Africa’s Top 10 Stories – December 2023

Europe’s largest economy intensified its Africa-focused energy efforts during the final stretch of 2023 to aid in its access to green energy resources. In November, Germany announced funding towards Africa’s first decarbonised iron plant, powered by hydrogen, and a hydrogen pilot plant and refuelling station in Namibia. In parallel, private entity Heraeus Precious Metals in collaboration with South Africa’s Sibanye-Stillwater introduced a far-reaching iridium-thrifting breakthrough – a boost for hydrogen generation. In addition, KfW, Germany’s state-owned investment and development bank, pledged over US$540 million in loans to aid South Africa in its energy transition away from coal. Concurrently, the German government is also investing in building hydrogen production capacity across the rest of Africa through the European Union (EU) – pledging US$4.4 billion to the Africa-EU Green Energy Initiative and commencing energy projects in Algeria, The Gambia, Mauritania and Nigeria.

Africa’s biggest economies boosted innovation and business over the last quarter of the year with the introduction of new technology start-up developments. In late November, Nigeria’s National Information Technology Agency signed a MoU with a leading incubator, Venture Garden Group, to establish a start-up assistance and engagement platform – acting as a key driver for the implementation of Nigeria’s Start-up Act. Entrepreneurs will be required to register on the platform and can communicate with all government agencies and connect with investors – forming part of the country’s collaborative ecosystem approach. Concurrently, in early December, Kenya announced that its Start-up Bill would be signed into law in 2024. The bill seeks to govern the interactions between the government, incubators, start-ups and investors. Registered businesses are set to receive incentives such as tax breaks, access to credit, funding and training, boosting innovation and job creation. In addition, Kenya also announced that the Kenya Entrepreneurship Programme is close to being implemented, further increasing funding for start-ups.

Following a decade of positioning to tap into the potential of its natural gas reserves, Tanzania’s effort are beginning to bear fruit by forging transport and export agreements with Mozambique and Uganda. In early November, Tanzania’s Petroleum Upstream Regulatory Authority and Mozambique’s National Institute of Petroleum were close to signing a unitisation agreement to co-develop a shared natural gas reservoir covering multiple license areas. Tanzania will leverage Mozambique’s gas infrastructure and expertise to supply gas across East Africa. In a similar vein, Tanzania and Uganda have signed an agreement on a feasibility study for a gas pipeline linking Tanzania’s remote deepwater gas fields to Uganda. Tanzania is currently awaiting government approval for a US$42 billion liquified natural gas project to unlock the estimated 57.5 trillion cubic feet of natural gas deposit. Uganda is also keen to use the East African Crude Oil Pipeline between the two countries to transport natural gas in maximising returns.

The East African nation has taken innovative steps to strengthen and protect its seed industry while simultaneously maintaining food security. In early October, the Rwanda Institute for Conservation Agriculture, in partnership with the Howard G Buffett Foundation and One Acre Fund, launched a seed centre in the country’s Bugesera District. The centre is designed to improve farmer resilience and farm productivity by partnering with seed companies to offer services that boost growth and process high-quality seeds. In addition, the centre will contribute to the region’s policy to promote a strong domestic seed sector. In tandem, Rwanda’s Ministry of Agriculture and Animal Resources in collaboration with the National Seed Association of Rwanda launched a roadmap to support partnerships to curb fake seeds by 2030. The roadmap proposes the creation of a National Seed Certification Agency to set standards, monitor quality and enforce compliance that improve seed quality in Rwanda while ensuring food security.

The African fintech space experienced sustained expansion in the last three months as innovative payment platforms emerged, emphasising both cryptocurrency and cross-border transactions. In mid-November, Yellowcard, a cryptocurrency fintech, became the first company on the continent to launch PayPal USD – this stablecoin from PayPal is set to open opportunities for digital financial transactions between Africa and the US. In parallel, Ripple, a US-based cryptocurrency fintech, joined forces with African fintech Onafriq to expand cross-border payment systems in Africa. Ripple will power digital asset payment corridors between 27 African countries. Simultaneously, cryptocurrency conversion was notable in South Africa as global payment company Paycorp launched CryptoExpress, an app designed to simplify the conversion of cryptocurrencies to cash. Additionally, Stitch, a South African payment platform, launched ‘Pay with Crypto’, allowing customers to pay with cryptocurrency while businesses get settled in cash. Further north, Pan-African fintech, Cellulant, obtained initial approval as a payment service facilitator in Egypt.

Africa’s most industrialised economy is currently working on approving its medical devices manufacturing masterplan with the latest stage of implementation in October seeking to identify potential specific objectives to add to the plan. The masterplan’s core vision is to create ‘an effective and competitive medical devices value chain that produces reliable, quality and affordable and competitive medical devices for local and export markets’. The four core objectives are to: grow a competitive medical device manufacturing industry that will supply local and international markets; reduce the trade deficit; generate employment and build technical skills; and increase broad-based black economic empowerment. The masterplan is in response to the current trade imbalance in the sector, as around 90% of medical devices are being imported to South Africa. In addition, the country wants to bolster domestic capacity to address the needs of the health system directly and improve health outcomes for citizens.

Key nodes of the continent’s port infrastructure received substantial investments and international backing over the last quarter of 2023, bolstering logistics and trade. In late October, Tanzania joined forces with Dubai-based DP World for a port management deal. The Emirati company is set to operate four berths of the Dar es Salaam Port, increasing efficiency and growing Tanzania’s economy. The deal has been met with protests due to a foreign company managing local ports. Concurrently, Namibia and the European Union launched a strategic port roadmap for the development of sustainable raw materials value chains and green hydrogen. This includes outlining steps for transforming the Port of Walvis Bay into a regional logistics hub, and driving green industrialisation, economic decarbonisation, job creation, and energy development. Additionally, in late November, Kenya initiated discussions with Uganda to establish a dry port in the Ugandan capital of Kampala. The facility, Kenyan Port Authority-Uganda, is set to streamline business operations for Ugandan importers.

South Africa continued to transform its automotive sector as the country’s inaugural Electric Vehicle (EV) Policy gained traction. In early December, the Department of Trade, Industry and Competition released the final iteration of its EV White Paper following its approval and adoption by the government in November. The paper outlines a course to transition the country’s automotive industry from primarily producing internal combustion engine (ICE) vehicles to a dual platform that includes EVs in the production and consumption mix, alongside ICE vehicles by 2035 – production of EVs is anticipated to start by 2026. The document was developed with the country’s energy crisis in mind and was aimed at facilitating the addition of more renewable energy sources to the energy grid as well as highlighting the considerable industrialisation opportunity for the country and the region to develop ‘critical mineral to batteries’ capacity. The government is set to make the first announcements of resource allocations in the February 2024 Budget.

Mozambique’s green transition was bolstered in November, as a new energy transition strategy was approved. Late in the month, the government announced the approval of the strategy, aimed at reducing the dependence on fossil fuels, with an estimated cost of US$80 billion to implement by 2050, a step aimed at winning finance to develop the economy. The first steps outlined in the Energy Transition Strategy are to include the addition of 2 000 MW of hydropower capacity by 2030 and expanding the transmission grid to allow for the addition of more renewable energy. The strategy forms part of the country’s desire to be a global leader in climate-aligned development and lays a clear pathway for harnessing these assets to enable sustainable nationwide growth while supporting emissions reductions. Mozambique has joined South Africa in seeking international funding to finance its green transition.

South Africa’s transport and logistics sector continued its green transition as major e-commerce players including the country’s giant, Takealot, launched electric delivery fleets. In late October, the online behemoth released its first electric truck fleet in Cape Town in response to the shift towards sustainable logistics. A month later the company also announced that the e-fleet will be available in Johannesburg. In similar moves over November, Uber launched an electric vehicle (EV)-only delivery service in Cape Town. Uber Package’s scooters use swappable batteries and therefore do not need to be plugged in to recharge. The move is crucial to achieving Uber’s global target of becoming a zero-emission platform by 2040. In parallel, DHL is set to run a pilot test of its ID Buzz Cargo fleet, with four electric vans to be placed at DHL service centres in Johannesburg, Cape Town, and Durban for six months to build awareness about EV deliveries.