Africa

1. The right track
2. Renewable commitment
3. Loving lithium
4. Crypto fundraising
5. Bank expansion
6. Thinking ahead

Also, a 6,000-kilometer e-motorbike ride powered by sunshine.

Welcome to Semafor Africa, where we understand the need to pivot. So, too, apparently, do commodity-driven African economies. And, as we write, the pivot is less about moving away from commodity-driven economies and more to being driven by different commodities. Countries that built their economies on oil and gas are now finding they need to prioritize mining solid minerals, like lithium, that are key to the energy transition.

Chatting to investors at an Africa-focused event in London last week, it was clear that there’s a broad focus on finding opportunities that revolve around that transition and digital infrastructure.

The challenge for countries like Nigeria, which wants to capitalize on its lithium reserves, is how to switch focus after decades in which mining was effectively abandoned by successive governments that were focused on oil, which accounts for about 90% of its foreign exchange earnings. As Alexander reports, B2B companies could forge vital connections that the state has allowed to wither away. Another approach, which Angola has taken with the Lobito Corridor project, is to find a way to work closely with major powers that want those solid minerals. Either way, it’s clear more countries will need to find ways to diversify to adapt for a fast-changing global economy.

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Uganda inks rail deal with Turkish firm

The value of a deal signed by Uganda’s government with Turkish firm Yapi Merkezi for the construction of a 272-kilometer section of its Standard Gauge Railway. Construction is expected to begin in November and take four years to complete. Back in January, Uganda canceled a previous agreement with a Chinese firm for the construction of this stretch of railway. The segment will run from the capital, Kampala, to Malaba on the Kenyan border, connecting with Kenya’s rail network and providing access to the Port of Mombasa. Uganda’s works ministry permanent secretary said the East African country will use its own funds and credit from export credit organizations to finance the project.

Adding more renewable energy

Sub-Saharan Africa’s renewable energy capacity is projected to increase by more than two and half times to nearly 90 gigawatts by 2030, according to the International Energy Agency (IEA). South Africa is the continent’s leader and it will contribute 40% of the projected capacity, mainly through solar power generation. Hydropower projects from Ethiopia, Tanzania and Angola will contribute 13 gigawatts combined, while solar PV installations in Nigeria and Kenya will account for 17 gigawatts. However, there will be challenges along the way to actualizing Africa’s renewable energy ambitions. They include “stop-and-go policies, high offtaker risks and low grid availability and reliability,” the IEA notes.

Nigerian lithium attracts foreign companies

LAGOS — Nigeria’s ambition to build a value-added supply chain for critical minerals including lithium is getting a significant boost from an unlikely source: an e-marketplace startup.

Sabi, a business-to-business e-commerce company focused on the informal economy, has been quietly building expertise as a middle man for miners seeking to export. In recent weeks, it inked separate deals with two companies — Italy’s Snowball Holdings, and Transition Resources from the US. They plan to set up lithium processing plants in the country over the coming year.

The three-year old Lagos-based startup will ensure both international companies have regular supply from discrete small-scale lithium miners across Nigeria, CEO Anu Adasolum told Semafor Africa. It will also manage the companies’ access to services like quality control and logistics needed to export the refined mineral abroad.

The expected daily processing capacity for each plant will be 500 tons per day “with scalable capacity of up to 1,000 tons per day,” Adasolum said. The US will be the primary export destination for now but Italy and Germany could be accessible in the future, she said.

Sabi is also exploring avenues to advance mineral processing in Zambia for copper and Tanzania for nickel. These moves reflect a broader regional wave to supply in-demand commodities to the world, especially in relation to the energy transition.

Yellow Card snaps up new funding

Yellow Card, the African fintech startup in the midst of a rapid expansion on the continent, raised $33 million in new venture capital funding from Blockchain Capital and other investors, the company said on Wednesday.

The firm is the latest example of how cryptocurrencies are changing finance in emerging markets and enabling the free flow of capital in places with underdeveloped banking systems. At the same time, about 20% of countries in sub-Saharan Africa have banned digital assets as the collapse of the FTX exchange reverberated globally.

Yellow Card serves as a payment rail in 20 African countries, allowing customers to easily move money across borders while paying a fraction of the fees associated with traditional money transfers. With its new funding, the company is looking to grow its customer base and expand to other countries, like Morocco and Kenya, both of which are considering new legislation opening them up further to digital currencies.

The company, founded in 2016, uses stablecoins, which are usually tied to the value of the US dollar, as a common medium of exchange in order to enable smoother transactions. When customers deposit local currency with Yellow Card, they receive stablecoins including USDT and USDC, which customers can then use to send money around the world in other currencies via the Yellow Card platform.

— Reed Albergotti

J.P. Morgan Chase appoints new Nairobi, Abidjan chiefs

The United States’ largest bank J.P. Morgan Chase has appointed heads for its newly-opened representative offices in Nairobi and Abidjan.

The move is part of the bank’s expansion push into the continent. A J.P. Morgan representative told Semafor Africa the new offices would primarily offer corporate and investment banking services, and “maintain key relationships with governments, financial institutions, and corporations.”

Sailepu Montet, a former deputy director for financial services and head of reserves at the Central Bank of Kenya, will head up the Nairobi office. Kenya’s central bank approved the opening of the J.P. Morgan representative office in Nairobi earlier this week.

Michael Ahonzo Avou will lead the Abidjan representative office. His most recent roles include managing director of Société Générale Asset Management West Africa.

The news comes as J.P. Morgan Chase CEO Jamie Dimon began his trip to four African countries, starting with Nigeria on Wednesday. He is expected to also visit Kenya, Côte d’Ivoire, and South Africa for a series of meetings.

— Martin K.N Siele in Nairobi

Senegal’s quarter-century plan

Senegal’s government published a 25-year economic development plan anchored around raising incomes, increasing life expectancy and lowering its deficit.

President Bassirou Diomaye Faye said he aims to “build a diversified and resilient economy” to triple per capita income by 2050. Faye said this can be achieved by developing the agriculture sector and harnessing oil and gas resources, alongside “ambitious industrialisation.” Sangomar, Senegal’s first offshore oil drilling project, started exploration in June. Meanwhile, the administration is carrying out audits of existing contracts granted by its predecessor to ensure conformity with its agenda.

The 44-year-old leader, who took office in April, dissolved parliament last month in the hope that a new legislature would support his policy agenda. Parliament will resume after legislative elections on Nov. 17.

— Alexander

CRDB Bank CEO Abdulmajid Nsekela will speak at the Digital Payments Infrastructure session at the Fall Edition of Semafor’s World Economy Summit on Oct. 25. The session will explore how robust payments infrastructure and expanded access to financial services drive business growth and empower consumers, while also examining how policymakers, companies, and individuals can harness this potential. RSVP to this session and the World Economy Summit here.

Geopolitics

🇦🇴 US President Joe Biden will travel to Angola in December for talks with President João Lourenço about collaboration on security, health and economic partnerships, the White House said. Biden postponed the trip earlier this month to oversee preparations for hurricanes that were expected to strike southeastern United States.

🇱🇸 The UN World Food Program warned more than 27 million people in southern Africa are at risk of starvation following the worst drought in decades.

Deals

🇿🇲 Saudi Arabian investment fund Manara Minerals is “closing in on a deal” to buy at least a 15% stake in Zambian copper and nickel assets belonging to Canadian miner First Quantum Minerals, Reuters reports. The stake would potentially be worth at least $1.5 billion.

🇬🇲 Infrastructure investor Africa50 has begun work on revamping the mile-long Senegambia Bridge in the Gambia. The investor said it has issued the first $15.5 million tranche of a $100 million ‘Asset Recycling’ programme with Gambia’s government.

🇿🇦 South African power company Terra Firma is developing a $73 million solar energy project to deliver 110 megawatt peak of wheeled energy. Wheeling enables the transmission of power from one system to another through a third-party network.

🇳🇬 The Nigerian Air Force said it is set to acquire Italian-made aircraft including 24 attack jets and 10 helicopters as part of a fleet renewal strategy.

Tech

🇿🇦 South African bank Capitec said it is blocking electronic fund transfers from its smartphone and web apps to cryptocurrency exchanges as a measure to protect against fraud.

🇰🇪 Octavia Carbon, a Kenyan startup with technology to remove carbon from the atmosphere, raised $3.9 million in equity financing from a round co-led by investment firms Lateral Frontiers and E4E Africa.

🇿🇦 🇹🇳 E-commerce retailer Jumia will close operations in South Africa and Tunisia by the end of the year. Closing these will allow a focus on the “most promising markets that have a stronger growth potential,” the company said.

Monetary Policy

🇳🇦 Namibia‘s central bank cut the repo rate by 25 basis points to 7.25%, its governor said on Wednesday. It followed a cut of the same size at August’s meeting.

A Kenyan-made electric motorcycle has completed a 6,000-kilometer ride from Nairobi to Stellenbosch, South Africa, using solar power. The trip was a collaboration between Kenyan electric mobility company Roam and Stellenbosch University’s engineering faculty.

The Roam Air passed through Tanzania, Malawi, Zambia, and Botswana during a journey that began on Sept. 29 and ended on Oct. 16. Its batteries were charged solely with solar energy. Two riders — one of whom is Roam’s Masa Kituyi — embarked on the journey, accompanied by two solar-powered support vehicles. The team behind the expedition said they wanted to test the feasibility of clean energy solutions for long-distance travel in Africa.

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