Africa

🇳🇬 U.S. investment company Blackwells Capital on Wednesday urged the Nigerian cell tower operator IHS Holding to overhaul its board to address what it called a lack of “serious focus”. “The stock price remains low in substantial part because the company refuses to embrace transparency with investors,” read a letter from Blackwells, a long-term IHS shareholder, to the company’s board. IHS is also in a power struggle with two of its largest shareholders, MTN, Africa’s biggest mobile operator, and Wendels, a French investment company. Together they own around 45% of IHS’s stock holding and both want the company’s corporate governance overhauled to improve stock performance.

🇿🇼 The Gauteng High Court in South Africa quashed the government’s move to terminate special residency permits that give around 180,000 Zimbabweans the right to live and work in the country. The court said the decision to scrap the Zimbabwe Exemption Permit (ZEP) system was ”unconstitutional.” The Helen Suzman Foundation, one of the human rights organizations which challenged the South African government’s 2021 bid to cancel the ZEP, told the court that, if implemented, the move would force Zimbabweans to return home unless they obtained regular work visas.

🇸🇱 U.S. and European election observers have raised concerns about Sierra Leone’s presidential election results. President Julius Maada Bio was declared the winner on Tuesday with around 56% of the vote but main opposition leader Samura Kamara rejected the results. On Wednesday, the European Union Election Observation Mission called on Sierra Leone’s electoral commission to publish disaggregated results data per polling station after raising concerns about “statistical inconsistencies”. The U.S. embassy in Freetown also raised concerns saying: “Washington is keenly interested in the election outcome. The announced results must accurately reflect the will of the Sierra Leonean people.”

🇷🇼 The British government’s plans to send asylum seekers to Rwanda have been deemed unlawful by a UK appeal court. Judges said the East African country had not provided enough safeguards to prove it is a ”safe third country”, despite Kigali insisting it has been recognized for its “exemplary” treatment of refugees. Britain’s prime minister said his government, which is committed to reducing the number of people entering the country, would mount a legal challenge to the ruling.

The value of debt made up of locally issued U.S. dollar bonds and cocoa bills that Ghana has agreed to restructure with local banks. Pension funds and debt owed to the country’s central bank are also said to be part of the deal, according to a Reuters report. Ghana needs to restructure its local debt to fully access the IMF’s $3 billion, three-year rescue package that was approved in May. A third of Ghana’s $48.4 billion public debt stock was domestic, as of last November.

Rwanda’s push to be Africa’s financial hub attracts leading fintech startups

THE NEWS

KIGALI, Rwanda - Two of Africa’s biggest fintech players are expanding their operations in Rwanda, which is pushing to position itself as a strategically important hub for the fintech sector by revamping its business laws and tax code.

Chipper Cash, the pan-African money transfer company, opened in Kigali last week with a launch party on the sidelines of a three-day government-organized fintech conference. Chipper opened two months after Flutterwave, which said it received two new licenses to offer cross-border money transfers in Rwanda. Flutterwave first launched there in 2019.

“It’s one of the few markets where we have every license you can think about,” Olugbenga Agboola, Flutterwave’s chief executive, told Semafor Africa. “It’s not about market size but readiness. They are ready here.” Jovani Ntabgoba, who leads Chipper’s presence in Rwanda, described it as “a forward-thinking market that embraces technology.”

KNOW MORE

Beyond having companies set up outposts, Rwanda says it wants to be Africa’s “proof of concept country” where startups test services before rolling out elsewhere.

For fintech companies, it has reduced its licensing timeline, cut corporate income tax to 15% for fintechs instead of 28% paid in other sectors, and exempts them from paying 15% withholding tax on dividends, Jean-Marie Kananura, chief investment officer of Rwanda Finance, a government company overseeing the fintech drive, told Semafor Africa. “What we’re offering is ease of operation and to promote you when you are licensed,” he said.

ALEXANDER’S VIEW

Rwanda, with 13 million people and a $10 billion GDP, is considerably smaller than sub Saharan Africa’s main economies (Nigeria, South Africa, and Kenya) with more mature innovation cultures and the bulk share of tech investment dollars. But industry observers point to a clear structure, responsive government partners, and safe surroundings as factors that could see the East African country punch above its weight in the long run. “Numbers could become relative as people see a better environment to work in,” Babatunde Obrimah, chief operating officer of the Fintech Association of Nigeria, told Semafor Africa.

African startups in Lagos, Nairobi and other epicenters of tech activity, entrepreneurs continue to seek out flexible, stable regulatory environments with minimal friction. Nigeria, for one, has been a case study in how erratic monetary policy hampers companies that need to report and repatriate earnings in dollars. Similarly-sized alternatives are either just opening up (Ethiopia) or have their prospects undermined by political instability (DR Congo).

Among the smaller markets, Rwanda’s push to stand out appears to have less competition. By offering operational incentives through the Kigali International Financial Centre set up in 2020 to mirror similar initiatives in Dubai, Doha, and Hong Kong, it casts itself as a mainland Africa alternative to Mauritius, which serves company offshoring interests, and Casablanca, which is more a route into North Africa. For Rwanda, it could significantly boost the amount of funds moving through its financial system every year by becoming a strategically important hub for these valuable and increasingly influential young fintech companies. International investors have thrown their weight behind Africa’s fintech startups.

This positioning of Rwanda as a ‘Singapore of Africa’ (as the project is sometimes described) is not new from Rwanda and a timeline for the influx of truly global financial giants could take many years. But there is one example of a company starting there and growing wings abroad. In 2016, the autonomous drone startup Zipline started its health products delivery in Rwanda, using lessons there as the basis to offer the service to state and federal governments in Ghana and Nigeria. Now valued at over $4 billion, Zipline positions itself as a general-purpose on-demand delivery company in competition with Amazon and FedEx.

When trying to be a financial center, it helps to be “safe, sound and well-run,” Jochen Biedermann, managing director of the nonprofit World Alliance of International Financial Centers, told Semafor Africa. But talent development and retention are also crucial, he said.

Seema Dhanani heads the Kenya office of British International Investment, the UK’s development finance institution. Earlier this month, International Energy Agency energy chief Fatih Birol criticized the role being played by international financial institutions (IFIs) as African nations transition from fossils to cleaner energy sources.

Chef Mmabatho Molefe is serving her version of South African street food at the “open kitchen” of London’s Carousel restaurant. Molefe, whose 12-day residency ends on July 8, is the latest guest chef at the award-winning eatery known for discovering hidden talent. She will take diners on a seven-course journey through Zulu cuisine. The menu ranges from sweetcorn custard with chickpea shoots and mealie bread to seared scallops with corned beef tongue and spicy tomato broth. “The idea behind the menu itself was to represent memories of my childhood, and that’s just based on dishes that my mom would prepare for me,” she said in an interview with Britain’s Guardian newspaper.

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