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Africa’s Top 10 Stories  |  April 2022

Despite relative peace in Eastern Europe since the late 1990s, escalating tensions between Russia and Ukraine over the past decade boiled over in early March. Though fighting has mostly been contained in eastern Ukraine, international sanctions and a lack of security for ships in the Black Sea have meant an effective severance of Belarus, Russia and Ukraine from global markets. The biggest risk to Africa comes in the form of compromised food security, particularly in northern countries where Russian and Ukrainian wheat is a staple. Uncertainty is expected to last into the medium term as the crisis has also pushed up the price of other farming inputs like oil and fertiliser. In the current context, the outlook appears dire, however, there are two key opportunities for Africa going forward: strengthening agricultural initiatives, and positioning for a mineral boom, to fill the vacuum left by the Russia and Ukraine conflict.

Data courtesy: Food and Agriculture Organisation, Statista, International Trade Centre, Economic Times of India; 2020-2022

March brings to an end a protracted legal battle which has created a fault line between developed and developing nations. For over two years now, countries in the developing world, led by India and South Africa, have petitioned for the right to produce their own domestic Covid-19 vaccines, including advanced mRNA vaccines. Developed nations, including the UK and Switzerland, have been pushing back, arguing that the loss of IP would deter investment and harm the pharma sector in the long run. According to a published text, which at the time of writing is yet to be ratified, the United States, European Union, India and South Africa have reached a separate compromise among themselves, which will pave the way for the eventual wavering of IP on vaccines and their ingredients for a period of between three and five years. This is positive news for the African continent, which continues to lag behind other regions of the world in terms of vaccine rollout.

The Metaverse promises to be the next frontier in digital technology, but its dependence on wearable technology like VR headsets could pose an obstacle to mass adoption in developing markets like those in Sub Saharan Africa. Image courtesy: Pxhere

Meta, formerly known as Facebook, announced in October 2021 that it would be launching Africa’s first digital “Metaverse” platform for the local market. The space has since garnered an official title, “Ubuntuland” and is attracting the interest of local businesses, with African telecoms giant, MTN, securing 144 digital plots in March. MTN is yet to divulge how it will use the property, but it will likely include immersive customer engagement and marketing portals. It has since been joined by advertising firm M&C Saatchi Abel, which has also purchased an unspecified amount of space. Ubuntuland has been described as a platform where users and businesses can host digital showrooms, shops, concert stages and film festivals as some of its functionalities. Other metaverses have enjoyed initial success in Dubai and other markets, but it remains to be seen whether the accessibility gap can be bridged to make a local metaverse work at scale.

Sources: WEF, Reuters, Ernst & Young, Business Insider; 2021-2022

The European Union (EU) has laid down the gauntlet for China’s dominance of the African infrastructure space with the announcement of US$170 billion in financing to the continent. This forms part of the EU’s Global Gateway project, seen as a formal challenge to China’s own project for strengthening relations with countries across the globe; the Belt and Road initiative. Notably, almost half of the EU’s total budget for this project – US$350 million – will go towards Africa, highlighting the continent’s strategic position to European policymakers in planning for the years ahead. Morocco, Europe’s closest geographical partner in Africa, will be one of the first to benefit by securing US$1.8 billion as a supplement to assist in ongoing smart infrastructure development plans. The EU has also positioned its assistance as a means to ensure a post-Covid 19 recovery and help to revitalise emerging economies through the modernisation of critical infrastructure, including energy, education, healthcare and transport.

Sources: European Commission, Voice of America, News24; 2022

Rig 810 at the El Merk oilfield in Algeria. Despite systemic challenges, the country still remains one of the most established and most promising hydrocarbon exporter markets and one of the largest gas producers in the MENA region outside of the Arabian Peninsula. Image courtesy: WikiCommons

Algeria’s state-owned petroleum company, Sonatrach, appears to be on the rebound as of February, following the announcement that it would be embarking on a US$40 billion development project in an effort to stem its longstanding decline. Spokespersons for the company have confirmed that the initiatives will be primarily based around increased exploration and production, including a return to the Libyan market which Sonatrach exited in 2014. The ambitious programme of revitalisation was made possible by the infusion of much needed investment capital from global oil majors in 2021 under the condition that the Algerian government rescind its long-held policy of keeping the oil industry under state control and closed to foreign investment. With plummeting state revenues and international desperation to curb oil price hikes, the stage is set for Algeria to reconcile with the global market.

Africa’s importance in the global logistics market was reiterated at the start of 2022, with the revelation that Mediterranean Shipping Company (MSC), one of the world’s largest freight cargo carriers, would be acquiring Bollore Africa for US$6.4 billion. The Bollore Group has been present in Africa for almost a century and is currently operating in 47 African markets, specialising in both marine and dryland ports with international offices for clients in Europe, the Middle East and East Asia. MSC was recently declared the largest shipping company in the world by Alphaliner, edging just over its competitor Maersk Logistics in terms of 20-foot-equivalent cargo capacity. With demand for Africa’s resource exports projected to remain high and regional cross-border trade likely to pick up with the implementation of the AfCFTA, the acquisition by MSC will close on the world’s last remaining frontier market for logistics services.

Africa’s importance in the global logistics market was reiterated at the start of 2022, with the revelation that Mediterranean Shipping Company (MSC), one of the world’s largest freight cargo carriers, would be acquiring Bollore Africa for US$6.4 billion. The Bollore Group has been present in Africa for almost a century and is currently operating in 47 African markets, specialising in both marine and dryland ports with international offices for clients in Europe, the Middle East and East Asia. MSC was recently declared the largest shipping company in the world by Alphaliner, edging just over its competitor Maersk Logistics in terms of 20-foot-equivalent cargo capacity. With demand for Africa’s resource exports projected to remain high and regional cross-border trade likely to pick up with the implementation of the AfCFTA, the acquisition by MSC will close on the world’s last remaining frontier market for logistics services.

Sources: ITWeb, African Business, Engineering News, Times LIVE; 2021-2022

In northern Egypt, progress continued through January in bringing the Dabaa plant, the first of its kind nuclear facility in the country, to realisation. At the time of writing, the last few pieces of the operational plan were being laid down with the long-disputed contract for the provision of nuclear fuel being awarded to Korea Hydro and Nuclear Power. Upon completion, the Dabaa facility will provide an additional 4800MW of power to the national grid and will represent the first-ever generation Type III reactor on the continent. Egypt is also not alone in its nuclear ambitions at continental level with other African countries also making motion toward building nuclear capacity. Thanks to finance provided by Chinese and Russian firms, comparatively marginal markets like Angola, Tanzania and Zimbabwe have considered plans to incorporate their own modular reactors capable of ensuring power for industrial scale applications.

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