Africa

The size of the stake sold by Danish turbine manufacturer Vestas in Africa’s largest wind farm. Vestas sold a portion of Kenya’s Lake Turkana Wind Power to the Climate Finance Partnership, a fund managed by global investment giant BlackRock, for an undisclosed fee. The sale is a key part of Vestas’s plan to develop wind farms without remaining their long-term owner. The turbine maker, which had held the stake since 2014, will continue to service the turbines at the project. The stake became available after Google pulled out of a deal to buy it for $40 million in 2020, which valued the business at around $320 million.

Ghana eyes local iron ore processing to boost economy

THE NEWS

ACCRA, Ghana — Ghana aims to process its iron ore locally by 2027 for steel production to boost economic growth, a government document seen by Semafor Africa shows. It is part of a continent-wide push to add more value to natural resources at home.

The goal is stated in a report by the industry regulator Ghana-Integrated Iron and Steel Development Corporation (GIISDEC), together with the Ghana Geological Survey Authority (GGSA) mineral resources body. The document shows the government has signed agreements with eight companies to assess the country’s iron ore deposits. It also shows that none of the investors currently exploring the mineral will own concessions but rather mine within a fixed term, with the government prioritizing Ghanaian companies as key industry players.

Nasurulai Abdullai, GIISDEC’s spokesman, told Semafor Africa authorities are in talks with other companies in addition to those that had already signed agreements.

The decision not to export the mineral in its raw form comes as the West African nation — the world’s second largest cocoa exporter — seeks to diversify its economy from its reliance on exports of that crop, as well as gold and oil.

“Value addition means creating employment, expanding the base of what you have and therefore creating a future that would be beneficial to the country,” Deputy mining minister George Mireku Duker told Semafor Africa.

NANA OYE’S VIEW

Ghana’s plans for iron ore processing are part of the country’s push to take advantage of its natural resources to grow its economy instead of exporting raw materials. The thinking is that making steel domestically will literally provide the building blocks for international development while also creating jobs.

The export of processed iron would also generate much needed dollar revenues and reduce Ghana’s steel imports.

Several African countries are increasingly trying to process minerals at home — largely spurred on by the hope of tapping into the multibillion-dollar industry around electric vehicles. Africa Finance Corporation, a multilateral lender focused on infrastructure development, this month signed an expression of interest to provide $100 million in financing to develop a cobalt sulphate refinery in Zambia by the end of 2025. The substance is used in lithium-ion batteries. Zimbabwe last year banned raw lithium exports and encouraged local processing. Similarly, DR Congo has said it wants to move up the battery supply chain by processing more minerals locally.

The goals of these governments will have to withstand negotiations with companies that offer the necessary expertise as well as the rigors of domestic politics. One of those realities, which we’ll watch play out in Ghana, is the fact that Akufo-Addo’s administration will be replaced after an election in December. And, of course, we don’t know which policies will be carried on by the next government. Throw in the fact that mining is notoriously tricky, often beset by delays, and it seems hard to predict how much of the stated plan will be rolled out.

The African Union (AU) has agreed to a new initiative that will predict demand for vaccines and ensure member states can procure enough supply. Leaders who met at its annual summit in Addis Ababa over the weekend agreed to create a “robust market” for vaccine manufacturers, said Jean Kaseya who heads Africa CDC, the AU’s public health arm. Africa CDC will oversee the new procurement system. A vote at the summit expanded the mandate of Africa CDC to include medicine manufacturing and diagnostics. The move is part of a bid for the continent to produce at least 60% of its vaccines by 2040. Last year, it produced less than 1%. Africa CDC estimates that there is a $50 billion annual market in Africa for medicines and vaccines each year.

Kenya’s government sued over controversial ad deal

NAIROBI — Kenya’s government is being sued by the Law Society of Kenya (LSK), for contracting a local newspaper to solely publish and distribute government advertisements through a weekly supplement.

The LSK claims the move to centralize government advertising in the newspaper, The Star, will stifle media freedom and limit public access to information in contravention of several constitutional provisions.

The suit comes a fortnight after Semafor Africa exclusively reported that executives at two of Kenya’s largest media houses — Nation Media Group (NMG) and Mediamax — had discussed potential legal challenges to the government’s award of the tender to The Star, which threatens to cost them millions of dollars in potential revenue amid a financial downturn in the sector. The government supplement, MyGov, was previously co-distributed by Nation, Standard and People Daily. Government advertising accounts for around 30% to 40% of the revenues of newspaper houses.

Media executives who spoke to Semafor Africa claimed the move by President William Ruto’s administration was meant to hurt their ability to hold the government accountable.

The government defended the award of the tender, saying the process was above board and noting that The Star’s bid was much lower than those of its rivals.

The High Court in Nairobi on Monday ordered for the ICT ministry and National Treasury to be served with court papers regarding the matter.

— Martin Siele

Senegal-based venture capital firm Partech Africa said it raised €280 million ($300 million) for an investment fund for African tech startups — a rare sign of interest in African tech amid a slow fundraising year. This will be Partech’s second such fund, and doubles the size of its existing investment.

Investors in the Partech Africa Fund II include Lagos-based African Reinsurance Corporation and the Dubai Future District Fund. The African Development Bank and the World Bank’s International Finance Corporation are among more than 40 other development financiers that invested in the fund. Partech also plans to expand its operations, adding a new office in Lagos, Nigeria, to support its Dakar headquarters, and an outpost in Nairobi, Kenya.

The firm invests between $1 million and $15 million in early-stage through to later stage “Series C” African startups, making it one of the continent’s largest investors. In 2018, it raised $135 million and funded 17 startups, including South African payments provider Yoco, Nigerian groceries logistics startup TradeDepot, and Wave, a Senegal-based mobile banking service.

African tech funding last year saw the withdrawal of big-ticket investors like Tiger Global and Softbank, who drew back to focus on their home markets. Partech’s new fund, one of the largest yet dedicated to African startups, makes the case that some investors are still betting on tech innovation on the continent.

— Alexander Onukwue

🇿🇦 South African mining company Anglo American Platinum (Amplats) said on Monday that it would restructure its operations after profit plunged by 71% last year. Around 3,700 jobs could be cut, or around 17% of its workforce. Amplats chief executive Craig Miller said “further measures to create critical resilience and greater competitiveness” were needed to sustain the business. The price of platinum-group metals has dropped significantly since the start of last year.

🇬🇳 Guinea’s military junta announced the dissolution of the government and sealed the country’s borders, but did not disclose the reason for the decision. The presidency’s secretary general, Amara Camara, read the presidential decree on state TV on Monday. He did not say when a new government might be appointed. Ministers from the dissolved government have been ordered to surrender their vehicles and passports. The junta seized power in a military coup in Sept. 2021, forming a government led by Prime Minister Bernard Goumou.

🇳🇬 Singaporean commodity trader Olam Group said it found no evidence to support fraud allegations against its Nigerian operations. Reporting in the Nigerian press last year claimed that local authorities were investigating the companies for a $50 billion foreign exchange fraud. Olam termed the allegations “manifestly inaccurate and designed to be misleading.” The company saw its Singapore-listed shares surge to the highest level in almost 15 years following the investigation’s culmination.

🇪🇹 Ethiopia’s investment arm signed a preliminary agreement to develop infrastructure for data mining and artificial intelligence training operations. The deal comes as demand for bitcoin mining surges in Ethiopia, where cheap and abundant power make it easy to create the cryptocurrency.

🇿🇦 South Africa’s Presidential Climate Commission said the energy ministry lacked adequate plans to address the country’s power supply crisis and climate change concerns. The body, established to advise President Cyril Ramaphosa on climate issues, has sought to drive the country away from its reliance on coal-fired power stations and transition to cleaner sources of energy. South Africa’s energy minister is reluctant to move away from fossil fuels, arguing it is necessary for electricity supply and employment. Africa’s most industrialized economy is the 15th-largest producer of greenhouse gasses in the world.

East Africa’s trade bottlenecks

→ What’s happening? Non-tariff barriers (NTBs) are threatening the growth of trade between member states of the East African Community (EAC). A 2023 Regional Meeting Committee report from the EAC places the direct costs of NTBs at $16.7 million. NTBs are neither import or export duties, but restrict international trade through bureaucratic delays, import and export quotas, and other technical barriers.

→ Why is this important? Non-tariff barriers are fueling trade disputes between East African countries. Kenya’s imports from Tanzania fell last year by 19.2%, or 10.23 billion Kenyan shillings ($723 million), after Dodoma introduced food export restrictions. And Uganda took Kenya to the East African Court of Justice in January after Nairobi denied it permission to use its ports to handle oil imports headed for Kampala.

→ What’s the EAC saying? The EAC is pushing for expedited processes to resolve non-tariff trade barriers. The organization’s chair, Dr. Peter Mathuki, urged ministers to take action, and said NTBs were an impediment to trade within the region. Trade grew to $9.4 billion last year, up nearly 8% when compared to 2022 — but the regional bloc argues growth would be higher without the restrictions.

→ Where does Africa’s free trade area fit into this? Experts warn NTBs pose one of the biggest threats to the success of the African Continental Free Trade Area (AfCTA), which is intended to grow intra-African trade. Anderson Maina, a Nairobi-based tax consultant, told Semafor Africa the impact of NTBs was being felt across the continent. He pointed to data by the UN trade body UNCTAD, which shows African countries could gain $20 billion per year by tackling NTBs at the continental level, compared to just $3.6 billion they could gain by removing tariffs.

“When you see trucks piling up at the Kenya-Uganda border, because of customs delays and trade restrictions, that’s money and opportunities being lost,” he said.

— Martin Siele

Tanzania’s founding father Julius Nyerere has been honored with a commemorative statue outside of the African Union’s (AU) headquarters in Addis Ababa, Ethiopia. Nyerere, known as a committed pan-Africanist, played a key role in establishing what is now the AU. The prime minister led his country from its independence in 1961 until 1985, and was a staunch anti-colonialist, advocating for racial harmony and an end to white minority rule in southern Africa. He becomes the third leader to be honored with a statue outside the AU headquarters after Ghana’s founding father Kwame Nkrumah and Ethiopia’s emperor Haile Selassie, both symbols of African nationalism.

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