Africa

1. Basic pay
2. Energy gap
3. Dangote’s refinery crisis
4. Ruto embraces opposition
5. Food insecurity
6. Ethiopian Airlines ban
7. South Africans in Washington

Also, how the push for sand for urbanization can hurt farming.

Hello! Welcome to Semafor Africa, where we expect the unexpected. Anyone who, like us, has followed the rise and rise of industrialist Aliko Dangote will know he has been a close friend to successive Nigerian governments. That helped him to build a business empire that made him Africa’s richest man. But he appears to have fallen out of favor with Nigerian authorities under the presidency of Bola Tinubu. And, as Alexander reports, it threatens his giant refinery project.

The row between Dangote and Nigerian authorities could determine the future of a project that promises to end the system that for decades has seen Africa’s top crude oil producer import fuel. It could break the cabal of fuel importers and other vested interests who have grown rich on dysfunction.

But there’s another issue — investor sentiment. As we’ve previously reported, multinationals are leaving Nigeria in their droves. Now Dangote’s problems are acting as a reminder of the extent to which the fortunes of those brave enough to do business in Nigeria relies on their relationship with the government of the day. If this could happen to Dangote, perhaps nobody is safe.

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Nigeria’s new minimum wage

The new minimum monthly wage in Nigeria, worth around ​​$44, after lawmakers passed a wage bill on Tuesday. They amended legislation which previously set it at 30,000 naira a month. The increase, which will take effect once President Bola Tinubu gives the bill his assent, was agreed to on Thursday by the country’s main labor unions after talks with the government. Their negotiations followed months of deadlock and the threat of strikes. Labor unions argued that soaring prices and a weakening currency caused by reforms implemented by Tinubu were hitting workers hard.

Tanzania turns to mini-grids for power

Mini-grids could plug the electricity gap in Tanzania, where about half the population lacks access to electricity. About 135 mini-grids are currently operational across the country, a report by the World Resources Institute shows. Solar photovoltaic cells and hydropower account for nearly 80% of the existing mini-grid facilities, though diesel dominates in terms of the number of kilowatts generated. The report argues that “Tanzania offers an attractive market for off-grid solutions.” But challenges to investment in the sector remain, including the absence of geospatial data to provide a solid basis for market expansion strategies, as well as for monitoring and evaluation.

Africa’s richest man is under pressure

LAGOS — Africa’s richest man, Aliko Dangote, is battling to get his $20 billion refinery in Nigeria fully functional and begin recouping returns on his investment as clashes with local regulators and oil majors spill over into a public war of words.

The Dangote Refinery was commissioned early last year to loud promises that it would end costly fuel imports by the continent’s top crude oil producer and offer affordable pump prices, without the need for a $10 billion government subsidy. The facility, which took seven years to build, is designed to refine 650,000 barrels of oil per day and meet all of Nigeria’s fuel needs when at full capacity.

But the tycoon is now embroiled in a row with Nigerian authorities that has created uncertainty around the project. He is being accused by Nigerian regulators of demanding a monopoly over refined oil products. Dangote and his team have accused international oil producers of unfairly selling locally produced crude to it above market prices.

“This is really very disheartening,” the 67-year-old billionaire told journalists this week, in an extended defense of his investments in Nigeria, which include large cement, food and fertilizer production companies. He said the refinery did not get “one single incentive” from the Nigerian government and paid $100 million to buy the over 2,600 hectares of land that it sits on in the outskirts of Lagos.

Attempts to broker a truce are underway. Nigeria’s deputy oil minister Heineken Lokpobiri said other government officials who attended a meeting on Monday with Dangote “demonstrated a strong commitment” to solve the refinery’s challenges.

Separately, a group of lawmakers asked Tinubu — who, like his predecessor, is Nigeria’s oil minister — to suspend the regulator who accused Dangote of monopolistic intent.

Kenya’s embattled president recruits opposition

Kenyan President William Ruto plans to hand control of several key ministries to allies of opposition leader Raila Odinga as part of his response to mass protests that have rocked his government.

Earlier this month Ruto dismissed nearly his entire cabinet at the height of the protests against proposed tax hikes and government corruption. He has since nominated ministers for his new cabinet and called upon individuals close to Odinga, whom he defeated in the 2022 presidential election.

Senior members of Odinga’s Orange Democratic Movement (ODM) party were among those nominated for ministerial roles on Wednesday. The ODM’s chairman, John Mbadi, was named national treasury cabinet secretary, putting him at the helm of the economy. Other Odinga allies were placed in charge of the energy and petroleum ministry and the mining portfolio.

Other parties in the Odinga-led Azimio opposition coalition had previously distanced themselves from plans to join the Ruto cabinet, arguing it would be a betrayal of the youth protesters who continue to demand for Ruto’s resignation.

Several cabinet secretaries that had been dismissed were announced as ministerial nominees on Wednesday, albeit for different roles. Last week, the president named his first 11 nominees, which included people he dismissed a week earlier. The move was widely criticized by protesters.

Ruto’s new nominees still need to be vetted by parliament.

— Martin K.N Siele

Africa’s food crisis needs innovative funding — UN official

Innovative funding models are needed to spur investment and prevent food shortages across Africa that are predicted to grip countries in the coming years, a senior UN official told Semafor.

Alvaro Lario, president of the UN’s International Fund for Agricultural Development (IFAD), spoke in reference to a new UN report that predicts Africans will make up over half of the 582 million people worldwide expected to be chronically undernourished in 2030.

The annual State of Food Security and Nutrition in the World report, published on Wednesday, found Africa had the largest share of people facing hunger in 2023, at 20.4%. Its authors said there was a “clear trend” of rising hunger in Africa, whereas progress had been made in Latin America and the Caribbean and the situation in Asia was relatively unchanged.

Lario, whose agency invests in long-term global food supplies, said the trends in Africa are “extremely worrisome.” He told Semafor Africa more innovation, such as partnerships between financial institutions and the private sector to fund climate adaptation projects, was needed to drive greater investment in agriculture and farming.

“We want to bring more financing — not all the financing can come in the form of grants,” he said. “What we need to make sure is that finance catalyzes further mobilization of resources.”

— Alexis

Eritrea suspends Ethiopian Airlines

The Eritrean government has suspended Ethiopian Airlines from operating in the country from Sept. 30.

The East African nation, which neighbors Ethiopia, is accusing Africa’s biggest airline of “malicious trading practices” including luggage theft, price hikes, and regular flight delays.

Ethiopian Airlines only resumed operations in Eritrea in 2018 after a peace agreement between the two countries ended a two-decade rift. The airline had previously complained about its inability to repatriate its funds from Eritrea due to the country’s foreign exchange restrictions.

The suspension could pose a significant challenge for ordinary Eritreans because their national carrier, Eritrean Airlines, has limited operations. International airlines rarely serve the insular country due to low profitability and difficulties in repatriating earnings. If the tensions escalate and Ethiopia closes its airspace to Eritrean flights, the consequences could be severe for citizens.

Ethiopian Airlines said it is seeking clarification from Eritrean authorities after the suspension. In a statement issued on Wednesday, Ethiopian Airlines said it was notified of the suspension by Eritrea’s Civil Aviation Authority but had not been given specific reasons for the decision.

— Samuel Getachew in Addis Ababa

South Africa seeks to reset US relations

South Africa is scrambling to “reset” its relations with the United States, as a bipartisan bill calling on the White House to review the status of its longstanding diplomatic engagement with Africa’s most industrialized country makes its way through Congress.

A large team of South Africa delegates led by trade minister Parks Tau has been in Washington DC, ostensibly for the AGOA Forum, the annual US-Africa trade preference program. But the minister, his deputy minister Andrew Whitfield and a mix of delegates from South Africa’s private sector and even labor have been taking meetings and making their case to various members of congress on Capitol Hill and think tanks around the city.

The U.S.-South Africa Bilateral Relations Review Act was originally introduced in February by John James, a Republican congressman from Michigan, and cosponsored by four other Republicans and three Democrats. It questioned South Africa’s non-aligned stance which has seen the country maintain relations with Russia and Iran, two US adversaries. South Africa has also been critical of Israel’s response to the Oct. 7 terrorist attacks by Hamas. In particular, South Africa was responsible for hauling Israel in front of the International Court of Justice to answer for its response in Gaza. It’s a move that has been criticized by the Biden administration and members of Congress.

In an interview with reporters in Washington on Tuesday, Tau acknowledged the relationship between the countries had worsened in recent years. But he explained the recent South African election in May, which has been followed by the creation of a multi-party Government of National Unity, was an opportunity for the country to reset its direction, including resetting its relations with the US. He said the visit was as much a “listening mission” as it was about understanding why “our message of non-alignment” is being misunderstood.

— Yinka

Geopolitics

🇸🇩 The US Secretary of State Antony Blinken on Tuesday invited Sudan’s army and the paramilitary Rapid Support Forces (RSF) to start US-mediated negotiations in Switzerland, beginning on Aug. 14. The RSF leader Mohamed Hamdan Daglo welcomed the move on social media site X.

🇹🇩 Chad’s foreign ministry said on Tuesday that 157 of its citizens had been detained in neighboring Libya, without disclosing reasons for their arrest. It added that repatriation flights would follow in the coming weeks.

🇸🇳 The US agreed to lend Senegal $81 million towards the construction of its development project, the Dakar-based Vacap Hospitality SA, which aims to boost its tourism industry.

Governance

🇳🇬 Nigeria’s government proposed a one-time 70% tax on all realized profits from foreign-exchange rate transactions of banks in the 2023 financial year to fund capital projects, education and healthcare access as well as public welfare initiatives, according to a letter sent to lawmakers.

🇸🇱 A high court in Sierra Leone sentenced 11 people to prison terms for their alleged roles in a failed military coup last November.

Climate change

🇿🇦 South African President Cyril Ramaphosa signed the Climate Change Bill set to enable the nation to meet its emissions reduction commitments under the Paris climate agreement, the presidency said on Tuesday.

Deals

🇿🇦 Swedish multinational home appliance company Electrolux Group announced the signing of an agreement to divest its water heater business in South Africa under the Kwikot brand for 2.4 billion rand ($131 million).

Health

🇨🇩 Doctors in DR Congo said they had seen rising suspected mpox cases, raising fears of a new variant that appears to be more capable of transmitting between people than previous strains.

Tech

🇳🇬 Meta said it removed 63,000 Instagram accounts in Nigeria that engage in financial extortion based on sexual content. Accounts removed include “a coordinated network of around 2,500” as well as Facebook accounts belonging to advance fee fraud scammers.

Rapid urbanization in Ghana’s capital Accra has accelerated sand mining activities in neighboring communities, contributing to agricultural land degradation. In a study published in the journal Nature, researchers from Germany’s Universität Kassel and Ghana’s University of Cape Coast said locals reported substantial agricultural land loss, and the destruction of food crops. Sand is a key material for Ghanaian infrastructure, but the researchers argue more sustainable resources should be cultivated to limit adverse impacts. The findings revealed a significant decline in soil fertility of mined fields compared to unmined fields.

• Can Kamala Harris turn memes into votes?
• China’s bid to boost its diplomatic clout may fall short.
• Bangladesh student protests reach a shaky peace.

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Happy 177th Independence Day to the people of Liberia 🇱🇷 !!

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