Africa

1. Cut your cloth
2. Opening up
3. DRC v Apple
4. Visa-free review
5. New funds

Also, a better understanding of the ecological mysteries of Africa’s forests.

Hello! Welcome to Semafor Africa, where we’re a unicorn in our own right, but perhaps not in the way that matters to some. This year has been tough for African tech startups trying to raise funding — the global venture slowdown has hit the continent’s hubs hard. It’s been hard for local venture capital funds raising funds to feed the pipeline of promising entrepreneurs, but it’s been even worse for those entrepreneurs. Our friends at Africa: The Big Deal estimate funding for 2024 will come in around $2.2 billion, down some 25% from last year.

And yet, the fourth quarter has given us two new African unicorns — privately funded companies valued at over a billion dollars. Seven weeks ago Nigeria’s Moniepoint announced it had raised $110 million in a Series C round, at a valuation “over $1 billion,” and this week South Africa’s Tyme (parent of TymeBank) revealed it had raised $250 million in a Series D round at a $1.5 billion valuation. Eight of the nine African unicorns to date are fintech companies.

But my question is whether unicorns really matter for the wider ecosystem? Lofty valuations don’t necessarily mean a young company is executing at the highest levels. Zecharias Amsalu, founder of Africa Fintech Summit and an angel investor, thinks they do matter. African unicorns are “symbolic of the ‘investiability’ of the continent,” he tells me. “It will catalyze future investment.”

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Nigeria’s Tinubu unveils “ambitious” budget

Nigeria’s President Bola Tinubu presented a 47.9 trillion naira ($30 billion) budget for 2025 to Parliament on Wednesday.

The bill, Tinubu’s second as president, assumes a benchmark oil price of $75 per barrel and production of just over 2 million barrels per day — an output level some analysts say would be hard to achieve due to sabotage and aging infrastructure. Budgets in Africa’s top crude producer are anchored on oil sales which make up around 90% of foreign exchange earnings.

The budget also assumes inflation will fall from over 34% currently to 15% next year. It is an “optimistic forecast,” says Ibukun Omoyeni, an economist at Lagos-based Vetiva Capital. He believes inflation “may be much higher” than the government’s estimate and that a supplementary budget would need to be issued at some point.

Tinubu, who has largely stuck by a policy agenda that has sharply raised the cost of living during his tenure, said the latest budget was “ambitious but necessary” for the country’s future.

— Alexander Onukwue in Lagos

Ethiopia opens up to foreign banks

Ethiopian lawmakers have passed long-planned legislation to allow foreign banks to operate in the country. The move is a key part of the government’s drive to attract more foreign investment.

Ethiopia has one of sub-Saharan Africa’s biggest economies and, with more than 120 million inhabitants, is the continent’s second most populous nation. Prime Minister Abiy Ahmed has sought to open up the country’s tightly controlled economy since coming to power in 2018.

The new law, passed by Parliament on Tuesday, allows foreign lenders to establish subsidiaries, open branches or representative offices, and buy shares in local banks. But it imposed a limit on foreign strategic investors, capping their ownership at 40% in any local bank.

The state-owned Commercial Bank of Ethiopia currently dominates the country’s banking sector.

— Alexis Akwagyiram

DRC lodges criminal complaint against Apple

DR Congo has filed a criminal complaint against Apple in France and Belgium over the tech giant’s alleged use of conflict minerals in its supply chain. It accuses Apple of being complicit in crimes committed by armed groups controlling mines in eastern DRC, saying minerals pillaged from the region are laundered internationally and used in the manufacture of Apple devices.

Apple “strongly disputes” the allegations, saying it does not directly source minerals and audits its supply chain to ensure ethical sourcing, in addition to funding organizations enabling mineral traceability. In a statement, it said its suppliers had been notified earlier this year that their refiners and smelters must suspend sourcing of tin, tantalum, tungsten and gold from DRC and Rwanda, which has been accused of backing armed groups in eastern DRC.

— Martin K.N Siele

Kenya reviews visa-free policy

Kenya will review its widely criticized visa-free policy after the country plummeted in an index that measures accessibility to visitors.

The government in January replaced visas with its Electronic Travel Authorization (ETA) system — a mandatory online requirement that costs $30 and takes three days to process. Travellers have complained about the cost and processing delays.

The Cabinet on Tuesday greenlit a review in response to “various concerns.” Tourism Cabinet Secretary Rebecca Miano on Wednesday said on X that a review was scheduled for Jan. 7, adding that it would aim to improve Kenya’s ranking on the Africa Visa Openness Index, by the African Development Bank, where the country fell 17 places this year to rank 46th out of 54 countries.

Kenya generated around $2.7 billion dollars from tourism last year, making it one of the largest contributors to the economy. Some fear the ETA could hinder the country’s ability to meet its target of welcoming 5 million tourists annually by 2027, up from 2.1 million last year.

— Martin

IMF releases funds to Zambia

The amount the International Monetary Fund will release to Zambia to support the southern African country’s economy. The IMF’s executive board on Monday said it had approved the latest payment after completing a review of the country’s 38-month extended credit facility program, which was approved in August 2022 and increased in June to $1.7 billion from $1.3 billion. IMF officials said Zambia’s government should implement structural reforms to promote private sector growth, fight corruption, and sustain agriculture reforms in the face of a looming economic slowdown. The officials said economic growth is expected to fall to 1.2% due to drought that reduced agriculture and electricity production.

Deals

🇳🇬 Shell’s bid to sell its onshore assets in Nigeria to Renaissance Africa Energy — a consortium of Nigerian and Swiss companies — for up to $2.4 billion was approved by the government on Wednesday. It follows the oil giant’s announcement earlier this week that it will invest in a deep-water reserve in southern Nigeria that could produce 110,000 barrels of oil per day.

🇿🇦 State-owned company Telkom received the South African telecoms regulator’s approval to sell Swiftnet, its masts and towers unit, for 6.75 billion rand ($373 million) to a consortium led by private equity firm Actis.

🇿🇦 South Africa asset manager Futuregrowth invested 150 million rand ($8.3 million) in Sourcefin, a local lender to small and medium sized businesses.

Energy

🇰🇪 The Kenyan government extended an oil supply deal with Saudi Aramco, Abu Dhabi National Oil Company, and Emirates National Oil Company.

Geopolitics

🇲🇺 Mauritius’ new premier Navin Ramgoolam called for the renegotiation of a deal, agreed in October, under which the UK would hand sovereignty of the Chagos islands to his country but retain control of the UK-US military base on Diego Garcia, one of the islands.

Governance

🇿🇦 South Africa’s government closed more than 1,000 small convenience stores, known locally as spaza shops, to prevent the sale of pesticide-laden food linked to the deaths of 38 children nationwide.

🇹🇿 Tanzania’s government launched an initiative aimed at regulating the importation, registration and use of electric vehicles.

“Africa’s indigenous forests remain one of the most poorly understood biomes in the world,” despite being home to an estimated 80% of the continent’s terrestrial biodiversity.

Nick Dall, writing for Al Jazeera, looks at the ongoing work by forest ecologists and biodiversity researchers in Groenkop Forest, South Africa, to categorize diverse insect species. He explains the continent’s indigenous forests are extensive carbon sinks that host species ranging from insects to invertebrates. Dall notes that identifying new species and working out how they fit into the ecosystem is “both expensive and time-consuming.”

Filmmaker Nenad Cicin-Sain set out to write his next screenplay using AI, but the project has been delayed because the program keeps making up excuses to miss deadlines, Semafor’s Reed Albergotti reported. “I don’t see a solution to their accountability issue,” Cicin-Sain told Albergotti.

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