Africa Top10 Business News

1Africa Scrambles to Build Innovation Hubs across the Continent

Innovation Hubs

A recent meeting of stakeholders of the Africa50 infrastructure fund warned countries that if they continue at the current rate of industrialisation, and fail to invest in their knowledge economies, they will face 100m jobless citizens across the region by 2050. Innovation ecosystems require basic infrastructure, such as road networks and ports, digital infrastructure including cheap broadband, supportive business and regulatory environments, technology, and talented scientific and mathematical minds, and in too many countries these basics are desperately lacking. Africa50 is drawing from a $871m fund to deploy early-stage risk capital to help lure local and global talent to Africa by giving early-stage startups and hi-tech ventures the financial freedom to grow.But as countries scramble for resources to build their digital ecosystems, areas of the continent are still struggling for electricity to power basic digital technology. Bridging the continent’s infrastructure gap is estimated to cost $160bn a year – without this, the potential of innovation hubs may be a distant dream.
 

SOURCES: AFRICAN BUSINESS MAGAZINE

2Ghana Named as Host of the African Continental Free Trade Area

Ghana African Continental Free Trade Area

In support of the new trade bloc, Ghanaian President Nana Akufo-Addo pledged to donate $10 million to the AU to support the operationalization of the secretariat of the AfCFTA. Although the AfCFTA will be economically transformative for Africa in the long-term, the immediate benefits will be restricted due to the macro-economic uncertainties of regional trade. The opportunities for Africa with this new trade bloc are immense. The Economist Intelligence Unit estimates that the AfCFTA will create the world’s largest continental free-trade area, provided all 55 African Union (AU) members join, and has the potential to create an African single market of 1.2 billion consumers whilst eliminating about 90% of tariffs on goods over the next five years. The AfCFTA is expected to boost the economies of African countries through employment creation and the promotion of made-in-Africa goods. But Kayode Akindele, a partner at TIA Capital, a pan-African investment partnership focussed on credit-based investing across sub-Saharan Africa, is not opening up the bubbly just yet.
 

SOURCES: FORBES AFRICA

3South Africa’s Central Bank Outlines Quick Moves to Save the Economy

South Africa's Central Bank

Removing policy uncertainty in South Africa, allocating new broadband spectrum and changing visa regulations could immediately boost the country’s flagging economy and reduce the crisis-level unemployment rate, Reserve Bank Deputy Governor Kuben Naidoo said. While the central bank has long called on government for structural reforms to lift economic growth, its senior leaders have until now been reluctant to flag specific changes that could be made and have simply said these fall beyond the scope of monetary policy and the inflation-targeting mandate. Rolling out the 5G network to accommodate new spectrum allocation could boost direct investment by between 0.25% to 0.5% of gross domestic product, lower data costs and create new markets. Relaxing visa laws for tourists, which can be done “with a click of the finger”, could create as many as 300 000 full time and 600 000 part-time jobs for every 1 million visitors to the country, making inroads into the 29% unemployment rate, Naidoo said. Making it easier for skilled migrants to live and work in the country should be a “no-brainer” because that could create four unskilled jobs per skilled migrant, he said.

SOURCES: FIN24

4The Impact Of Lab-Grown Diamonds On The African Diamond Trade

Lab-Grown Diamonds

Prior to the political war thriller Blood Diamond being released onto the silver screen in 2006, most of the world was blissfully unaware of the immense suffering often associated with the African diamond industry.  While diamonds are inherently associated with love, joy, and commitment, many inhabitants of Africa’s diamond-producing countries believe that the shimmering stones are more of a curse than a blessing. Up to this day, diamond mining still fuels a number of evils including worker exploitation, environmental dilapidation, and brutal civil wars. When you purchase a lab-grown diamond you can be 100% sure of its origin. Not only are diamonds that are grown in the lab genuinely conflict-free but they are also significantly more environmentally-friendly as well as substantially more affordable. The African environment can benefit greatly by increased demand for grown diamonds as they do not result in erosion water and soil contamination, loss of biodiversity, and the creation of sinkholes whatsoever. 
 

SOURCE: AFRICA.COM

5Gloves Off in the Zambia vs Vedanta Row

Zambia vs Vedanta Row

The government of Zambia has defended its efforts to kick London-based copper miner Vedanta Resources out of the country, in an escalating row over tax and alleged underinvestment. The southern African nation’s national mining vehicle, ZCCM, is seeking to have Vedanta subsidiary Konkola Copper Mines (KCM), its partner in the country’s largest copper mine, placed into liquidation. Vedanta responded earlier this week by seeking to have the case referred to arbitration in South Africa. A South African court has ruled that the sale process should be halted but the government has pressed on regardless. One source within the Zambian tax authorities said the company owed about $100m in VAT, customs duties and other taxes, even once refunds due to the company were taken into account. The source added that KCM, which has previously been criticised over pollution, has also withheld $10m in dividend payments.

SOURCE: THE GUARDIAN

6Building Green Breweries in Africa

Green Breweries in Africa

Diageo, the British owner of iconic brands including Guinness and Johnny Walker, is going green at brewing sites across Africa with an ambitious $218 million investment drive. The beverages multinational will overhaul the electricity mix at its African brewing sites across the continent and install solar power, biomass boilers and new water recovery equipment. The spending consists of an initial $60 million upfront investment in equipment and installation with $158 million earmarked for long-term maintenance and operations costs. The plans are a key commitment in one of Diageo’s most important market with the continent currently accounting for 13% of its global sales. And there’s potential for significant upside as Africa’s $13 billion beer market is the fastest growing globally. But the increased focus of global brewers targeting market share in Africa (in some cases by producing both premium beer brands and locally brewed low-end options), also comes with the risk of alcohol-related health problems as the African market is doubly attractive for brewers given weaker regulation for sales and advertising compared to western markets.

SOURCE: QUARTZ AFRICA

7African Bank Sets Agenda for Regional Integration

African Development Fund

Ethiopia and the African Development Bank Group have signed a $98 million grant agreement from the African Development Fund (ADF) to help finance phase one of the Ethiopia–Djibouti Road Transport Corridor Project. The total cost of the project is $255 million, comprising an ADF grant of $98 million to the government of Ethiopia, an ADF grant of $5.3 million to the government of Djibouti and a co-financing contribution of $151 million by the government of Ethiopia. The project will kick off in 2020 and be implemented over a five-year period. The ADF grant to land-locked Ethiopia’s road transport sector is part of the Bank’s efforts to boost regional integration and connectivity, especially access to seaports. The project consists of the construction of the first 60 km of a 4-lane expressway section of the new 126 km stretch from Adama to Awash and includes the design of a one-stop border post at Dewele. The project will enhance trade by significantly reducing transport costs, thereby accelerating the economic growth of Ethiopia and its neighbour Djibouti, as it is part of the main import-export corridor. The expressway is expected to improve access to markets for farmers and rural communities. Other beneficiaries include some 3,000 truck-drivers who work the 900 km between Djibouti and Addis Ababa, and youths, who will receive over 95% of the job opportunities during the construction phase.

SOURCE: AFRICAN DEVELOPMENT BANK

8REPORT: The “Grand-scale Corruption” which the Sassou-Nguesso Family Continues to Engage

Sassou-Nguesso

A new investigation by anti-corruption NGO Global Witness has discovered the apparent theft of more than $50 million in public funds from the Republic of Congo by Denis Christel “Kiki” Sassou-Nguesso, son of the country’s president, Denis Sassou-Nguesso. The resulting report alleges the younger Sassou-Nguesso, 44, laundered the money through a “complex and opaque corporate structure” spanning six European countries, the British Virgin Islands, and the US state of Delaware. It’s far from the first time the nation’s first family has been accused of embezzling funds from their country’s treasury. In 2007, Global Witness fingered Kiki, a Congolese parliamentarian, as having spent “hundreds of thousands of dollars of money that may derive from sales of state oil on lavish designer shopping sprees in Paris, Marbella and Dubai.” His sister, Claudia Sassou-Nguesso—also an elected member of Congo’s parliament—allegedly pilfered nearly $20 million in state monies to buy a condo in New York City’s Trump International Hotel & Tower, according to a Global Witness report released in April. (The Congolese government called the charges “fake news.”)

SOURCE: DEUTSCHE WELLE

9The World’s Top Cocoa Producers Coordinate on 2020-2021 Cocoa Bean Prices

Top Cocoa Producers

Côte d’Ivoire and Ghana have joined forces to impose a floor price for cocoa of $2,600 per tonne and a live income differential of $400 per tonne. “We will not sell the 2020-21 crop for below $2,600 per tonne,” Ivorian President Ouattara said in a televised address. He also said he wanted the guaranteed price for farmers to return to 2015 levels of $1.71 per kilogramme from the current level of $1.28 per kilogramme. The move is a dramatic change of course from only a few weeks ago. On July 16, Ghana and the Ivory Coast had given in to pressure from the global chocolate industry and lifted a month-long ban on cocoa sales that was meant to push international buyers to accept a  $2,600-a-tonne minimum agreement. At the time, the two countries settled for a fixed premium price under which farmers in Ghana and the Ivory Coast would get $400 premium per every tonne of cocoa beans they sell during the 2020-2021 harvest season.

SOURCE: AL JAZEERA

10Madagascar’s First Locally Owned Sea-cucumber Farm

Sea-cucumber Farm

In much of the Far East, sea cucumbers are a delicacy, fetching a high price for their purported health benefits. In Tampolove, a tiny windswept village of mud huts and sandy paths squeezed between the coast and the forest in south-west Madagascar, they have provided a major boost to the local economy and environment. The delicacy is transforming the lives of people who have typically earned no more than a dollar a day, while at the same time helping to alleviate the pressure on marine species. Sea cucumbers belong to the echinoderm family, along with starfish and urchins, and come in all shapes and sizes. They spend their days buried in silt, emerging at night to feed, sifting through the sediment for particles, a practice that provides an essential filtration service that benefits the wider ecosystem. n 2004 the local community, with the support of a British NGO, Blue Ventures, came together to decide what to do about the rapid decline in fish and octopus stocks in their coastal waters. They set up an association, comprising representatives from several villages on this stretch of coast, whose responsibility it would be to manage fishing and the environment. They called the protected area Velondriake, which translates from the Vezo language as “to live with the sea”.
 

SOURCE: BBC

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