Africa

➚  Buy: Nestlé. Rwanda’s Food and Drugs Authority lifted a one-month ban on Cerelac, a widely-used cereal for babies produced by the Swiss consumer goods company. Regulators had suspended sales due to fears that batches of the product could be fake. Laboratory tests showed boxes of the cereal that initially did not bear the address of its manufacturer were authentic.

➘ Sell: Unilever. The British company’s division in Nigeria will no longer produce household cleaning and skincare products as part of a business restructuring to “accelerate growth and sustain profitability.” Popular Unilever brands like Omo, Lux, and Sunlight are a staple of the country’s consumer goods sector. The company said this exit is to “reduce exposure to devaluation and currency liquidity” in its business model.

🇺🇬 Ugandan lawmakers passed an anti-homosexuality bill on Tuesday which proposes tough penalties, including up to life imprisonment, for anyone who publicly identifies as LGBTQ+, engages in, or promotes same-sex relations. The bill, which is set to be presented to President Yoweri Museveni for assent, has already been criticized by the United Nations and the U.S.

🇪🇹 Ethiopia’s parliament on Wednesday removed the Tigray region’s dominant party, Tigray People’s Liberation Front, from the official list of terrorist groups. The move, which was supported by the majority of lawmakers, is aimed at strengthening the November 2022 peace deal that ended a two-year war primarily waged between Tigrayan forces and Ethiopian Federal soldiers. Ethiopia has also established an interim administration for Tigray which was a key step in the implementation of the agreement.

🇨🇫 Chinese President Xi Jinping condemned an armed attack on a gold mine in the Central African Republic that left nine Chinese citizens dead and two others severely injured last weekend. Xi called for the perpetrators to be brought to justice and urged authorities in the Central African Republic to ensure the safety of Chinese nationals.

🇰🇪 Meta was dragged to court in Kenya for the third time in less than a year on Monday by 43 content moderators formerly employed through the outsourcing company Sama. Court documents seen by Semafor Africa reveal that the group, which moderated content on Facebook and Instagram, is accusing Meta of illegally sacking and blacklisting them from jobs with the outsourcing firm that replaced Sama. On Tuesday, Kenya’s Employment and Labour Relations Court granted their plea, pending a case hearing on March 31.

The capacity of new power generation projects registered in South Africa last month, according to the country’s energy regulator. For comparison, the total capacity registered for the whole of 2022 was 1,664MW. South African businesses have increasingly pursued private power generation to reduce their reliance on ailing state utility Eskom, whose problems have led to rolling blackouts that prompted President Cyril Ramaphosa to declare a state of disaster last month. The Outlier, citing the National Energy Regulator of South Africa figures, said there had been a “massive increase” in renewable energy power projects in the last year.

Zimbabwe’s EV battery plant ambitions favor Chinese players over locals

THE NEWS

HARARE, Zimbabwe — Zimbabwe’s decision to ban raw lithium exports and encourage local processing is helping Chinese and western companies gain a foothold in its mining industry — but is putting local players at a competitive disadvantage.

Global players have rushed to close deals since the unexpected ban was announced in December. On Wednesday, Chinese battery minerals producer Zhejiang Huayou Cobalt revealed it had started trial production of lithium concentrates at its Arcadia mine, which it bought last year for $422 million. London-listed Marula Mining this month established Muchai Mining, a subsidiary aimed at developing lithium mining and processing opportunities, which include further refining the lithium in the matte format usable in the manufacture of lithium batteries. Last month, China Natural Resource announced a $1.75 billion deal to acquire Williams Minerals, the rightsholder of a lithium mine in Manicaland Province.

As Africa’s largest lithium producer, Zimbabwe is keen to take advantage of a rapidly growing global demand for electric vehicle car batteries, which use lithium elements in their production. Analysts at Mckinsey have projected the entire lithium-ion battery chain, from mining through recycling, to grow by over 30% annually to top $400 billion in 2030.

Zimbabwe has been through a period of difficult economic conditions for more than two decades now with hyperinflation, forex shortages, and rampant unemployment ravaging the country. President Emerson Mnangagwa’s government sees moving up the value chain across the mining sector as one of the paths to revitalizing the country, with the ultimate goal of setting up domestic EV battery plants.

Polite Kambamura, Zimbabwe’s Deputy Mines Minister told Semafor Africa, the government wants to drive the country towards a $12 billion mining industry by the end of this year, up from about $5 billion grossed by mineral exports in 2021, with lithium mining alone expected to generate about $500 million.

TAWANDA’S VIEW

The most likely winners of Zimbabwe’s push to move up the value chain are Chinese companies, who already control 60% of the world’s lithium processing capacity; they are most able to take advantage of Zimbabwe’s new push by building production facilities near the mines.

Zimbabwean companies will have much less control over the lithium processing that takes place here. Local producers will find it difficult to take advantage of the opportunities without special dispensation by the government or by working together to access funding, said experts.

Brains Muchemwa, an economist working with the Zimbabwe Indigenous Lithium Miners and Processors Association, said there is a need for the creation of a funding vehicle to support local players in the lithium sector as a way of building up capacity at home.

“Talk of battery manufacturing plants without building capacity in the industry is a long shot… it’s just not possible in the short term,” Muchemwa told Semafor Africa.

He explained that “holders of lithium claims in Zimbabwe are selling them off because they do not have the capacity for exploration or to fund production so the government needs to set-up a fund” for the local lithium holders to be able to do exploration.

There are also real doubts that Zimbabwe will realize its vision of being home to lithium battery manufacturing plants anytime soon. The approach by players to set up processing plants individually is seen by experts as haphazard and more focused on being in compliance with the new laws rather than any concerted attempt to build a global industry hub.

Muchemwa believes that the government has to take realistic steps, starting off with enabling Zimbabwean lithium miners to be able to undertake exploration and processing. Zimbabwe produced 1,200 tonnes of lithium in 2021, a relatively modest amount in global terms, but with better exploration, production and processing capacity, it can not only mine more lithium but also move up the production chain.

Other local, mostly small-scale miners of lithium in Zimbabwe, say they require access to processors as the first phase of investment to upgrade production of the battery metal in Zimbabwe before “talk of electric vehicle battery production.”

“It will take time for us to get those plants to manufacture batteries,” said Tendai Mandaza, a small-scale lithium miner, who operates in the Mutoko district of Mashonaland East Province. At the moment, he explained, miners like him “are just mining on a low scale due to constraints” as they “do not have access to machinery and equipment; we are just mining for survival.”

ROOM FOR DISAGREEMENT

Investors and new entrants have expressed long-term commitment to contribute to the potential electric vehicle battery manufacturing ecosystem in Zimbabwe. “We are committed to value-add in-country and work with local partners and industry to make this a reality,” said Jason Brewer, chief executive officer for Marula Mining in an interview. “Zimbabwe is a great opportunity and that view is clearly reinforced by the significant investment that Zimbabwe is attracting at the moment in its lithium sector.”

THE VIEW FROM LONDON

Zimbabwe needs technological assistance to fully benefit from its lithium endowment, said Stephen Chan of University of London’s SOAS college. Chan said “lithium in Zimbabwe has to be exported” mainly because the mineral-rich southern African country “doesn’t have sufficient industry or transport” required to move and process the metal at scale.

But with western and Chinese companies increasingly scrambling for access to Zimbabwe’s lithium, amid reports of mounting stockpiles of the metal owing to the ban, Chan said that “race for access (to lithium) will become more intense as time passes” nonetheless.

NOTABLE

• Zimbabwe’s decision to ban lithium ore exports has resulted in nearly 2 million tons of ore being stockpiled, according to Zimbabwe Miners Federation President Henrietta Rushwaya. The industry is calling on the government to review the ban as it “threatens the viability of their operations.”
• China beat Tesla to Nigeria’s lithium mining promise when Kaduna, a state in the country’s northwestern region, selected Ming Xin Mineral Separation to build the country’s first lithium-processing plant.

Paying school fees is one of the most commonly reported financial worries of people in sub-Saharan Africa, the World Bank’s Global Findex database shows. And the stress is significantly higher among women than men in the region. Liberia typifies this trend with 67% of its women expressing concerns about paying school fees compared with 56% of men. Kenya, Nigeria, South Africa — three of Africa’s largest economies — show a similar pattern. As the World Bank suggests, there are many reasons why women might report greater financial stress about school fees than men. “Women might be responsible for making school fee payments or might worry less than men about other expenses, such as monthly bills,” the bank says in a report. It suggests a continent-wide culture where catering to children’s education is a mother’s concern, supposedly while men are preoccupied by other bills. South Sudan was one of a few countries where paying school fees predominantly concerns men.

Africa’s climate change adaptation requires more private funding

Sub-Saharan Africa is particularly vulnerable to waves of displacement from global warming and extreme weather events, warns the United Nation’s latest report on climate change. It says an absence of concerted investment in adaptation methods will increase damages.

The UN’s Intergovernmental Panel on CIimate Change (IPCC) this month reiterated the many ways in which human activity has caused climate change, noting specifically that Africa, Asia, Central and South America, and small island states have been most adversely affected. Of particular concern is the assessment that funding to help affected communities currently “falls short.”

The report does not go into specific climate challenges in African countries, like in Malawi where a deadly cyclone has killed over 500 people this month after ravaging much of the country. But its warning of the potential for more displacement is validated by the ongoing turbulence. The UN’s International Organisation for Migration says half a million people have been displaced in Malawi, with neighbors Mozambique and Madagascar experiencing similar devastation.

Displacement due to climate change “disrupts social connections and community cohesiveness, putting additional pressure on resources in the receiving areas,” Christopher Trisos, a climate scientist in South Africa and co-author of the latest IPCC report, told Semafor Africa. While migration can be effective for climate adaptation, institutions, governments and people must be provided with sufficient resources, Trisos said.

Financial support remains a thorny subject, however. A UN fund being created to distribute money from richer to low-income countries impacted by climate change is splitting opinion among climate negotiators. But adaptation cannot rely on public funding alone; over 90% of funding already comes from the public sector, Trisos said. “The private sector today has not invested much, especially not for the most vulnerable people in Africa.”

— Alexander Onukwue

A proposal for African nations to swap debt to invest in climate action was discussed this week at a United Nations meeting of finance ministers in Ethiopia’s capital, Addis Ababa. John Ashbourne is a global economist at Fitch Solutions, specializing in emerging markets.

• Nigeria’s Labour Party presidential candidate in the February elections Peter Obi may have defined his place as a political force to reckon with, according to an analysis by the Council on Foreign Relations. Until last May, the presidential race in Africa’s biggest economy was a two-horse race between the incumbent All Progressives Congress and the opposition People’s Democratic Party. Obi’s entry triggered a youth movement drawn from urban areas and trade unions which distorted the odds. The 61-year-old and his supporters — known as the Obi-dients — await the outcome of a legal challenge lodged after he lost to APC’s Bola Tinubu. But the legacy of Obi’s campaign may be that it has inspired a young generation of voters to rise above ethnopolitical identity and embrace a pan-Nigerian identity.
• China is investing heavily to project a positive image of the country to the world through media, and particularly to fast-growing populations across Africa. The Chinese Communist Party has been working consistently to develop compelling messaging for its African audiences through its official news agency, Xinhua, which has 37 bureaus in Africa, explains Foreign Policy. Xinhua promotes a positive view of the CCP and Chinese culture in all six U.N. languages — Arabic, English, French, Spanish, Russian, and Chinese — on the continent.

We all instinctively know African pop has become the world’s pop in the last couple of years led by Afrobeats stars, mostly from Nigeria, showing up at the top of charts and major events like the Grammys and Oscars. Now we have the data to back it up from the global music trade body IFPI. It said this week that sub-Saharan Africa was the fastest growing region for recorded music in the world in 2022 with “steep increases of 34.7%” boosted by a strong climb in revenues in South Africa. Talking of South Africa, in the report, Warner Music Africa’s managing director Temi Adeniji highlights Amapiano as the next big African genre on the global stage: “It reminds me of where Afrobeats was maybe five years ago when people were just starting to understand it.” We think Amapiano star Kamo Mphela (pictured) is one to keep an eye on.

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— Yinka, Alexis, Alexander, and Muchira