings on one online platform. TelkomOne’s aim is to promote universal access to SABC content, giving users ease of access on its mobile service in an affordable manner. In similar moves further north, Intrigal, an Egyptian provider of IP video products, Telecom Egypt and TPay Mobile, a digital mobile payments platform, have joined forces to launch the Jawwy TV app. The app is expected to offer a new digital entertainment platform, presenting viewers with popular content titles through 50 free-to-air channels. These mobile streaming services will provide users with another option in a competitive over-the-top media service market.
INTERNATIONAL FINANCE CORPORATION INVESTSIN MALIAN MINING TO PROMOTE SELF-SUFFICIENCY
The International Finance Corporation has announced a US$10.6 million investment into Malian quicklime and agriculture lime producer Carrières et Chaux du Mali (CCM) at a key time for the country’s growing agriculture and extractive industries. The capital injection will allow for a dramatic boost in the firm’s quicklime production capacity, from 16 500 tonnes annually to an estimated 30 000 by 2023. This will also boost production capacity of agricultural lime to 50 000 tonnes per year. Mali has played an integral part in the global market’s pivot away from Southern Africa as its go-to African gold source, but investments up until now have been severely constrained by the high costs of importing European lime, a key ingredient used in the processing of minerals, in a region where poor road and utilities infrastructure already places a high premium on production costs.
STATE-OF-THE-ART TISSUE CULTURE FACILITY OPENSIN SOUTH AFRICA TO THE BENEFIT OF LOCAL FRUIT PRODUCERS
A state-of-the-art Tissue Culture Facility (TCF) has been established outside Paarl in South Africa’s Western Cape province. The facility is planned to supply plant material and root stock to the local wine grape, table grape raisin, pome, and stone fruit industries. Plans are also being put in place to eventually assist with other commodities as well. The tissue culture process involves taking a single disease-free plant gamete through heat treatment, and then breeding that same plant sample into hundreds or even thousands of disease-free daughter plants, which can then be supplied to local agriculturalists. The Western Cape produces 55% of the country’s agricultural export and is a key hub for both the global fruit and wine industries. The development of the facility to global phytosanitary standards will propel the country further up the wine value chain.
RWANDA FORGES AHEAD WITH NUCLEAR INDUSTRY DEVELOPMENTS
The small yet highly progressive East African state of Rwanda has made its first concrete steps towards entering the nuclear industry in November. The Rwandan Presidency announced that the country has officially ascended to three key treaties that relate to codes of conduct surrounding nuclear accidents, fuel management and physical protection of nuclear material. The moves indicate Kigali’s commitment to its 2019 announcement that it would partner with Rosatom in the construction of the region’s first nuclear power plant to be finalised in 2023. Beyond the opportunities which this presents in nuclear energy, the development would also allow for the country to eventually become active in the manufacture of radiological tools for the medical and security industries. As one of several longer-term solutions to Africa’s energy crisis, the continent is poised to engage with the nuclear industry as an avenue of exports for its substantial deposits of chromium, uranium and thorium.
The Kazungula Bridge over the Zambezi River under construction. On 10 October it was announced that the bridge construction has been completed. It aims to link markets in eight African countries, and enhance trade, integration and spur global competitiveness in the region. Image courtesy: John Chandler/Flickr
TANZANIA EXPANDS RARE EARTH EXPORT PORTFOLIO IN A BID TO RAISE MINING REVENUES
Tanzania is in the final stages of granting Australian mining firm Peak Resources the rights to mine rare earth elements at the Ngualla site in the country’s south west. Once complete, the deal will cement the country’s position as both one of the only active rare earth producers in the East African region, and the fourth largest rare earth producer in Africa. The Tanzanian government like many others has felt the pinch of falling commodity prices and rising debt levels in recent years, prompting an expansion in the country’s revenue base. Aside from rare earth elements, Tanzania boasts substantial iron ore, gemstone and gold deposits. In recent years, Tanzania has been positioning itself as the preferred East Africa logistics hub, and has placed emphasis on revamping rail connections to nearby states to facilitate this. The country is well placed to also act as a key exporting hub for East African minerals to manufacturing zones in East Asia and the Middle East.
Tanzanite mining in Tanzania. Peak Resources is set to be granted the rights to mine rare-earth metal in the country. Tanzania will become the only active rare-earth producers in the region. Image courtesy: Eugene Lata/Flickr
Kenya-UK bilateral relations strengthen with new trade deal
Kenya and the United Kingdom have concluded a Strategic Economic Partnership Agreement. The deal will support Kenyan exporters to expand their presence in the UK and European Union markets, and will herald a new era of trade and development cooperation post-Brexit. Moreover, the deal will deliver a comprehensive package of benefits, including secure long-term market access to regional exporters in the European market. The agreement will also welcome new foreign direct investment, anchored on Kenya’s strategic position as a leader in the region.
African Continental Free Trade Area to launch in 2021
The African Continental Free Trade Area (AfCFTA) will launch on 1 January 2021, despite the ongoing Covid-19 pandemic. However, not all customs infrastructure will be ready in time, as indicated by AfCFTA Secretary-General Wamkele Mene. The customs infrastructure covers everything from legal or regulatory changes to allow tariffs to drop in line with the deal, to ensuring that customs agents have the correct tariff schedule at every border. The AfCFTA aims to bring 1.3 billion people together in an economic bloc that could boost living standards and encourage development across Africa.
Tigray conflict in Ethiopia intensifies
Tensions have escalated significantly in Ethiopia’s Tigray region leading to hundreds of civilian casualties in the ongoing ethnic conflict between Tigray and the Ethiopian government. Furthermore, the leader of the Tigray region has indicated that his forces have bombed an airport in neighbouring Eritrea, as the fighting intensifies and spreads across borders. The conflict has led to regional tension as well as hundreds of civilians fleeing to Sudan.
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.