Africa

1. Maersk’s Nigeria investment
2. South Africa on top
3. An AI battle
4. OPay keeps rising
5. China’s influence

Also, Portugal backs away from reparations.

Hello! Welcome to Semafor Africa, where we’re following the twists and turns of South Africa’s election campaigns. Whoever leads the country after the May 29 vote will be responsible for a nation that’ll play a pivotal role in the continent’s relationship with the rest of the world in the next few years.

South Africa will chair the G20 in 2025, after Brazil vacates the position. That role offers an opportunity for Pretoria to put African issues on the global agenda within a group that discusses the world’s most pressing economic and political issues. And Pretoria will be joined by the African Union, representing 55 member states, which became a G20 member last year. That combination should amplify the voice of Africans in a group whose members account for 85% of the world’s economic output and more than 75% of world trade.

Internationally, South Africa’s influence will extend beyond the G20 due to its status as a BRICS nation alongside Brazil, Russia, India, and China. The group has expanded over the last year — through the admission of new members, but also by positioning itself as a geopolitical counterbalance to the US-led West. And, as we explore in more detail in this edition, South Africa’s economy is projected to be the largest on the continent this year. South Africa’s economy, along with that of Nigeria, plays an outsized role in boosting growth elsewhere on the continent.

While all politics is local, the five-year term of South Africa’s next president will clearly be significant far beyond the country’s borders. The world will be watching, and so will we.

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Nigeria secures seaport investment

The value of investment in seaport infrastructure that Nigeria said it had secured from Danish shipping company A.P. Moller-Maersk. The investment followed a meeting between President Bola Tinubu and the company’s chairman in Saudi Arabia. Tinubu said his government would support the modernization and automation of its ports, including in the commercial capital Lagos, to improve trade, reduce corruption and boost efficiency.

South Africa takes the lead

South Africa will become Africa’s largest economy this year, according to growth projections in the International Monetary Fund’s World Outlook report published earlier this month. This could be helpful for bragging rights by supporters and surrogates for the ruling African National Congress in the run-up to what is likely to be a historic election next month. But closer review suggests that Africa’s most industrialized economy might be the best of a tepid bunch. Its GDP is only expected to grow by 0.9%, as it remains hampered by energy shortages and clogged ports. Nigeria, which proudly held the “Africa’s biggest economy” moniker until it was edged out last year by Egypt, has seen its economy shrink as the impact of painful economic reforms take hold. While it is forecast to grow by 3.3% this year, Nigeria is still expected to slip to fourth behind Egypt and Algeria.

AI in Africa opens up new battlefront for China, US

The US and China are in a new race to shape the development, use and governance of artificial intelligence in Africa, even as African countries scramble to devise their own AI policies.

The two countries have stepped up efforts in recent weeks to collaborate with African countries on attracting AI investment and formulating policy.

At the American Chamber of Commerce Business Summit in Nairobi last week, the US and Kenya signed a partnership agreement enabling American companies to invest in artificial intelligence and data centers in Kenya, East Africa’s largest economy. US Secretary of Commerce Gina Raimondo said the deal would help “facilitate data flows, and empower digital upskilling.” Kenya, Microsoft, and the UAE’s G42 investment group also announced the construction of a 1 gigawatt data center powered by renewable energy near Nairobi.

China declared its intention to collaborate with African countries on AI at the China-Africa internet summit in the southeastern city of Xiamen earlier in April. China’s Cyberspace Administration pushed for the establishment of a China-Africa AI policy and the promotion of AI technology research, development, and application, including in African learning institutions.

A handful of African countries, including Egypt, Rwanda, and Mauritius have so far published national AI strategies, while others including Nigeria, Kenya, and South Africa are in different stages of developing similar strategies. But regulation of AI is yet to be adopted on the continent, despite growing calls to do so.

Chinese-owned fintech sees valuation rise

The valuation of OPay, one of Africa’s largest fintech startups operating in Nigeria and Egypt, has risen to nearly $3 billion, according to Opera, the Chinese-owned Norwegian technology company that was one of its early investors.

In a securities filing to the US SEC, Opera said the revised valuation follows an increase in its holding from 6.4% to 9.3% last year and in the fintech’s performance metrics, notably a four-fold increase in customer base in 2023. Opera said it expects OPay’s revenue to grow at an annualized rate of 35% between 2023 and 2030.

OPay’s products in Nigeria, its largest market, are a bank account for faster online money transfers than traditional banks provide, and a point-of-sale device that enables vendors to accept card payments and offer cash withdrawals to customers. Nigeria’s botched currency redesign last year accelerated OPay’s growth as a major player in the country’s financial services ecosystem.

The fintech giant was valued at $2 billion in 2021 when it raised $400 million in a round led by SoftBank, with the participation of investors including Sequoia Capital China. It has remained one of Africa’s most valuable startups in the years since, drawing closer to Flutterwave’s February 2022 valuation of $3 billion.

Opera’s increased stake in OPay came via a transaction to buy the majority of the Asian business of Nanobank, a lender that Opera partly owned. Opera had held its OPay shares as “for sale” since 2021 until last December, signaling a change in perception of OPay’s prospects, including greater possibility of an initial public offering in the near future.

The 2024 US-Africa Business Summit, hosted by Corporate Council on Africa, is the premier conference promoting US-Africa trade, investment, and commercial engagement. The Summit will be held May 6-9, 2023 in Dallas, Texas, and will bring together more than 1,500 US and African public and private sector executives including Heads of State, international investors, US and African government officials, and multilateral stakeholders. Semafor Africa readers get 20% when registering here.

US losing influential edge to China in Africa, poll suggests

Washington’s influence on the African continent is waning — and it is being edged out by Beijing for the first time, new polling from Gallup shows.

The US and China are racing to establish dominance on the African continent, a rivalry “centered on many geopolitical issues, including a race to secure access to precious minerals and disputes over debt relief,” the Gallup report noted.

Approval ratings of the US have sunk in African nations in recent years, the data shows, and people are instead turning their attention towards China, which has pledged myriad investments to African countries through its Belt and Road Initiative and other private investments.

China last year saw its highest approval rating on the African continent in decades, Gallup wrote, most notably in Ghana, Côte d’Ivoire, and Senegal. The US, meanwhile, saw its overall approval rating sink by 3% in 2023.

Approval sank by 29% in Uganda, which was blocked from receiving benefits from Washington’s African Growth and Opportunity Act following its enactment of a harsh anti-LGBTQ law last year. Its approval also slumped in The Gambia and Kenya, Gallup noted.

— Jenna Moon

Governance

🇸🇱 Sierra Leone’s government on Friday said it paid $17 million of its $48 million debt to Turkey’s Karpowership to restore energy supply to the capital Freetown. It follows the resignation of the country’s energy minister and a weeks-long electricity crisis.

🇧🇫 Burkina Faso has suspended foreign media — including French newspaper Le Monde, UK’s The Guardian, and Germany’s Deutsche Welle — over coverage of a Human Rights Watch report that alleged the army committed extrajudicial killings. The government has rejected the allegations.

🇳🇦 Namibia could see an economic boom following significant oil discoveries off its southwestern coast, TotalEnergies’ chief executive said. TotalEnergies, Shell and Galp Energia have discovered an estimated 11 billion barrels in oil reserves in the past two years.

Net Zero

🇹🇬 Togo plans to construct a 25 megawatt solar power plant in the northern city of Dapaong funded by World Bank’s International Development Association.

🇧🇫 Burkina Faso has approved a $49 million concessional loan from the China’s Export-Import Bank for the construction of the Donsin solar power plant and its electricity storage system.

Tech

🇳🇬 Nigeria’s central bank asked four fintech companies — Moniepoint, Kuda, OPay, and Palmpay — to suspend account openings for new users, over an investigation into unauthorized forex transactions.

🇬🇭 Online food delivery company Glovo is closing down its operations in Ghana. It said the growth potential for food delivery in the country required “substantial investment over an extended period of time.”

🇰🇪 Kenya’s competition watchdog asked food delivery operators to open physical offices that customers can visit for dispute resolution.

Food Security

🇿🇲 Zambia is looking to import more than 500,000 metric tonnes of maize from Uganda to address a food shortage. The shortage follows a drought that was declared a national disaster in February.

Deals

🇳🇬 Nigeria food delivery startup Chowdeck raised $2.5 million from a number of investors including Y Combinator, and the founders of the Nigerian fintech startup Paystack.

🇰🇪 Kenyan travel booking startup BuuPass acquired QuickBus, a competitor, in a cash and stock transaction for an undisclosed amount.

🇦🇪 🇸🇸 The Dubai-based Hamad Bin Khalifa Department of Projects agreed to lend South Sudan $12.9 billion in exchange for oil until at least 2043, Bloomberg reported. It’s the largest ever cash-for-oil deal in an African nation, and is valued at two times higher than South Sudan’s GDP.

Mining

🇿🇦 South Africa-based mining giant Impala Platinum said on Friday that it could cut 3,900 jobs as it restructures its operations in the country due to a slump in metal prices.

Portugal has resisted calls for reparations and compensation for slavery and the colonization of African people. Lisbon said on Saturday that it planned to “deepen mutual relations” and “respect for historical truth” but had “no process or program of specific actions” for paying reparations. The government statement came days after Portuguese President Marcelo Rebelo de Sousa called for the nation to find ways to compensate its former colonies, which include Angola, Cabo Verde, and Brazil. He said Lisbon had an obligation to lead this process of reparations. Portugal’s colonial era lasted more than five centuries, and 6 million enslaved Africans were forcibly transported across the Atlantic to its colonies.

• A third Modi term in India could be more radical than ever.
• The New Yorker’s succession race is kicking off.
• How Washington is responding to the campus Israel protests.

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