Africa

1. AI in Africa
2. How much?
3. Tech investment
4. Back to Dubai
5. Gambia decides

Also, MMA is coming to the continent.

Hello! Welcome to Semafor Africa, where we remain optimistic. The power of positive thinking should never be underestimated, especially in business. The trick is not crossing the line from being positive to magical thinking. There are some who would argue the African tech startup space went through a period where that line was crossed. That was at the top of the market, when valuations got a bit frothy.

The severe slowdown in tech funding over the last few years has prompted a period of soul searching. There’s now an acknowledgement that valuations were juiced by Silicon Valley investors with a passing interest in the continent’s tech space. I’m hearing founders who could once demand valuations at 10 to over 20 times future revenue are having to convince potential early stage investors to come in at three to five times.

But this isn’t being discussed as an entirely bad thing. There has been a change in tone in recent months with the Africa-focused investors Alexander spoke with for our main story. I’m hearing the same. The optimism comes from both investors and founders, who are all now much more grounded and realistic about the market, and excited about where it’s going.

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How AI could boost economic growth

The value of Africa’s artificial intelligence market, according to a new report by GSMA, a global industry body that represents mobile operators. The report estimates that the continent represents just 2.5% of the global AI market. Its authors say AI could improve efficiency, particularly in agriculture, to such an extent that its use could boost Africa’s economic growth by $2.9 trillion by 2030. But several obstacles must be overcome to improve the continent’s digital infrastructure, such as additional investment to build more data centers and improve power provision, according to the GSMA.

Nigeria’s bribery culture

Nigerians paid nearly $1.3 billion in bribes to public officials in 2023, a survey by the government’s statistics agency and the UN’s drug and crimes office found.

More than a quarter of the 33,000 Nigerians that responded to the survey paid at least one bribe to a public official between November 2022 and October 2023, with the average amount being about $15, according to the exchange rate within the period.

But it’s not just the public sector; bribes to private sector employees, which includes doctors, also saw a rise, with 14% of respondents reporting an incident, up from 6% in 2021.

Most bribes are paid by cash or bank transfer, a pattern that has remained consistent since the last survey five years ago. More than 70% of bribes are paid in the offices of public officials or on the street, the report said, while 5% take place in the homes of public officials.

— Alexander Onukwue in Lagos

Africa’s tech investors are upbeat

LAGOS — Investors in African startups are increasingly confident of a return to more dealmaking, as the causes of a near two-year pullback by global capital providers fade away.

Investments in African startups totaled just $780 million in the first half of this year, down 60% from the same period last year, according to Africa: The Big Deal, which tracks funding data.

And in 2023, African startups raised $2.3 billion from equity deals, less than half the year before, and with a simultaneous halving of the number of investors participating in deals, a report by pan-African investor Partech said.

But there are signs of macroeconomic stability in Africa’s top destinations for venture capital investment — particularly Nigeria, where the central bank has intervened to calm inflation and currency devaluation. That, plus the prospect of rate cuts by the US Federal Reserve, could boost optimism in the funding ecosystem, some investors say.

The last couple of years have provided African tech hubs with lessons on the need for better structure in making investments, to minimize the potential for startup closures and misdeeds, investors say. “There’s much more optimism in July 2024 than if you were speaking to me in July 2023,” Idris Bello of LoftyInc Capital, who splits time between Cairo, Lagos and the US, told Semafor Africa.

“I think we’re seeing this nice plateau where investment capital is coming back in a much healthier ecosystem, with companies that are making real money with real users and a lot less of the froth of the hype cycle,” said Lexi Novitske, general partner at Norrsken22.

Before this funding crunch, African tech benefited from the influx of capital from Western investors who took advantage of low interest rates that made borrowing appealing and encouraged investment. A return to low rates, after a year and half of increases up to last July, could spark capital’s revival on the continent.

UAE lifts visa ban on Nigerians

The United Arab Emirates has lifted a 21-month long visa ban on Nigerians, while introducing new rules — and costs — involving digital verification of passport holders.

Nigeria’s information minister Mohammed Idris said on Monday that the UAE’s decision to lift the ban came after “mutually beneficial negotiations” between both governments and referred new “updated controls and conditions” that prospective Nigerian visitors to the UAE must abide by.

Travelers will need to submit documents proving their identity and showing travel history, among other things, in order to generate a verification number that would then be used to apply for a visa, according to an Emirati government website. The new process adds another $450 to the fees. An exception is granted for applicants 13 years or younger.
The announcement ends a tense stand-off and resumes a much-sought after route for business and leisure travelers as trade has grown between both nations.

The lifting of the ban this week was preceded by Emirates Airline’s announcement in May that it would resume daily flights between Lagos and Dubai later this year in October.

— Alexander

Lawmakers uphold Gambia’s FGM ban

The Gambia’s lawmakers have voted to retain a ban on female genital mutilation (FGM).

The practice, which involves the partial or total removal of the clitoris, has roots in social and religious beliefs.

The West African country passed a law to criminalize the custom in 2015. But a bill to repeal the ban passed its second reading earlier this year, paving the way for a final vote on Monday.

Thirty-four National Assembly members voted to maintain the ban, and 19 sought its repeal.

Despite being outlawed, FGM remains a significant challenge in The Gambia: Research suggests 75% of Gambian women aged 15 to 49 have undergone FGM, underscoring the extent to which it is deeply entrenched in cultural norms.

The decision to uphold the ban was celebrated by human rights activists who gathered outside parliament during the vote. “Gambian girls have won,” said rights campaigner Jaha Dukureh.

But activists have warned that it would remain challenging to implement the law, particularly in rural areas where resistance to change is strong.

— Isatou Keita in Banjul, The Gambia

Governance

🇷🇼 Projected results from Rwanda’s electoral commission suggest President Paul Kagame secured a fourth term in power after securing around 99% of votes in the country’s election on Monday.

🇧🇼 Lower diamond production in Botswana has led the IMF to revise the country’s economic growth projections down to 1% from 3.6%. The fund said the government should consider a cut to “ambitious capital projects” that are set to widen the country’s deficit.

Deals

🇳🇬 Nigeria’s Access Bank will receive $50 million from British International Investment, the UK’s development financier, to strengthen its capital base. The bank is aiming to raise $1.8 billion to meet new central bank capital requirements.

🇰🇪 Uncover, a Kenyan skincare producer and products marketplace, raised $1.4 million to expand into Uganda and Ghana.

🇹🇬 Sri Lankan apparel manufacturer Star Garments Group received a $15 million loan from the International Finance Corporation to set up the first “large-scale, export-focused” textile plant in Togo.

🇰🇪 Kenya’s competition authority approved a deal that will see Toyota affiliate CFAO Motors Kenya become majority owner of state-owned plant Kenya Vehicle Manufacturers with a $7.8 million offer (1 billion Kenyan shillings).

Geopolitics

🇳🇬 World Trade Organization chief Ngozi Okonjo-Iweala is being urged to seek a second term by the body’s African group of countries. The Nigerian former finance minister became the WTO’s first female leader in 2021 for a term that is due to end next year.

Health

🇨🇮 Children in Côte d’Ivoire will be the first in Africa to receive shots of a malaria vaccine co-developed by the Serum Institute in India and the University of Oxford. The R21 vaccine is one of two malaria vaccines recommended by the World Health Organisation.

Tech

🇿🇦 South Africa’s Financial Sector Conduct Authority plans to monitor finance influencers on social media after the emergence of evidence that suggests some spread misinformation and are “perpetuating scams” online.

🇬🇭 Ghana’s Cyber Security Authority granted licenses to 51 firms as the first cohort of service providers to be recognized under the sector’s new regulatory framework.

Cameroonian mixed martial arts and boxing star Francis Ngannou has taken up a leading role in a new African MMA league backed by the US-based fight promoter Professional Fighters League. Ngannou will serve as the chairman of PFL Africa. The African MMA series is set to begin in 2025. The PFL will benefit from a newly-signed broadcast agreement with French media giant Canal+ which, in addition to airing fights, aims to broadcast the sport to 8 million homes. The agreement to establish and develop PFL Africa formed a key part of Ngannou’s multi-million dollar contract with the PFL last year, after he left the popular Ultimate Fighting Championship. “There is a great wealth of talent in Africa just waiting to be given the global stage,” he said following the PFL Africa launch.

• Trump says he was saved ‘by luck or by God.’
• China holds key economic meeting amid mounting challenges.
• Putin critic convicted in absentia.

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