Africa

🇬🇦 Gabon’s military junta paid the first installment of its debt-for-nature blue bond totaling $500 million, said a U.S.-based organization that helped design the debt swap. The Nature Conservancy said the junta paid its first $1.1 million instalment into a fund that underpins the deal. The agreement — a first of its kind in Africa — was signed in August, shortly before deposed president Ali Bongo was overthrown. Debt-for-nature swaps are designed to allow a country’s debt to be bought up and replaced with a cheaper loan or bond, underwritten by a multilateral development bank guarantee or risk insurance policy. The savings are expected to be used for conservation projects.

🇸🇳 Senegalese opposition leader Ousmane Sonko’s Pastef party said it would sponsor Bassirou Diomaye Faye, its secretary general, for next February’s presidential election. It came after the country’s supreme court blocked Sonko’s presidential bid in a judgment issued last Friday. Pastef said the decision to back Faye was not “an abdication” of Sonko’s candidacy but an attempt to defeat the current regime’s “strategy.” Faye, like Sonko, faces various criminal charges that Pastef says are politically motivated including calling for insurrection and undermining state security.

🇿🇲 Zambia’s efforts to restructure $3 billion of outstanding eurobonds hit a snag after its official creditors led by China and France rejected a revised agreement that the government reached with bondholders. They said the deal still doesn’t offer comparable terms to the restructuring agreement struck last month for $6.3 billion in bilateral debt. The decision to reject the deal was criticized by the private bondholders. They said it threatened the credibility of a wider G20 Common Framework set up to secure agreements on debt relief for poor countries. Zambia defaulted on its debt in late 2020.

🇸🇴 Somalia is expected to become the eighth member of the East African Community (EAC) this week if leaders of countries in the economic bloc greenlight its entry at a summit on Nov. 23-24 in Tanzania. The move would add 3,000 kilometers of coastline to the EAC, in addition to boosting the bloc’s market size and GDP. Somalia would benefit from reduced trade barriers in accessing the EAC market, and inclusion in multi-national infrastructure projects. Somalia’s prospective membership has been hotly debated in the country amid concerns that continued internal conflict could hamper its participation.

🇿🇦 Israel’s ambassador to South Africa was on Monday recalled to Jerusalem following criticism of his country’s campaign in Gaza against Hamas. “Against the background of recent comments from South Africa, the Israel ambassador to South Africa has been called for consultations in Jerusalem,” Israel’s foreign ministry said in a statement. South African Minister in the Presidency Khumbudzo Ntshavheni on Monday told reporters that the government expected the International Criminal Court to issue an arrest warrant against Israel Prime Minister Benjamin Netanyahu. South Africa recalled its ambassador and diplomatic mission to Israel earlier this month in protest against the bombardment of the Gaza Strip.

The number of aircraft that Ethiopia’s national carrier ordered from U.S. planemaker Boeing at last week’s Dubai Airshow. Ethiopian Airlines announced it had purchased 20 Boeing 737 Max planes, 11 Boeing 787 Dreamliners and 11 Airbus planes. Its group chief executive, Mesfin Tasew, said the purchases were part of the airline’s long-term growth strategy. It also indicated it had retained an option to acquire 36 more Boeing aircraft at a later date. But the acquisition of the 737 Max jets has raised concerns as it comes four years after the crash of an Ethiopian Airlines Boeing 737 Max southeast of Addis Ababa in 2019. The crash killed all 157 passengers and crew on board. Tasew said the airline had “verified and confirmed that a design defect on this aircraft has been fully corrected by Boeing, and we once again have confidence in this aircraft.”

An attack on AfDB Ethiopia staff is sparking a debate inside the bank

THE SCOOP

ADDIS ABABA/LAGOS — Staffers across the African Development Bank are pushing back at attempts by its top management to quietly resolve a major diplomatic spat with the government of Ethiopia after two members of its country management team were physically attacked in Addis Ababa.

The Oct. 31 assaults took place during an AfDB visit by the country manager to Ethiopia’s finance ministry. Two people familiar with the matter said there had been an email phishing incident by fraudsters which had led to the disappearance of over $5 million intended to be deposited into the bank. But it is still unclear if the attacks on the AfDB officials by the ministry’s security guards were directly related to the disappearance of the funds. The bank said it is awaiting the outcome of Ethiopia’s investigation “which we expect to be prompt and transparent.”

The AfDB’s senior leadership in Addis Ababa, led by Ethiopia country manager Abdul Kamara, were initially detained but then later violently assaulted leaving Kamara with visible facial injuries in a photo seen by Semafor Africa that has been shared in influential Ethiopian social media circles. An earlier AfDB statement said the two staff members were “unlawfully arrested, physically assaulted, and detained for many hours by elements of the security forces without any official explanation.”

The AfDB’s president Akinwumi Adesina has tried to reassure staff that the matter is being taken seriously and reached out to Ethiopia’s Prime Minister Abiy Ahmed over the incident. Adesina has also filed a complaint. In an internal memo to staff, seen by Semafor Africa, Adesina said: “The safety, security, rights, privileges and diplomatic immunities of our staff in all countries where we operate are of paramount importance.” He also said that none of the bank’s operations in Ethiopia had been affected by the incident.

But there is some disquiet among long-time staffers who want the bank to take much more bold action with harsh sanctions on Ethiopia to ensure the bank’s staff are not at risk in even more volatile countries. “At the least we should have suspended operations and withdrawn all personnel. To send a strong signal,” said one staffer in a text message seen by Semafor Africa. Another text suggested the bank would be “endorsing state-sponsored thuggery” if the AfDB did not take strong action.

In a statement, the bank described such characterization of its response as “incorrect” pointing out the “very serious diplomatic matter” had been addressed at the highest levels.

KNOW MORE

The AfDB is Africa’s leading development finance institution, and its staffers are typically accorded with diplomatic immunity like other DFIs. One of the ways it is seen as different from the larger World Bank and the International Monetary Fund, is that it is perceived to have specialist expertise and a closer understanding of Africa’s economic realities.

The bank, headquartered in Côte d’Ivoire’s capital Abidjan, has been an important partner for Ethiopia on a string of development projects across energy, transport, water supply and sanitation, and agriculture.

The bank sent a delegation of senior leadership to Addis Ababa this week to address the incident.

Rising global demand for lithium threatens to fuel a wave of corruption in African countries and harm communities, a new investigative report has warned. The metal is crucial in the manufacture of electric vehicle (EV) batteries. Lithium deposits in Africa have been identified in Namibia, Ghana, Zimbabwe, Ethiopia, Nigeria, DR Congo, and Mali.

“The mineral supply chains for the batteries that will power the green energy revolution should benefit producer nations. Instead, they could embed corruption, fail to develop local economies, and harm citizens and the environment,” states U.K. non-profit Global Witness in the report.

Ninety percent of the world’s lithium supply in 2022 came from China, Chile and Australia. With global demand for lithium expected to rise six-fold between 2022 and 2035, the world is searching for new sources of the metal. Most lithium mining projects in Africa are in the exploratory or development stages.

The report on mines in Zimbabwe, Namibia and the DRC highlights numerous areas of concern. In Zimbabwe, a rush for lithium led artisanal miners to flood the Masandawana mine, with many working under unsafe conditions and child labor reported. The government soon began evicting them as the mine was taken over by companies linked to the ruling Zanu-PF party.

In Namibia, a Chinese-owned firm is accused of acquiring its mine through bribery. The firm, Xinfeng Investments, is also accused of developing an industrial mine using licenses meant for local small-scale miners, and avoiding an Environmental Impact Assessment (EIA). It did not respond to queries from Global Witness. And, in the DRC, development of the Manono mine has been stalled by boardroom battles and alleged corruption.

The report calls for battery mineral supply chains to be “rigorously screened for corruption and other ESG [Environmental, Social, Governance] risks” by battery manufacturers, car makers and policy makers.

— Martin K.N. Siele

Who is Liberia’s next president?

→ What’s happening? Liberia’s president, George Weah, lost his re-election bid for a second six year term. He conceded to Joseph Boakai, his challenger in the run-off voting round over the weekend. Boakai won 50.89% of the votes to Weah’s 49.11%, according to Liberia’s electoral body.

→ Who is Joseph Boakai? The president-elect was deputy to former president Ellen Johnson Sirleaf between 2006 and 2018. This year’s contest pitted Boakai and Weah against each other in a repeat of the race from six years ago when the latter rode to the presidency on his popularity as a former football star, tapping into mass disenchantment with the state of the country. That factor appears to have worked in Boakai’s favor this time as most Liberians report feeling their standard of living is falling, according to a poll by Gallup.

→ What are his main challenges? Boakai, who turns 79 at the end of November, will be tasked with fixing Liberia’s economic malaise and internal security problems. More than half of the country’s 5 million people are estimated to be poor, according to the World Bank. Three in four Liberians often did not have enough money for food in the past year, Gallup found. Boakai also faces the challenge of changing the decades-long perception held by a majority of Liberians (81%) that corruption is widespread in government.

→ What’s the significance? Liberia will have its fourth successive democratic government when Boakai takes office next year. “My foremost priority and top-most national agenda remain the pursuit of national prosperity for our people,” he said in a statement on Monday. Reuters reports that Boakai intends to review mining concessions to ensure they benefit Liberia.

— Alexander Onukwue

“You’d lose credibility by pretending that all is well and dandy”

LAGOS — This year has seen a marked slowdown in funding for young tech companies and there’s been a rising number of startup collapses. Now local investors are taking on the responsibility of making the case that large profitable companies can be built in Africa. In Lagos last week, venture capital firms TLcom Capital (an early Andela investor), and Ventures Platform (an early Paystack investor) held separate in-person events aimed at projecting optimism to foreign fund managers tempted to cool on Africa after a seemingly dull year. Semafor Africa caught up with Kola Aina, Ventures Platform’s founding partner, for a vibe check.

What’s been your deal activity this year?

We’re investing from our $47 million fund closed last December. The current climate means valuations are better though we are slower, prioritizing follow-on investments in our portfolio companies. We’ve done seven deals this year, fewer than in previous years.

What is your Africa pitch to foreign investors?

You’d lose credibility very quickly by pretending that all is well and dandy. No one can pretend there aren’t forex or inflation issues or that we shouldn’t balance consumer protection with innovation. But visitors who come here have a better appreciation of the ecosystem and can make new connections that help them steer investments.

How do forex issues affect investor interest?

Countries the world over have gone through forex fluctuations and some have found ways to stabilize. If you’re short term in your perspective, you’d probably want to duck and move. The stress today is that instability makes it difficult to plan and value companies. Currency devaluation hurts in the short term but it really doesn’t matter long term. Venture investing is a long-term play.

What needs to happen for less bad news, for example about fraud?

A startup is a company and every company needs a board. We’ve shifted from saying companies should only get boards at Series A to thinking of boards as a function of investment quantum. If you raise significant amounts of money, maybe above half a million dollars, you can consider a board. The more investors raise the bar, the more likely companies are to shore up compliance and governance.

— Alexander Onukwue

Renewed efforts to address antimicrobial resistance — the phenomenon where microbes resist drugs designed to eradicate them — are taking center stage in Africa, the continent that bears the greatest burden. Tom Nyirenda, a research scientist with experience in infectious diseases, says poverty and inequality in developing nations have been fueling antimicrobial resistance, largely due to poor sanitation, shortage of healthcare workers and inadequate health resources. However, the African Union is trying to change this narrative. The African Union Framework for Antimicrobial Resistance Control seeks to strengthen research in the field and advocates for policies to enhance awareness. The AU is also working with the Global Antibiotic Research and Development Partnership, a global initiative to develop new antibiotics.

• Twitter’s CEO has turned the service’s Hail Mary bet on an imagined $100 million political advertising business over to someone she trusts: her son.
• OpenAI has received just a fraction of Microsoft’s $10 billion investment.
• A powerful right-wing media figure sat down for a friendly interview with Ron DeSantis. He didn’t disclose his family connection to the campaign.

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