Africa’s Top 10 Stories – September 2023

BRICS is positioning itself to transform the global economic landscape through expansion and increased collaboration. Prior to the BRICS Summit 2023 held in August in South Africa, expansion plans were mooted by the bloc as 22 countries submitted formal requests and 20 others submitted informal requests to become full-time members. As a result, a major announcement during the summit was of the admission of six new members from 2024: Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and UAE, a move aimed at growing the importance of the bloc. This also comes after BRICS members – Brazil, Russia, India, China and South Africa – considered plans for a common currency over the previous quarter. Concurrently, BRICS energy ministers discussed collaboration in improving access to secure an affordable energy supply while simultaneously transitioning to cleaner energy systems. Members deliberated on joint projects in the energy sector, while the BRICS Bank raised US$77.8 million at its first-ever South African bond auction.

South Africa and China continued to strengthen bilateral relations through the 2023 BRICS Summit. South Africa has welcomed investment in several sectors including trade, aerospace, agriculture and business, with the lion’s share being directed towards energy. South Africa is also ready to seal a deal with China that will assist solar power installers secure access to panels for projects needed to tackle the country’s energy crisis. Simultaneously, South Africa’s Industrial Development Corporation and the Bank of China signed a framework agreement that could unlock a US$519 million funding package over the next five years to support regional projects in energy and other sectors. In addition, China has pledged to donate emergency power equipment worth US$8.6 million, as well as send alternative power supplies to an estimated 500 critical facilities around the country. These developments will advance energy cooperation between the nations while assisting South Africa with its energy crisis.

The African and Asian nations have sought to strengthen bilateral relations through various energy and mining agreements. In early August, an agreement was signed to jointly explore rare earth minerals. This forms part of Japan’s plan to develop supply chains for cobalt and other minerals used in electric vehicle battery manufacturing, in order to be less reliant on Chinese imports. The Japan Organization for Metals and Energy Security (JOGMEC) and Epangelo, Namibia’s state-owned mining company, will lead this partnership. Later on in the month, JOGMEC secured critical mineral agreements with the African countries of Angola, the Democratic Republic of Congo, Madagascar and Zambia, to further mitigate reliance on China and ensure supply for Japan’s high-tech industry. Concurrently, Namibia’s Hyphen Hydrogen Energy signed an MoU with Itochu, a Japanese import/export company, to explore areas for potential collaboration and drive forward the region’s largest green hydrogen project. Following Japan’s lead, the UK also signed mining and energy agreements with Zambia and South Africa, to diversify its supply chains.

Eskom, South Africa’s embattled national power utility company, launched an innovative new product in August, which is anticipated to enhance electricity supply and provide greater customer choice. “Virtual wheeling” will enable industrial and commercial customers embedded within Eskom and municipal networks, to become customers of the growing number of electricity traders being licensed by the National Energy Regulator of South Africa. As a result, electricity pricing will become market-driven, while diversification and competition will create a reliable supply. Off the back of this development, Vodacom South Africa and Eskom signed a first-of-its-kind virtual wheeling agreement, enabling the telco to source 100% of its electricity demand from renewable energy sources by 2025 – the agreement will allow the country’s private sector to add capacity to the national grid. In addition, the telco will be able to secure independent power purchases on the same terms and conditions that underpin its agreement with Eskom.

The potential for African cannabis continued to grow over July as Ghana introduced new cultivation laws. The country has become the first West African market to legalise the cultivation of cannabis for medical and industrial use – recreational use remains illegal. In a move to boost the sector, Ghana’s Parliament adopted the Narcotics Control Commission (Amendment) Bill 2023, empowering the Minister of Interior to grant licences for cannabis cultivation for certain varieties of hemp cannabis that have a tetrahydrocannabinol content of less than 0.3%. The bill paves the way for the development of a more regulated industry, ensuring that its cultivation and usage adhere to strict guidelines and quality standards. The West African country’s progressive approach mirrors a broader trend in Africa as 11 other countries have made the move to legalise cannabis for medical and scientific purposes – the global cannabis market is projected to grow from US$57 billion in 2023 to US$444 billion by 2030.

The Africa Climate Summit was held in September as the continent seeks to wield greater global influence and bring in financing and support for green transitions. The most significant pledge came from the UAE with US$4.5 billion in clean energy investment, aiming to jumpstart a pipeline of bankable clean energy projects on the continent. Further developments included the UK announcing climate finance and resilience projects worth US$61 million. Husk Power Systems, a US clean energy company, aims to accelerate climate-resilient economic growth through its ‘Africa Sunshot’ initiative, mobilising US$500 million in equity and debt. FSD Africa Investments, the investing arm of FSD Africa, announced US$19.5 million in support of climate adaptation and climate-aligned infrastructure projects. The summit concluded with a total of US$23 billion pledged towards green projects by governments and investors, as well as the establishment of the ‘Nairobi Declaration’ – a call from African leaders for urgent action on climate change.

Africa’s e-mobility drive continued over the last quarter as South Africa and Kenya made forward motions on green transport developments. In late July, BMW South Africa revealed it will introduce the electric CE 02 motorcycle in early 2024 – labelled the ‘eParkourer for cities and urban areas’ with a 90km range before recharging. In addition, in early September, South Africa revealed it will provide fiscal support to the automotive industry to help it transition to producing electric vehicles. In parallel, Roam, a Swedish-Kenyan technology company, has opened the largest electric motorcycle assembly plant in East Africa. The plant is set to drive urban mobility by offering sustainable transportation solutions for motorcycle taxis used in the logistics sector. In late August, Uber launched an electric motorcycle service in Kenya, its first in Africa. Dubbed the ‘Electric Boda’, the launch is aimed at making its global platform emissions free by 2040, while simultaneously strengthening the country’s e-mobility drive.

Green hydrogen continued to be a major talking point last quarter as Namibia and South Africa took vital steps to realise their renewable energy potential. Over the last quarter, Namibia’s Hyphen Hydrogen bolstered its US$10 billion project by launching a socioeconomic development framework and appointing ILF Consulting Engineers, an independent international engineering and consulting firm, to provide project management services, technical expertise, procurement and contract advice. Simultaneously in early September, Hydrogene de France, a French hydrogen development company, announced the construction of a green hydrogen plant, which will commence in 2024 and yield 1 400 tons of green hydrogen annually. Not to be left behind, in early July, South Africa joined forces with Denmark and the Netherlands in raising US$1 billion to bolster the country’s green hydrogen economy. In parallel, the country’s Transnet National Ports Authority announced construction plans for a new port and rail infrastructure, which is currently at feasibility stage. Furthermore, the South African government plans to play a key role in de-risking green hydrogen projects in support of the Northern Cape province’s energy ambitions.

Kenya continued to position itself as a leader in the African green transition amid the continent’s first Climate Summit in September. Kenya, alongside the NDC Partnership, a global coalition of countries and institutions collaborating to drive transformational climate action, launched the National Climate Change Action Plan 2023-2027, targeting a 32% reduction in greenhouse gas emissions by 2030. To support this initiative, government pledged to bolster its climate action by implementing low-carbon and efficient transport systems, and construction of Kenya Power’s EcoCloud data centre commenced, benefitting from 953MW of geothermal power generation. Kenya Petroleum Refineries, now under Kenya Pipeline Company ownership, will rehabilitate the defunct refinery into a gas-to-power plant, which will be supplied by natural gas from Tanzania. A further significant initiative to address climate change was the launch of Kenya’s Green Hydrogen Strategy and Roadmap. In partnership with the European Union, the strategy outlines Kenya’s ambitions for green hydrogen, aligning with its overarching climate change goals.

Cryptocurrency regulations continue to evolve as South Africa embraces digital currency

South Africa’s cryptocurrency landscape continued to evolve in July through the introduction of new regulations and developments. Crypto exchanges in the country will now require licences to operate by the end of 2023 – with 20 applications received by the Financial Sector Conduct Authority. In addition, Momint, a local cryptocurrency startup, has integrated cash voucher purchases into its blockchain wallet, which will allow users to spend their cryptocurrency at over 10 000 retailers.

Egypt partners with China to develop a drought and salt-tolerant crop

Egypt and China have joined forces to innovate their agricultural sectors. In August, both countries agreed to develop drought- and salt-tolerant crops to overcome water scarcity and salinity in Egypt as the country tackles climate change implications. The partnership forms part of a three-year action plan for agricultural cooperation between the countries, aiming to exchange expertise on agricultural innovation and technology.

IATA simplifies payment systems in Africa through new partnerships and expansion

The International Air Transport Association (IATA) has taken steps to enhance customer experience and simplify their payment systems over the last quarter. Flutterwave, an African payments technology company, has joined the IATA Financial Gateway (IFG) platform, to facilitate travel to Africa – airlines from across the world are now able to process payments from customers using Flutterwave’s various payment modes. Additionally, IATA revealed that its EasyPay service was launched in Cameroon, Chad, Congo, Gabon and Mauritius. The e-wallet acts as a secure travel agency payments solution available to agencies accredited by IATA.