(These are key developments worth watching across Africa in the coming week.)
Africa promised stronger voice at IMF
Africa will get a “stronger voice” at the International Monetary Fund, with a third representative on the executive board, Managing Director Kristalina Georgeiva said.
This came as the IMF and its sister organization, the World Bank, are about their October 9 to 13 meeting in the Moroccan city of Marakhesh. It will be the first time in Africa in half a century, at a time when the host city is just recovering from a devastating earthquake. The executive board, headed by Georgeiva, is the main decision-making organ of the IMF with 24 directors.
The World Bank is similarly expanding its board to accommodate a third African representative. Both organizations, for long dominated by the U.S. and European countries, are responding to demands for institutional reform. The meeting in Marakhesh is also expected to address the debt of poorer countries and their options amid the challenges of climate change.
Africa’s needs are huge, due to economic shocks from the Ukraine War and a higher interest-rate regime in major economies, with the African Union seeking as much as $500 billion in annual concessional lending for the continent. The IMF points to improvements in its financial support for the continent that now averages $10 billion a year from about $1 billion before the coronavirus pandemic. And there are plans to do more, Georgeiva said.
African nations have for long blamed the two Washington-based institutions for prescribing economic solutions that have only made poverty worse in the continent by cutting funding to education, health and other social services.
Canada’s Barrick Gold to revamp Zambian mine with $2 billion
Toronto-based Barrick Gold agreed a deal to invest US$2 billion to turn around a loss-making Lumwana mine in the southern African country of Zambia.
The expansion is intended to turn the mine into a “super pit” that will see Zambia double copper output, currently estimated to be about 170,000 metric tons a year, when the new capacity comes on stream in 2028, Barrick Gold said in a statement.
Zambia’s copper production has been in decline in recent years, falling behind the Democratic Republic of Congo, which has experienced a surge in output. Barrick is emerging as a force to be reckoned with globally in copper production and is betting on Lumwana and another US$7 billion investment in Pakistan to increase its share of profits from copper.
Barrick, which acquired the Zambian asset in 2011, is joining several other companies that have in recent times announced new investments in the country since the election of President Hakainde Hichilema, who has initiated several business-friendly policies. China Nonferrous Metal Mining Group last week announced it was putting in more than US$1 billion in copper mining. Last year First Quantum Minerals Ltd., another Canadian miner, said it was investing US$1.25 billion to expand production at its Kansanshi copper mine, northwest of the capital, Lusaka.
African startups raise $2.6 billion so far this year
Technology startups across Africa raised US$2.6 billion in the first nine months of this year, with signs of investor fatigue emerging in the third quarter.
The sum of US$116.7 million that went to 22 startups in September is 52.11 percent less than the US$243.7 million raised in August and down 70 percent year-on-year from US$384.4 raised in September last year, according to TechCabal, a Lagos-based tech publishing company.
September figures are only better than the US$60 million raised in March. In all, US$492.6 million was raised in the third quarter, xx percent lower than than US$877 million in the second quarter and less than half of the US$1.3 billion that came in in the first quarter, bringing the total to US$2.57 billion.
The Southern African region led the way with US$69 million or 59 percent, followed by West Africa with US$26.1 million, East Africa with US$20.2 million and North Africa with US$1.2 million. Most of the funds went to investments related to energy, financial technology and e-commerce.
The main September deals include the following:
- Wetility. South African energy startup, raised US$48 in equity and debt.
- Subculture, a Kenyan solar energy startup, got US$12 million in syndicated debt.
- Complete Farmers, a Ghanaian company focused on agriculture, got US$10.4 million in a pre-Series A round fundraiser.
- Lupiya, a Zambian fintech company, garnered US$8.25 million in a Series A round.
- Rentoza, a South African retail startup, got for business expansion.
Congo germanuim may weaken China dominance
China’s dominance in the production of germanium, a mineral used in solar panels and other electronics, may start to wane with a plant in Democratic Republic of Congo set to start production.
President Felix Tshisekedi inaugurated a new facility this week in the southern city of Lubumbashi. Run by state-owned STL, it will produce 30 percent of the world’s germanium, according to the company’s website in addition to processing copper, cobalt and zinc oxide from drilling waste in the area.
China currently accounts for more than 60 percent of global supplies of germanium, and it’s among the items it has restricted its exports as part of its trade war with the U.S. and European allies.
Germanium, a silvery material, is now regarded of strategic importance due to its diverse uses in building optic fibers, night vision equipment and solar-powered satellites.
Briefly
French troops start leaving Niger
France said its troops stationed in the West African country of Niger will start pulling out of the country this week, marking a decoupling from its former colony triggered by a military coup that ousted French ally, former President Mohammed Bazoum.
The junta led by Abourahamane Tchiani broke relations with France and demanded the exit of more than 1,500 French troops that had been invited by the toppled government to help fight desert incursions by jihadist insurgents. Niger has aligned with Russia, with troops from the Wagner mercenary group now supporting the governing junta.
Congo, Zambia plan copper route to Tanzania
DR Congo and Zambia plan an US$850 million road connecting the copper-producing regions of both countries to Tanzanian ports for export.
When operational, the road will shorten the current export route by more than 200 kilometers.
Sub-Saharan Africa growth to slow this year
Economic growth in sub-Saharan Africa is expected to slow this year to 2.5 percent from 3.6 percent in 2022 due to a number of challenges, according to the World Bank.
The biggest drag is the slow growth in the two biggest economies in Nigeria and South Africa. Other factors include the heavy debt overhang of some countries and the residual effects of the coups that have rocked a number of countries in West and Central Africa.
Economic Indicators
- Central banks in Uganda and Kenya left their benchmark interest rates unchanged; Uganda at 9.5 percent, Kenya at 10.5 percent.
- Angola emerged from recession in the second quarter after the economy grew 0.2 percent to end two consecutive quarters of negative growth.
Ahead
October 9
Tanzania to release September inflation data
October 10
Rwanda and Namibia to announce September inflation figures
Angola to release reserves data
Liberia to hold general elections
October 11
Ghana to release inflation data for September
October 12
South Africa to release data on manufacturing and mining
October 13
Botswana to announce September inflation figures
Insights Newsletter is published by Afrika Insights, an Ontario, Canada-based business advisory and publishing firm. Email: afrikainsights@afrikainsights.ca