Africa

1. The Trump effect
2. Moove on up
3. Back to the future
4. Inadvisable behavior
5. Downward revision
6. Angel interest

Also, a Nigerian cultural event is recognized by UNESCO.

Hello! Welcome to Semafor Africa, where accounting isn’t necessarily one of our strongest subjects. I’m in Lagos this week where the parlous state of the Nigerian economy manifests in all kinds of unexpected ways beyond the daily struggle for everyday people. Last year’s decision to end the country’s expensive fuel subsidy, followed swiftly by another significant devaluation of the naira early this year, has made life very difficult.

Public transport costs have rocketed with many workers in Lagos seeing prices jump by over 100% in a few weeks. It is probably why I’ve noticed slightly less traffic congestion this week. But even if that was accurate, few observers think that’s a great trade off.

The naira’s rapid devaluation has meant businesses of all sizes have struggled. International companies including Diageo and LaFarge have had to find buyers for their Nigeria businesses. Business leaders told me they’ve had to brush up on their replacement cost accounting processes to ensure they’re correctly keeping records of how much it will cost to buy new inventory as prices change in real time in line with the naira’s gyrations.

But the financial reset by consumers and business owners “is not as tough as the mental adjustment,” said veteran economist Bismarck Rewane of Lagos-based Financial Derivatives. “It’s an adjustment we’ve been through before, but this one has been particularly vicious.”

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Trump’s White House could recognize Somaliland

Somaliland, a self-governing region within Somalia, will be much closer to being recognized by the United States as the world’s newest country when Donald Trump returns to the White House in January.

Support for the region has grown strong among Republican US-Africa policy leaders on Capitol Hill and likely Africa advisors of Trump’s incoming White House. Many of these people told Semafor Africa they would encourage Trump to recognize Somaliland, “even if it wasn’t on Day One.”

Recognizing Somaliland could enable US intelligence to set up long term operations to monitor the movement of weapons in the volatile region and the activities of China, which has a military base in neighboring Djibouti.

Last month the territory held its sixth successful election since reclaiming independence from Somalia in 1991. Peter Pham, a former Africa envoy in Trump’s first term, said Somaliland’s democratic process had “demonstrated its attractiveness as a partner for the United States and other countries.”

Moove to manage self-driving fleet

American self-driving car company Waymo is outsourcing its fleet management to Moove, a Nigerian-born vehicle financing business initially aimed at Uber drivers across Africa.

Moove said it will oversee “fleet operations, facilities, and charging infrastructure” for Waymo’s all-electric fleet starting from next year in Phoenix, and later in Miami in 2026.

Founded in 2020, Moove launched in Nigeria where it offers a multi-year payment plan for new cars used as Uber taxis. It takes daily deductions directly from drivers’ earnings. The company has raised more than $400 million through equity and debt investments, the latest being this year’s $100 million round led by Uber.

Moove also operates in Ghana, South Africa, Kenya, and Egypt. It developed capacity for managing electric vehicles two years ago in the United Arab Emirates. The company said its fleet on Uber in the UAE is entirely electric.

— Alexander Onukwue in Lagos

Ghana’s president-elect readies for economic challenges

Ghana’s president-elect John Dramani Mahama vowed to “reset” the country following his resounding election victory, as analysts predicted challenges in repairing a battered economy.

The country’s electoral commission on Monday declared main opposition candidate Mahama the winner of Saturday’s poll with 56.55% of the vote. His main rival, outgoing Vice President Mahamudu Bawumia, had already conceded defeat on Sunday.

Ghana, the world’s second biggest cocoa grower and major gold producer, is mired in its worst economic crisis in decades, triggered by a 2022 default on its $30 billion sovereign debt, which led to a $3 billion IMF bailout and debt restructuring. “There is much to do to salvage our country and reset it,” Mahama, previously president from 2012 to 2017, said in his acceptance speech.

David Omojomolo, Africa economist at Capital Economics, said Mahama’s priorities would be to ensure fiscal policies adhere to the IMF program and “keeping investors onside post-debt restructuring.”

— Alexis Akwagyiram

McKinsey settles over South Africa bribery

The sum consulting giant McKinsey has agreed to pay to settle US bribery charges tied to its work in South Africa. The payment is part of a three-year deferred prosecution agreement that would see charges against McKinsey dismissed if the firm meets various conditions, including not engaging in further misconduct. The US Department of Justice said the scheme to bribe foreign officials had earned McKinsey and McKinsey Africa $85 million in profits. The firm was accused of paying bribes to officials at two state-owned firms in South Africa — power utility Eskom and rail and freight operator Transnet — between 2012 and 2016. The DoJ claims the firm bribed the officials “in order to obtain lucrative consulting business.”

World Bank cuts Kenya growth rate

The World Bank has cut Kenya’s economic growth estimate for 2024 to 4.7%, from an initial 5%. The lowered estimate was attributed to strained fiscal conditions — including tax revenue shortfalls and high debt servicing costs — as well as the impact of flooding and anti-government protests earlier this year.

Progress on addressing the fiscal challenges could yet drive growth up to 5.1% in the medium term, the bank said in its Kenya Economic Update Report published on Tuesday. It noted that at 4.7%, the growth estimate would still be higher than the sub-Saharan African average of 3% for 2024.

The report credited Kenya with lowering inflation, increasing forex reserves held by the central bank, and maintaining a stable foreign exchange rate.

— Martin K.N Siele in Nairobi

African angel interest jumps four-fold

Investment activity into African startups by angel investors has grown in the last decade. The number of angel investors on the continent increased four-fold between 2020 and 2023, corresponding with a near tripling of investment dollars to $22.5 million, according to the African Business Angel Network (ABAN). Most angel investors say they are sector agnostic but they also prefer to back high growth ventures that already make money, ABAN’s survey shows.

More than half of African angel investors are company founders themselves or C-level executives, with the majority operating in South Africa, Nigeria, and Kenya. But country-specific angel investment networks are spread across Africa, helping to grow local tech ecosystems by boosting interest in startup investments.

Governance

🇧🇫 Burkina Faso’s military junta on Friday dismissed the prime minister and dissolved the government. Rimtalba Jean Emmanuel Ouedraogo, who previously served as communications minister, was appointed prime minister on Saturday.

Deals

🇳🇬 Norwegian energy company Equinor completed the sale of its Nigerian unit to Chappal Energies for $1.2 billion. Equinor’s Africa portfolio now consists of Angola, Algeria, Libya and Tanzania.

🇿🇦 Logistics tracking company Ctrack acquired the international telematics business of US telecoms provider Inseego for $52 million.

🌍 Seedstars Africa raised $42 million in the first close of its Ventures I fund for investing in early-stage African startups. The fund’s investors include the African Development Bank and the European Union-backed EIB Global.

🌍 Sony Music has pulled its catalog from Boomplay, the Chinese music streaming service that focuses on African users, over late royalty payments. Songs by Nigerian stars Wizkid and Davido are said to be among those pulled.

International Finance

🇿🇲 Zambia and France signed a bilateral debt restructuring agreement, as part of the southern African country’s efforts to revamp about $13 billion in external debt after defaulting in 2020. The deal, under the G20 Common Framework for debt restructuring, pushes the maturity of its debt back by an average 12 years to beyond 2040.

Geopolitics

🇲🇼 🇿🇲 UK International Development Minister Anneliese Dodds is visiting Malawi and Zambia this week. She will announce a £39 million ($49.8 million) package to support education in Malawi before traveling to Zambia where she will sign agreements on renewable energy.

🇰🇪 The US and UK imposed sanctions on British-Kenyan businessman Kamlesh Pattni over his alleged involvement in the illicit gold trade. His assets are set to be frozen.

Nigeria’s religious and cultural festival, Kano Durbar, has been included in UNESCO’s list of Intangible Cultural Heritage of Humanity. It is the 8th element to be inscribed on the list from Nigeria. Kano Durbar festival brings together many ethnic groups including Hausa, Fulani, Arabs, Nupe, Yoruba and Tuaregs, and educates younger generations about their cultural identity. It is usually held as a procession of 10,000 men on horses, as well as men and women performing various cultural practices passed down through generations. The festival is held annually during the Eid El-Fitr and Eid El-Kabir Islamic festivals.

Syrian rebels stunned the world over the past 10 days, forcing a dictator out of power, Semafor’s Gulf editor Mohammed Sergie wrote, breaking down what happened and what could come next as Syrians navigate a new era.

“Will the weeks, months, or years ahead bring utopia? No. Will tyranny return? Perhaps. Could it be more brutal than what we’ve endured? Unimaginable,” he added.

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