Africa

How much China plans to spend on modernizing the railway connecting Zambia’s copper belt to Tanzania’s Port of Dar es Salaam. The railway, built in the 1970s, was funded by the Mao Zedong-led Chinese government as a foreign aid project. A new proposal presented by China’s ambassador to Zambia revealed that the renovation would be funded through a public-private partnership. It is expected to provide a transport route for critical minerals, including copper and cobalt used in the production of electric vehicle batteries.

African development lender looks beyond the continent for investors

THE SCOOP

Africa Finance Corporation, an Africa-owned development institution, is restructuring its equity holding for non-African sovereigns to take more than a fifth of its ownership structure, according to a senior executive at the bank, raising concerns that it could alter the lender’s priorities.

The Lagos-based multilateral lender, which took on Turkey’s Exim Bank as its first non-regional equity holder in December, has held early talks with future sovereign investors including United Arab Emirates, Qatar, and Saudi Arabia as it looks for long-term partners focused on African development, AFC Executive Director Sanjeev Gupta told Semafor Africa.

Gupta said the bank’s management had made a “conscious strategy” to make up to 24% of the institution’s equity available “for non-African shareholders to come in.”

KNOW MORE

AFC was founded as a multilateral financial institution in 2007, via a treaty among African countries to address the continent’s infrastructure and energy deficits among other areas. It was initiated by Nigeria which retains a 40% plus stake in the Lagos-based firm via the country’s central bank.

Today, there are 42 African sovereign states with equity stakes alongside African financial institutions. The bank had $10.8 billion in assets at the end of the first half of 2023. It has invested around $11 billion since its inception.

YINKA’S VIEW

There are plenty of reasons to understand why AFC’s senior team, led by chief executive Samaila Zubairu, are keen on the prospect of expanding their equity holding base with non-regional members. For one thing, as an ambitious African institution, it can’t be easy to maintain an investment grade credit rating on the global markets when so many of the sovereigns and African institutional stakeholders are themselves not of investment grade. Adding sovereign holders with potentially stronger credit profiles will go some way to helping to maintain its A3 credit rating, and maybe even improve it, say market watchers I’ve spoken with.

But there will be some tension about whether AFC is going to lose its carefully-managed identity as a pragmatic Africa-first financial institution, which is tied to its wholly African ownership. The much larger African Development Bank — Africa’s top development bank and the continent’s only AAA-rated financial institution — has 54 African member countries and 27 non-African members. There have been quiet grumblings in the past about whether it moves quickly enough to address Africa’s many urgent challenges and whether its non-regional holders have too much say on its agenda.

AFC’s Gupta says it is aware of these risks and is taking a “deliberate” approach. “We just don’t want anybody to come in as an investor,” he told me. “We only want those sovereigns or private sector capital that have a strategic interest in Africa.”

Each of the non-regional partners will hold relatively small stakes. Turkey, for example, will hold less than 4%, Gupta said.

Nigeria’s instant payments system recorded 1 billion transactions in the month of March last year, the first time since its creation a decade ago. The milestone came weeks after the central bank’s currency redesign kicked in, triggering a scarcity of physical cash across Nigeria. Transaction volumes hovered at around 800 million a month for the rest of the year but that was still well above 2022 levels, according to data by NIBSS — a company co-owned by Nigerian commercial banks and the central bank that operates the instant payments system. Cash remains dominant in Nigerian daily life but electronic payments have grown over the years. August 2019 was the first month in which 100 million transactions were recorded on the instant payments system but the volume in 2023 was more than eight times larger than 2019’s according to NIBSS.

Senegal’s election delay protests

→ What’s happening? A delegation from West African bloc Ecowas is in Senegal for talks with government leaders and civil society groups to discuss tensions that have engulfed the country since the 10-month postponement of presidential elections that were due to be held this month. The Ecowas parliament’s speaker Sidie Mohamed Tunis is leading the diplomatic mission which arrived in Senegal yesterday and is due to stay until Feb. 14, Reuters reports.

→ Who else is coming? Nigeria’s President Bola Tinubu, who currently heads Ecowas, was reportedly due to visit Senegal’s President Macky Sall for talks yesterday but postponed the trip with no new date set, according to RFI.

→ Why is Senegal in this situation? Demonstrations have rocked the capital Dakar and other cities since Sall moved the elections which were due to take place on Feb. 25. Police have used tear gas on protesters and some journalists have reported being assaulted or arrested. The tensions intensified after a parliamentary vote last Monday ratified postponing the election to Dec.15 after dissenting MPs were forced out of the chamber. Three people have died since the protests began.

→ Who is driving the protests? An alliance of opposition parties has rallied around a determination to ensure the elections are held this month and prevent Sall from staying beyond the end of his term on April 2. Its leading voices include Khalifa Sall (a candidate who is no relation to the president), former prime minister Aminata Toure, and Bassirou Diomaye Faye — a candidate chosen by jailed opposition figure Ousmane Sonko.

→ So, opposition parties are presenting a united front? No. The alliance does not include the Senegalese Democratic Party (PDS). Despite being a prominent opposition party, it proposed and backed the controversial postponement after raising a dispute about the electoral body’s disqualification of its candidate, Karim Wade.

→ What’s President Sall saying? He rejects accusations that his move is geared towards securing a third term. “I am completely ready to pass the baton. I have always been programmed for that,” Sall told the Associated Press, in an interview published on Feb. 10. Abdoulaye Wade, the former Senegalese president and Karim’s father, said in a joint statement with his predecessor Abdou Diouf that they spoke with Sall and received assurances that he is not seeking a third term. They asked him to begin the national dialogue he said was necessary for a fair electoral process.

— Alexander Onukwue

JOHANNESBURG — South Africa’s government has mounted a fresh legal challenge in its bid to push for a ceasefire in Gaza, Zane Dangor, director-general in the Department of International Relations and Cooperation, told Semafor Africa.

It follows concerns that the Israeli government is not complying with a recent International Court of Justice (ICJ) ruling. South Africa accused Israel of genocide and sought a ruling from the ICJ in January.

Pretoria is concerned that the Jan. 26 ruling, which ordered Israel to take measures to prevent acts of genocide, is being ignored. It submitted legal papers to the ICJ on Tuesday, Dangor said.

Dangor said South Africa’s stance enjoyed support from many quarters, including from diplomatic missions of countries that are traditionally aligned to Israel. He hopes civil society formations would press their governments to put Israel under pressure to agree to calls for a ceasefire.

South Africa wrote to the ICJ, asking it to step in more decisively to stop the carnage, said Dangor.

South African businesses are concerned that trade relations with Israel’s allies, like the U.S., could be jeopardized as a result of South Africa’s pro-Palestine stance, a business leader said, speaking on condition of anonymity over fear of censure. In the same week, it emerged that the U.S. Congress had received a draft bill calling for a full review of the country’s bilateral relationship with South Africa.

The bill was introduced by U.S. Republican congressman John James and Democratic Party congressman Jared Moskowitz, bringing uncertainty about South Africa’s future participation in the African Growth and Opportunity Act, which gives duty-free status to thousands of exports from the continent.

— Sam Mkokeli

Semafor’s 2024 World Economy Summit, on April 17-18, will feature conversations with global policymakers and power brokers in Washington, against the backdrop of the IMF and World Bank meetings.

Chaired by former U.S. Commerce Secretary Penny Pritzker and Carlyle Group co-founder David Rubenstein, and in partnership with BCG, the summit will feature 150 speakers across two days and three different stages, including the Gallup Great Hall. Join Semafor for conversations with the people shaping the global economy.

Access Holdings, which owns Nigeria’s largest bank by assets, has appointed Bolaji Agbede as its acting chief executive following the death of its CEO Herbert Wigwe on Friday in a helicopter crash.

Agbede joined Access Bank in 2003, a year after Wigwe bought the bank with co-owner Aigboje Aig-Imokhuede. Agbede managed the bank’s portfolio of chemical trading companies and led human resources for 12 years before becoming an executive director when Access evolved into a holding company in 2022, the bank said in a statement.

Her appointment follows the group’s “robust succession planning practices,” said Abubakar Jimoh, the board chair. The role will see Agbede oversee Access’s presence across 14 African countries and diversification into services like fintech. In his time as CEO, Wigwe led the overall ship but individual country managers and teams in each country — from Kenya to South Africa — ran banking operations.

Wigwe’s death has elicited grief across Africa. Nigeria’s President Bola Tinubu said his passing was “an overwhelming tragedy that is shocking beyond comprehension.” South Africa’s President Cyril Ramaphosa mourned his death citing Access Bank’s “support for our investment drive.”

Meanwhile, investigators of the helicopter crash in the U.S. plan to produce a preliminary report in a few weeks. “We are on scene now to gather perishable evidence,” a transport safety official said on Sunday in a briefing.

— Alexander Onukwue in Lagos

🇿🇼 Zimbabwe is considering backing its currency with gold in a bid to stabilize it, the finance minister said on Monday. Last week President Emmerson Mnangagwa said officials were working on a “structured currency” to manage exchange rate volatility. The Zimbabwean dollar has slumped by about 40% since the start of the year due to increased foreign currency demand and weaker commodity prices denting inflows. The authorities have repeatedly tried to rescue the Zimbabwe dollar following its reintroduction in 2019, a decade after it was scrapped due to hyperinflation.

🇬🇧 🇳🇬 U.K. Business and Trade Secretary Kemi Badenoch signed an agreement with Nigeria to promote bilateral trade. The deal, the first of its kind between the nations, will see Nigeria commit to removing trade barriers and “pave the way” for collaboration in the film and media industry, the UK government said in a statement. The UK has struggled to arrange new full free trade agreements since leaving the European Union. Trade between Nigeria and the U.K. totaled $8.8 billion in the year to September 2023.

🇪🇺 🇲🇷 The European Union has pledged some €200 million ($215.4 million) to support Mauritania’s efforts to curb people smuggling to the Canary Islands and launch new infrastructure projects. Initiatives to be funded over the next five years include green hydrogen projects in collaboration with Spanish companies. The announcement was made last week when EU officials visited Mauritania and held talks with President Mohamed Ould Ghazouani. The northwest African country is part of a significant route for people trying to reach the Canary Islands.

🇿🇦 South Africa’s president on Monday ordered the deployment of 2,900 troops to tackle armed groups in eastern DR Congo. The troops will be deployed until Dec.15 with a 2 billion rand ($106 million) budget. It comes amid clashes between M23 rebels and the Congolese army in DRC’s North Kivu province. The troops will form part of a Southern African Development Community (SADC) force approved by the bloc last year to help the world’s top supplier of cobalt, where fighting over land and resources has caused instability for decades.

🇸🇴 Militant group al-Shabab claimed responsibility for an attack at a military base in Somalia’s capital that the United Arab Emirates said killed four Emirati troops and a Bahraini military officer. The UAE has increased its investments in ports in East Africa through its maritime giant DP World, including developments in Somalia’s Bosaso port and Berbera in the autonomous Somaliland region. The militant group, in its statement, said it considers the UAE to be an “enemy” of Islamic law for backing the Somali government in its fight against the group.

Kobi Sam is managing director of the Emerging Market Alternative Credit team at Ninety One, a South Africa-based investment firm. He recently traveled across the United States meeting investors to discuss private credit investment opportunities in Africa.

Tanzanian writers dominated the Safal-Cornell Kiswahili Prize for African Literature, whose winners were announced last Friday in Nairobi. The prize, founded in 2014, celebrates poetry and prose written in the Kiswahili language. Four Tanzanian writers were the winners and runners up in fiction and poetry categories. Philipo Oyaro won the top fiction prize for his book Dunia Duara and Fatuma Salim clinched the top poetry prize for Changa la Moto. The two winners received $5,000 while runners-up walked away with $2,500. “Recognizing the work of writers in Kiswahili de-centers the use of imperial and borrowed languages in African literatures,” argues Kenyan writer Njuki Githethwa in an essay about the prize, published in Africa is a Country. “Writing and expressing in African languages contributes to African liberation.”

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