Africa

The amount Chinese construction companies — including Sinohydro Corp and China Railway Group — agreed to invest in infrastructure projects in DR Congo. It follows a renegotiated agreement over their Sicomines copper and cobalt joint venture. The agreement stipulates that the Chinese companies will pay 1.2% royalty on the proceeds of Sicomines venture annually to DRC. State miner Gecamines will gain the right to market about a third of the venture’s output, according to a statement released Saturday. The renewed deal follows President Felix Tshisekedi’s push for the restructuring of a $6.2 billion contract between the countries agreed in 2008 which he said provided little benefit to the DRC.

South Africa’s Gaza stance threatens trade ties with Israel

THE SCOOP

JOHANNESBURG — Israeli companies have canceled the importation of grapes from South Africa, according to three people with direct knowledge. It is prompting fears the African nation’s businesses may face a broader boycott due to Pretoria’s stance over the conflict in Gaza.

South Africa took Israel to the UN’s International Court of Justice (ICJ) earlier this month over accusations that Israel is committing genocide against Palestinians. The court subsequently ordered Israel to do all it could to prevent acts of genocide in Gaza.

The Congress of South African Trade Unions (COSATU), South Africa’s biggest trade union group, called on the country’s government to protect its workforce from the impact of any trade dispute with Israel. “We need to ensure no South African worker loses their job,” said its spokesman, Matthew Parks, while also calling for the international community to impose sanctions on Israel.

It was important that South Africa’s trade department and other official bodies “provide support and assistance” to any company which “faces a boycott from Israel,” he told Semafor Africa.

KNOW MORE

Coal and diamonds are the most valuable South African exports to Israel. Some 53% of the nation’s coal was sent there in 2022 and a quarter of its diamonds.

South Africa has long criticized Israel and drawn parallels with its own history under the apartheid regime. It recalled its diplomats from Tel Aviv in November in response to Israel’s military operation in Gaza. Parliament later voted in favor of a motion calling for the closure of Israel’s embassy in Pretoria and the suspension of diplomatic ties — following pressure from within the country’s ruling party, as reported by Semafor Africa prior to the vote.

SAM’S VIEW

South Africa will see any trade boycott from Israel as expected collateral damage. Pretoria may also, justifiably, feel there is a bigger market for its agricultural products because Israel is 48th on its list of export partners. And just 4% of South African grape exports go to Israel. The bigger fear is any effect a trade spat with Israel could have on trade relations with the United States, the country’s long standing ally.

The threat of placing further strain on its relationship with the U.S. will worry the South African government after it took considerable diplomatic effort to improve relations last year after Washington’s ambassador accused Pretoria of trading arms with Russia — a matter South African government investigators told me could have been traced to a private company, even though an inquiry with a limited scope later found no evidence of an arms shipment.

Washington has several levers it can use against South Africa if it chose to join Israel in imposing restricting imports, including AGOA, its preferential trade platform that allows about 7,000 products to enter the U.S. market duty-free. But suspending South Africa’s access to AGOA would be equivalent to the U.S. cutting off its nose to spite its face because it needs South African minerals, making that option unlikely. It would also punish U.S. manufacturers like Ford, which makes cars from South Africa.

Despite the reality that the U.S. is unlikely to do anything drastic, people I’ve spoken to at the highest levels of government and trade unions fear that the political opposition to Israel, having already spilled over into the courtroom, could further spread to boardrooms and supermarket shelves.

Leaving Ecowas

→ What’s happening? Niger, Mali and Burkina Faso said they were leaving West Africa’s economic bloc Ecowas with immediate effect in a joint statement on Sunday. The three nations are led by military governments that came to power following coups. Ecowas had previously suspended the trio and urged each of them to return to democratic rule.

→ What led to this? Relations between Ecowas and the three countries had deteriorated in recent months as the bloc toughened its stance against military governments to deter potential putschists in a sub-region that’s been rocked by a series of coups in recent years. Ecowas had said it didn’t recognize military governments, imposed sanctions and even threatened a military intervention to restore democracy in Niger after its coup last July.

→ Was this a surprise? Not entirely. The three countries, all of which are contending with Islamist insurgencies, had already strengthened ties between themselves by signing a mutual defense pact last September to establish the Alliance of Sahel States (AES). Under the agreement, they will help each other against threats of armed rebellion or external aggression.

→ What’s at stake? The move undermines the push for a joined up regional response to insurgencies waged by militants linked to al-Qaida and Islamic State. It pushes against the more assertive Ecowas stance taken by the bloc’s current chair, Nigerian President Bola Tinubu, while cementing the rejection of those nations’ former colonial ruler France. It also opens the door to closer ties with Russia which has provided troops to Mali. Moscow reportedly deployed troops in Burkina Faso for the first time last week and has held talks with Niger’s junta about military assistance.

“Taken in combination with the recent deployment of Russian troops to Burkina Faso, this withdrawal looks like an even more diminishing of the influence of the two traditional super powers in West Africa — France and Nigeria,” Cheta Nwanze at Nigerian political risk consultancy SBM Intelligence, told Semafor Africa.

→ What happens next? Ecowas, in a communique issued on Sunday, said it was yet to receive any “direct formal notification” from the countries of their intention to leave the group. It’s not yet clear how their departure would affect the bloc, traditionally a group of 15 member countries where goods and citizens move freely. But it’s likely to undermine its longstanding aim to increase regional integration.

— Alexis

Femi Otedola

On Nigeria’s stock market this month, one billionaire’s company has become the most valuable public company with its shares up 116% year-to-date, breaking the 10 trillion naira ($11 billion) mark. But Dangote Cement, owned by Africa’s richest man Aliko Dangote, owes that jump to another Nigerian billionaire — Femi Otedola.

Otedola is Africa’s 20th richest person, according to Forbes. The 61-year-old oil magnate amassed a $1.1 billion fortune with holdings in energy, banking, shipping and real estate. He said last week that he has bought a “significant” amount of cement company’s stock — a “strategic investment” based on “confidence in Dangote Cement’s potential to generate foreign exchange for the country.” Dangote’s personal wealth has grown 46% this month to $22 billion, Bloomberg said, thanks to his compatriot who plans to keep buying the stock.

Nigeria’s naira has weakened nearly 20% against the dollar on the parallel market this year but the stock market’s main index is up 37%, reaching 100,000 points for the first time ever. At the heart of the milestone is what appears to be an aggressive investment pattern by one billionaire. A year ago, Otedola amassed a 6.3% stake in Transcorp, a conglomerate with hotel, power and oil businesses. The company’s value rose by 600% but Otedola would later sell off after Tony Elumelu, Transcorp’s controlling owner, increased his stake to ward off an ownership battle.

Analysts see nothing wrong with Otedola’s strategy. “He looks for blue chips he thinks are undervalued and buys a chunk,” one analyst said, speaking anonymously. CardinalStone, a Lagos-based broker has been pleased with its long position on Dangote Cement and plans to take profits this week.

Not everyone is comfortable with Otedola’s influence, though. Cryptic notes of caution and suspicion from some watchers dot corners of X (formerly Twitter). But their voices remain in the minority.

— Alexander Onukwue 

Most identity fraud attacks in Africa over the last two years have involved national ID documents, according to a report by identity verification company Smile ID. National IDs accounted for 80% of all document frauds, surpassing the instances involving passports, voter identification or driver’s licenses, the company said, citing its analysis of biometric and document verifications completed between 2021 and 2023. South Africa, Tanzania, Kenya, and Uganda were the countries where fraud attacks on national IDs were most prevalent. As many African countries implement new national ID systems, “logistical issues around properly discarding the older IDs can lead to them falling into the wrong hands,” Smile ID said in the report.

Safaricom said users of its M-Pesa mobile money service in Ethiopia nearly tripled to 3.1 million between September and December last year. M-Pesa was launched by the company’s Ethiopian subsidiary last August and raked in 1.2 million users a month later. The growth in users saw an increase in transaction value to 18.5 billion Kenyan shillings ($114.7 million) from 3 billion shillings ($18.6 million), while volume grew to 9 million transactions from 2 million, according to reports citing the company on Tuesday.

South African gaming company Carry1st has received investment from Sony’s $10 million Innovation Fund for Africa established last year. Neither party disclosed the amount involved, only describing it as a “strategic investment” in which the startup hopes to benefit from Sony’s expertise in gaming and entertainment. Carry1st estimates that there are more than 200 million gamers in Africa and that the market size is expected to be valued at $1 billion this year.

— Alexander 

🇮🇹 🌍 Italian Prime Minister Giorgia Meloni on Monday presented a strategic plan to African and European leaders aimed at transforming her country into an energy hub and stopping illegal migration. Meloni, who took office in 2022 on an anti-migrant ticket, spoke during the Italy-Africa summit attended by African leaders including President of Mozambique Filipe Nyusi (pictured), Kenya’s President William Ruto, and President Macky Sall of Senegal. She said the so-called Mattei Plan would initially be funded to the tune of €5.5 billion ($5.9 billion), some of which would be loans, with investments focused on energy, agriculture, water, health and education.

🇸🇳 Senegalese opposition leader Ousmane Sonko endorsed his deputy to run for president in the Feb. 25 elections. Sonko, in a speech broadcast on his Facebook page, urged his supporters to vote for Bassirou Faye, secretary-general of his dissolved Pastef party. Senegal’s constitutional council released the final list of presidential candidates on Jan. 20, excluding Sonko. Faye will take on 19 other candidates, including president Macky Sall’s chosen successor Prime Minister Amadou Ba. Sonko was detained in July and accused of plotting an insurrection, criminal conspiracy and theft, among other crimes.

🇷🇼 The Rwandan government on Monday said it had signed a memorandum of understanding with mining giant Rio Tinto for the exploration and mining of lithium in the country’s Western Province. Rio Tinto Minerals Development said it would accelerate the search for primary lithium deposits, one of the most sought-after minerals used in the manufacture of batteries for electric vehicles.

🇿🇦 South Africa’s ruling African National Congress has suspended its former President Jacob Zuma following a string of statements criticizing it and declaring support for the newly-formed Umkhonto we Sizwe party. The ANC’s secretary-general, announcing the suspension on Monday, said Zuma was “actively impugning” the party’s integrity. “Instead of ignoring him as a discredited former president, the ANC may be lending a veneer of credibility to Zuma and the new party,” wrote Sam Mkokeli in Johannesburg, for Semafor Africa. South Africa is due to hold a general election this year.

🇳🇬 Nigeria’s central bank on Monday announced it had pumped another $500 million into the foreign exchange market as it moves to settle all legitimate forex backlogs.The bank spokesperson said it was working to improve liquidity in the Nigerian forex markets. Earlier this month, it paid about $2 billion of the backlog across sectors such as manufacturing, aviation, and petroleum. Africa’s biggest economy has about $7 billion in forex forwards that have matured, causing concern to investors as foreign currency shortages continue to weigh down the naira currency.

Kenya’s government is under growing pressure to take action following a rise in cases of femicide and other violence targeting women. Thousands of women held major protests across the country over the weekend to raise awareness around the issue. Government officials on Tuesday held a meeting to discuss ways to protect women against predators. At least 10 cases of femicide have been reported in Kenya in January alone, with several gruesome murders hitting the headlines. The Coalition against Sexual Violence (CASV), which brings together 15 women’s organizations in Kenya, has tabled a list of demands to the government which include expedited arrests and legal process for perpetrators, as well as a statement from President William Ruto on the matter and countrywide campaigns on gender based violence.

• MrBeast has adapted his videos for China’s YouTube, Bilibili.
• The Washington Post’s CEO on his plans to fix “the most important news organization in America.”
• Global Election Hot List: Indonesia, the US, India, and more.

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— Yinka, Alexis, Alexander Onukwue, Martin Siele, and Muchira Gachenge