(These are recent developments across Africa worth noting.)
Canadian companies affected as Burkina Faso cancels mining permits
The military government in the West African state of Burkina Faso cancelled four mining licences this week, including those belonging to two Canadian companies.
Reasons for withdrawing the permits include non-performance, violation of regulations and expiration, according to a statement from military ruler Ibrahim Traore’s office at the end of Wednesday’s weekly cabinet meeting.
Among those affected is the Perkoa zinc mine in the west-central Sanguie region, which was run by a unit of Canada’s Trevali Mining. The mine was flooded in April 2022 resulting in several fatalities. Subsequently, a judicial tribunal liquidated the asset because the company lacked the resources to reactivate the mine.
Another affected Canadian company is Komet Resources Inc., whose permit for gold mining in parts of the North and the Sahel region was withdrawn. The authorities allege the mine was left idle for more than two years while taxes and royalties haven’t been paid since the permit was obtained in 2015.
Other licences nullified are those of Norgold, a London-based miner that had splintered from Russian company Seves…, covering the Yeou mine, and Indian-owned Balaji Mining Group.
While Norgold’s permit had expired, it wasn’t renewed because the authorities said an incomplete application was filed. In the case of Balaji Mining, the state said it stopped mining since 2020 without authorization and its renewal application did provide proof of required technical and financial capacity.
“The application for renewal of the incomplete permit was deemed inadmissible,” energy minister Simon Pierre Boussim was quoted as saying in the official statement.
South Africa’s power cuts meet fiscal woes
At a time when South Africa’s power cuts and other infrastructure problems require more funding and investment, the government of President Cyril Ramaphosa finds itself confronting a growing debt burden.
This is coming at a time when growth has been weak and economic recovery poor, leading to missed targets in tax collection and a shortfall of 56.8 billion rand. The result is that the government is now spending more than 20 percent of all revenue on debt servicing.
For Finance Minister Enoch Godongwana, the solution is to borrow even more and fund the debt by increasing taxes while paring government spending. This has meant that some state enterprises, such as the rail company Transnet that have been seeking more government funding, will be left in the lurch.
Government borrowing will average half a trillion rand a year for the next three years, according to Godongwana. Priority will be given to a monthly welfare payment of 350 rand to some 8 million citizens deemed very poor, which has been extended for another two years as well as a pay raise for government employees.
General elections are due next year with several opinion polls suggesting that the ruling African National Congress (ANC) might lose its parliamentary majority. If it happens, it would be the first since the end of apartheid in 1994. The ANC government appears bent on doing everything it can to ensure the predictions don’t come true.
African startups raised $144 million in October
African start-ups raised as much as $144 million in fresh funding in October, a 23.6 percent jump from US$ 117 million raised in September, data compiled from disclosed deals show.
Energy ventures took the main chunk of the new capital that went to 27 companies with $86 million, followed by fintech start-ups with US$29 million. The next significant funding of US$8.6 million went to companies investing in health.
The funding pattern shows a decline in fintech investments and increasing funding for energy deals, especially those related to clean energy projects. Energy companies have raised more money than other sectors across Africa since June this year.
East Africa led the other regions of the continent by attracting US$79 million, followed by Southern Africa with US$36.8 million. Next was West Africa with 18.9 million while North Africa brought the rear with US$9.5 million.
The top deals include the US$65 million made available to Kenyan company M-Kopa through debt by the International Finance Corporation. South African fintech Stitch got US$25 million of new funding, while Nigerian clean-energy startup WATT got US$13 million in new capital.
Year-on-year, it represented a funding decline of more than 22 percent from the US186.4 million, raised during the same period last year.
Briefly
Congo truckers strike halt cobalt, copper exports
A strike by truck drivers in the Democratic Republic of Congo is stopping exports of mined cobalt and copper from the Kolwezi mining area. Among the worst-hut are Swiss-based producer Glencore and China’s CMOC Group.
Africa’s biggest refinery starts test runs
The newly built Dangote Refinery and Petrochemicals plant in Nigeria’s commercial capital, Lagos, said it secured crude supplies for test runs that will start in December. Six crude cargoes for the test runs will be supplied by state-owned Nigerian National Petroleum Co. Ltd., the company said. The refinery has an installed capacity to process 650,000 barrels of crude daily.
Ahead
November 14
Liberia holds presidential election run-off vote.
South Africa to announce third-quarter jobs data
November 15
African Financial Industry Summit holds in Lome, Togo.
Ghana President Nana Akuffo-Ado to present 2024 budget proposals
Nigeria, Botswana, Ghana and Eswatini to release October inflation data
November 16
Madagascar to hold presidential election.
November 17
Three-day Global Tech Africa Conference holds in Lagos, Nigeria
Insights Newsletter is published by Afrika Insights, an Ontario, Canada-based business advisory and publishing firm. Email: afrikainsights@africainsights.ca