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Africa’s Top 10 Stories  |  January 2022

The Nigerian government is pushing ahead with a sizeable development scheme to advance various agricultural value chains. During December, the government announced a mega project that seeks to develop agro-industrial zones across the country, affecting the full agricultural value chain, from coca and cassava to rice and livestock. The project will cost more than US$210 million, which will be financed by the African Development Bank (AfDB) and the Africa Growing Together Fund – over US$530 million will come from other partners such as the Islamic Development Bank and the International Fund for Agricultural Development. Local authorities have additionally taken steps to mitigate against accusations of regional and ethnic favouritism by ensuring a diversified geographical spread across the country’s main regions. Envisaged as a means to economically revitalise rural areas and peri urban spaces, the mega project will also try to ensure that marginalised rural women benefit through a gender action plan with its own dedicated US$2 million budget.

Sources: African Development Bank, International Trade Administration, Food Business Africa; 2021-2022

In parallel to more advanced economies, South Africa is edging closer to a possible vaccine mandate. Though no legally binding policy has been enforced, some major corporations operating in the country have already taken the steps of imposing their own mandates on employees, including MTN, Old Mutual and Standard Bank. The move could help accelerate local vaccine uptake rates which have thus far proven low in comparison to developed markets. Representatives of the local beverage sector have also placed pressure on the government to provide clarity on such a mandate, noting that the economy could not afford any additional lockdown restrictions. Government has signalled that it is broadly in favour of such proposals but has faced strong pushback from advocacy groups such as AfriForum who argue against the constitutionality of any such mandates.

Sugarcane fields in KwaZulu-Natal province, South Africa. A combination of bad policymaking, civil unrest and taxation has left the industry in dire straits, but updates to legislation will pave the way for an industry turnaround. Image courtesy: iStock

The southern African economic powerhouse has joined Nigeria and a growing list of African states in giving serious thought to revitalising local sugar industries. The South African sugar industry has experienced a marked decline in recent years due to increasing competition, a challenging macroeconomic environment and stringent policies. Since the 2000s, the country’s overall sugar production has declined by 25% with the past year a particularly low ebb due to the economic impact of Covid-19 and civil unrest in the country’s coastal KwaZulu-Natal province. Aiming to reverse this trend, the government has announced the Sugarcane Value Chain Master Plan 2030, which provides a deepened localisation focus that will seek to enhance job retention, assist up-and-coming small scale farmers and facilitate product diversification. The impetus on revitalising the sugar sector is high in Nigeria as well, with BUA Group receiving US$200 million in financing from the African Finance Corporation during December for an integrated sugar project.

Sources: World Bank, Construction Review Online, Intergovernmental Committee, The East African, Trade.gov; 2019-2022

The East African nation has continued to strengthen ties with neighbouring Democratic Republic of Congo (DRC) over the course of December, launching expansion initiatives to regional infrastructure and dealing with regional security concerns. Among the developments is a 213km road project that will see a number of Congolese cities, including Beni, Butembo and Goma, connect to Uganda to facilitate cross-border trade and act as a vital export corridor for minerals and other key natural resources. Decades-long insecurity in the region has made efficient, legally compliant cross-border trade difficult, but closer cooperation between the Congolese and Ugandan militaries has led to a turnaround in recent months. Uganda has also noted that it plans on keeping its troops committed as long as necessary to ensure the cessation of the Allied Democratic Forces (ADF), a local terrorist group responsible for attacks on both sides of the border including the most recent bombing in Beni.

54Gene, a Nigeria-based health start-up supported by non-profit organisations such as the Gates Foundation, aims to address the backlog of locally relevant genomic data essential for creating effective healthcare treatments for African patients. Founded in 2019, the company has recently taken the next step in addressing the continent’s healthcare asymmetries through the launch of a new diagnostics arm, 7River Labs. Named in reference to Africa’s seven major river networks, the subsidiary is made up of a series of diagnostics hubs capable of performing some 300 different molecular diagnostics tests across a broad spectrum of categories, including oncology, infectious diseases, genetic testing and sequencing, anatomic pathology, clinical chemistry, microbiology, haematology as well as communicable and non-communicable diseases. With the majority of such tests still performed outside the continent 54Gene, is well-positioned to capitalise on an untapped market estimated to be worth US$10 billion.

A hydrogen powered bus in the UK. With limited capacity for renewables expansion within EU territory, European countries will begin to increasingly look to outsource their production to Africa where enormous green energy potential, particularly of solar, remains untapped. Image courtesy: WikiCommons

Mauritania has moved closer to implementing its green hydrogen plan that it announced in September 2021. Chariot, an upstream-to-green energy company, has raised US$9.5 million for a pilot study to determine the overall feasibility of green hydrogen in the country. According to a Memorandum of Understanding reached between Chariot and the Mauritanian government, the company will eventually oversee the construction of the 10GW Noor green hydrogen plant at an estimated cost of US$3.5 billion. The build commencement of Project Noor is expected to start immediately through pre-feasibility and feasibility studies on necessary solar and wind power capacities. Chariot CEO Adonis Pouroulis noted that at completion the project would be able to supply 600 000 tons of hydrogen annually. With local oil and gas developments driving improvements to regional logistics and port infrastructure, the Noor project could stand in good stead to export hydrogen to international markets.

In mid-December, BUA Group, a leading manufacturing company in Nigeria, started to restructure its agro-processing assets, consolidating all of its food-related operations under a new specialised entity known as BUA Foods. The company has numerous developments under way in this space, including a new 2400-ton capacity flour mill currently under construction thanks to a recent contract between BUA and Turkish construction and installer company Milleral, which can raise milling capacity to 4 000 tons per annum. A vertically integrated sugar processing facility is another of BUA’s recent large-scale endeavours, which has been made possible through a US$200 million loan from the African Finance Corporation. The moves form a key part of the country’s national Backward Integration Programme, which seeks to expand local sugar capacity to reach 1.7 million tons. The company is currently also in the process of listing on the Nigeria Stock Exchange.

South African company Labat Africa Group, one of only two pharmaceutical cannabis firms listed on the Johannesburg Stock Exchange, saw its share price rocket by 54% after it listed on the Frankfurt Stock Exchange in early December. The decision was originally prompted by the German legislature’s announcement that it would allow for the consumption of cannabis for both medicinal and recreational reasons, dramatically shaking up the lucrative European export market, which many southern African cannabis exporters have come to target. Labat has stated that the move represents only the beginning of a broader globalisation strategy, now made possible thanks to the influx of shareholder capital. The South African Department of Agriculture and Land Reform estimates that the local cannabis industry is worth over US$1 billion and could eventually employ up to 25 000 people. The global medical cannabis industry is growing fast and is expected to maintain a heady 20% compound annual growth rate between now and 2026.

Sources: Business Tech, Bloomberg, Business Insider, The Africa Report, Mondaq; 2018-2022

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