Africa’s Top 10 Stories – June 2024

In late May, South Africans headed to the national polls, marking a significant shift in the nation’s political landscape. For the first time since the end of apartheid, the incumbent African National Congress (ANC) lost its two-thirds majority, accumulating just over 40% of the vote, and leading to the formation of a coalition government. Four leading parties – the Democratic Alliance, Inkatha Freedom Party, Patriotic Alliance and Good – have agreed to join the ANC in forming a Government of National Unity, with Cyril Ramaphosa re-elected as President for a second term. The coalition government is poised to navigate a complex political environment, balancing diverse party interests to address pressing economic and social issues in the country.

The European Union’s Critical Raw Materials Act launched in April 2024 signalled Africa’s ascension as a pivotal supplier of critical minerals to the EU. The Act seeks to break China’s dominance over Africa’s mineral resources by offering alternative opportunities for the continent’s economic development. In addition, the Act’s focus on diversification away from China aligns with the continent’s potential to meet the growing global demand for minerals that are crucial to various industries in Europe. Simultaneously, it highlights the continent’s strategic importance in ensuring mineral resource security for the EU. The EU has agreed on several partnerships with countries including Angola, Namibia, Rwanda, the Democratic Republic of Congo and Zambia to stimulate private investment in African mining and foster national economic development by supplying multiple global stakeholders.

In the second quarter of 2024, Zimbabwe moved to launch its new gold-backed currency, the ‘ZiG’. The introduction of ZiG aims to provide stability to the country’s monetary system given the past challenges of hyperinflation and currency volatility. Zimbabwe’s central bank has taken steps to integrate ZiG into its financial framework, including publishing inflation rates in both ZiG and US dollars and converting the annual budget to reflect the new currency. In addition, authorities expressed intentions to achieve full convertibility of the ZiG currency and ensure its adoption in official transactions. Despite initial challenges in attracting investors and enforcing compliance with the official ZiG exchange rate, the government remains committed to the currency’s success, alongside other renewed policy moves in sectors such as mining, to make tangible economic progress over the rest of 2024 and beyond.

Kenya and the United States (US) deepened their bilateral relations over Q2, catalysed by President William Ruto’s state visit to the US in May. The trip marked a pivotal moment in strengthening diplomatic and economic ties between the two countries following Ruto’s ascension to the presidency in 2022. Key talking points revolved around the US designating Kenya as a non-NATO ally, underscoring its strategic importance as a military support actor on the continent, and extending a semiconductor chip grant aimed at bolstering the country’s technology industry. Additionally, Kenya secured a US$45 million agri-debt waiver benefiting coffee farmers through a slight increase in coffee auction earnings, despite existing quality concerns. President Ruto’s visit also highlighted geopolitical shifts, as discussions centred on diminishing Chinese influence in East Africa. In early June, the Organization of American States also invited Kenya to participate in talks, signalling broader international engagement with the country.

Over Q2 both South Africa and Nigeria took steps to formulate national artificial intelligence (AI) policies, reflecting the growing prominence of the technology in Africa. In mid-April, South Africa introduced a Draft National AI Plan to stimulate stakeholder dialogue. The plan drew criticism from experts, who highlighted the need for a comprehensive overhaul to address privacy and inclusivity concerns. Concurrently, South Africa initiated plans to appoint an AI minister and advisory council for policy oversight, while launching the country’s first military-focused AI hub. Nigeria marked its entry into the AI policy landscape by introducing its first multilingual language model as part of its National AI Strategy. In addition, the Kaduna State Government partnered with Google to establish an AI learning series in Hausa, underscoring Nigeria’s commitment to leveraging AI for socio-economic development. In a move related to AI further north on the continent, Morocco welcomed a US$500 million investment by US firm Iozera in an AI hub and data centre in the country.

Among the biggest stories of the quarter is Anglo American’s move to reshape its business and demerge from its core subsidiaries, Anglo Platinum and De Beers, to unlock additional stakeholder value and streamline operations. Although the reorganisation is designed to increase operational focus, analysts highlight potential hurdles, including valuation and regulatory concerns about the sale. In early June, Botswana entered discussions to increase its stake in De Beers, reflecting the geopolitical and economic ripples of the corporate shift, to enhance its influence in the diamond industry, and potentially boost its national revenue. Overall, the restructuring is expected to create more agile entities, better positioned to adapt to market demands and operational efficiencies.

Amid the evolving landscape of cryptocurrency regulation in Africa, April 2024 witnessed contrasting developments across major economies. South Africa issued its first crypto licences, marking a significant milestone in legitimising the crypto industry. Up to 75 licences were initially issued, with Jaltech and Luno publicly announcing theirs. AltCoinTrader, a local cryptocurrency exchange, secured full-service provider status, exemplifying the country’s strides in navigating regulatory scrutiny. However, the Financial Sector Conduct Authority’s cautionary stance against alleged crypto scams underscores persistent challenges in the industry. In addition, proposed regulatory amendments hint at a potential overhaul of cryptocurrency rules, as platforms will now need to identify the parties of a transaction. Further north, Kenya’s establishment of a multi-agency group signals proactive measures to regulate cryptocurrencies and digital assets. Nigeria likewise imposed directives on entities to identify users transacting on specific crypto platforms during the same period.

Global technology and telecommunications giants Google and Liquid Technologies embarked on a transformative partnership aimed at accelerating digital adoption across Africa. In late May, the Umoja fibre optic line was launched to connect Africa and Australia. The companies said their partnership on Umoja aims to expand the reach and reliability of digital connectivity throughout Africa. The project links to the Equiano cable, run by Google, in an effort dubbed ‘Africa Connect’. In addition, in early June, Liquid became the first Google Cloud Interconnect provider on the continent. The collaboration promises to revolutionise connectivity by providing robust, low-latency access to Google’s cloud services, and facilitating digital transformation for businesses and governments alike. Both companies made similar independent concurrent strides in other African regions, including Liquid partnering with Medi Telecom to enhance network services in Morocco, and Google collaborating with the Kenyan government to boost cybersecurity efforts by deploying Google Cloud’s CyberShield solution to government platforms.

Early June saw the first Africa-South Korea summit take place, marking a pivotal moment for green energy and resulting in a landmark deal for the supply of critical minerals from Africa to South Korea. Key African beneficiaries of the move include Namibia, the Democratic of Congo and Zambia, known for their rich deposits of cobalt, copper, and lithium that are essential for battery production. Additionally, Kenya, Morocco and Tanzania initiated discussions around Economic Partnership Agreements with South Korea, aiming to further integrate and enhance trade relations. The Asian nation’s commitment to securing critical minerals highlights its burgeoning electric vehicle and electronics industries, which will need African minerals to continue growing. The summit’s outcomes emphasised mutual benefits, with African countries gaining significant investment and technological support to aid the strategy. The main points to counter are fluctuating mineral prices should supply rise beyond the required demand.

South Africa’s healthcare landscape underwent a monumental transformation with the approval of the National Health Insurance (NHI) policy in mid-May. President Cyril Ramaphosa’s signing of the NHI bill into law aims to provide universal health coverage to all citizens. The policy shift is set to impact private healthcare providers the most, given the forthcoming integration of private and public health services under a unified system. Key beneficiaries of the NHI include major pharmaceutical companies and big pharma retailers, which are set to gain from the immense buying power of the NHI Fund, once it is in operation. Concerns regarding the NHI include the financial implications for medical aid schemes, particularly with potential tax increases on medical aid contributions and impact on affordability for users – early predictions include a 31% increase in personal income tax rates.

Namibia announces intention to join OPEC, further boosting oil potential
In early April, Namibia made motions to join the Organization of the Petroleum Exporting Countries (OPEC), signalling its emergence as a notable contributor to the global oil supply chain. The move comes as Namibia anticipates large-scale oil production in the coming years given more recent reserve discoveries. By seeking OPEC membership, Namibia aims to enhance its influence in global oil markets and leverage OPEC’s expertise and resources. OPEC Secretary General Haitham Al Ghais in turn expressed support for Namibia’s inclusion. 

South Africa’s ABSA launches a non-banking subsidiary in China
In June, South African bank ABSA launched a non-banking subsidiary in China, marking a strategic expansion into Asia. This aims to enhance trade and investment opportunities between Africa and China, leveraging ABSA’s financial expertise in doing business in Africa. The new entity will focus on facilitating trade finance, advisory services, and corporate banking solutions. ABSA’s expansion signals the desire to bridge financing solution gaps and provide support to Chinese businesses operating in Africa.

Former Twitter CEO expands payment platform technology in Africa
Jack Dorsey, the former Twitter/X CEO, announced the expansion of his payment platform, Block, into Africa through a partnership with Chipper Cash in June. Block’s integration with Chipper Cash promises to streamline cross-border transactions and offer innovative financial solutions, marking another step to advance Africa’s digital economy, financial inclusion, and digital payments across the continent.