TAR117 - Q4 2021

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TOP 200 AFRICAN BANKS Rebuild, recapitalise, refocus

N° 117 • OCTOBER - NOVEMBER - DECEMBER 2021

SOUTH AFRICA Ramaphosa’s race to fix the ANC TITANS OF TECH The big beasts of Africa’s Silicon Savanna

www.theafricareport.com

BIG IDEA

DANGOTE’S

It’s probably because we started in the mobile sector that we’re moving up fast in financial services.

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EDITORIAL

CARBON MUST FALL!

Like calls to topple statues and governments, the war on carbon has the attributes of a resounding battle cry. More so, when almost everyone can agree. It’s not easy being green, but we must all try harder.

The simplicity is deceptive. Beneath it lurks depths of hypocrisy and doubledealing. Ranged against that are the righteous campaigners to save the planet from carbon dioxide poisoning. Mostly young, they are angered by the obfuscation and lies of corporations and governments.

Yet, this is another world – literally another century – from the Earth Summit in Rio in 1992. Uniting activists across the globe, Rio produced UN treaties on carbon levels, forests and water, triggering annual climate summits. At its core was the link between protecting the environment and accelerating sustainable development in Africa, Asia and South America.

That has eroded. Governments are making climate less political and more about technical fixes and market solutions. It is leading to a deadly complacency.

Red lights should be flashing when world leaders descend on Glasgow in November for the UN’s COP26 climate summit. In September, UN climate chief Patricia Espinosa reported that greenhouse gases are set to rise by 16%

in 2030 compared with levels in 2010. On these trends, she forecasts catastrophic global warming of 2.7°C by the end of the century.

Africa has contributed less than 1% to cumulative global carbon emissions, yet it has been hit harder than any continent by climate change. If much of the bargaining at Glasgow is around carbon levels, developing economies risk being sidelined. The lion’s share of the global carbon budget, set at the summit, should go to low-emitting, energy-poor countries.

That’sespeciallyrelevant for Africa’s hydrocarbon producers, as Nigeria’s vice-president Yemi Osinbajo argues. Bans or restrictions on public investment in Africa’s fossil fuels, especially natural gas, will stymie the region’s efforts to fix its energy crisis.

Finance for adaptation to and mitigation of climate change will be another dividing line at the conference. In 2016, the G20 club of countries agreed to contribute $100bn a year in climate finance to developing economies.

Only Germany and the Nordic countries have met their quotas. So far, the US has paid less than a fifth of its promise, although Biden has committed to boosting payments this year.

African states will have to negotiate harder.

Until now, they have secured less than 5% of the available funding. They should also get backing from the international financial institutions for more innovative funding.

South Africa’s deputy finance minister, David Masondo, for example, has proposed a debt-for-climate swap that would allow the Eskom energy utility to raise $10bn to move from coal to renewable energy.

Africa’s pioneering mobile-money systems are inspiring new ideas about off-grid and sustainable energy. Speeding up that work will need far greater investment in universities and technical colleges, as well as money from the markets. All of that will count next year when the UN Climate summit is held in Africa.

THEAFRICAREPORT / N N° 117 / OCTOBER-NOVEMBER-DECEMBER OCTOBER NOVEMBER DECEMBER 2021

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#117 / October-November-December 2021 THE AFRICA REPORT 57-BIS, RUE D’AUTEUIL 75016 PARIS – FRANCE TEL: (33) 1 44 30 19 60 FAX: (33) 1 44 30 19 30 www.theafricareport.com

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AFRICAN

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8O 62 NIGERIA FOCUS The Buhari government has not delivered on major reforms for the business sector. And while many mega-projects are going ahead nonetheless, business leaders will have to adjust to the policies of a new resident at Aso Rock come 2023.

FEATURES 26 WIDE ANGLE / Dangote’s big idea We talk to Nigerian billionaire Aliko Dangote and make an exclusive visit to his $19bn fertiliser and oil refinery plants in Lekki, just outside of Lagos.

36 PROFILE / Ramaphosa’s land of the rising sun South Africa’s president has strengthened his hand in the governing ANC but faces a tough test in 1 November’s local elections due to Covid-19, poor service delivery and the slow pace ofhis reforms.

50 PROFILE / Team Biden A look at the US President’s hand-picked list of diplomats, envoys, spies and soldiers representing Washington in Africa and competing with the likes of China and Russia.

TOP 200 BANKS AND TOP 100 INSURERS Our exclusive ranking of the largest companies in the African financial services sector. They were hit by Covid-19 but are making plans for the days of more growth.

112 CONSTRUCTION DOSSIER Egypt’s new cities, Chinese troubles in DRC and Egyptian cement.

120 TOP 40 DIGITAL LEADERS Our exclusive ranking of digital innovators and power players.

130 MAURITIUS FOCUS Port Louis is looking for a new economic miracle.

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THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

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THE TRUTH ABOUT ECONOMIC LIFE IN NORTHERN NIGERIA The death of economic growth in northern Nigeria is not for the lack of rich economic factors – minerals, materials and men – but of trained minds! [‘Why is President Buhari looking north to Niger?’, TAR online edition, 22 June.]

The early 1950s saw the southern Nigerian authorities embark on free education for their children. It was the foundation of knowledge acquisition and development. The development gap between the north and the south was so pronounced that in the 1978 Convocation Chancellor’s address, chief Ọbafemi Awolọwọ, the sage, said: “Stop the south for 50 years, no new schools built, no new admissions into existing schools, the north cannot catch up.”

The oil boom of the General Yakubu Gowon era brought false wealth to the nation.

Government contracts drove many out of their erstwhile legitimate

RAMAPHOSA WILL NOT CREATE A DECADE OF GROWTH Goolam Ballim is talking nonsense [TAR online edition, 24 June]. All the policy initiatives by Cyril Ramaphosa are directed at benefiting the old establishments that are still in control of the economy. The majority of South Africans are still poor, inequality is huge and unemployment among the majority blacks is over 64%. Cronyism is rifer than before. The reforms in [power] generation are to benefit foreign companies with local political connections. The 51% stake in South African Airways sold to Harith Group was not transparent and was parcelled out to individuals associated with the faction in the ANC that supports Ramaphosa.

The new port regulatory authority is set up to weaken Transnet so that it can be primed for privatisation.

Kwame Amuah

income sources and made them “emergency contractors”. A host of northerners fell for this.

Nothing now originates from the north except if it is fully funded by the south. The burden of northern leadership today is how will they manage their untrained population without the funds from the south, now that the south has realised that the north has dragged them too

far below the height they should have attained?

The north can definitely survive without the south, but will the feudal lords allow it?

David Adebayọ Alabi

FIGHTING TERRITORIAL INEQUALITIES The painful thing is that whatever he does, President Muhammadu Buhari is wrong: if he does not develop

the north, he’s wrong, and if he develops it in this manner, he is also wrong. Why can’t Nigerian governments deliver a comprehensive approach to territorial inequalities and make a serious long-term plan to get it right? Short-term political mandates are clearly making rulers blind when it comes to the bigger picture and general interest.

Sabine

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THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

COFFEE WITH THE AFRICA REPORT

FRANNIE

LÉAUTIER

DISCREET COUNSELLOR The Africa Report has a cuppa with the engineer, international adviser and technocrat, discussing the climate change agenda and reform in Tanzania

By PATRICK SMITH in Paris A coffee break is an ideal meeting time for someone as quietly frenetic as Frannie Léautier. At the end of a long day of virtual meetings for her in several different time zones we connect by the ubiquitous Zoom, sipping our East African coffee as we work through my lengthy roster of questions. It is a week before the UN General Assembly, in which African representatives are trying to move continental concerns about climate change, conflict and vaccine nationalism up the international agenda.

How best to do that? A good strategy, Léautier argues, would be for Africa to go to New York and the COP26 climate summit with some clear trade-offs aimed at the G20, the club of the world’s biggest economies.

“Gabon is a good example,” says Léautier, citing the reforms that limited timber exports in favour of local processing. It is a viable new model, she says, as it has “that circular economy benefit: you get the job creation, and you get the reforestation benefit […] and because they could crowd-in

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private investments, that allowed them to use the derisking role of the state.”

The DRC, with the world’s largest expanse of rainforest, is looking at a similar plan. Combined with its hydropower projects and the world’s biggest reserves of cobalt (used for electric car batteries), the country could become a green-energy and biodiversity superpower. That would require heroic amounts of political will from President Félix Tshisekedi’s government.

Another model Léautier points to is Seychelles’ green bonds, which raise finance to protect the island state against rising sea levels. In the same vein, regional giant South Africa

Africa should go to the UN and the COP26 with some clear trade-offs for the G20

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

has proposed a ‘debt-for-climate’ swap to raise $10bn and enable its Eskom power utilities to replace coal-burning power stations with low- or no-carbon alternatives.

There is also the matter of natural justice. Oil and gas producers in Africa and the Middle East face pressure from rich Western states to keep their fossil fuels in the ground. That is, the same Western states that developed their economies on the back of coal and oil.

Léautier says this needs a more imaginative approach – political economy mixed with an understanding of technology: “I was very interested to hear [Nigeria’s vice-president Yemi] Osinbajo’s comments on gas as the transitional fuel for Africa.” She says this could work “from an engineering and operational point of view” and it “helps Africa leap-frog into a hydrogen economy, because its roughly the same technology that’s needed.

You can even transport hydrogen and natural gas in the same pipeline.”

Although Léautier will not be standing on any podium at the UN in New York, she is a leading member of that unofficial band of African intellectuals and practitioners whose discreet counsel is valued by governments and companies. Her resumé – chief of staff to the president of the World Bank, senior vice-president at the African Development Bank (AfDB) and executive secretary at the UN/World Bank’s African Capacity Building Foundation – partly explains the busy calendar. Then there is her academic story: a doctorate in civil engineering, and teaching stints at Massachusetts Institute of Technology and Harvard’s Kennedy School.

Both sides of Léautier’s career make her sceptical about creating a new climate-focused international institution. Instead, she backs the idea of the African Union having a seat at the G20 alongside South Africa, to reinforce the continent’s bargaining power.

It is still necessary, Léautier says, to find ways for the multilateral banks

the solutions […], therefore marrying these two is where the impact would be multiplied.”

TARW C PAU FOR

Léautier’s history, growing up in northern Tanzania near Mount Kilimanjaro and then studying engineering in Dar es Salaam, mirrors that combination of groundedness and an international view. Today, she is hopeful about Tanzania’s chances of transformation under President Samia Suluhu Hassan. Having stepped in after the death of her predecessor, John Magufuli, in March, Hassan has to “figure out what she can change quickly and what has to take time. On the health side, there are things she was able to do quickly, like wearing a mask [in public] – now people are getting vaccinated and there’s cooperation with international entities.”

JEAN-MAR

and institutions to work better with the regional and national ones. That same approach might help preempt a wave of debt crises, if creditors and borrowers could coordinate better.

She adds: “One of the things I found quite amazing going from the World Bank to the AfDB was how much closer to the reality on the ground the AfDB is, but how much less muscle it had to get

Léautier is hopeful about Tanzania’s chances of transformation

However, it could be a long march for Hassan. “She can shuffle the cabinet, which she’s done, and she can reprioritise the budget […], but changing perceptions and attitudes is slow.” Reforms could speed up after Tanzania’s next election if Hassan stands for the presidency. Léautier would enthusiastically support this, arguing that Hassan could surprise people in the same way as President Lyndon B. Johnson in the US, who pushed through some of the country’s most radical reforms after the assassination of John F. Kennedy in 1963.

Tanzania has a history of women pioneers, such as freedom fighter Bibi Titi Mohammed, who inspired the post-independence generation of activists. Mentoring successive generations of women is critical, Léautier says.

In these semi-pandemic days, Léautier rations her travel between her base in Paris and the Kigali offices of SouthBridge Investments, a financial advisory firm of which she is CEO. We end our coffee with some musings on Africa’s soft power – its ability to project its culture far beyond the limits of its current economic rankings.

“Africans, despite a lot of adversity, retain humanity at their core,” says Léautier. “If you can empathise with people, which they call ubuntu, that gives you an opportunity to learn from others and spread your own way of thinking […]. It’s very important for a culture to absorb other ideas.” That might explain the global boom in interest in African music, books, dance and film. But it is also a neat summation of Léautier’s own trajectory

N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

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POLITICAL TRANSITION IN CHAD The TMC ensures the continuity of the state Chad’s Transitional Military Council (TMC), which was set up after the death of President Idriss Deby Itno, is continuing to strengthen the foundations of a state made fragile by the attacks on its borders.

It has been working on all fronts for the past four months to ensure institutional continuity, security, social support and freedom.

Following the President of the National Assembly’s refusal to step in as interim president, a fifteen-member Transitional Military Council (TMC), headed by General Mahamat Idriss Deby, was tasked with dealing with the threats facing the country. Nearly four months later, the performance of this council, in conjunction with the country’s political, social and religious stakeholders, as well as with its international allies, is convincing.

Institutional continuity

JAMG - © VINCENT FOURNIER POUR JA

On 21 April, a Transitional Charter was promulgated to establish the transitional bodies.

These include, in addition to the TMC, the National Transitional Council (NTC), currently in the process of being set up, and the Transitional Government (TG). It was in accordance with this Charter that a civilian transitional Prime Minister, Albert Pahimi Padacké, was appointed on 26 April. Five days later, following mediation by the international community and national consultations, a transitional government was set up by the Prime Minister. The

General Mahamat Idriss Déby Itno President of the TMC. On 20 April 2021, Field Marshal Idriss Deby Itno lost his life during a rebel incursion into Chad, on the very same day that the provisional results of the presidential election were announced. The demise of the President of the Republic, Head of State and Supreme Commander of the Armed Forces, further emboldened rebel groups and sparked more attacks on the country’s borders, shaking the state to its foundations.

The Transitional Government.

Prime Minister’s programme was unanimously approved by the National Assembly on 14 May.

THE PRIME MINISTER’S PROGRAMME WAS UNANIMOUSLY APPROVED

BY THE NATIONAL ASSEMBLY A roadmap in the lead-up to a National Development Plan The government has drawn up a roadmap to guide transitional bodies in their dealings with friendly countries and development partners.

This is a reference framework to steer actions aimed at ensuring the continuity of the state, safeguard the gains made in terms of peace and stability, and maintain the country’s development programmes, in order to create the right conditions for a general election to take place at the end of the transition period.

ADVERTORIAL

ECONOMIC RECOVERY: SUPPORT FROM INTERNATIONAL PARTNERS FOR CHAD’S ECONOMIC RECOVERY The government’s roadmap is not a substitute for the impending National Development Plan (20222026), which is expected to revive the national economy. Chad will need the support of all its partners in order to implement this plan, as well as the roadmap that precedes it. For this reason, there has been intense diplomatic activity over the past four months, including trips by the Head of State to Niger, Nigeria, Angola and France. It should be stressed that the transition process has received significant support from the international community, in particular from the African Union, the Economic and Monetary Community of Central African States (CEMAC), and the Economic Community of Central African States 5 July 2021, the President of the TMC (ECCAS), as well as from friendly countries (Togo, Egypt, Qatar, Angola, and Sudan). and President Macron at the Elysée Palace.

• Strengthening security and defence: 298 billion CFA francs, of which 11 billion are available • Organising dialogue, consolidating peace and national unity: 424 billion CFA francs, of which 129 billion are available • Strengthening good governance and the rule of law: 273 billion CFA francs, of which 14 billion are available Financing for these planned actions will come from the state budget and from development partners and Chad’s allies, either bilaterally or through an event that brings together international donors.

• Démocracy and the rule of law

The government has released several prisoners of conscience, including Baradine Berdeï Targuio in June. Targuio, who heads up the Chadian Organisation for Human Rights (OTDH), was accused of subversive online activity, before being arrested in January 2020 and sentenced to three years in prison in February, despite his Supreme Court appeal. To its credit, the government also legalised presidential candidate Succes Masra’s political party, Les Transformateurs. It is also worth noting that the rights of FACT prisoners of war are being upheld. Lastly, on 30 June, the president of the TMC signed a decree granting collective remissions of sentences to common law prisoners

SIGNS OF GOODWILL In an effort to convince its political and social partners of its genuine desire to achieve a swift transition and return power to civilians in the short term, the TMC has made numerous demonstrations of goodwill. It is also making every effort to restore security throughout the country.

• Peace and security

In early May, the Chadian army declared victory over the rebels of the Front pour l’alternance et la concorde au Tchad (FACT), whose forays led to the death of President Idriss Déby. As a result, the security forces carried out a census of the military and a disarmament operation to further strengthen their victory.

30 June 2021, the President of the TMC pays a visit to the Chadian contingent in Tera, in the Three-Borders area (Mali, Niger, Burkina Faso).

• Respecting rights and freedoms

The government lifted restrictions on peaceful marches and authorised several demonstrations in compliance with the terms of the Public Security Minister’s order. For example, on 29 July, the march organised by the civil society coalition Wakit-Tama took place peacefully.

THE GOVERNMENT LIFTED RESTRICTIONS ON PEACEFUL MARCHES • National reconciliation

With the constitution of a government of national unity and reconciliation, a portfolio of National Reconciliation and Dialogue was created, headed by the Minister for National Reconciliation. A committee responsible for the organisation of the inclusive national dialogue is being set up with all the country’s political and social stakeholders. Members of this committee will be selected on the basis of how representative and competent they are.

The TMC’s policy of reaching out to opponents in exile is the reason for Hassan Fadoul Khitir’s return to the country after having lived in exile in Togo for two decades.

• Social and civil services

Despite the country’s difficult economic situation, which is exacerbated by the health crisis, there have been no delays in the payment of civil servants’ salaries and the retired population’s pensions. To improve services to citizens, the government has acquired a 19 MW generator to boost the capacity of the SNE, and the water supply has been improved in the capital, N’Djamena.

JAMG - PHOTOS D.R. SAUF MENTION

This roadmap sets out three strategic thrusts and identifies 123 actions, along with the estimated implementation costs:

OPINION

A COUP AGAINST THE PEOPLE

ALL RIGHTS RESERVED

PATRICK SMITH Editor-in-Chief, The Africa Report

Just before dawn on 21 September, a band of soldiers from the Armoured Corps drove tanks out of the Al Shajara camp in South Khartoum with the aim of taking over a state radio station across the River Nile in Omdurman.

Somewhere along the line, the plan went awry. Either a rival group thwarted it or the plotters abandoned it.

That is as much as the military and civilian wings of the transitional government can agree on. For the people of Khartoum, who went about their day remarkably untroubled by what the army claimed was a dramatic confrontation at dawn, it was another sign that Sudan’s transition to a new constitution and multiparty elections is floundering.

Hours later, a military spokesman reported that Major General Abdul-Baqi al-Hassan Bakrawi had been arrested

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with more than 20 senior officers for plotting against the authorities. Then Generals Abdel Fattah al-Burhan and Mohamed Hamdan ‘Hemedti’ Dagalo, leaders of the military wing of the transitional government, pitched up at Al Shajara, ostensibly to preside over a graduation ceremony.

Their message was simple: the military are the guardians of the transition. “Our forces were the ones who foiled the coup attempt,” said Burhan.

Then, with a weird twist of logic, he added that it was the civilian wing of the government under Prime Minister Abdalla Hamdok that was responsible for stirring trouble in the military. “We have been excluded from the Prime Minister’s initiative and no party can lead the country alone,” said Burhan, before criticising “those who seek to sow discord in the armed forces”.

This seems to refer to government’s attempts at military reform, which seek to bring the army’s extensive economic assets under the control of the treasury in Khartoum and to integrate disparate military units, spy agencies and militias set up under

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

ousted leader Omar al-Bashir. As the military pushes back hard, and although the reform plan was in the transitional accord signed two years ago, tensions with civilian politicians and activists are rising.

Although he was a signatory to that accord, Hemedti now says there is no possibility that the Rapid Support Forces (RSF), the militia of about 50,000 fighters that he commands, will be integrated into the Sudan Armed Forces. It would, he claims, divide the country.

Set up under Bashir’s rule a decade ago, the RSF was a formalisation of the Janjaweed groups that the Islamist regime in Khartoum had used to suppress opposition in Darfur. Some Janjaweed leaders, but not yet Hemedti, have been named by the International Criminal Court (ICC) for crimes against humanity after militia fighters killed and displaced hundreds of thousands of people in Darfur.

Since the revolution that ousted Bashir in April 2019, investigators have been probing those officers and militia leaders responsible for what the ICC prosecutor labelled “genocide” in Darfur. Both Hemedti and Burhan were in command in Darfur in the early 2000s at the height of the Bashir regime’s operations there.

The stakes for senior officers rose further in July after foreign minister Mariam al-Mahdi discussed arrangements with Karim Khan, the new prosecutor at the ICC, for Bashir’s trial.

The ICC indicted him in 2010 for war crimes; he has been held in Khartoum since he was overthrown. A team from the ICC is due in Khartoum to work on the dossier.

These developments are making Burhan and Hemedti uneasy, together with an independent investigation into the officers responsible for the murder of more than 100 activists when outside the defence ministry in Khartoum in June 2019.

Trying to change that conversation, Burhan and Hemedti argue that the

ADRIÀ FRUITÓS FOR TAR

military’s dissatisfaction is fuelled by the mismanagement of the country.

Civilians predominate on the council of ministers under Hamdok.

As they were addressing fellow officers at Al Shajara, Hamdok was telling state television the attempted coup was part of a wider plot: “It was another attempt by remnants of the former regime to abort the civil democratic transition.”

Even if some recent protests – the blocking of roads and ports and disruption of oil production – have been orchestrated by the military and loyalists to the former regime, there are genuine resentments across the country at the failure of the transitional government to improve living standards.

Having taken over an economy in free-fall in 2019, Hamdok’s ministers then had to navigate the economic and social fallout of the Covid-19 pandemic. The government’s main efforts went on rebuilding Sudan’s ties with the international system. It got Khartoum taken off the US list of terrorist-sponsoring states, making Sudan eligible for more development aid and the clearing of its arrears to

Hamdok is squeezed between the leaders of the 2019 revolution and the military

the IMF. That has triggered a deal to restructure the country’s $50bn in foreign debt and to open it up for new flows.

While that progresses month by month, local conditions have been deteriorating rapidly. Activists have been railing against the end of fuel subsidies – a condition of the IMF deal – which have driven up prices.

These pressures have been squeezing Hamdok and his ministers between the activists of the Forces of Freedom and Change (FFC), who led the revolution in 2019, and the military. An economist, Hamdok was deputy head of the UN’s Economic Commission for Africa. His instincts were more

technocratic – to secure international finance – than political, when he took over as prime minister.

After FFC leaders warned Hamdok that he was jeopardising local support for an internationally oriented economic policy, he launched his ‘The Way Forward’ initiative in June. It aims to consolidate activists under the FFC and strengthen efforts to dismantle the remnants of the Bashir regime and speed up reforms of the military and security forces.

Although the new plan made few waves in the media, it has unsettled military officers. All the more so because Hamdok is due to take over from Burhan as chair of the Sovereignty Council in November. It will be the first time that Sudan has had a civilian head of state in over three decades.

Ahead of this scheduled handover, Hamdok is trying to up his support on the streets, which has waned from its stratospheric levels two years ago.

Burhan and Hemedti are watching warily. They could still take the nuclear option, allowing agents of the former regime to stir the pot and cause chaos, and using that as pretext to restore military control.

Their model would be out of General Abdel Fattah al-Sisi’s playbook in Egypt. Their problem is that hundreds of thousands of Sudanese have tasted a post-military freedom and are all too aware of that game plan.

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

13

GALERIE DOMINIQUE FIAT

The Africa Report’s exclusive guide to the quarter ahead features key events from the worlds of politics, business and culture. Find out more about how to plan your October, November & December.

Making bets on whether elections will take place as planned in Libya and Somalia? Looking to hit the highlights of the continental cultural calendar in October? Watching in worry as the world negotiates another climate-change deal at COP26?

14

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

Q4

Luanda Biennale: culture for peace

/ OCTOBER

GALERIE DOMINIQUE FIAT

Prince Gyasi, The 12 Powers, 2020: 1-54 Contemporary Art Fair

UNESCO

FESPACO returns to Ouagadougou

CULTURE NIC BOTHMA/EPA/MAXPPP

Arts on the agenda On 4-8 October the Biennale of Luanda highlights arts, culture and heritage as ‘Levers for Building the Africa We Want’. The 1-54 Contemporary Art Fair in London celebrates the continent’s contemporary artists on 14-17 October, and from 16-23 October Ouagadougou welcomes back the pan-African film and TV festival FESPACO.

GOVERNMENTS OF SUDAN AND SOUTH SUDAN A businesslike joint press release announced that on 1 October four border posts would be opened for the first time since South Sudan’s independence in 2010.

APPOINTMENTS ALL RIGHTS RESERVED

‘The two parties engaged in extensive talks and candid discussion on all aspects and fields of cooperation’

SEGUN OGUNSANYA On 1 October Ogunsanya takes over as CEO of Indian telco Airtel Africa on the retirement of Raghunath Mandava.

7-9 October The Africa-France summit postponed in 2020 will be held in Montpellier, France. sommetafriquefrance.org 13-14 October The 6th Global Business Forum Africa in Dubai discusses ‘Transformation Through Trade’. globalbusinessforum.com 21-22 October Istanbul hosts the 3rd Turkey-Africa Economic & Business Forum. turkeyafricaforum.org

16

COVID-19 From October, Durban-based Aspen Pharmacare, a manufacturer for Johnson & Johnson, will make Covid-19 vaccines solely for Africa, following an outcry that Africa-made vaccines were being sent to Europe.

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

TAKELOT

EVENTS

MAMONGAE MAHLARE South African e-commerce outfit Takealot has appointed Mahlare as new CEO, and founder and CEO Kim Reid will become chairman (see page 123).

Q4

/ OCTOBER MOZAMBIQUE SADC

President Farmaajo celebrates Independence Day

salve

The Southern African Development Community (SADC) and Rwanda are sending troops to Mozambique to help quell the Islamist rebellion in Cabo Delgado Province. South Africa’s contingent of 1,495 troops are due to stay in the country from 15 July to 15 October.

TANZANIA a vum Ro

Nanngade Mocímboa da Praia

NANGADE Maputo Diiaca

Muedda

TWITTER/M_FARMAAJO

GAS FIELDS

PALMA

MOCIMBOA DA PRAIA

MUEDA MOZAMBIQUE

INDIAN OCEAN

MUIDUMBE

Somalia has settled for October and November 2021 presidential elections after President Mohamed Abdullahi Mohamed ‘Farmaajo’, tried to extend his rule beyond February without holding a vote. The organising of the delayed national elections has laid bare many tensions. The country’s institutions are weak, insecurity is rife and political trust is low.

Abdullahi has been in conflict with Somalia’s federal member states and in September his relationship broke down with Prime Minister Mohamed Hussein Roble, who is in charge of organising the elections. The conflict could again spill over into the security forces, warns the think tank International Crisis Group.

Opposition presidential candidates also criticised the government’s road map for elections in late August, providing yet another avenue that could lead to more election delays.

Abdullahi had promised to hold a “one man, one vote” election, but insecurity, a lack of resources and a lack of political consensus made that impossible. So, now, elders from clans will pick the delegates responsible for choosing members of parliament (MPs). The MPs and senators then elect a president, in a race that will include three former presidents and Abdullahi.

18

QUISSANGA 50 km

ANCUABE

CABO DELGADO SITUATION

Metuge

Pemba

Major violent incidents Apr.-Sept. 2021

FRANCOIS MORI/AP/SIPA

The cheese stands alone

Macomia MELUCO

STEFAN HEUNIS/AFP

SOMALIA

SOURCE: CABO LIGADO OBSERVATORY

MACOMIA MONTEPUEZ

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

JUSTICE

High-profile trials Courts are in the spotlight in October. Former president of Burkina Faso Blaise Compaoré will be tried for the assassination of former president Thomas Sankara in 1987, when he led a coup d’état against his former associate that resulted in 12 deaths. In Nigeria, the trial for treason of Nnamdi Kanu, the leader of the Indigenous People of Biafra (IPOB) separist group, was adjourned to 21 October after he failed to appear before the Federal High Court of Nigeria in July.

AFREXIMBANK

CENTRAL AFRICA REGIONAL OFFICE

24 September 2021

Uniting the Continent Announcing the opening of our Central Africa Regional Office in Yaoundé, Cameroon Friday 24 September 2021, Afreximbank proudly takes up residence in Yaoundé.

Republic of Congo, Chad and Gabon, reflects the expansion of the Bank’s Member States from 37 to 51 since 2015.

By extending further across the continent, the Bank continues to deliver on its pan-African mandate, adding to its presence in Cairo, Kampala, Abuja, Abidjan and Harare.

Our geographical growth reinforces our commitment to financing and promoting intra-extra African trade.

The Central Africa Regional Office, which covers Cameroon, Central African Republic, Congo, Equatorial Guinea, Democratic

Welcome to our office at the Headquarters Building of the National Social Insurance Fund (NSIF), Independence Square!

afreximbank.com

/ NOVEMBER TN N

MR

CLIMATE CHANGE

Africa’s COP26 agenda

LB B AL

MU

SE E GA RG

ML

EG

SU

NG

BF

Collector Femi Akinsanya, gallerist Sorella Acosta and art

by Evans Mbugua

Lovely in Lagos Art X Lagos, the innovative Nigerian art fair, is returning after an online-only edition last year. It will take place from 4 to 7 November at the Federal Palace Hotel in Victoria Island, Lagos. The fair is known for highlighting up-and-coming artists, having included Hank Willis Thomas, Yinka Shonibare and Portia Zvavahera. After the in-person exhibition, this year’s fair will continue online until 21 November.

20

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

ART X LAGOS 2019

The 26th UN Climate Change Conference GU BE E NI (COP26), takes place in Scotland from 31 GH SL T O I C October to 12 November and is an opporLI CR tunity for African countries to highlight EG climate concerns that will inevitably have wideChange in potential GB spread impact. In the past year, Kenya declared a cereal output, 2080 state of national emergency after a harsh drought Decrease -50% or more and Madagascar entered a climate-induced Decrease 25%-50% famine.

Decrease 5%-25% Gabon’s Tanguy Gahouma-Bekale is leading No change ±5% the African group of countries at COP26, and has laid out the challenge: “The continent contributes Increase 5%-25% just 4% of total global greenhouse gas emissions, Increase 25% or more the lowest of any region, yet its socioeconomic Not suitable development is threatened by the climate crisis.”

Governments want strong measures to help them adapt to climate change.

A projection map built for the UN Environment Programme predicts that Africa will be the hardest-hit continent. African activists are demanding that Africa should be at the centre of talks on climate and energy, before it is too late.

ART

ER

CH

DJ ET

SD

SS

CA

SO UG DC

KY SOURCE: UNEP 2009

Q4

RW BU

RC

TA

AN

MA ZA

MO ZI

MD

BT NA ES SA

LE

500 km

‘You begin to wonder why the Anambra people are more interested in elections at the centre and not the elections in their state’ PAUL JAMES, YIAGA AFRICA The election programme manager for the NGO Yiaga Africa says that turnout for the 6 November governorship elections in Nigeria’s Anambra State is likely to be low, after only 21% turnout in the 2017 elections. He describes Anambra as Nigeria’s worst case of voter apathy in governorship elections.

LUCA SOLA/AFP

African National Congress president Cyril Ramaphosa prepares for the 1 November polls

SOUTH AFRICA

Election day Insiders argue that President Cyril Ramaphosa is more popular than his party, the African National Congress (ANC). He will not be on the ballot in the 1 November municipal polls, which will be a chance for the rightists of the Democratic Alliance and the leftists of the Economic Freedom Fighters to convince voters that they should be entrusted with the job of running more major cities. The argument goes that if they can do a better job of running Johannesburg or Durban, the voting public should then trust them with more responsibility on the national level. If the current trend remains, the ANC will lose more support.

What can Ramaphosa do?

(See page 36)?

ALL RIGHTS RESERVED

APPOINTMENTS

NTSHAVHENI PETER MAPHAHA Major-General Maphaha has been appointed as the new surgeon general of South Africa, commanding the South African Military Health Service as the country continues to battle Covid-19.

BOOKS Two African writers feature in the Booker Prize shortlist of six this year, with a winner due to be announced on 2 November. In The Promise, South Africa’s Damon Galgut uses a family’s story to examine the country’s racial conflicts with a narrator’s eye that is ‘deliciously lethal in its observation of the crash and burn of a white South African family’. Somali-British writer Nadifa Mohamed’s The Fortune Men fictionalises the true story of Mahmood Mattan, a Somali shopkeeper wrongfully convicted and hanged for murder in Cardiff in 1952.

EVENTS 9-12 November Africa Energy Week will welcome players in the oil and gas sectors to Cape Town, South Africa to discuss the future of the sector and promising investments.

aew2021.com

15-21 November The African Continental Free Trade Area (AfCFTA) and its trade opportunities will be in the spotlight at the Intra-Africa Trade Fair in Durban, South Africa.

intraafricantradefair.com

13-20 November Nigeria’s culture lovers will head to the south-west region’s Ekiti State this year for the National Festival of Arts and Culture (NAFEST), celebrating unity in diversity.

ncac.gov.ng

TELECOMS Namibia’s largest telecoms company, MTC, will list on the country’s stock exchange in November. This is set to be the largest listing on the stock exchange since its establishment.

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

21

/ DECEMBER

In August, foreign ministers of neighbouring countries gathered in Algiers to pave the way for the Libyan elections

LIBYA

Election uncertainty Many threats loom on the horizon that could throw off plans for Libya to hold national elections on 24 December and turn a page on the conflict that has raged since the overthrow of former leader Muammar Gaddafi. As The Africa Report went to press, the Libyan parliament had not approved the election’s legal framework, eastern rebel leader Khalifa Haftar could still play the role of spoiler, an estimated 20,000 foreign mercenaries are still in the country and the Libya conflict is a theatre for the geopolitical competition between global powers including Russia, Turkey and their allies.

The Libyan government in Tripoli and its Western government supporters have expressed doubts about

GREEN ENERGY

By December, an additional six units at Kenya’s Olkaria geothermal plant are due to come online and boost the country’s green growth. The Olkaria I development will add 83MW to raise total capacity of the plant to 273.7MW.

22

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

the election timetable. United Nations special envoy Ján Kubiš issued a stark warning in September, saying that “aborting the drive for elections will for many be a signal that violence is the only path to power in the country”. He added: “Libya is at a crossroads where positive or negative outcomes are equally possible.”

Candidates have yet to be announced, but Haftar, Gaddafi’s son Saif al-Islam Gaddafi, Aref Ali Nayed, a former ambassador to the United Arab Emirates, and Fathi Bashagha, a former interior minister in the Government of National Accord, are some of the top potential candidates. Some preparations for the vote were moved ahead, with 2.8 million voters registered as of early September.

19,626

The African Union Mission to Somalia (AMISOM), with its nearly 20,000 troops from African countries, is due to expire in December. The AU’s acting director of conflict management, Fiona Lortan, said in August: “We know there is still a need for some sort of security presence from the AU to assist the Somalia government in the next few years while it builds up its forces.”

BILLAL BENSALEM/NURPHOTO/AFP

Q4

DEBT

Distressing deadline PUBLIC HEALTH The African Centres for Disease Control (CDC) will host its first conference on public health from 14-16 December. The virtual conference will encourage participants to discuss solutions to the Covid-19 crisis in Africa.

The G20’s Covid-19 Debt Service Suspension Initiative ends in December.

Critics say it did not go far enough and does not involve all creditors.

HOW DSSI BENEFITS LOW-INCOME AFRICAN COUNTRIES Country

INTEGRATION

Making progress

Kenya and Tanzania have set a deadline of December to remove trade barriers between their two countries.

Risk of overall debt distress

Potential DSSI savings (May 2020 – Dec. 2021) % of GDP USD millions

Angola

Yes

/

4.7

4171

Kenya

Yes

High

1.9

1831.2 1184.5

Ethiopia

Yes

High

1.2

Cameroon

Yes

High

2.4

947

Mozambique

Yes

In distress

5

758.7

Ghana

No

High

1.1

735

Rep. Congo

Yes

In distress

4.5

566.6

Zambia

Yes

High

2.3

540.2

/

/

3635.2

Others

Ghana and South Africa have agreed a visa-free arrangement from December 2021, which aims to boost trade and bilateral relations.

DSSI participation?

/

‘The Pan-African Payment and Settlement System has already been built. We are piloting the system in the West African Monetary Zone’ DENYS DENYA Afreximbank’s executive vice-president for finance, administration and banking services is excited about rolling out a continental programme to facilitate payments as soon as results from the West African pilot prove positive.

GAMBIA

MARCO LONGARI/AFP

Barrow’s bedfellow

President Barrow has broken his promise

Three months before the elections on 4 December, Gambia’s former dictator Yahya Jammeh’s Alliance for Patriotic Reorientation and Construction announced a coalition with the ruling National People’s Party of President Adama Barrow. Barrow won the 2017 election after a peaceful transfer of power in 2017 that Jammeh tried his best to avoid. Barrow promised vast changes and to serve a single term, and in the process of running again has lost many allies that helped him win the vote.

Human rights groups called the Jammeh-Barrow alliance a betrayal and questioned the government’s willingness to prosecute Jammeh – who is in exile in Equatorial Guinea – for crimes committed under his regime. A commission of inquiry into crimes committed during Jammeh’s presidency was due to report its findings to President Barrow in September. Senegal is sending troops to provide security during the elections, and the Economic Community of West African States is continuing its role as mediator.

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

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RAJESH JANTILAL/AFP

Features

26 WIDE ANGLE Dangote’s big idea We talk to Nigerian billionaire Aliko Dangote and make an exclusive visit to his $19bn fertiliser and oil refinery plants in Lekki, just outside of Lagos.

24

36 PROFILE Ramaphosa’s land of the rising sun South Africa’s president has strengthened his hand in the governing ANC but faces a tough test in 1 November’s local elections due to frustrations with lockdowns, poor service delivery and the slowness of reforms.

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

50 PROFILE Team Biden A look at the US president’s hand-picked list of diplomats, envoys, spies and soldiers representing Washington in Africa and competing with the likes of China and Russia.

ADVERTORIAL

Mauritius on the road to a post-pandemic economic rebound

“Reasons for optimism” Alain Law Min, CEO, MCB Ltd

I

t is an undisputed fact that the business and investment climate around the world has been significantly disrupted by the pandemic.

Nevertheless, despite the unstable and uncertain economic environment, the financial services sector in Mauritius has remained strong and resilient.

This resilience of our financial services sector gives us every reason to be optimistic about the recovery of our economy. Of course, much will depend on the evolution of the pandemic, the effectiveness of the vaccination campaign (as of 8 September, more than 770,000 of my fellow citizens had received two doses of vaccines) and on the sustained recovery of the tourism sector.

The financial services sector is well positioned to provide support to stakeholders on the road to recovery and to contribute to building back Mauritius into a greener and smarter country in the medium term. In addition, the financial services sector has a crucial role to play in attracting, managing, structuring and channeling trade and investment flows, particularly towards Africa.

In order to take full advantage of this postpandemic economic rebound, the Mauritian financial services sector can leverage on the country’s intrinsic strengths, linked to its business climate, its investment-grade, compliance with international norms and standards, and its

institutional and governance framework. It is also important to highlight the social and political stability of Mauritius, the investment protection conventions, its connectivity, reliable infrastructure, as well as its skilled and bilingual workforce.

With the recent signing - a first in Africa - of free trade agreements with India and China, as well as other agreements such as the African Continental Free Trade Agreement and the country’s membership of regional economic groupings , the Mauritius financial centre is well positioned to become the preferred regional platform for trade and investment in the AsiaAfrica corridor.

As the leading bank in Mauritius, MCB can facilitate commercial and trade activities and channel investments in Africa, by capitalising on the expertise acquired in key sectors. Over the years, MCB Group has extended its network regionally and across the continent. Beyond strengthening our correspondent banking relationship - more than a hundred in Africa - the Bank can leverage the Group’s subsidiaries in Madagascar, the Maldives and the Seychelles, its associates in Reunion and Mozambique, while taking advantage of its Representative Offices located in Johannesburg, Nairobi, Paris and Dubai.

I remain confident that we have the elements that will enable us to sail through these challenging times.

mcb.mu

FEATURES /

26

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

Aliko of Africa’s WIDE ANGLE

$19bn bet

With an exclusive visit to his industrial hub and an interview with Nigerian billionaire Aliko Dangote, The Africa Report looks at the continent’s most colossal industrial project and its chances for success

by NICHOLAS NORBROOK in Lekki and Lagos

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

27

FEATURES / WIDE ANGLE / Aliko of Africa’s $19bn bet

S

Someone on the other end of the phone line is taking a hell of a beating. The sound of angry demands barked in Italian-inflected English breaks through the thin walls of the pre-fabricated office. A stern message is being delivered. The voice on this end of the phone belongs to Giuseppe Surace, chief operating officer on the biggest and costliest project in Africa.

Welcome to Aliko Dangote’s management village. It is the nerve centre for the world’s biggest single-train oil refinery, which is being built next to the world’s biggest ammonia plant. It is rising out of 2,635ha of marshland, some 40km east of Lagos. Surace is credited with turning around the project over the past three years.

Its cost escalation can be measured in superlatives, too. That may account for the shouting next door. At the project’s launch less than a decade ago, the refinery was expected to cost $9bn. By 2019, that has ballooned to $15bn. Now the figure is an estimated $19bn.

We are all sitting in the Dangote Industries Limited management office antechamber: staffers and visitors alike glance nervously at each other, half smiling. So much depends on this refinery succeeding. It would be sign that African countries could finally start breaking the resource curse – that endless outflow of

28

raw materials from the continent, enriching the more industrialised parts of the planet while it itself remains poor. In the process, Nigeria will save itself a petrol import bill of “around $3bn” a year, according to central bank governor Godwin Emefiele. For others, it signals that ambitious industrial projects can be originated, banked and executed by Africans for Africans.

The refinery will have the capacity to handle 650,000 barrels of oil per day. Sinopec, a Chinese oil major, is building the world’s largest atmospheric tower for the refinery.

Sinopec sent the 113 metre-long, 2,252tn tower to the site in 2019, arriving – along with many other monster-sized components – via a bespoke jetty.

Where we go, others follow Dangote sees his industrial project as derisking Africa. “The perception is that Africa is not a place you can go and do business,” he told The Africa Report in May. “We are the company who can get people believing and investing in Africa. Other people will see our success and follow suit.”

The scale of the project is awe-inspiring, and it is easy to see how the cost escalation and delays have dogged it, despite Dangote’s reputation for determined efficiency. Its sheer size and complexity is matched only by the deeply entrenched system of opaque vested interests that has encircled Nigeria’s oil sector over the past half century: a bindweed wrapping itself tightly around the propellor of national economic and political progress.

First the scale. Approach the refinery by road, and a thicket of cranes and towers emerges across the skyline. “There are 130km of roads within the complex,” says Dangote. “We are seven times the size of Victoria Island,” referring to the affluent business area at the heart of Nigeria’s economic capital.

PP unit The refinery will be able to produce 77 different types of polypropylene (PP), a recyclable thermoplastic polymer with a wide range of industrial and commercial uses – from synthetic fibres for carpets to packaging and building materials.

Nigeria currently imports over 65,000tn of PP a year; a market Dangote intends to dominate.

Tank farms Around 30 tanks with a capacity of millions of litres will be the central logistical hub of the refinery. Pipes will run under the sea for several kilometres to five mooring buoys, which will allow large ships to pump crude into the tanks, or pump refined products onto the ships. Before the refinery proper gets started, the tank farms will be used a trading centre.

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

DANGOTE’S REFINERY – A SCHEMATIC OVERVIEW Central cracking area

Fertiliser plant

Refineries are governed by an imposing array of terminology – RFCC (Residual Fluid Catalytic Cracking), MHC (Mild Hydrocracking), DHDT (Diesel Hydrotreating unit), atmospheric crude towers.... All have one simple goal: taking various types of crude oil, and ‘cracking’ it into more and more valuable distillates like diesel, petrol and aircraft fuel.

The first active industrial unit on site, Dangote’s $2.5bn granulated urea fertiliser plant is now pumping out cargoes of fertiliser that target the American market. With a capacity of 4,500tn of urea production a day, it will also benefit Nigeria.

Dangote Industries director Devakumar Edwin claims 120 trucks a day now distribute Dangote fertiliser nationwide.

Water treatment and storage Aromatics

Power plant

DHDT

Lekki Lagoon

Ethylene complex

Gas processing plant

Extension area

LAGOS FREE ZONE

Dangote’s next-door neighbour is the growing Toloram-run special economic zone, which already hosts factories for Kellogg’s, among others. It will have its own Chinese-built deepsea port, run by CMA CGM.

Dangote Port

Lekki Deep Sea Port

A port of one’s own Gulf of Guinea

With outsized pieces of refinery equipment built abroad and imported for assembly on site, a challenge appeared: the quays of Nigeria’s congested Apapa port were unable to take the weight. The solution: a bespoke port able to berth the dispatching ships, now repurposed to act as an export hub for Dangote’s fertiliser factory.

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

29

OM SAATER/BLOOMBERG/GETTY

Dangote’s project in Lekki is an industrial city, says Surace, pointing to the 19 interconnected industrial units – cracking towers, power station, ethylene complex, gas-processing plants and water treatment plant. There is also the fertiliser plant that came on-stream earlier this year.

Thirty hulking dark-blue cylinders, each capable of holding 60m litres, sit at the shoreline – a tank farm for oil, petrol, ethanol and other derivatives. Pipes from the tank farm disappear underground and resurface 5km offshore at three buoys, able to berth 120tn ultra-large tankers.

The Dangote project reclaimed the refinery site from marshland using the largest dredging vessels on the planet. The backfilling took 15 months. “About 80% of it was swamp,” recalled Dangote. “We raised it by 1.5m.”

Dangote Industries hired a Chinese company to compact the land. Then a deep foundation of 150,000 or so piles were drilled 25m down and filled with stone – again the largest amount for any project on earth.

DANGOTE

FEATURES / WIDE ANGLE

30

OM SAATER/BLOOMBERG/GETTY

Changing states The project was originally planned for a site in Ogun State. The money had been raised in 2013 – a mix of Dangote’s own money and syndicated loans from Nigerian and international banks. And a grand launching ceremony was held in Abuja, with journalists presented with gift boxes containing technical specifications for the refinery and shiny new Samsung smartphones.

“There was a disagreement with the governor of Ogun State, and we had already raised money by then, $3.2bn. He was just playing around with us, and we were busy paying interest,” said Dangote. Then Lagos State governor Babatunde Fashola stepped in with an offer.

“When we moved to Lagos, we thought it was really good land,” says Dangote. “They took us to an area where it was okay – but in fact just 20%-25% of the land was okay; the rest was a marsh.” Despite the swampy second site, Dangote decided against moving again.

“First of all, Lagos makes sense, because it is 60% of the market. And also, if we move again it won’t happen - in fact the bankers would have asked for their money back!”

After Dangote and his team navigated the physical scale and location delays, a black swan

Stack towers taking shape in Lekki

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

flew into view. Covid-19 hit in early 2020, with many of the group’s Chinese workers still in China celebrating Chinese New Year. They were reluctant to return. “We only trapped the few ones that were left, though they wanted to go home. We were able to convince them, luckily for us,” Dangote recalls.

He adds: “People don’t realise what we have faced. We even had to ask ourselves: ‘How do we even bring in the equipment?’”

Nigeria’s ports are only able to handle a downforce of 2tn-3tn per square metre.

“For our equipment, we need a minimum of 20tn-25tn per square metre – we have a single piece that weighs 3,000tn. The building of that very expensive jetty wasn’t part of our original calculations.”

The site is seven times the size of Victoria Island

Some industry critics carp that Dangote may have “nickel-and-dimed on the technology”, in the words of Antony Goldman of Londonbased ProMedia Consulting and a longtime analyst of Nigeria’s energy sector.

Others point to Surace’s reorganisation of the four or five key contractors as proof that the original management set-up was not working. While Dangote Industries spokesperson Anthony Chiejina pushes back on questions of cheap technology, he agrees that the company’s abilities have improved along with the bumps and challenges “that naturally come with project of this scale”.

From oil to iPhones

$3.2bn The original 2013 loan for the refinery project, before it became the behemoth it is today Construction has encountered many setbacks including bringing back Chinese workers

As the project launched, Nigeria’s naira currency spiralled downwards, depressed by a collapse in oil prices. The country’s foreign-exchange shortage started to bite from 2016 onwards, as Nigeria’s oil-dependent economy strained. “Do you know where the naira was when we started this project? 160 [naira to the dollar] […] and now it is at 480,” says Dangote. But the firm’s $2.2bn loan required repayments in dollars, as did the equipment purchases, heaping more pressure on the finances of the project.

Surace estimates mechnical completetion “will be reached by the end of the year [2021]”, and after 2-6 months of tests and commissioning, the refinery should reach a steady rate of production by the middle of 2022.

The most serious challenge of all, however, is one of political economy. Dangote’s refinery is disrupting a system that makes billions of dollars a year from Nigeria’s opaque energy sector. It is a system that runs contrary to the economic nationalism currently in vogue in Abuja under the regime of President Muhammadu Buhari.

Abba Kyari, Buhari’s late chief of staff, regularly decried Nigeria’s failure to ‘add value’ to its oil, forcing it to import petrol and allowing the profits from transforming its raw materials go elsewhere.How to change this? How can countries leap from exporting raw materials to becoming industrial hubs selling high-value-added items? How do you transition from selling oil to selling iPhones?

Economists and philosophers from Alexander Hamilton, Adam Smith and Karl Marx through John Maynard Keynes to Thomas Piketty have argued over how countries can transform their economies and the living standards of their people. Asia is home to most of the countries that have made that elusive leap in the past half century: Japan, Taiwan, South Korea and China. All saw confrontations, sometimes collaborations and collusions between business or capital on one side, and national political leadership on the other.

In Japan it was collaboration. After Japan’s militarists took chunks of territory from the fading empires of Russia and China, then annexed Korea, they witnessed the rise of US military power early in the 20th century. That sparked a nationalist drive among Japan’s imperial elite to copy technology: large banks were hitched to conglomerates to accelerate the industrial transition. After Japan’s defeat

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

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FEATURES / WIDE ANGLE / Aliko of Africa’s $19bn bet

in the Second World War, the US sidelined the old elite and empowered a set of economy-focused technocrats to accelerate the process.

In South Korea, politicians and business tried both collaboration and confrontation. The main architect of the country’s vast industrial progress was Lieutenant General Park Chunghee. He threw 21 leading businessmen into jail when he came to power in 1963 after a coup.

Many were commodity importers accused of “illicit wealth accumulation”.

There is no easy copypaste from Asian Tiger to African Lion

Park and the chaebols History buffs might draw parallels with the campaign in the early 1980s by a younger General Buhari – then in power as military leader after a coup – against corporate malfeasance, commission-seekers and the trading economy. One of the regime’s targets, accused of not paying for his rice import licences, was Isyaku Rabiu, the father of Dangote’s current rival in the cement and refinery business, Abdul Samad Rabiu of BUA Group.

Such stories about South Korea and Nigeria are offered by those who see the aggressive curbing of corporate power as a key to economic progress. What happened next shows

a different twist. South Korea’s economy tanked. The authorities released the businessmen, and General Park invited the head of Samsung, Ri Pyong-chol, to talk. Those conversations ended with the chaebols – Korea’s vast conglomerates – taking a far greater role in building a modern industrial economy, in return for subsidised loans and protection from foreign competition.

‘To induce chaebols to venture into more risky kinds of production and marketing activities, Park was ready to assist his strategically chosen chaebol partners in strengthening their corporate capabilities,’ wrote Eun Mee Kim and Gil-Sung Park in The Park Chung Hee Era. After this, General Park worked on strengthening the ability of the state to finance businesses.

Produce what you consume Dangote agrees with the principle. “That’s the only way to go because there is no way for anybody to create sustainable growth and take people out of poverty if you continue to create jobs elsewhere. You need to create jobs internally,” he argues. “How do you create jobs internally? You have to produce at least

AFP

Aliko Dangote with Nigerian Vice President Yemi Osinbajo

32

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

Monopoly or not?

Fast-forward to today, and Nigeria is no longer dependent on cement imports. But sceptics will point to the fact that the cost of cement in Nigeria is twice that of its regional peers.

Boosters, however, attribute this to logistics hurdles and high energy costs.

Nigeria’s political economy differs sharply from those of Japan and South Korea. Critics like historian and accountant Feyi Fawehinmi argue that the ‘East Asian Tigers’ analogy breaks down in Nigeria because in Asia domestic competition was encouraged to prevent state capture by big companies. In Nigeria, that has not happened. There simply is not the same state pressure on Nigerian national champions, says Fawehinmi.

Is that fair? Commentators point to the emergence of Abdul Samad Rabiu into the domestic sugar, cement and now refinery

State builders enjoy military discipline LEFT: MARK CHILVERS FOR TAR / RIGHT: BACHRACH/GETTY

as much as you consume and then think of participating in export of the excess amount.”

He illustrates this with another page from the history of his group, Dangote Cement: “The only way of making Africa self-sufficient is for us to produce what we consume. And we made a big intervention in cement, where the majority of these countries, be it Zambia, Ethiopia, Tanzania […] they were struggling.

They had no capacity. They had no cement.

But we went there, we made it available, we also made it cheaper.”

So while Dangote may hope to be the next Samsung Heavy Industries, who is Nigeria’s General Park? Who helped focus Nigerian business on climbing the value chain?

Former general and president Olusegun Obasanjo likes to claim he created 25 billionaires. “Well, he wasn’t really overexaggerating,” laughs Dangote, who points to the way Obasanjo helped Nigerian blue-chip companies finance bigger projects – not by nationalising the banks, but by forcing them to grow by consolidation.

For Dangote, where Obasanjo really emulated General Park was in cement policy, which helped the emergence of strong domestic players. “[It] was really one of the best policies […]. By the time we went into cement, Nigeria was producing less that 2.4m tonnes of cement as a country, and with all the extra demand, we were doing over 8m-9m tonnes of imports, which wasn’t sustainable.”

Inspired by his time in the Tokyo Military Academy, South Korea’s General Park wanted a ‘rich nation, strong army’. Military ruler of Nigeria between 1976 and 79, Obasanjo also attempted to engineer strong national companies. One attempt, Transcorp, has not lived up to the hype.

OLUSEGUN OBASANJO

PARK P CHUNG--HEE

Military ruler from 19761979 and president from m 1999-2017.

Servved as militaryy ruler d then and presidentt from 1979.

1962–1

sectors as proof that there are no monopolies in Nigeria. Switzerland’s LafargeHolcim cement conglomerate also operates in the country.

Regardless of where you stand on the Dangote state-assisted monopoly debate, Nigeria’s government is now backing the country’s biggest business in the biggest arena – the global energy market. That was not always the case, and the Buhari administration has wavered in its backing for the project at certain moments.

Diffident Buhari backs Dangote

Dangote Group turnover could increase eightfold

Perhaps, suggest some insiders, this is because Dangote had promised the refinery would be complete by the time of the 2019 elections – a chance of reflected glory for Buhari that didn’t materialise. Buhari started talking about rehabilitating old refineries – a direct competitor to Dangote’s project. But ultimately he agreed to back Dangote, despite personal reservations about business conglomerates.

The plan was to use the refinery as a way to drive Nigerian power to the frontline in the battle to capture profit in the energy industry.

The system of corrupt sales and imports that has evolved in Nigeria since the earliest days of oil production is now threatened by a refinery that removes the need for ‘swap’ contracts and other financial paraphernalia.

Dangote’s previous successes have created a large conglomerate with a turnover of around $4bn a year. That could increase eightfold, say industry experts, when the refinery and fertiliser plants are producing at capacity. But

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

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FEATURES / WIDE ANGLE / Aliko of Africa’s $19bn bet

now he is going head-to-head with trading companies like Vitol, with a turnover of $140bn in 2020. Will Dangote be able to out-trade the commodity giants?

Trading conglomerates have been making billions of dollars by selling refined petroleum products to Nigeria and buying its crude oil through politically connected businesspeople at heavily discounted prices. They are not going to give up without a fight. And, says ProMedia Consulting’s Goldman, “they are the tip of the iceberg”. Under the conglomerates are legions of bureaucrats and government operatives who are all cut into the deals that structure Nigeria’s energy sector.

NIGERIA’S PETROL IMPORTS IN THE LAST THREE YEARS (in billion naira)

800,000 600,000 400,000 200,000 0 Q1

Q2 Q3 2018

A subterranean system The veil that covers this secretive system fell recently in a New York court, when a commodity trader admitted to bribing Nigerian government officials to win oil contracts.

The plea bargain of Anthony Stimler, who worked at Switerzland-based trader Glencore until 2019, sheds light on how commodity companies sought to make mega-profits, squirrel them away in tax havens and then throw the scraps to the local political jobbers.

Millions of dollars were paid in bribes, including to officials at the Nigerian National Petroleum Corporation (NNPC), said prosecutors. ‘The conduct described in the plea is unacceptable and has no place in Glencore,’ the company said in a statement.

This subterranean struggle by importers against disruption is a key reason why Dangote has hit so many obstacles with the refinery.

“This project has aged him,” says a Nigerian businessman who requested anonymity. He points to the systematic sabotage of Nigeria’s state-owned refineries from the 1970s onwards as proof of the vested interests at play.

“People throw about the words ‘sabotage’ and ‘cabal’ too much in Nigeria,” says Goldman, “but in this case [of Dangote’s refinery] it seems pretty clear.”

A source within Dangote Group told The Africa Report that commodity importers had attempted to lean on both the refinery contractors and the bankers. “They don’t want the refinery to stand. They want to underdevelop the country,” the source said.

Asked whether Vitol had ever tried to obstruct the construction of the refinery, Vitol spokesperson Andrea Schlaepfer said:

34

Sabotage?

Cabal? “In this case it seems pretty clear,” says Goldman

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

Q4

Q1

Q2 Q3 2019

Q4

Q1

Q2 Q3 2020

Q4

Q1 2021

“No. Vitol is fully supportive of the Dangote refinery and believes it to be in Nigeria’s best interests.”

Grey hairs or not, it is unwise to bet against Dangote, as shown by two developments this year. The first was the set of provisions included in the recently passed Petroleum Industry Bill. It enables the NNPC to take a 20% stake in Dangote’s refinery project and protects the refinery’s business model by introducing fuel-import licences that prioritise local refiners. It also replicates the backward-integration provisions seen in Nigeria’s cement and sugar sectors.

Nigeria’s minister of state for petroleum resources, Timipre Sylva, says: “Acquiring stakes in the Dangote refinery and other private refineries was a strategic decision by the government to get involved in the running of these important assets and not allow them [to be] completely in the hands of private individuals.”

Reversal of fortunes Veteran commodity traders were taken aback.

“They genuinely did not think this would get through,” says Goldman, who argues that it was Buhari’s own determination to see the oil reforms passed that helped the national assembly to get the laws over the line, after more than a decade of arguing.

When questioned on this, Glencore chose not to comment.

The second twist: a report from Reuters – dismissed as “pure speculation” by Dangote Industries spokesperson Chiejina –that major commodity traders are in discussions to sign long-term contracts for the provision of crude in exchange for cargoes of refined petroleum.

If this is true, it signals that Dangote has won, and has inserted himself into Nigeria’s

and the region’s energy ecosystem. Another source in the Dangote Group says that while Vitol staff do come to Dangote headquarters in Lagos, “Vitol are our business partners, nothing more”.

It would not be the first time Dangote had taken on a multinational and won some space in the market. In Cameroon, for example, myriad problems erupted when he and his group took on the 40-year-old cement monopoly held by Lafarge.

Refined business practices If Nigerian billionaire Aliko Dangote can drop multiple billions into a refinery, it is because of his diversified and large income streams. That financial strength is down to income streams across several sectors, patiently built up over the past decade – in textiles, then sugar and cement, logistics and others.

Cement remains the biggest contributor. Net income from Dangote Cement, for example, hit nearly half a billion dollars in the first half of 2021, a 50% jump after a difficult and Covid-19beset 2020. With installed capacity of 48.6m tonnes per year across the continent, Dangote Cement is adding new capacity in Nigeria’s Edo State later this year.

“They laughed at us in 2010, when we said we were going into Senegal,” recalls Anthony Chiejina, a Dangote spokesperson.

“Saying that we could only operate companies at home with government support, not abroad. They are not laughing now.”

Dangote Cement has nine subsidiaries across Africa, which contribute around 13m tonnes a year in production. And there is room to grow, Dangote told The Africa Report: “The Ethiopian finance minister asked if I could come up with additional capacity.”

Dangote built the first foundations of his fortune on sugar. The first half of 2021 delivered N28.6bn ($70m) in gross profit for the sugar business. With the backward integration scheme in place – a government-protected market in exchange for domestic sugar production – Dangote hopes this will multiply tenfold. A salt refinery, NASCON, added gross profits of $17m.

More substantial revenues are expected from the now functioning 3m-tonne-a-year urea fertiliser plant that sits next to its big brother refinery in Lekki. With a deal to import phosphates in place from nearby Togo and gas pipelines direct to the factory, the project targets the North American and South American markets, with the first cargo arriving in Louisiana in early July. The remaining 1m tonnes per year “will stay in Nigeria,” explained Dangote. He added that Brazil will be a key export market and hopes to see revenue hitting $2.5bn per year when the fertiliser facility is running at full capacity.

Dangote talks of consolidation, once the oil refinery is complete. But the firm has also been looking at a dairy project.

Rice-milling projects are underway in Nigeria’s north. “The other thing we might look into is steel,” he concluded.

The long game An optimistic take on what all of this means is that Dangote’s refinery – however delayed it is – will break the resource curse and weaken the grip of external forces on Nigeria’s oil industry, which sends most of the profit elsewhere. Even if 100% of that profit is taken by Dangote Inc., at least it is a Nigerian who is making it, the argument goes. That new revenue stream could allow him to take on even tougher sectors with real industrial spillover benefits, such as steel production.

And then there is the pessimistic take: Dangote will have replaced the oil importers and the cost of energy will remain high in Nigeria, leading to a similar stagnation to that seen in Mexico, where wealthy monopolists like Carlos Slim choke competition and prevent the emergence of new companies.

Chiejina kicks against this. “Manufacturing is hard; and if you look at our economic history, we have been set up to distribute wealth, but not to create it,” he says. “Take milk – Nigeria imports virtually all its milk consumption, but who will take up the challenge? The day Dangote decides to look at this opportunity, people will start screaming.”

President Obasanjo has the last, nuanced, word: “Africans will develop Africa. And we have to get that right.”

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FEATURES /

Ramaphosa’s land of the rising sun PROFILE

President Cyril Ramaphosa has strengthened his position within the ANC. However, with local elections planned for 1 November, he has to win over voters frustrated by lockdowns, poor service delivery and the pace of reform

By CARIEN DU PLESSIS in Johannesburg

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THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

RAJESH JANTILAL/AFP

Ramaphosa faces tough polls in November

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

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FEATURES / PROFILE / Ramaphosa’s land of the rising sun

w

When he launched the African National Congress’s (ANC) municipal election campaign in the Soweto neighbourhood where he grew up, President Cyril Ramaphosa collided with some harsh realities. Many in the area have been living without electricity for over a year. Just days before Ramaphosa arrived, a mob went to his family home, threatening to burn it down.

Part of the problem is neglect and corruption at the power utility Eskom. That is made worse by residents refusing to pay and instead making illegal connections to the system, which overload it and blow the transformers. Speaking from a makeshift podium in the township and sporting ANC colours, Ramaphosa tried to persuade residents that the government was serious about fixing the power problems. “It is much better to move to prepaid electricity because in that way you can control your consumption. I am on prepaid and my wife is able to control our electricity consumption,” he said in Venda.

Many would have questioned the parallels between power consumption in Soweto with that of the Ramaphosa household. Ramaphosa’s temporary move from politics to business in the late 1990s has made him one of the country’s richest men. But he appeared reassured by his reception at the rally in Soweto.

38

These are the voters across the country that Ramaphosa has to keep loyal to the ANC in the local elections on 1 November. A bad result for the ANC could weaken his grip on the party, a year before he is due to stand at its elective conference for a second term as party president.

His efforts to clean up corruption have left many ANC structures without leaders and the party’s coffers depleted. Greater transparency on funding has deterred some business donors.

By Ramaphosa’s own admission, the party has failed at local government level. Millions who got running water and electricity for the first time after liberation in 1994 are seeing those services disrupted.

Slow motion Political gangsters, linked to corrupt networks, are terrorising communities. “It is one of the weakest links […], many of our local government structures have been operating sub-optimally, and corruption is rife there,” Ramaphosa told business people in Mbombela, Mpumalanga province. “Now we are facing a good opportunity to place really good people into local government.”

Since he came to power in 2017 pledging to reform the ANC and the government, Ramaphosa has been criticised for moving too slowly to sack allies of former president Jacob Zuma who are held responsible for the state’s capture by a corrupt business elite.

Ramaphosa insists he had to play the long game. That meant painstaking but slow work by the prosecutorial authorities and reform of the public service.

When Zuma was jailed in July for refusing to testify at a commission of inquiry on state capture, his allies orchestrated a violent backlash with looting and arson in his home province, KwaZulu-Natal, and in Gauteng, the country’s economic hub. Yet Zuma’s jailing could mark a turning point.

“South Africa has been able to achieve something huge with the detention of Zuma for breaking the law,” says Professor Christopher Isike at the University of Pretoria – “an African state is able to arrest a president and [tell] him that he is not bigger than the state.” It also sends a message to Zuma allies such as Ace Magashule, the ANC’s secretary general, who has been suspended while he awaits trial on corruption charges.

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

The municipal elections will show how far Ramaphosa has consolidated power

GULSHAN KHAN/AFP

DA leader John Steenhuisen is looking to win back white voters

Rolling to rock bottom

The municipal elections will show how far Ramaphosa has consolidated power. “Zuma was blamed for poor performance [by the ANC in the local government elections] in 2016, and now the same might happen to Ramaphosa,” an ally of the president in the party’s national executive committee told The Africa Report.

“The Ace group wants the ANC to perform badly under the leadership of Ramaphosa because they want to take over the leadership of the ANC, even if it’s seriously weakened.”

DA goes back to its liberal roots The Democratic Alliance (DA), led by John Steenhuisen, hopes to hold on to the gains it made in the 2016 elections, when the party had its best showing yet and managed to wrest three metros – Johannesburg, Tshwane (Pretoria) and Nelson Mandela Bay (Gqeberha/ Port Elizabeth) – from the ANC, in alliance with smaller parties. The DA, then led by its first black leader, Mmusi Maimane, managed to get a record 24.6% (up from 15.3% in 2011), buoyed in part by its strong campaign against Zuma’s corruption.

A repeat performance seems unlikely. In the 2019 general elections, the DA lost support to the white rightwing Freedom Front Plus as well as to Ramaphosa’s ANC, getting 20.8% of the vote. This trend continued

The problems at electricity utility Eskom have been years in the making. Former president Thabo Mbeki admitted in 2008 that neglect was to blame for power outages. Under former president Zuma, corruption at the state-owned enterprises (SOEs) worsened. Shortly after taking office, Ramaphosa replaced the minister responsible with a close ally, Pravin Gordhan. He also replaced the boards of some SOEs, notably appointing André de Ruyter in November 2019 to clean up Eskom. But the advances have been incremental and Eskom’s failures still pose a major risk to the economy. Some questionable projects remain, such as the multibillion-rand “emergency” generation partnership with Karpowership. An amendment to the Electricity Regulation Act opening the way for greater private generation was gazetted some months ago and should take some of the strain off Eskom.

A Ramaphosa supporter says that infrastructure reforms will always take time. Trying to fix everything is “like a ball rolling down a hill, and you want to stop it, but you can’t. It’s going to continue rolling until it gets to the bottom of the hill.”

Reforms that have taken four years could have been implemented in two, argues the chairman of Business for South Africa (B4SA), Martin Kingston.

Still, he says, “there was more progress on crime and corruption than what we could have anticipated”.

The same frustration applies to the implementation of structural reforms. They should go beyond talk, to efficient implementation, he says. “I think the President and his colleagues understand that, but, as business, we have a requirement and a desire for urgency and visible, decisive action.”

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

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FEATURES / PROFILE / Ramaphosa’s land of the rising sun MUNICIPAL ELECTION RESULTS

in the past year’s by-elections, with the party losing in former strongholds in at least two municipalities.

The DA has launched a strong campaign to return to its pure liberal roots and to woo back its white former voters. In the process, it has alienated some of the black voters. The only thing that could work in the party’s favour is that it has a good record to show in the municipalities where it does govern, reflected in votes in local elections.

Oozing confidence

MUJAHID SAFODIEN/AP/SIPA

The Economic Freedom Fighters (EFF), led by Julius Malema, is the only of the three bigger parties that has grown consistently since it first took part in elections in 2014. In its first local government elections, in 2016, the party got 8.2% of the vote but didn’t manage to win a single ward outright. An IPSOS opinion poll in September (see graph, page 43) indicated that it may be the only one of the three main parties to increase its percentage of votes in 2021. Malema has pushed a racial, populist, pan-Africanist agenda. Although the party promises to tackle corruption, a number of

its leaders have been implicated in the looting of VBS Mutual Bank.

Electoral support is vital for Ramaphosa.

His strength within the party comes from his appeal to the wider population, says Northern Cape Premier Zamani Saul, who supported Ramaphosa’s presidential campaign. Even the ANC’s internal polls have shown Ramaphosa to be more popular than the party, as he rallied South Africans to contribute to the country with Hugh Masekela’s Thuma Mina anthem, a song that calls for sacrifice and taking responsibility.

Detractors paint Ramaphosa as an outsider.

They will try to use that against him at the party’s elective conference in December 2022.

But no other strong contender has yet emerged to challenge Ramaphosa for leadership.

The party’s position remains strong, according to Saul: “We have structures in the length and the breadth of the country, even in deep rural areas […]. That is the advantage we have.” Yet, infighting could damage its election campaign. “When there is paralysis and disunity at branch level, you can see that in the elections outcome.”

40

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

Majority ANC DA IFP NFP Coalition or minority ANC DA IFP NFP Others

The EFF’s prospects look good for a larger vote share in 2021 elections

SOURCE: THE INDEPENDENT ELECTORAL COMMISSION, VIA WIKIPEDIA.ORG

2011

2016

In August, Ramaphosa reshuffled his cabinet for the first time. He greatly strengthened the office of the president, which now has two ministers and four deputies and includes the portfolio for state security, brought in from the cabinet. Deputy minister of state security Zizi Kodwa moved sideways into the presidency to provide intelligence assistance. Ramaphosa appointed another trusted ally, Mondli Gungubele, as minister in the presidency to replace the popular Jackson Mthembu, who died after contracting Covid-19. This centralisation of power suggests Ramaphosa is planning a much more ambitious reform programme if he wins a second term next year.

“If you’re in a strengthened political position, your next move is a consolidation of that strength,” says Saul. “The President is in a better space than three years back.” Then, Ramaphosa had just narrowly been elected as ANC president. The party’s national executive committee was split, for and against him. All that has changed, insists Saul. “If you look at the reshuffle, you see a man who oozes some sense of confidence.”

Defence heavyweight After finance minister Tito Mboweni asked to leave, Ramaphosa appointed the ANC’s economic transformation head, Enoch Godongwana, in his stead. Godongwana will be a strong ally for Ramaphosa to run a post-Covid-19 economic recovery programme.

But others point out that he has overseen several ANC policy failures.

The most applauded move was the appointment of national assembly speaker Thandi Modise as defence minister. She served in the ANC’s military wing, Umkhonto we Sizwe, and is seen as highly effective. She replaced Nosiviwe Mapisa-Nqakula, who had been

increasingly at odds with the President.

Deputy president David Mabuza is another kind of problem for Ramaphosa. Without Mabuza pulling in support from his home province of Mpumalanga, Ramaphosa would not have won the ANC presidency. The current state of their relationship is a mystery, like Mabuza’s health.

Outside government, Ramaphosa listens closely to some of his old comrades from the United Democratic Front of the 1980s. Some, like Murphy Morobe and Cheryl Carolus, are in business; others, such as former minister Derek Hanekom, sit on the ANC’s national executive committee.

Who needs yesterday’s people?

Managing his foes and allies in the ANC, which include people under investigation, has hampered Ramaphosa’s anti-corruption drive.

Professor Anthony Butler at the University of Cape Town (UCT), a biographer of Ramaphosa, says that much of the drive has been targeted at politicians who are already out of contention. “There is this huge palaver about Ace [Magashule] and [Jacob] Zuma, but they are already yesterday’s people.” Butler says there has been no attempt to deal with routine corruption in provinces and city politics: “People don’t feel like they will be dealt with directly.”

Ramaphosa put out a call for public participation before appointing advocate Shamila Batohi as head of the National Prosecuting Authority (NPA) in February 2019, and has done the same ahead of the retirement of controversial chief justice Mogoeng Mogoeng.

This move has been sold by Ramaphosa’s supporters as one that will increase transparency and democracy in appointments. Butler sees it as an ad hoc solution and possibly one that is open to legal challenge.

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

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FEATURES / PROFILE / Ramaphosa’s land of the rising sun The trial of Jacob Zuma sent a message that no-one is above the law

Party, but no fun(ds)

PHILL MAGAKOE/AFP

One of Cyril Ramaphosa’s big selling points within the ANC was that he has his own money and therefore has no need to get involved in corruption. Ramaphosa was ANC secretary general under Nelson Mandela’s leadership, but, soon after his role in negotiations ahead of the 1994 transition to democracy, he went into business and built up a sizeable empire buoyed by the party’s policy of black economic empowerment. Ramaphosa wrapped up his business interests when he became ANC deputy president

“This could be a clever way of getting the person he wants,” says the UCT’s Butler.

“It could be a way of taking a decision without putting his political capital on the line.” The call for public participation followed revelations by Ramaphosa before the state capture commission that some senior officials in the ANC had had a hand in appointing judges.

Justice minister Ronald Lamola argues that a more transparent process of appointment assures successful candidates that they have the support of society. It was Ramaphosa’s idea, says Lamola. “He believes in that kind of consultative process, […] which we ourselves support and make sure that it finds fruition and execution.” How might such wide consultations work in practice in such a polarised society?

“Everyone who makes an input, we’re going to listen, but at the end he [Ramaphosa] will make a decision,” Lamola says.

While Magashule remains suspended Ramaphosa has more flexibility

‘New dawn’ good for business Most of the strategic posts in the department have been filled, says Lamola. “Some of the things, you can’t really move them faster. The key thing is that there is a political will that this happens […] [which] has allowed the systems to run on their own, to fix the challenges.”

Trust between business and the government has been strengthening after recent reforms.

Ramaphosa’s “new dawn” approach of renewal “inspired a lot of people in business to put

42

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

down their concern and scepticism, and step up to the plate,” says Martin Kingston, until recently vice president of Business Unity South Africa, the apex body representing business.

“He was dealt a complicated hand and didn’t have free rein to do what we as business wanted him to, and there was considerable frustration about the process of slow change to achieve economic growth and social stability.”

Fundamental shift Covid-19 brought government and business closer. Kingston says: “Business took a decision very publicly to support the government, led by Ramaphosa, to combat the ramifications of the pandemic.” Large, small, formal and informal businesses were invited to cooperate “in a fluid and dynamic infrastructure”.

“There is nobody in government who doesn’t recognise that there has been a fundamental shift,” says Kingston. “This has created partnership and high levels of mutual respect.”

Despite the sheen Ramaphosa puts on things, and despite the rapport he has with those outside of the ANC, he is dependent on votes from party members to remain in power. One of his supporters has suggested that the party’s recent difficulty in registering its candidates on time was because Ramaphosa’s supporters were outmanoeuvred in several municipalities.

Critics say Ramaphosa will also have to be careful how he centralises power in the

in 2012, and he stepped down from the boards of several companies and resigned as Shanduka chairman.

Those networks have stood him in good stead, and the working relationship between government and business has never been so good. One of the first things Ramaphosa did when coming to power was to initiate an annual investment summit, much of which in the early years involved putting a sheen on existing investment commitments in an effort to lure others.

The ANC has been coy about leaders openly campaigning for positions, a hangover from the struggle days. Its constitution is vague about campaign funding, and a lot of questions have been asked about Ramaphosa’s relationship to his funders, with some in the ANC criticising Western investors and multinationals. Ramaphosa has also had his hand firmly on the purse strings of the party, and the Mail & Guardian in May reported that he closed the funding taps amidst claims that deputy president

presidency so as not to alienate those who feel they should be consulted more. Many party leaders want a say in government policy and in the deployment of senior state officials.

While ANC secretary general Magashule remains suspended, there is less adherence to the authority of the party and some of its cumbersome procedures. This has given Ramaphosa more flexibility. Does this suggest that in order to fix the country, Ramaphosa will destroy the ANC? An emphatic “No” comes from a source close to the President, who insists the ANC is so woven into South African society that it’s impossible – even wrong – to separate the two.

“What happens in the ANC has a profound impact on what happens in the country,” the source says. “What happens in the [elective]

SOURCE: IPOSOS AND ELECTORAL COMMISSION

53.9

49.3

conference has a massive effect on the country in the years to follow.”

At least one leader – Limpopo premier Stanley Mathabatha – has openly declared that he would support Ramaphosa for a second term, but many others are cautious. Lamola says that, for now, he is concentrating on putting his energy behind the ANC’s elections campaign.

Dark before the new dawn?

WHICH PARTIES ARE GAINING AND LOSING GROUND? 2016 poll results

IPSOS opinion poll indications for 2021 in%

26.9 17.9

14.5 8.2

ANC

DA

David Mabuza and his ally, treasurergeneral Paul Mashatile, had been abusing party funds. It has also been reported that the party had for a number of years not paid income tax, as well as staff benefits and pensions.

An attempt to clear these debts has put the party deep in the red. Staff members recently went without salaries for months, which affected morale and elections preparations, and it gave some of Ramaphosa’s detractors an opportunity to rally against him.

4.25 EFF

IFP

1.4

“Obviously there will be conferences soon,” Lamola says. When depends on lockdown regulations being lifted or a viable online platform being found. Even Ramaphosa’s detractors agree, however, that there is no competition for now. “Up to now he’s done fairly well,” Lamola says. “He’s still in a good position to take the ANC forward.”

Ramaphosa is said to be upbeat about the prospects. This is despite warnings that social coherence has been weakened by the strict Covid-19 lockdowns, and more still by a sense of lawlessness that set in during the Zuma years. Communities are complaining about a spike in crime levels and drug abuse over the past year. Speaking to a small group of Muslim business leaders in Mbombela, Ramaphosa said that he is not going to allow things to collapse under his watch and that revelations of wrong-doing will herald better times. “Sometimes, before the sun rises, it gets very dark,” he said.

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TOGOINFO

The past several months has seen the President of Togo inaugurating a number of new facilities and infrastructure in the areas of electricity production, ICTs, industrial transformation and vocational training. The coming into operation of these projects is a perfect demonstration of Togo’s ongoing transformation, as outlined in its National Development Plan.

ADÉTIKOPÉ – AN INDUSTRIAL AND LOGISTICS PLATFORM TO TRANSFORM TOGO’S INDUSTRY On Sunday 6 June 2021, President Faure Essozimma Gnassingbé officially opened the new Industrial Platform of Adétikopé (PIA).

T

he Adétikopé Industrial and will soon include a Single Platform (PIA) was officially Window to facilitate companies’ opened on Sunday 6 June administrative procedures. With 2021 by President Faure Essozimna the enormous improvements made Gnassingbé. This integrated and to the country’s business climate multisectoral facility is in recent years, it is set one of the main projects to generate some 35,000 implemented under the direct and indirect jobs in National Development the long term.

DIRECT Plan (NDP, 2018-2022).

AND INDIRECT By enabling the local proThe goal of the Adétikopé JOBS cessing of natural resourcIndustrial Platform is to es that were previously develop high value-added exported in their raw state, it will industrial chains in several agribusiserve as a catalyst for the transforness sectors: cotton, soya, sesame, mation of the national industrial cocoa, coffee and poultry. There ecosystem. is also room for other sectors with high economic potential to set The PIA benefits from an advanup in the complex, particularly the automotive, pharmaceutical, tageous tax regime designed to cosmetics, packaging and recycling ensure investors’ competitiveness

35,000

The President, Faure Essozimma Gnassingbé, at the PIA ribbon-cutting.

ADVERTORIAL industries. Currently, two companies are already up and running at the PIA: Togo Agro-Ressources SAU, an agribusiness company that processes soybeans into edible oil, and Togo Wood Industries SARL.

AN ADVANTAGE FOR TOGO’S PORT CORRIDOR In a speech attended by, amongst others, Burkina Faso’s Minister of Trade, Industry and Handicrafts representing the President of Faso, the AfCFTA Secretary General and representatives of the International Fund for Agricultural Development (IFAD) and the International Finance Corporation (IFC), Prime Minister Victoire Tomégah-Dogbé stressed the significance of this hub as a tool for achieving the government’s objectives of inclusion, equitable distribution of the benefits of growth and better social protection.

The PIA’s location just 27 km from the Autonomous Port of Lomé and the fact that it has its own dry port with the capacity to accommodate up to 800 trucks, greatly improves “the logistical performance of our port corridor,” said the Prime Minister. “This is of paramount importance for Togo, a land of

Prime Minister Victoire Tomégah-Dogbé speaking at the opening of the PIA.

hospitality, traditional transit and a natural access route for neighbouring countries.”

AN ADDITIONAL $1 BILLION IN ANNUAL EXPORTS Developed as a public-private partnership between the government of Togo and ARISE IIP, an ARISE Group subsidiary, the PIA required an investment of 130 billion CFA francs (200 million euros) in its first phase of construction, which covers 129 hectares. ARISE IIP group chairman Gagan Gupta said that, over the next four years, he expects “annual exports to increase by more than a billion dollars”.

One of the Adétikopé Industrial Platform (PIA) buildings.

A tool for achieving the government’s objectives of inclusion, equitable distribution of the benefits of growth and better social protection

TOGOINFO Overview of IFAD.

A NEW VOCATIONAL TRAINING FACILITY FOR THE BUILDING AND PUBLIC WORKS SECTOR

O

n 28 April, the President launches a new institute for work-linked training for development (IFAD) focusing on the construction industry. Located in Adidogomé, Lomé, IFAD-Bâtiment offers graduate training (certificate, diploma and professional baccalaureate) and “certification” in four major areas: structural work ( planning and execution and general masonry), carpentry and metallurgy, energy and fluids, and finishing and secondary work. Future plans include a renewable energies work-study training centre.

The school complex features a digital workplace integrated into all its courses and modern infrastructure (equipped workshops, resource

centres, etc.). In these sandwich courses, students alternate between the campus for general and technical courses, and the building and project sites of partner companies. Motivation is the most important selection criterion for applicants.

A THIRD IFAD FOR LIVESTOCK FARMING ON THE HORIZON

28 April 2021: President Faure Essozimna Gnassingbé inaugurates the IFAD.

10 new development training institutes will be opened over the next five years

The President’s commitment to making young people active in the economic and social development of Togo is evident in the successful implementation of this project. He had announced the establishment of IFADs in January 2018. “The emphasis will be placed on the quality of vocational training, because this is where the tools and skills needed for real participation of young people in development come from,” he explained. He went on to announce that “10 new development training institutes will be opened over the next five years in the fields of agriculture, logistics, construction, transport and digital technology”.

IFAD-Aquaculture in Elavagnon, in the eastern Mono region, was the first of these institutions to open and was followed by IFAD-Bâtiment. In a few months’ time, IFAD- Élevage will open its doors in Barkoissi, to support the introduction of a dairy, small ruminant, poultry and pig industry.

Entrance to the Institut de Formation en Alternance pour le Développement (IFAD).

ADVERTORIAL

TOGO CONSOLIDATES ITS PROGRESS TOWARDS ENERGY SELF-SUFFICIENCY WITH TWO NEW POWER PLANTS

President Faure Essozimna Gnassingbé tours the Blitta solar power plant.

RISE IN INWARD FOREIGN DIRECT INVESTMENT IN TOGO

Gas turbines at the Kékéli combined cycle power plant.

O

n 26 April, less than two years after construction began on the Kékéli Efficient Power plant, the first flame was lit when the 47-megawatt gas turbine was commissioned. By the end of the year, a steam turbine will be added to this facility. This combined cycle system will provide 65.5 megawatts of power without the need for additional gas consumption and with limited CO2 emissions into the atmosphere.

This will increase the country’s electricity production capacity by 50%.

In conjunction with ongoing grid extension projects, Kékéli will provide 263,000 Togolese households, or nearly two million people, with access to electricity.

Requiring an investment of 85 billion CFA francs (130 million euros), this plant is proof of Togo’s capacity for innovation. It was fi-

(CNUCED SOURCE)

nanced under a 25-year concession agreement with Eranove for the design, construction, operation and maintenance of the plant, and a public-private partnership (PPP) involving the Togolese government and international industrial and financial players.

Kiféma Capital is the investment vehicle that holds the State’s stake and brings together all Togolese national investors, including the sovereign wealth fund Togo Invest and national institutions.

The Kékéli Power plant will provide access to electricity for 263,000 Togolese households, or nearly two million people

+85% This is the increase in Foreign Direct Investment (FDI) inflows to Togo recorded between 2019 and 2020.

According to UNCTAD, FDI inflows rose from 191 billion CFA francs ($346 million) to 352.5 billion CFA francs ($639 million). It was $89 million in 2017. The majority of these investments come from other West African countries and include the construction of two cement plants by companies from Burkina Faso ($100 million, CinMetal Group) and Nigeria ($60 million, Dangote).

TOGOINFO

BLLITTA PROVIDES 50 MWP OF AD DDITIONAL SOLAR ENERGY Tw wo months after Kékéli came into service, President Gnassingbé offficially opened the Sheikh Mohamed Bin Zayed solar power pl plant in Blitta on 22 June. This 50 MWp photovoltaic power station was built by AMEA Togo Solar, a subsidiary of AMEA Power, and is set to provide energy to approximately 158,300 households, which represents 9% of the demand in the central region.

The project was financed to the tune of 21 billion CFA francs by the West African Development Bank (BOAD) and the Abu Dhabi Fund for Development (ADFD). Its completion “perfectly illustrates how successful public-private partnerships are in Africa, with AMEA Power benefitting from Togo’s progressive investment climate, which prompted it to pre-finance this project,” said Aziable Mila, Minister Delegate to the President of the Republic in charge of Energy and Mines.

AMEA Power, a subsidiary of Al Nowais Investments (ANI), based in the United Arab Emirates, will operate the plant for 25 years.

Over this time it expects to avoid

The Blitta solar power plant’s photovoltaic panels.

Commissioning of the Blitta solar power plant in the presence of the President, Faure Essozimna Gnassingbé.

more than 1 million tonnes of CO2 emissions.

Kékélé and Blitta, both major projects carried out within the framework of the National Electrification Strategy, enable Togo to take giant steps towards achieving its ambitions. The government plans to increase the national electricity access rate to 75% by 2025 and then to 100% by 2030, and to increase the share of renewable energy in the country’s energy mix to 50%. At the Council of Ministers meeting on 17 June, the government adopted two draft decrees concerning the installation of two solar power stations at Salimde and Awandjelo, with installed capacities of 60 and 80 MWp respectively.

AMEA Power benefits from Togo’s progressive investment climate

Mrs Mawougno Aziablé, Minister Delegate to the President of the Republic, in charge of Energy and Mines.

ADVERTORIAL

TOGO OPENS ITS FIRST DATA CENTRE Facade of the brand new Lomé Data Centre, where companies can organise, process, store and warehouse large amounts of data.

The President, Faure Essozimna Gnassingbé attends the opening of the Lomé Data Centre.

It offers a reliable alternative for accessing very high-speed Internet bandwidth at lower costs, thanks to the optimisation of available networks in a single site.

BECOMING A DIGITAL HUB OF AFRICA Built on over a hectare in the capital’s new administrative complex, the facility is Tier III certified, which is one of the highest levels of reliability in the sector. It comprises an administrative wing and five 133 m² server rooms, four of which are

Mrs. Cina Lawson, Minister of the Digital Economy Economy.

Ms Coralie Gevers, Director of Operations of the World Bank, at the official opening of the Data Centre.

intended for private companies. It took two and a half years to build and was financed to the tune of 12.7 billion CFA francs by the World Bank, as part of the regional infrastructure development programme (WARCIP).

Built by the French company CFAO Technologies and Togo’s Centro, under the supervision of APL France, specialists in data centre design and construction, the Lomé Data Centre is part of the government’s strategy for growth through digital transformation.

“Around two thirds of the 42 priority projects in the government’s new roadmap have a digital component”, said Cina Lawson, Minister for the Digital Economy, at the ribbon cutting ceremony.

This facility brings Togo a step closer to its ambition of becoming a technological and digital hub in Africa.

DIFCOM/DF - PHOTOS: © PRESIDENCY OF THE REPUBLIC.

I

n June this year, President Faure Gnassingbé officially opened Togo’s first strategic data hosting facility. The Lomé Data Centre is the country’s first neutral colocation data centre and allows institutions and companies to host their data in a secure environment.

PROFILE

Team Biden

FEATURES /

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THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

South-West dialogue at the G7 summit in June

US President Joe Biden has hand-picked an Africa team of veteran diplomats, conflict specialists and policymakers to help Washington compete with China and Russia

By JULIAN PECQUET in Washington DC

NEWSPIX/NEWS PICTURES

B

Barely two weeks into his administration, US President Joe Biden delighted supporters of closer US-Africa ties with his message to regional leaders gathering virtually for the 34th African Union (AU) summit. In his 5 February address, the US President set a different tone for US-Africa relations after four years of Donald Trump. Instead of “America First”, Biden promised a new era of “solidarity, support and mutual respect”.

Eight months since taking office on 20 January, Biden has assembled a deep bench of Africa experts eager to engage with African nations and the AU. Several were born on the continent or have African-born parents and many are women, their appointments helping to fulfil Biden’s promise

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

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FEATURES / PROFILE / Team Biden

to create a diverse administration that “looks like America”.

But, despite the rhetoric, Africa is not likely to feature high on the list of diplomatic priorities. Washington is in the midst of its “Pivot to Asia” to take on China’s growing influence and the US withdrawal from Afghanistan shows a growing reluctance to put boots on the ground to fight terrorism. Plus, US influence in the world is getting weaker, as shown by the roles of Turkey and Russia in Libya and Syria.

Rather than politically motivated appointments, “this administration wanted to make sure that it had people who were good choices because of their experience and their expertise,” says Florizelle Liser, a former assistant US trade representative for Africa who now heads the Corporate Council on Africa.

Tapping Africa expertise At the same time, some of Biden’s signature hires reflect his determination that the US once again lead on democracy, human rights and climate change – issues that risk antagonising African countries leery of foreign intervention.

Republicans are blocking dozens of the president’s picks, including top Africa positions.

And crises on the continent have already led to a reshuffling of staff resources and priorities.

To help formulate a Biden Africa policy, the president has tapped into Washington’s cadre of Africanists. In one of his first hires, Biden selected a longtime diplomat to head Africa policy at the White House National Security Council. Dana Banks’ predecessors under

Trump came from the CIA and the Commerce Department. Over at the Department of State, Biden has appointed a former ambassador to South Sudan, Mary Catherine ‘Molly’ Phee, to head up Africa policy.

He has also hired Sierra Leone-born conflict resolution expert Chidi Blyden as the first African American to lead Africa policy at the Department of Defense, signalling a focus on security cooperation and training beyond US kinetic operations.

In a move that has excited the Africa policy community, he chose former assistant secretary of state for African affairs Linda Thomas-Greenfield to serve as ambassador to the United Nations. She is seen as ideally suited to court a large African bloc of countries that tend to vote in unison.

“Having somebody who has a phenomenal reputation in Africa, who knows Africa intimately, is a huge advantage,” says Tibor Nagy, who succeeded Thomas-Greenfield at African affairs from 2018 until this January. “In the past we’ve had UN ambassadors who couldn’t even name the countries on the African continent.”

Nagy describes African affairs as the province of a small group of experts who rotate in and out of government. He says Africa policy is “one of the very, very few non-partisan issues” in Washington, with a focus across administrations on key issues such as economic development and counterterrorism.

Under Biden, many of these experts are seeing their roles change from “stewards to architects” of policy, say Cameron Hudson, a

Competing with China

Jesse Corradi

Managing Director for Africa, International Development Finance Corporation (DFC)

ERIN GRANZOW

Corrodi brings his experience from his work at USAID’s Development Credit Authority and from the private sector via Lehman Brothers and Closed Loop Partners. Competing with China for influence on the continent, the DFC is lending $300m to Liquid Intelligent Technologies to expand its network of data centres and giving $3.3m to help launch vaccine production in Senegal via the Institut Pasteur in Dakar.

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THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

Shot in the arm

Alice Albright

Climate and aid Biden himself has made two signature appointments in two areas with an outsize impact on Africa. With Samantha Power, the president has put an outspoken human rights activist in charge of the US Agency for International Development, which doles out billions of dollars of assistance to the continent every year. Her role, Biden said, was to rally the international community “to stand up for the dignity and humanity of all people”. Climate envoy John Kerry is another marquee name with an eye on Africa. The former secretary of state stopped by Egypt in June and warned Cairo against investing too heavily in oil and gas.

Finally, several hires attest to the tendency for entrenched conflicts to sideline long-term goals for US-Africa relations. With violence raging in Tigray, Biden tapped veteran diplomat Jeffrey Feltman in April as his special envoy for the Horn of Africa. And the chief of mission for Libya, Richard Norland, has seen his role expanded to special envoy as the US steps up its diplomatic engagement ahead of elections planned for December.

“Whatever they think they’re going to focus on, they’re going to have to deal with what issues emerge,” Nagy says of Biden’s Africa team. “It’s not Washington setting the agenda for Africa; it’s Africa setting the agenda for Washington.”

Nominee CEO, Millennium Challenge Corporation (MCC) Created in 2004, the Millennium Challenge Corporation (MCC) has the goal of delivering US aid with better results and more innovation. It provides time-limited grants to countries selected for their good governance, economic freedom and investment in their citizens. In August, Biden nominated Alice Albright – CEO of the Global Partnership for Education’s secretariat – to take up the MCC’s leadership. A big test of the MCC’s effectiveness is its recent $500m backing for the strengthening of Senegal’s electricity sector. Albright brings experience at the Export-Import Bank of the United States and the Global Alliance for Vaccines and Immunizations to the table. She is the daughter of the former secretary of state and ambassador to the United Nations Madeleine Albright.

Conflict de-escalator

Chidi Blyden

Deputy Assistant Secretary for African affairs, Department of Defense Born in Sierra Leone, Blyden is the first African-American to serve as the Pentagon’s top Africa official.

Setting out her task, she said: “My office is focused on people, partnership and perspective.”

Blyden brings a broad range of perspectives. She was a professional staffer on the House of Representative’s armed services committee, handled defence policy for East and Central Africa under President Barack Obama and helped design programmes for African security professionals at the National Defense University’s Africa Center for Strategic Studies.

An expert in conflict resolution, she was the first Africa director at the nonprofit Center for Civilians in Conflict, helping train members of the Nigerian Armed Forces.

JOANNE SORRENTINO/DISA/JSSC

senior fellow at the Atlantic Council’s Africa Center. As a result, “it’s hard to divine what their individual policy intentions are going to be.”

The uncertainty is compounded by political obstruction on Capitol Hill, where Senator Ted Cruz (R-Texas) held up dozens of diplomatic appointments in an effort to extract sanctions on Russia’s gas pipeline to western Europe.

These included Phee (who is now confirmed) as well as several ambassadorial nominees, which in turn delayed the selection of Phee’s deputy as well as any potential plans to replace the departed special envoys to the Sahel, the Great Lakes, and Sudan and South Sudan.

Still, the new Africa team has offered some hints about its goals. Banks, for example, has announced the donation of millions of doses of Covid-19 vaccines to Africa and requested a doubling of funding for the Prosper Africa initiative that aims to boost US trade and investment.

ADVERTORIAL

EXPERT ADVICE

Contributing to Africa’s low carbon industrialization What is Genser Energy’s approach to LNG and renewable energy in Africa?

We provide two solutions in Africa, distributed generation installations and natural gas midstream and distribution infrastructure, which allow us to sell power and natural gas to mines, industries and utilities. To encourage the uptake of cleaner natural gas to replace diesel and HFO we reduce the minimum investment and build small-scale LNG installations and virtual pipelines.

and steel mills in the area. We routed our pipeline to these industrial zones at no extra cost to the government. We are also working to improve power generation in Ghana’s second-largest city, Kumasi, by extending our pipeline to that city en route to the gold mines.

What is your transition strategy to low carbon and carbon neutral?

Our two-phase carbon footprint reduction plan comprises a transition phase and a low carbon phase. We are currently in the transition phase and partnering and investing

By making investments to convert mines to cleaner, cheaper natural gas we help reduce the mining industry’s environmental footprint. We We are currently in the transition phase and recently converted Gold partnering and investing with our customers, Fields Ghana Limited’s elution circuit burners in their suppliers and competitors to convert them Tarkwa Mine from diesel to from high carbon to low carbon fuels. natural gas, with significant savings which they then reallocated to with our customers, suppliers and compettheir CSR program. Our prediction is that itors to convert them from high carbon to Africa will leapfrog into renewables when low carbon fuels. For example, Genser Enerbattery technology has advanced and begy provided the initial investment when we comes more affordable. converted Gold Fields’ Tarkwa Mine’s elution circuit burners from diesel to natural gas.

We also optimize our infrastructure. When Another initiative is to convert their trucks developing Genser Energy’s pipeline netfrom diesel to LNG/CNG, and through this work in Ghana, we looked at the Ghanaian build a long-term sustainable relationship. government’s economic development plan We do this to get people excited and to enwhich included an alumina processing plant courage faster uptake.

Genser Energy 1015 18th St NW - Suite 804 Washington, DC 20036 USA info@genserenergy.com www.genserenergy.com

Investments must be ramped up to move into the low carbon phase, reduce thermal power generation to almost zero and switch to hydrogen instead of LNG for fuel needs.

In preparation for going carbon neutral, we’re developing projects to replace natural gas, and turning towards hydroelectric, wind and PV solar power. Our existing energy infrastructure can be repurposed for renewables.

Knowledge & skills transfer Wherever we operate, about >85% of our staff is local with >90% being regional. We have a very high retention rate of close to 96%. We set great store in training; our people are our strongest asset. Most staff join the company through internship programs from universities in Ghana, Burkina Faso, Ivory Coast, and Togo and undergo a rigorous 4-year training program and from what we have seen, they choose to stay with us and contribute towards our success

What are your expansion plans?

We currently operate in Ghana, Burkina Faso, Mali and Guinea – and whilst we are looking to expand in the region we are also looking to deepen our involvement in each of these markets. We cannot do it alone and we are actively seeking partnerships to achieve our goals.

We recently moved our head office to Washington D.C. to gain better access to industry groups and trade associations involved in US-Africa Cooperation. Setting up a dynamic office will allow us to tap into the talent, technology, and capital markets available in the US, and provide us with the opportunity to bring Genser Energy’s expertise from the African continent to the United States.

Baafour Asiamah-Adjei CEO, Genser Energy

JAMG Photo D.R.

As active energypartners,we are always looking to find solutions for our clients. We are talking to the Ghana National Petroleum Corporation (GNPC) about extracting heavy hydrocarbons and processing their raw gas into very clean fuel products. We’re also discussing a partnership with a global heavy equipment provider to convert their HFO engines to natural gas.

FEATURES / PROFILE / Team Biden

Soldier at the summit

Stephen J. Townsend

BRETT CARLSEN/NYT/REA

Commander, United States Africa Command

Jabs and funds

The four-star general came to the job in 2019 without decades of experience on the continent; however, he did participate in nearly every major conflict the US has been involved in since the 1980s. Leaning on that experience, he says: “China and Russia don’t ignore Africa, and that alone should say something.”

Aid power

Dana Banks

Samantha Power

Senior Director for Africa, National Security Council

Administrator, USAID

DR

The administrator of the US Agency for International Development (USAID) holds considerable sway over US policy toward Africa. With Power, Biden has chosen a human-rights interventionist with considerable star quality. A former US ambassador to the UN who has written extensively about America’s failure to prevent genocide in Rwanda and elsewhere, Power wasted no time taking on a peace-making role, travelling to Ethiopia to put Addis Ababa on notice that US assistance is at risk if the violence in Tigray does not end.

Trade not aid

Enoh T. Ebong

Director, US Trade and Development Agency (USTDA) Like Chidi Blyden, Biden’s pick to head USTDA was born in Africa – in this case, Nigeria. Ebong was named acting director in February after a 15-year career at the agency, serving as general counsel, deputy director and chief operating officer. USTDA aims to develop sustainable infrastructure and foster economic growth in developing countries while promoting US exports.

DR

Banks became special assistant to President Biden and senior director for Africa at the National Security Council in January. She brings a diplomatic sensibility to a role that was filled under President Trump by a CIA Africa expert and then a trade official with little experience in subSaharan Africa. In contrast, Banks is a 22-year veteran of the State Department who has served in countries including South Africa, Togo and Tanzania. She has led announcements of US Covid-19 vaccine shipments to Africa and increased funding requests for the Prosper Africa trade and investment initiative.

Connecting Businesses and Investors

There are tremendous opportunities for trade and investment between the United States and Africa’s fast-growing economies.

Through Prosper Africa, the U.S. Government is committed to helping businesses and investors unlock these opportunities.

Prosper Africa is a one-stop shop so companies don’t have to spend valuable resources navigating Washington in order to do business in the United States and across the African continent.

Find your next opportunity today.

Visit the website at: prosperafrica.gov

@ProsperAfricaUS Prosper Africa ProsperAfricaUS

Mary Catherine ‘Molly’ Phee

Crisis chops

Jeffrey Feltman

Special Envoy to the Horn of Africa Biden’s decision to name a special envoy for the Horn of Africa in April is a keen reminder that crises on the ground often end up dominating US policymaking in Africa. While precipitated by the conflict in Tigray, Feltman’s appointment also covers terrorism and instability in Somalia, Sudan’s democratic transition and regional tensions over the Grand Ethiopian Renaissance Dam. Feltman brings seasoned crisis diplomacy chops to the role, having served as ambassador to Lebanon during the 2006 war, as the top State Department official for the Middle East and North Africa during the Arab Spring, and as UN under-secretary-general for political affairs, notably handling talks with North Korea. Feltman travelled to Egypt, Eritrea, Sudan and Ethiopia in May, reporting: ‘We are deeply concerned about increasing political and ethnic polarisation throughout [Ethiopia].’ He returned to the region in August, meeting officials in Ethiopia, Djibouti and the United Arab Emirates.

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Biden’s pick for the top Africa position at the State Department is a 30-year veteran of the US diplomatic corps. Phee, an Arabic speaker, served as deputy chief of mission in Ethiopia and was the US’s second ambassador to South Sudan in 2015-2017. She also helped craft US policy in Iraq, Afghanistan and the UN. When in a temporary posting at the State Department’s bureau for international organisations, she said: “To be most effective, the UN needs a body to hold countries accountable, to provide a platform for human rights defenders and to assist countries that are working to improve human rights at home.”

Gumbo and opportunities

Linda Thomas-Greenfield Ambassador to the United Nations

A Southern woman celebrated for her ‘gumbo diplomacy’ recipe for breaking down barriers over home-cooked meals, ThomasGreenfield is the latest Africanist to join the senior ranks of the US government. Like Susan Rice before her, she’s representing the US at the United Nations after previously serving as assistant secretary of state for African affairs. She says that she and her colleagues in Washington “need to focus on the opportunities” in Africa rather than building up the narrative of a continent of crises. Thomas-Greenfield was US ambassador to Liberia from 2008 to 2012 and has served in Nigeria, Kenya and Gambia. This gives her plenty of experience with the powerful African voting bloc at the UN as the Biden administration pushes multilateral diplomacy after four years of Trump’s ‘America First’ approach. She sees mutual interests between the US and African countries on “security, global health, climate, freedom, democracy, and shared prosperity”.

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

GREG NASH/UPI//SIPA

SIMON DAVIS/DFID

Assistant Secretary of State for Africa

SHUTTERSTOCK/SIPA

Missions accomplished

COMMUNIQUÉ

EXPERT ADVICE

The Whitaker Group Ghana: 1 Dulles Court – Joggis street, Accra US: 1818 Library Street, Suite 500, Reston VA, 20190 Email: twg@thewhitakergroup.us www.thewhitakergroup.us

To build back better, prioritize Africa

W

e must “build back better”, President Biden says as the world struggles to recover from COVID. This can only happen if the US makes a radical and long overdue U-turn in the way we think about and treat Africa.

A prosperous, healthy and self-reliant Africa, on a sustainable, carbon-neutral trajectory to industrialization and urbanization driven by its extraordinary natural endowments, is not a nice-to-have. It is a must-have. But the only people who can make it happen are Africans themselves, unencumbered by the self-serving ministrations of colonial powers, both the old and the new ones that pretend to be something else.

In the US, we had an idea of what Afghanistan should be and spent trillions of dollars trying to make it so, failing utterly. Contractors and NGOs got rich along with local elites only too happy to pocket US taxpayer dollars without full accountability so long as they said they were fighting our enemies.

If the US aid-industrial-complex could not fix one small country with trillions of dollars, what makes us believe it can fix Africa with a few billion? We have got to stop thinking and acting as if we know better.

Rosa Whitaker President & CEO, The Whitaker Group

...the US aid-industrial-complex could not fix one small country with trillions of dollars, what makes us believe it can fix Africa with a few billion?

Africa has its own blueprint for building a single market served by competitive African businesses linked by infrastructure shaped for the needs of Africa, not colonizers. We must first listen to Africa’s collective aspirations and respond impactfully, whether by creating tax incentives for private US investments in Africa or by leveraging our bond market to support Africa’s infrastructure development.

Since 2003, The Whitaker Group has been at the forefront of work to advance smart enterprise solutions across Africa. Our global clients and projects demonstrate the virtue of doing much good while also doing well.

JAMG Photo D.R.

Not one of the world’s most pressing challenges can be resolved unless Africa is a full and willing part of the solution -- not climate change and the destruction of the biosphere, not the threat of ongoing pandemics, not destabilizing mass migrations, not the cancer of terrorism that feeds on corruption and failing states, not the potential for economic stagnation as the populations of the industrialzed North age out of the workforce, not the new and potentially disastrous antagonism between the US and China.

FEATURES / PROFILE / Team Biden

MONICA A. KING/U.S. ARMY

Diplomatic heritage

Richard Norland Ambassador and Special Envoy to Libya

North Africa and diplomacy have a deep connection for Washington’s new ambassador to Tripoli. Born in Morocco to diplomat parents, Norland has a long history of representing US interests abroad. And those experiences have helped him to build up skills in dealing with conflicts, be it as a political consellor in Ireland or deputy chief of mission in Afghanistan.

Washington is worried about the roadmap to ramp down the Libyan conflict, with Norland saying in September: “Political leaders from all parties must bear the responsibility of reaching a compromise which will allow the intended elections to be held on time.” As The Africa Report went to press, there were strong doubts that the vote planned for December would be organised without a hitch (see page 22).

The Libyan elections will be a litmus test for the most recent international push to end the conflict and establish democratic governance in the country. Norland was in Egypt in August to meet with President Abdel Fattah al-Sisi and eastern rebel leader Khalifa Haftar. His goal was to discourage spoilers, and to get Haftar and his allies on the same page as the government in Tripoli, which wants to hold a vote to resolve the conflicts that have hurt the country since the overthrow of Muammar Gaddafi in 2011. Washington is seemingly open to Haftar having a role in the future unified armed forces that the new Libyan government is set to create.

Naija-SA connection

Akunna Cook

Deputy Assistant Secretary of State for Southern Africa Cook is another top Africa policy official with deep personal ties to the continent. The daughter of Nigerian immigrants, she returned to the State Department in March after an almost 10-year detour into the private sector, practising law and as the founder and principal of Drake Road Strategies, advising on public policy. Her previous experience with the Africa bureau includes stints as the desk officer for Ghana, Togo and Benin and at the US embassy in Pretoria. In her new role she is also expected to help to promote trade, investment, climate, health, democracy and human rights. She has been boosting US health diplomacy by showing the US commitment to sharing Covid-19 vaccines, telling media: “We know that we cannot end this pandemic anywhere until we’ve ended it everywhere.” She has been critical of Nigeria’s moves to ban Twitter and China’s lending practices in Africa.

NIGERIA FOCUS /

NIGERIA FOCUS Nigeria’s President Muhammadu Buhari swept to victory in 2015 with the promise of turning the country around. With less than two years until he steps down, many in business say his interventionist policies have failed to deliver prosperity

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THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

Breaking new ground at BUA Group’s LASUCO sugar project in Lafiagi

BUA

Business dreams of the post-Buhari era

By NICHOLAS NORBROOK Bright white sheets of A4 paper flutter on shopfronts as the traffic slowly accelerates out of Lagos. ‘Car wash person urgently required.’ ‘Nanny wanted, room and meals included.’ Requests for

security guards and domestic help are easy to spot across the Lekki Peninsula, to the east of Nigeria’s commercial capital, where new condominiums are springing up.

Boosters say the Lekki Peninsula is the future of Nigeria. “I have

bought land out there,” says Patrick Koshoni, founder of the exclusive private members’ club Miliki, who is looking to build a boutique hotel for workers in Lekki. The site of the new Dangote refinery (see page 26), Lekki is also home to a

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

63

Economic nationalism Security is a key concern. Trucking goods is highly risky in much of the north. “I have a farm in Katsina State that I have not been to for the past two years,” says Kabir Ibrahim, president of the All Farmers Association of Nigeria. “People do not go to the farms any more because, when they go, they don’t come back.”

Abuja’s business champions are not feting the administration of President Muhammadu Buhari either. “Things have not got better,” says one construction-sector CEO who asked not to be named.

“We have not got our equipment imported, the ports have been terrible, and the foreign exchange situation is killing us.”

Buhari’s administration arrived in 2015 with designs that were more interventionist than his predecessor’s. While Buhari may have celebrated the election of fellow Nigerian Ngozi Okonjo-Iweala as director of the World Trade Organisation and her “passion for

64

development”, his own instincts are more economic nationalism than free trade.

Six years on, analyst Abdulrauf Aliyu writes in The Alvin Report, ‘one won’t be wrong to say that the Nigerian economy remains tied to the life-support of oil, peasant agriculture and largely informal services sector, while income inequality, poverty and unemployment remain major defining features of the economy’.

Buhari’s ideas centred around the structural transformation that was needed to change that. Or such were the early noises made by his now deceased chief of staff Abba Kyari.

While a business council chaired by vice-president Yemi Osinbajo did some initial good work, it has since lost its bite. The border closure with Benin, for example, was a move more characteristic of an activist government that hoped to impose itself on regional smuggling markets – and while Benin’s food smugglers may be hurting, Nigeria’s consumers are hurting more.

Nigeria’s interventions to support the currency have also injured the business climate, argue many.

Defending the naira puts pressure on Nigeria’s reserve of US dollars,

Benin’s smugglers may be hurting, but Nigeria’s consumers are hurting more

which was already struggling due to lower oil prices.

Nigerian development economist Tobi Lawson says: “Excessive control has put a big ‘SELL’ on Nigeria’s economy and its currency.

Foreign direct investment has collapsed, remittances are also plummeting. Imports have not reduced and dollar scarcity means importers pay higher rates and charge consumers accordingly – which [accounts for] the inflation we are seeing.”

South African retailer Shoprite has left Nigeria, selling off its 25-store chain to a local investor with experts citing problems with ports, a fluctuating currency and difficulties repatriating profits as the reasons. Big telecoms companies like MTN and Etisalat are lobbying furiously to be allowed to have a mobile-money

NIGERIA’S FOREIGN EXCHANGE RESERVES (million US$) 50 000

40 000 30 000

20 000

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

2018

2020

SOURCES: TRADINGECONOMICS.COM, CENTRAL BANK OF NIGERIA

Singapore-powered new industrial zone with ambitions to catapult Lagos State into the latest iteration of East Asia’s export-driven development miracle. An integrated new port project with Chinese backers should help ease the burden on the clogged Lagos ports.

But Lekki may only be the future of Lagos. As fond as people are of pointing out that Africa is 54 countries, they might do the same for the 36 states in the fraught union known as Nigeria. Some of these states have the GDP of an ‘average’ African country – Lagos State’s economy is the size of Sudan’s, at $33bn. But because these states differ wildly one from the other in terms of wealth and political heft, any attempt to talk about the health of Nigerian business must also look to places that are less like Lekki and far more complicated.

SOM

NIGERIA FOCUS / Business dreams of the post-Buhari era

The pipeline of post-Buhari projects is indeed packed.

Dangote’s refinery will only just be getting up to speed by 2023, while BUA Group’s refinery is set to arrive a few years later. Both will save the country the vast foreignexchange outlays it currently spends on importing fuel.

Planners’ vision for Alárò City, a mixed-use model community in the Lekki Free Trade Zone

Oil and gas to flow

licence, while domestic players like Glo are already “printing money”, according to one industry insider.

But domestic companies struggle to emerge, too. While national champions are feted at the top of the tree, they are casting too much shade on more junior competitors – with some critics arguing large companies overly benefit from state support at the expense of a thriving corporate ecosystem.

Protection, what protection?

The problem of a lack of internal competitiveness and big players capturing regulators predates Buhari, but it has undoubtedly worsened now, says accountant and commentator Feyi Fawehinmi.

“By itself, protecting local players is not the worst thing in the world, and many countries have done it at various stages of

their development,” he says. “The problem is that the same government that protects local players from external competition in the name of nurturing them is soon quickly pulled into protecting those same local players from internal competition.”

For Olumide Adeosun, the CEO of domestic energy player Ardova, corporate Nigeria needs to evolve.

“There is still a lot of the dominantshareholder culture,” he says.

When that changes – and he does spy green shoots – there will be far greater interest from global capital in seizing the opportunities present in this country of more than 200 million people.

There is as much resignation as resilience in the stance of business.

A Lebanese property developer in Lagos says: “We are just waiting him [Buhari] out.”

BLACK-MARKET RATES SOAR (Naira/$) 550

Naira spot rate Naira black-market rate

500 450 400 350

2019

2020

2021

SOURCES: BLOOMBERG, ABOKIFX.COM

Naira spot and black-market rates have widened since devaluation in 2021

Two other big energy projects – Nigeria LNG’s Train 7 and Shell’s Bonga North and eventually Southwest – are set to come onstream, while large domestic players like Seplat are likely to consolidate and grow by purchasing Shell’s onshore and shallow-water assets. ‘Nigeria is expected to have 100 oil and gas projects commencing operations across the value chain between 2021 and 2025, accounting for 23% of the total project starts in Africa,’ reports GlobalData.

Large infrastructure projects will be completed, too, many of which Buhari pushed forwards, but for whom the benefits will accrue to his successor. A coastal train line is due to connect Lagos to Calabar in the south-east. And the upgraded and extended Lagos-Epe Expressway will provide importers and exporters with an additional route into the hinterland and connect the new Lekki deepwater port, which is integrated into Nigeria’s first privately owned free zone.

Some are not waiting out Buhari, but have seized the Nigerian nettle. Tolaram, the Singaporean developer of the Lagos Free Trade Zone, knows better than most about the ‘fortune at the bottom of the pyramid’ – shorthand for the oftignored aggregate spending of large swaths of emerging economies. “A lot of work goes into getting costs down to help companies be affordable,” says Lagos Free Trade Zone CEO Dinesh Rathi. “That’s allowed us to build long-term relationships with global brands.”

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

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Flour & Pasta

Mining & Construction

NIGERIA FOCUS /

Nordea voted for a motion that sought to push the company to prepare itself to respect the climate commitments in the Paris accords.

The resolution was not adopted, but the fact that it was supported by more than 30% of Shell’s voting rights sent a “clear signal” to the company, Granqvist says.

Gail Anderson, research director at Wood Mackenzie and a specialist in Nigerian oil and gas, questions who will want to buy high-cost, emissions-intensive assets in the Niger Delta. It will be “extremely hard” for Shell to shift all the licences in the current environment, she says.

OIL AND GAS

Nigeria’s PIB may to be too late to help Shell The supermajors are under pressure to reduce their carbon emissions, so Shell may have a hard time finding buyers for its stakes in Niger Delta fields

The signature of Nigeria’s Petroleum Industry Bill (PIB) may be too little, too late to help Royal Dutch Shell achieve best prices for its assets, analysts say. President Muhammadu Buhari finally signed the bill – first introduced in 2008 – into law on 16 August. The bill reduces taxes and royalty payments and exempts deep offshore oil and gas production from some taxes.

Shell is selling the joint-venture licences held by the Shell Petroleum Development Company of Nigeria (SPDC), which comprise a 30% stake in 19 oil-mining leases. The company called for expressions of interest by 10 September. The oil major is under legal and investor pressure to align its strategy with the Paris climate accords.

In May, a court in The Hague ordered Shell to reduce its 2019 worldwide CO2 emissions by 45% by 2030, a ruling that the company is appealing. Shell’s current aim of reducing emissions by 20% by 2030 is “clearly insufficient,” says Harry Granqvist, a senior environmental, social and governance analyst at Nordea Asset Management.

Shell says that its oil production peaked in 2019 and its output will decline by 1%-2% a year, including divestments, until 2030. At Shell’s latest shareholders’ meeting,

$2.3bn

Value of the 30% stake Nigerian assets that Shell wishes to sell, according to Gail Anderson of Wood Mackenzie

Shell’s Bonny Island LNG plant is not for sale

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Financing a challenge

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

AKINTUNDE AKINLEYE/REUTERS

By DAVID WHITEHOUSE

Wood Mackenzie says that only 20% of the joint-venture resources are currently commercial due to a lack of investment, crude theft and insecurity. A competent buyer giving priority to the assets could commercialise much more than that, a note from Anderson says.

Research from Janet Ogunkoya, a senior oil and gas analyst at Tellimer in Lagos, shows that daily oil production in Nigeria has dropped below the levels of 2020, and even below the rate during the 2016-2017 militant attacks.

Local independent oil producers are the most likely bidders for Shell’s assets, and the improved fiscal terms in the PIB strengthen the case for investing in the assets, she says. But local producers “do not have very robust balance sheets,” so “there might be some discounting, to take into account the relatively weak buying power”.

“For the local producers, getting financing to secure these assets would be a huge challenge,” Ogunkoya says, and some of the Nigerian leases have upcoming development costs. Ogunkoya points to local oil producer Seplat as a possible beneficiary of the pressures facing Shell.

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A Lagos market trader catches up on the latest drama

MEDIA

Creative and cash-rich Boosted by lockdown activity, Nigeria’s entertainment and media sector is set to grow and grow

By TEMI’ LAWAL in Lagos Irokotv founder Jason Njoku and media mogul Mo Abudu, are you listening? If Nigeria’s entertainment and media (E&M) industry continues on its growth path, its revenue could nearly double between now and 2025, making the country the fastest-growing E&M market in the world. A report from the consultants at PwC forecasts that the industry will earn $14.8bn in 2025, up from its current revenue of $7.7bn, riding on the growth of its internet-access segment.

As Nigeria’s government enforced a nationwide lockdown to slow the spread of Covid-19, the music industry was not spared.

The internet came to the rescue.

For example, the Nigerian musical superstar Wizkid banked on internet firepower to release his much-anticipated Made in Lagos album. The album has spent over 40 weeks on the Billboard World Albums Chart, peaking at number one album in the world.

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The PwC report examines how changes in consumer behaviour have driven powerful shifts in entertainment and media business models. ‘Foremost among these shifts is the way the streaming boom of 2020 has set the industry on a new growth trajectory,’ it says.

Streaming ahead As a testament to this, the global music-streaming giant Spotify this year rolled out its services to Nigerians. Internet-enabled platforms such as Netflix are making it possible to reach millions more with film and video.

Internet access already accounts for 78% of the industry’s revenue in Nigeria and is projected to steadily grow to 85% in 2025. ‘In fact, we may be moving into a new phase of streaming growth – one that is more measured, more focused on improving the experience of customers, and more intent on retaining and creating value from immense subscriber bases that have materialised,’ the

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

PwC authors say. The traditional TV and home video subsector holds the industry’s second-largest market share, which is projected to fall from 9% to 6% by 2025. Little wonder players in this space are also leveraging the internet wave.

Channels TV, for instance, has looked to the internet to retain its leading status. It has a combined viewership of almost 10 million on Twitter, Facebook, Instagram and YouTube, with well-structured multi-platform streaming services.

Steady growth from internet access, of course, depends on the country’s broadband infrastructure and mobile connectivity. Agbaje Kehinde, a Lagos-based technology expert, tells The Africa Report: “A lot of work needs to be done on internet penetration, quality and affordability if we truly want to optimise the growth and compete with the global market.”

A recent report by Jobberman, one of Nigeria’s most prominent career platforms, projects that the country’s creative industries, which currently employ 4.2 million people, will generate another 2.7 million jobs by 2025. Within this, the E&M sector currently employs 1.5 million Nigerians and will create jobs for almost one million more.

Watch this space and an internetconnected device near you.

CRISTINA ALDEHUELA/AFP

NIGERIA FOCUS /

NIGERIA FOCUS /

FINANCE

Crypto clue to drop in remittances A little sleuthing reveals why Nigeria’s remittances have dropped while cryptocurrency trading has boomed, despite government efforts to replace Bitcoin with the e-naira

Is Nigeria’s rich and tech-savvy diaspora using cryptocurrencies to circumvent a struggling naira when they send money home to support family or invest? The Nigerian Central Bank seems to think so – it is launching an e-naira to compete with Bitcoin and its rivals from October of this year.

Remittances are a big deal in Nigeria. In 2015, the country received more in remittance inflows than it earned from oil, the mainstay of the economy.

Amidst the coronavirus pandemic, remittances have been dropping.

Diaspora remittances sent to Nigeria declined by 27% to $17.2bn in 2020, down from $23.5bn in 2019. This steep decline was $4bn more than the World Bank had projected.

Do the numbers add up?

Meanwhile, cryptocurrency use – be it Bitcoin, Ethereum or dozens of others – has continued to surge, despite the central government’s ban on financial institutions facilitating payments in crypto.

The Africa Report asks if remittances have declined that much, or if many of the transactions have evaded official records, having been rerouted through cryptocurrency trades.

Peter Moses, a UK-based Nigerian finance and investment expert, argues that the shift to cryptocurrency may be responsible for part of the reported decline in remittances for 2020. “As at last

72

is increasingly making that option unattractive and unsustainable.

Many diaspora Nigerians have tended to buy assets in Nigeria such as government treasury bills, bonds and equities, but the yields on these assets in recent years have reached ultra-low levels.

To continue enjoying the kind of returns they have historically had, Moses says, they would be attracted to cryptocurrencies, which have been growing in value, despite crashes and concerns about government regulation.

year, Nigeria was already ranking third globally, after the United States and Russia, of the countries with the highest cryptocurrency trading volumes,” he says.

Nigerians in the diaspora regularly complain about the delays and high transaction fees at banks and international money transfer operators like Western Union and Moneygram.

“As rational economic agents, [Nigerians] opting for cryptocurrency for this purpose would only be natural, as it solves all these problems and offers a better banking experience,” Moses says.

Apart from to cover household expenditure, diaspora Nigerians send money home to invest, procure assets or store value. To attract more remittances from the diaspora, the Nigerian government has created diaspora bonds and sought to leverage diaspora investments. In 2017, the country issued its first diaspora bond, which raised $300m.

But the mismatch in the country’s fiscal and monetary management

Nigeria, top trading nation

BITCOIN TRADING VOLUME ON ONLINE EXCHANGES IN NIGERIA In 1,000 Nigerian Naira (NGN) In U.S. dollars (USD)

20 15 10 5 0 2016

2017

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

2018

2019

2020

SOURCE: STATISTA

By TEMI’ LAWAL in Lagos

Moses compares Nigeria with other African peers … and thinks something doesn’t add up: “If you look at comparable African countries which recorded increased remittance inflow [during the same time period] and the fact that the decline Nigeria experienced was steeper than the World Bank’s projection, it means something was obviously different in the case of Nigeria, and that wouldn’t be Covid-19, a universal crisis.

I therefore think that the decline wasn’t as huge as [was] reported but just a case of what was captured on official records.”

From March to June this year, Nigerians traded Bitcoin in deals worth $225m on Paxful, a cryptocurrency trading platform. With a total $1.5bn in trade volumes and 1.5 million users, the platform declared Nigeria as its biggest crypto market in April this year.

If you can’t beat them, join them seems to be the central bank’s

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thinking. On 27 July Central Bank of Nigeria (CBN) governor Godwin Emefiele announced that it would be launching the e-naira.

Might that be an attempt to divert some of that diaspora crypto flow through government accounts, thereby helping to stabilise Nigeria’s currency?

Ahmed Akinyele, a strategy and investment expert at L.A.T Cleveson, a Lagos-based investment company, tells The Africa Report that the plan to launch a digital currency in October could be a fruitless venture.

No incentive “I don’t think the CBN’s e-naira will capture the diverted remittances or generally boost remittance inflow. Nigeria’s credit rating [as an issuer] is negative, and that repels investors. The macroeconomic variables are also not great.

We have had sluggish growth, inflationary pressures have been on the increase. So, I don’t think there will be a massive adoption of the e-naira,” says Akinyele.

The decision for members of the diaspora will largely depend on the form that the digital currency will

74

TEMILADE ADELAJA/REUTERS

Before the ban, Bitcoin could be used to buy simple gadgets in Lagos

$99m

Peer-to-peer Bitcoin trade by Nigerians in the first quarter of 2021, an increase of about 28% on last year

take, says Moses, who argues that there are just two possible options: either it is given standalone currency status, or will be designed as simple payment tokens.

He argues that, if it is the latter, the same concerns that currently exist regarding unstable and arbitrary exchange rates remain.

But if the e-naira is given currency status, there will then be discussions about how it will be priced.

In other words, if it offers better pricing opportunities so that senders get a good rate when their remittances are converted to the local digital currency, that serves as an incentive.

Diaspora remittance inflow is the second largest source of foreign exchange earnings for Nigeria, and, with the CBN’s micromanagement regime of the exchange rates, it is likely to do what it can to boost foreign reserves. “The

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

naira-for-dollar scheme by the CBN earlier this year was a signal that the remittance inflow was declining. That was then followed by the cryptocurrency ban. That sends the signal that the monetary authority could see how cryptocurrency was diverting remittance inflows through that channel,” says Moses.

Nigerians traded Bitcoin worth $309.6m in 2020. South Africa and Kenya, whose trading volumes were $98.4m and $92.4m respectively, came in second and third.

Since it seemed that the naira-for-dollar scheme had not fully attracted the diverted remittances to the official channels, the CBN reiterated its ban on banks doing crypto transactions.

Many Nigerians, in response, have moved from crypto exchanges to peer-to-peer (P2P) transactions.

The country’s average monthly peer-to-peer Bitcoin volume, for example, has increased to $33.1m from $25.8m last year. In the first quarter of this year, the P2P Bitcoin trade by Nigerians was worth $99.1m – $62m more than second-placed Kenya traded in the same period.

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INTERVIEW

Tony Elumelu BRUNO LEVY FOR JA

‘Insurance should not be a luxury’ The founder of Nigerian group Heirs Holdings told The Africa Report about his big-picture vision of insurance as a boon for the economy and social mobility

By NICHOLAS NORBROOK Heirs Holdings, the holding company controlled by Nigerian entrepreneur Tony Elumelu, launched two insurance companies in June. Hiers Insurance and Hiers Life Assurance will target Nigeria’s burgeoning middle classes.

“Insurance should not be a luxury. And, just as we have democratised other sectors, we will democratise insurance,” Elumelu told the crowd gathered at the official launch of the companies in Lagos in June. “It has been an eight-year long journey, but with the optimism and the resilience that have brought us this far, it has been worth the wait.”

Elumelu remains bullish about the prospects from insurance in the country. “We think that the insurance penetration in Nigeria is very low. We are strategic, long-term investors. We see opportunities where others don’t see,” he said. “Given the size of our economy, the size of our population, given the strong role

76

of insurance in other economies it’s only a matter of time for that to happen here.”

A report by the pan-African credit rating agency Agusto & Co. put insurance penetration in Nigeria at less than 1%. It also identified a key problem: the collapse of the industry’s capital base. While this hit $2.2bn in 2007, it is now less than $1bn.

The regulator has been threatening to enforce a new minimum capital base for some time. With this, and six new entrants into the sector – including Heirs – Agusto argues that the greater competition will spark a fresh round of mergers and acquisitions as the sector consolidates.

Elumelu says that the deeper pools of capital that insurance

‘WE SEE OPPORTUNITIES WHERE OTHERS DON’T SEE ’

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

create are essential to drive other parts of the financing ecosystem.

“We think it’s been sleeping; it’s been idle. We think insurance is so critical in the wider financial intermediation space.”

He says the role of companies like his is to “help jump-start the sector” and that the digital knowhow within the group – which includes leading consumer-facing bank UBA – will give it the edge. “[We’ll be] bringing what we know how to do, prioritising customers, using digital applications to drive business. We think we will rekindle the interest of the Nigerian public in the insurance space.”

Help for homebuyers Elumelu believes insurance is a key transformational tool for Nigerians. “We need to make sure that everyone will leave school.

They start working. They want to buy a house. You want to buy a house easily, and banks are ready to finance this but the fear is always that you foreclose,” said Elumelu. Access to housing and mortgages could thus be partially tackled through insurance. But it will require changes in the laws around land titles and foreclosure, which currently do not encourage investment in the sector.

NIGERIA FOCUS /

FRANCE

Macron’s palace diplomacy rings the changes for France in Africa France’s president is looking to build deeper and wider ties with the continent, boosting business with Nigeria and debating new ways forward elsewhere in Africa

By NICHOLAS NORBROOK

giant CGM CMA, Rodolphe Saadé; the CEO of Accor, Sébastien Bazin; the CEO of TotalEnergies, Patrick Pouyanné; and the head of the Hopitaux de Paris, Martin Hirsch, were also all present.

President Macron’s yardstick for success is deals signed. Building on the accords of September 2020, BUA Group signed a new deal with Axens for the second phase of its

France’s President Emmanuel Macron spent formative months as an intern at the French embassy in Abuja. Now, he wants to better connect French companies to the vast economy that is Nigeria. His plan includes some good oldfashioned economic diplomacy.

As part of the ‘Choose France’ business summit at Versailles in June, Macron invited six Nigerian business heavyweights to a private meeting, bringing top-level French CEOs to the table too. It is part of a multi-year campaign to chase big contracts in anglophone Africa.

A highlight, at the 2020 summit, was a contract signed between French petrochemical group Axens and Nigeria’s BUA Group to provide the technology for the latter’s multibillion-dollar refinery.

France’s efforts appear to have been successful: the rarely spotted Mike Adenuga of Globacom (glo); Africa’s richest man, Aliko Dangote; UBA chairman Tony Elumelu; BUA chairman Abdul Samad Rabiu; property magnate Gilbert Chagoury and Access Bank boss Herbert Wigwe all gathered in Versailles. In addition – unlike at a previous attempt at a FrancoNigerian business summit – the French participation was similarly high: the CEO of French logistics

78

JONATHAN SARAGO/MEAE

Petits fours, big deals

Fallen kings make way for modern magnates at the Choose France summit in the Palace of Versailles

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

refinery project. But the star of the show was Wigwe, who announced the negotiation of a French banking licence for Access Bank, which will allow him to open a full-service bank, not just a representative office, in France. Meanwhile, Elumelu’s Heirs Holdings is said to be pushing to transform its Paris representative office into a fullservice banking entity.

The Versailles summit also allowed for the high-level networking that France’s minister of foreign trade, Franck Riester, has been pushing. Adenuga, for example, was introduced to French satellite communications group Eutelsat. That meeting has borne fruit, with a partnership that was due to be signed in late September at a special Lagos-themed event at the Elysée Palace in Paris. It should see the deployment of 500 wifi relay stations in rural areas of Nigeria that will be connected to a Eutelsat satellite. Likewise, French group Vocalcom, which already manages the call centre software for Globacom in Nigeria, hopes to cement a new deal in the mobilemoney sector with glo.

It has not been entirely plain sailing for the France-Nigeria relationship. A deal between BUA Group and St Gobain to create a

plasterboard factory in Nigeria fell through, with BUA’s Rabiu choosing a Turkish firm instead. The initial deal had been announced in June.

Sources inside the Elysée [the presidential residence] stress that this simply underlines both the tough competitive outlook for all companies globally, French included, and the need for exactly this kind of relationship-building diplomacy to build closer ties.

Lagos comes to the Elysée The Elysée Palace event is a way for President Macron to keep the Franco-Nigerian Business Council active. It also marks the end of France’s Africa2020 cultural season, for which the Elysée Palace and courtyard has been transformed into a immersive sound and visual replica of Lagos for the enjoyment of Macron and some 100 guests.

France’s Nigeria strategy is

$5bn

JONATHAN SARAGO/MEAE

After France agreed to provide Sudan with a $1.5bn bridging loan to help the country clear its arrears with the IMF, Macron indicated at a conference in May that he was open to fully clearing Sudan’s $5bn debt to France

part of a larger reset that the European country is seeking in its relations with the continent.

With this in mind, France will be holding a France-Africa Summit in Montpellier on 8 October. It will attempt to bring new voices into what is an occasionally fraught relationship, weighed down by colonial baggage and current-day flashpoints over the role of French security forces in the Sahel and of France’s central bank in the management of the CFA currency regimes. Led by Cameroonian philosopher Achille Mbembe, a series of France-Nigeria Dialogues will bring the perspective of youth and diaspora groups into the conversation.

This marks a wider and deeper engagement with the continent for France. In May, Paris held a conference on the financing of Africa’s economies, at which it announced debt relief for Sudan. It also held a separate event in support of Sudan’s Prime Minister Abdalla Hamdok in order to help Sudan better reintegrate into the global economic system. France took the opportunity to push for a new deal for the continent, asking for a redistribution of the recent disbursal of IMF special drawing rights.

Trade minister Franck Riester meets messrs Rabiu, Dangote and Elumelu

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

79

AFRICAN

BANKS A Shaken, like the rest of the continental economy, by the Covid-19 crisis, Africa’s big banks have nevertheless shown adaptability during this period, and some are already bouncing back

By PIERRE-OLIVIER ROUAUD

North Africa

Central Africa

West Africa

Southern Africa

East Africa

53 59

NUMBER OF BANKS

BY REGION

32

W

Support for SMEs Apart from the repercussions of the crisis on their own activities, banks have been in the front line during this extraordinary period. Many governments have used the banking channel to help cushion the shock by targeting small and medium-sized enterprises (SMEs). From April 2020, many banks on the continent put in place measures to suspend debt payments or restructure loans – for example, KCB (#40) in Kenya.

These measures, says one bank manager, were made possible “thanks to the action of the government, the Central Bank and international institutions such as the World Bank and the IMF”. In Côte d’Ivoire, a $300m loan granted by the World Bank in February is to be used to support credit to SMEs through the creation of a dedicated credit guarantee fund.

The upper echelons of our ranking show little change.

The top 12 banks remain the same, with a few modest ranking adjustments. Once again, only three countries are represented at the top of the ranking, namely Egypt, Morocco and South Africa, including the unchanging leader, Standard Bank Group (#1).

82

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

9 47

TOTAL PROFITS ($bn) 30

21.5

21.6

2015

2016

25.2

24.9

25.2 17.5

20

10

SOURCE: THE AFRICA REPORT RESEARCH

e are living in an unprecedented period.

Like the rest of the planet, the African continent has been on an economic roller coaster since the beginning of 2020. At a time when we seem to be approaching the end of the crisis period, the African Development Bank forecasts a growth rate of 3.4% in 2021 and 4.6% in 2022 in sub-Saharan Africa, after growth of just 2.1% last year.

In 2020, all the countries on the continent saw their growth slump or even collapse. These poor figures are reflected in the net banking income (NBI) of the 200 banks in our ranking. This key indicator – which measures the difference between revenue and expenditure – plunged, cumulatively, by 14.7% in 2020 to $71.4bn. A historic drop that follows the record high reached in 2019, with a global NBI of $83bn.

At the same time, the total balance sheet of these 200 banks is up 12.4% to $1.97trn. This sharp increase, which was rather unexpected during this recessionary period, can be explained, in large part, by the effect of the so-called ‘unconventional’ monetary policies put in place to deal with the crisis. These policies include the provision of large amounts of liquidity by central banks and an often historic cut in key interest rates.

2017

2018

2019

2020

TOTAL ASSETS BREAKDOWN $1.46trn

$1.74trn

$1.61trn

$1.76trn

$1.97trn

2016

2017

2018

2019

2020

In terms of relative share, Southern African banks, mainly composed of the 14 South African banks ranked, once again dominate our Top 200 in terms of total balance sheet. However, at 42% of the total, their share has fallen by 4% to the benefit of North African (35% of the total) and West African banks (16%), whose relative weight has increased by 2% each. The share of East African banks has remained stable at 16% of the total.

Surprisingly, this year of crisis was not marked by any major bank defaults. This is in part due to the measures to strengthen prudential ratios implemented in recent years.

Tiémoko Meyliet Kone, governor of the Banque Centrale des États de l’Afrique de l’Ouest, said that, in 2020, “the average levels of solvency ratios, both for credit institutions and large decentralised financial systems, were higher than the minimum standards in force”.

This resilience does not hide the fact that it has been a tough year for the banking sector, with rising risk costs, loan defaults and a decline in activity due to the depression in sectors such as tourism. On average, the profitability of

TOTAL LOANS ($bn) 416

336

367

255

106

200

0

35 10

10

2020

511

455 405

152

50

0

140

131 53 11

39 11

40

11

2020 2019

2018

0

2.58 -21

%

2020 assets ($bn)

Banco Angolano de Invest.

Fidelity Bank Ghana

4.60 -15

1.58 -14

1.00 -19

TOP 10 MOST PROFITABLE BANKS Africa uth So

cco oro Attijariwafa Bank

$539m

21

Firstrand Banking Group

Standard Bank Group

$2.17bn

$2.09bn

National Bank Banque of Egypt Misr

$1.26bn

15

12

12 12 4.5 1

13

4.6 1 2016

5.4 0.9

2018

$889m

5.9

5.4 1.2

$1.2bn

Commercial Int. Bank

14 16

Qatar National Bank Alahli

$560m

29 30

30 17

100

35

35

300 200

0.92

14

13

TOTAL NET INTEREST INCOME BREAKDOWN ($bn)

400

0.93

85

77

2017

2016

500

4.62

212

300

100

1.00

2.57 -43

357

133

2.59

United Equity BCDC United Bank of Orabank Bank for (Ex-Equity Bank for Khartoum Sénégal Africa Bank Africa Côte Burkina Faso Congo) d’Ivoire

Banco Banco de Millennium Banco Fomento Atlântico Sol de Angola (Angola) (Angola)

530

319

200

+73

TOP FIVE FOR ASSET DECLINE

434

440

400

+78

2017

435

462

9 2019

2018

AFRICA’S DEPOSITS ($bn)

500

46

43 10

66

9

2016

600

+102

1.3 2020

2019

2017

our Top 200 banks – net profit divided by NBI – is 24.6%, compared to 30% last year, which is the worst ratio since our ranking began. McKinsey estimates that the return on capital for African banks has been halved to 7%. However, interim results for 2021 often showed a marked recovery in profits, such as with Standard Bank, whose profit for the first half of the year rebounded by 41%.

Finally, beyond the ratios, one of the consequences of this crisis has been the acceleration of the digitalisation of banking processes and products. At the Kenyan bank KCB, 98% of transactions in the third quarter of 2020 were carried out online. And the share of mobile payments in the consumer-to-business sector increased from 16% to 44% in one year.

This trend has been driven by traditional institutions and networks, but also by new banks and fintechs. The past 18 months has seen record fundraising in this area, including the $200m raised by Wave, a company based in Senegal, which has become the first unicorn in Francophone Africa.

Zenith Guaranty Bank Trust Bank

$734m

$716m

Zenith Bank Nigeria

$572m

Eg

yp

t

g e ria

34

86

97

102

+106

129

241

100

+231

244

260

300

2020 assets ($bn)

Ni

500

%

M

470

400

TOP FIVE FOR ASSET GROWTH

453 424

METHODOLOGY We compiled our ranking of Africa’s Top 200 banks by sending out detailed questionnaires to more than 2,100 financial institutions spread across the continent.

Their replies were used to create a systematic ranking of Africa’s top banks based on total asset size. Our list features only the top 200 banks & 100 insurers. All data is communicated to us by the banks or their parent companies. These figures relate to the 2020 financial year. Where that information was unavailable we used 2019 figures, indicated in the rankings by italics. Banks are removed from the list if they do not supply data during two consecutive years. The data was converted to US$ using the exchange rates applicable on 31 December 2020. Numbers in the ‘Rank 2020’ column refer to a bank’s position in The Africa Report’s Top 200 Banks ranking of October 2020.

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

83

‘Access Bank has a vision to be Africa’s gateway to the world.’

1-40 Rank 2021

Rank 2020

Diff.

Total assets

Net interest income

Loans

Deposits

1

1

2

2

South Africa

172 822 496

7 408 482

79 148 301

103 042 788

South Africa

131 453 010

4 288 324

81 281 103

104 734 073

3

4

+1

National Bank of Egypt

Egypt

126 860 000

4

3

-1

Standard Bank of South Africa

South Africa

113 225 433

ND

45 669 600

101 488 000

4 537 977

76 706 759

89 979 882

5

6

+1

Nedbank Group

South Africa

83 795 788

6

5

-1

Absa Bank

South Africa

79 134 860

2 803 844

57 538 564

65 071 974

2 264 144

55 345 583

54 235 140

Bank

Country

0

Standard Bank Group

0

Firstrand Banking Group

7

8

+1

Banque Misr

Egypt

77 877 598

1 815 598

21 273 922

58 851 182

8

7

-1

Attijariwafa Bank

Morocco

63 071 311

2 648 722

37 047 642

39 591 304

9

9

0

Banque Centrale Populaire

Morocco

49 323 307

2 141 248

28 376 952

36 818 507

10

11

+1

Rand Merchant Bank

South Africa

43 172 874

567 332

ND

ND

11

10

-1

Investec Group Ltd

South Africa

37 508 760

968 047

19 603 502

25 533 576

12

12

0

BMCE Bank of Africa

Morocco

36 848 848

1 554 507

21 556 387

22 990 781

13

-

-

Fonds National d’Investissement

Algeria

30 897 812

38 921

22 418 418

ND

14

13

-1

First National Bank of South Africa

South Africa

29 198 892

ND

ND

ND

15

15

0

Banque Extérieure d’Algérie*

Algeria

27 273 407

1 038 423

18 291 908

17 979 805

16

16

0

Commercial International Bank

Egypt

27 138 029

1 596 687

7 584 325

21 640 378

17

14

-3

Banque Nationale d’Algérie

Algeria

25 939 643

661 876

13 130 480

ND

18

17

-1

Ecobank Transnational Inc.

Togo

25 939 473

1 679 765

9 239 948

18 296 952

19

18

-1

Commercial Bank of Ethiopia

Ethiopia

25 504 470

ND

ND

18 764 550

Access Bank Group

Nigeria

22 654 142

686 300

9 424 523

14 583 162

Zenith Bank

Nigeria

22 136 120

782 170

13 937 168

7 253 260

20

19

-1

21

21

0

22

20

-2

Crédit Populaire d’Algérie

Algeria

21 020 588

677 654

12 558 669

12 541 076

23

26

+3

United Bank for Africa Group

Nigeria

20 091 728

1 063 953

6 668 485

15 905 778

24

23

-1

First Bank of Nigeria

Nigeria

20 068 363

656 715

5 787 069

12 775 206

25

22

-3

Access Bank Nigeria

Nigeria

19 901 197

517 497

7 357 266

12 613 463

26

25

-1

Zenith Bank Nigeria

Nigeria

18 596 216

627 394

6 889 870

11 218 453

27

24

-3

Qatar National Bank Alahli

Egypt

18 107 739

910 445

10 463 544

14 835 776

28

28

0

Arab African International Bank

Egypt

14 266 534

350 609

4 145 212

9 775 581

29

29

0

30

32

+2

31

27

-4

MCB Group

Mauritius

13 127 252

541 605

5 944 311

9 637 558

32

33

+1

Guaranty Trust Bank

Nigeria

12 905 545

662 074

4 339 730

9 159 323

33

30

-3

Soc. Gén. Marocaine de Banques

Morocco

12 420 807

554 323

9 880 669

7 469 537

34

31

-3

MCB

Mauritius

11 986 487

475 440

5 594 589

9 167 569

35

35

0

Bank of Africa Group

Senegal

10 730 355

705 679

5 125 276

7 684 224

36

36

0

Capitec Bank

South Africa

10 678 472

1 035 726

39 019 888

8 087 464

37

40

+3

CIH Bank

Morocco

9 943 657

306 379

6 992 413

5 969 447

38

44

+6

Equity Bank Group

Kenya

9 237 349

501 854

4 348 409

6 741 287

39

34

-5

WesBank

South Africa

9 099 972

ND

ND

ND

40

37

-3

KCB Group

Kenya

8 989 071

873 564

5 416 821

6 981 738

Crédit Agricole du Maroc

Morocco

13 768 445

452 995

9 956 691

9 323 654

United Bank for Africa Nigeria

Nigeria

13 592 444

412 972

4 730 719

9 981 013

2020 results in thousands of US dollars; *in italics 2019 results; ND: no data

84

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

CHEVENING

HERBERT WIGWE CEO of Access Bank Group (#20)

It’s probably because we started in the mobile sector that we’re moving up fast in financial services.

More than 60 million people worldwide trust in Orange Money. Since its launch in Côte d’Ivoire 13 years ago, Orange Money has secured itself a place as a world leader in the financial services sector and aims to pave the way for financial inclusion in Africa and the Middle East. #OrangeMoney

Orange, limited company (“Société Anonyme”) with a share capital of €10,640,226,396 – Registered office: 111, quai du Président-Roosevelt 92130 – Issy-les-Moulineaux, France. Trade Register No. 380 .129 .866 Nanterre. Exclusive agent in banking and payment services for Orange Bank – Orias n° 13 001 387 (www.orias.fr).

$223 m

In February, National Bank of Kuwait – Egypt (#76) announced an EGP3.5bn increase in issued and paid-up capital.

41-80 Rank 2021 41

Rank 2020

Diff.

39

-2

42

46

+4

43

43

0

44

41

45

53

46

47

47

52

48

-

-

Bank

Country

Kenya Commercial Bank

Kenya

Total assets

Net interest income

8 632 315

607 662

Loans

Deposits

4 982 259

6 323 235

Al Barid Bank

Morocco

7 493 274

231 361

792 131

6 380 325

Atlantic Business International

Côte d’Ivoire

7 434 269

354 399

3 884 338

4 773 555

-3

BMCI

Morocco

7 395 021

338 785

5 646 037

4 953 754

+8

HSBC Bank Egypt

Egypt

7 389 203

407 542

2 303 439

5 722 653

+1

Faisal Islamic Bank of Egypt

Egypt

7 288 927

293 157

ND

ND

+5

Fidelity Bank

Nigeria

7 198 766

271 761

3 461 137

4 434 458

SBM Holdings Ltd

Mauritius

7 115 371

276 847

3 354 701

5 596 686

49

51

+2

Banque Int. Arabe de Tunisie

Tunisia

6 595 149

347 136

4 184 602

6 562 973

50

54

+4

BGFIBank Holding Corp.

Gabon

6 576 790

368 390

4 185 060

4 276 690

51

45

-6

Bank of Alexandria

Egypt

6 484 956

382 039

3 042 357

5 392 248

52

50

-2

Crédit du Maroc

Morocco

6 248 886

249 352

4 584 084

4 921 832

53

55

+2

54

64

+10

55

57

+2

56

-

-

57

56

58

49

Stanbic IBTC Chartered Bank

Nigeria

6 187 464

180 894

1 631 613

2 171 222

Oragroup SA

Togo

6 111 616

290 589

2 963 711

3 971 970

Equity Bank Kenya

Kenya

6 075 613

364 187

2 848 893

4 520 408

West African Development Bank

Togo

5 997 586

145 385

4 051 690

63 591

-1

Union Bank of Nigeria

Nigeria

5 718 578

271 790

1 508 680

2 428 361

-9

Ecobank Nigeria

Nigeria

5 707 318

241 989

2 300 929

3 696 423

59

42

-17

SBM Bank Mauritius

Mauritius

5 656 338

213 815

2 733 140

4 715 029

60

72

+12

Bank Audi Egypt

Egypt

5 429 610

195 822

1 924 021

4 777 210

61

62

+1

First City Monument Bank

Nigeria

5 372 407

334 038

2 147 437

3 281 112

62

59

-3

Arab International Bank*

Egypt

5 359 670

80 342

548 672

3 786 645

63

60

-3

Banque Nationale Agricole

Tunisia

5 321 472

254 575

4 400 026

323 888

64

66

+2

Co-operative Bank of Kenya

Kenya

4 887 395

487 123

2 608 371

3 445 537

65

61

-4

Banque de l’Habitat de Tunisie

Tunisia

4 844 562

206 575

3 728 627

2 616 854

66

107

+41

NCBA Group (ex-CBA)

Kenya

4 804 381

231 989

2 261 331

3 835 691

67

63

-4

Al Baraka Bank Egypt

Egypt

4 800 000

198 600

ND

ND

68

132

+64

69

78

+9

70

48

-22

71

68

-3

72

70

73 74

Bank of Khartoum

Sudan

4 621 989

ND

ND

ND

Abu Dhabi Islamic Bank – Egypt

Egypt

4 615 761

199 066

ND

3 984 991

Banco Angolano de Investimentos

Angola

4 597 950

351 830

554 170

4 084 550

Egyptian Gulf Bank

Egypt

4 572 000

65 515

1 503 000

3 824 000

-2

Société Tunisienne de Banque

Tunisia

4 556 330

229 240

3 350 961

3 104 480

74

+1

Société Générale Côte d’Ivoire

Côte d’Ivoire

4 482 755

306 796

3 007 878

3 751 745

69

-5

Banco de Poupança e Crédito*

Angola

4 149 383

(31 469)

85 536

2 952 747

75

76

+1

AfrAsia Bank

Mauritius

3 958 968

94 980

697 914

3 723 246

76

71

-5

National Bank of Kuwait – Egypt

Egypt

3 944 938

167 321

2 189 387

3 153 437

77

82

+5

Housing and Development Bank

Egypt

3 893 821

189 999

1 202 768

2 980 043

78

75

-3

Diamond Trust Bank Kenya

Kenya

3 867 992

228 798

1 898 195

2 713 316

79

80

+1

Attijari Bank

Tunisia

3 812 599

200 685

2 394 951

2 805 521

80

88

+8

Export Development Bank of Egypt

Egypt

3 599 553

26 769

1 982 905

2 806 808

2020 results in thousands of US dollars; *in italics 2019 results; ND: no data

86

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

First National Bank of Botswana (#106) recorded a 23% drop in profit after tax for the six-months ended 31 December 2020.

81-120 Rank 2021

Rank 2020

Diff.

Bank

Country

81

94

+13

Ahli United Bank Egypt

Egypt

3 575 791

82

73

-9

Absa Bank Mauritius

Mauritius

3 526 256

90 243

1 444 799

2 725 172

83

79

-4

Absa Bank Kenya

Kenya

3 450 866

211 857

1 900 581

2 319 672

84

85

+1

Suez Canal Bank

Egypt

3 445 508

98 508

1 127 038

2 812 724

85

84

-1

Sterling Bank

Nigeria

3 390 586

213 200

1 557 718

2 481 679

Amen Bank

Tunisia

3 386 340

147 764

2 215 009

2 162 593

Crédit Agricole Egypt

Egypt

3 291 494

182 567

1 628 407

2 616 600

Land Bank*

South Africa

3 282 841

46 309

2 955 752

ND

86

86

0

87

90

+3

88

77

-11

Total assets

Net interest income ND

Loans

Deposits

1 883 804

ND

89

87

-2

HSBC Mauritius

Mauritius

3 192 345

35 333

1 165 330

2 230 515

90

91

+1

First National Bank of Namibia

Namibia

3 129 551

137 377

2 046 473

2 621 890

91

81

-10

Banco BIC

Angola

3 098 702

395 894

1 000 886

2 033 422

92

95

+3

Banque Atlantique – Côte d’Ivoire

Côte d’Ivoire

3 090 257

137 385

1 683 458

2 322 213

93

96

+3

CRDB Bank

Tanzania

3 083 303

101 553

1 689 511

2 319 727

94

97

+3

National Microfinance Bank

Tanzania

3 052 182

243 232

1 766 982

2 289 946

95

104

+9

Ecobank Côte d’Ivoire

Côte d’Ivoire

2 996 376

161 794

1 166 427

1 829 937

96

92

-4

Stanbic Holdings

Kenya

2 990 210

116 436

1 786 330

2 365 727

97

89

-8

Société Générale Algérie

Algeria

2 986 059

172 674

1 622 088

2 405 298

98

93

-5

Standard Chartered Bank Kenya

Kenya

2 963 006

242 870

1 105 868

2 334 132

99

118

+19

100

98

-2

Coris Bank International

Burkina Faso

2 926 915

141 716

1 606 581

1 899 144

Bank Windhoek

Namibia

2 923 839

166 742

2 230 566

2 205 133

101

-

-

Stanbic Bank Kenya

Kenya

2 902 736

115 889

1 439 447

1 982 990

102

121

103

115

+19

NSIA Banque Côte d’Ivoire

Côte d’Ivoire

2 897 630

133 451

1 799 269

1 768 179

+12

Rawbank

DRC

2 894 197

203 545

788 316

2 217 134

Banque de Dévelop. du Mali

Mali

2 855 043

118 038

1 132 083

1 637 322

I&M Bank

Kenya

2 776 314

184 834

1 499 470

2 141 286

104

145

+41

105

100

-5

106

106

0

First National Bank of Botswana

Botswana

2 763 535

122 542

1 344 867

2 121 851

107

99

-8

Arab Tunisian Bank

Tunisia

2 730 162

96 681

1 889 594

2 202 915

108

114

+6

Ecobank Ghana

Ghana

2 711 764

232 740

846 275

2 006 886

109

102

-7

African Banking Corp. Holdings*

Botswana

2 627 400

231 400

644 100

723 700

110

113

+3

GCB Bank

Ghana

2 627 317

256 494

614 176

1 928 804

111

-

-

Equity BCDC

DRC

2 594 255

88 079

ND

ND

112

83

-29

Banco Millennium Atlântico

Angola

2 577 944

ND

698 597

2 085 424

113

65

-48

Banco de Fomento Angola

Angola

2 572 629

423 055

446 722

1 860 514

114

125

+11

Wema Bank

Nigeria

2 556 542

109 738

939 799

2 100 720

115

101

-14

116

110

-6

117

103

-14

118

122

+4

119

116

-3

120

133

+13

Banco Comercial e de Invest.

Mozambique

2 530 790

201 870

900 317

2 007 550

Banque de Tunisie

Tunisia

2 487 248

140 369

1 806 193

1 517 934

Banco Int. de Moçambique

Mozambique

2 450 340

211 824

635 261

1 837 448

Citibank Nigeria*

Nigeria

2 399 611

57 351

420 807

816 918

Union Internationale de Banques

Tunisia

2 383 331

148 401

2 152 254

1 893 923

Stanbic Bank Uganda

Uganda

2 316 302

132 514

976 955

1 483 239

2020 results in thousands of US dollars; *in italics 2019 results; ND: no data

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

87

‘MSMEs** hold the key to the inclusive and sustainable development of our economy.’

ABENA OSEI-POKU MD of Absa Ghana (#126)

Rank 2021

Rank 2020

Diff.

121

128

+7

Bank

Country

Total assets

Société Ivoirienne de Banque

Côte d’Ivoire

2 289 422

Net interest income

Loans

Deposits

139 253

1 598 584

18 063 172

122

109

-13

Awash International Bank

Ethiopia

2 279 523

ND

1 462 205

1 896 011

123

105

-18

Standard Bank Namibia

Namibia

2 257 151

80 134

1 505 708

1 651 870

124

130

+6

Union National Bank Egypt

Egypt

2 175 899

79 782

781 128

1 591 647

125

140

+15

Stanbic Bank Ghana

Ghana

2 166 290

105 554

743 544

1 643 481

126

119

-7

Absa Ghana

Ghana

2 133 026

164 083

761 844

1 106 161

127

129

+2

CBAO Groupe Attijariwafa Bank

Senegal

2 108 835

158 273

1 472 608

1 765 835

128

112

-16

BNP Paribas El Djazair

Algeria

2 075 056

119 925

1 135 007

1 604 222

129

111

-18

Gulf Bank Algeria

Algeria

2 036 696

119 095

1 275 280

1 534 207

130

143

+13

Société Générale Cameroun

Cameroon

2 008 689

147 236

1 245 790

1 585 820

131

123

-8

132

117

-15

133

124

-9

134

120

-14

135

126

136

127

Afriland First Bank*

Cameroon

1 986 143

110 399

868 789

1 502 290

Banque Al Baraka d’Algérie

Algeria

1 976 988

85 202

ND

ND

Attijariwafa Bank Egypt*

Egypt

1 969 082

ND

1 096 990

1 331 286

African Bank

South Africa

1 955 608

ND

ND

ND

-9

BGFIBank Gabon*

Gabon

1 934 436

108 942

1 268 921

1 578 465

-9

Standard Bank Mozambique

Mozambique

1 895 575

117 877

500 566

1 476 192

137

134

-3

Absa Bank Botswana

Botswana

1 883 400

120 172

1 273 218

1 456 251

138

153

+15

Banque Nat. d’Investissement

Côte d’Ivoire

1 853 859

97 185

915 151

1 648 878

139

147

+8

Bank of Africa – Burkina Faso

Burkina Faso

1 847 898

88 576

1 036 487

1 423 371

140

138

-2

Société Générale Sénégal

Senegal

1 808 539

130 317

1 204 862

1 477 264

141

142

+1

Ecobank Burkina Faso

Burkina Faso

1 775 954

89 786

718 218

1 392 785

142

152

+10

Standard Bank Mauritius

Mauritius

1 750 166

34 810

187 758

1 604 722

143

154

+11

Banque Zitouna

Tunisia

1 736 116

94 225

1 388 840

1 464 911

144

144

0

Stanbic Bank Botswana

Botswana

1 720 696

62 765

799 267

1 278 144

145

135

-10

Dashen Bank

Ethiopia

1 742 711

119 397

1 073 984

1 365 698

146

139

-7

147

137

-10

148

141

-7

Bank of Africa – Benin

Benin

1 688 221

84 685

752 802

1 146 875

149

131

-18

Fidelity Bank Ghana

Ghana

1 577 396

169 460

415 550

1 107 958

BICICI

Côte d’Ivoire

1 554 692

84 739

900 742

1 338 099

Bank of Baroda Kenya

Kenya

1 513 444

69 388

433 481

1 228 502

Investec Bank South Africa

South Africa

1 482 911

57 245

ND

ND

150

168

+18

151

155

+4

152

-

-

Investec Bank Mauritius

Mauritius

1 698 411

30 808

883 832

986 918

Misr Iran Development Bank*

Egypt

1 692 660

39 234

317 104

1 488 546

153

151

-2

Nedbank Namibia

Namibia

1 476 622

50 520

833 028

843 065

154

165

+11

Bank of Abyssinia

Ethiopia

1 452 415

98 591

939 453

1 215 933

Zenith Bank Ghana

Ghana

1 447 892

178 634

189 191

936 807

Bank One

Mauritius

1 409 816

32 490

509 189

1 185 394

155

167

+12

156

148

-8

157

157

0

Standard Chartered Bank Ghana

Ghana

1 365 465

173 875

288 203

977 834

158

163

+5

Calbank

Ghana

1 347 259

117 070

408 186

707 973

159

160

+1

Cooperative Bank of Oromia

Ethiopia

1 340 031

107 146

748 883

1 147 386

160

156

-4

Natixis Algérie

Algeria

1 332 001

65 583

612 331

1 050 782

2020 results in thousands of US dollars; *in italics 2019 results; ND: no data **micro, small and medium enterprise

88

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

LINKEDIN

121-160

Centenary Rural Development Bank (#171) lost more than $992,000 since 2019 due to fraud committed by staff members.

161-200 Rank 2021

Rank 2020

Diff.

161

162

+1

Bank

Country

Standard Bank de Angola

Angola

Total assets 1 329 226

Net interest income 77 293

Loans

Deposits

211 867

1 044 418

162

-

-

Orabank Togo

Togo

1 320 527

64 883

677 325

774 612

163

178

+15

Bank of Kigali

Rwanda

1 304 004

102 468

851 100

790 811

164

150

-14

Standard Chartered Bank Botswana

Botswana

1 287 675

63 012

743 153

1 085 069

165

159

-6

Development Bank of Nigeria

Nigeria

1 284 903

55 854

558 540

ND

166

-

-

167

184

+17

168

161

-7

Unity Bank

Nigeria

1 284 173

55 689

527 431

930 766

Bank of Africa – Côte d’Ivoire

Côte d’Ivoire

1 283 822

76 317

562 460

852 269

UBCI

Tunisia

1 280 627

89 104

922 037

975 415

Société Générale Burkina Faso

Burkina Faso

1 260 750

64 300

908 240

1 033 788

Stanbic Bank Zambia

Zambia

1 217 822

109 053

303 676

991 589

169

-

-

170

175

+5

171

188

+17

Centenary Rural Development Bank

Uganda

1 214 960

194 538

528 903

846 900

172

182

+10

Trust Merchant Bank

DRC

1 181 000

68 000

401 000

1 037 000

173

171

-2

National Bank of Kenya

Kenya

1 154 259

63 868

505 407

902 987

174

177

+3

SCB Cameroun

Cameroon

1 140 696

100 966

609 155

910 080

175

-

-

Orabank Côte d’Ivoire

Côte d’Ivoire

1 125 069

37 490

498 275

576 134

176

-

-

Orabank Mauritanie

Mauritania

1 107 451

65 582

607 584

932 921

177

172

-5

Hibret Bank (Ex-United Bank)*

Ethiopia

1 102 329

ND

673 860

902 057

178

174

-4

Mercantile Bank*

South Africa

1 086 197

66 428

658 603

864 664

179

183

+4

NIB International Bank

Ethiopia

1 084 099

72 163

652 839

859 113

180

185

+5

Bank of Africa – Mali

Mali

1 083 624

60 491

471 941

756 727

181

180

-1

FMB Capital Holdings

Malawi

1 078 580

127 261

409 710

757 729

182

176

-6

183

195

+12

184

-

-

185

186

+1

Prime Bank

Kenya

1 076 106

62 679

327 933

802 524

Bank of Africa – Sénégal

Senegal

1 050 170

56 094

522 800

697 850

Bridge Bank Group

Côte d’Ivoire

1 039 651

52 468

525 053

843 740

Ecobank Bénin

Benin

1 028 754

ND

ND

ND

186

136

-50

Banco Sol

Angola

1 002 461

63 498

309 413

792 994

187

-

-

United Bank for Africa Côte d’Ivoire

Côte d’Ivoire

1 000 335

55 348

367 650

706 642

188

-

-

Access Bank Ghana

Ghana

989 533

104 970

176 875

654 792

189

-

-

CFG Bank

Morocco

982 882

31 696

623 010

475 588

190

194

+4

Wegagen Bank

Ethiopia

975 246

112 332

605 061

768 453

191

196

+5

Banco Comercial do Atlântico

Cap-Vert

973 792

37 586

572 473

869 700

192

-

-

Agricultural Development Bank

Ghana

971 742

94 181

325 057

727 819

193

190

-3

Citibank NA Kenya

Kenya

968 730

80 113

337 658

720 658

194

193

-1

Absa Bank Uganda

Uganda

956 711

108 026

352 871

636 579

Devel. Finance Co. of Uganda

Uganda

944 616

82 146

479 335

700 744

Steward Bank*

Zimbabwe

940 866

24 852

55 046

751 330

195

-

-

196

191

-5

197

-

-

United Bank for Africa Cameroun

Cameroon

937 076

61 601

169 990

417 740

198

-

-

SBI Mauritius

Mauritius

936 953

19 198

404 422

510 190

199

-

-

United Bank for Africa Burkina Faso Burkina Faso

929 705

49 838

299 623

662 661

200

-

-

Orabank Sénégal

923 776

38 883

483 152

712 799

Senegal

2020 results in thousands of US dollars; *in italics 2019 results; ND: no data

90

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

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INTERVIEW

Lungisa Fuzile

CEO, Standard Bank of South Africa

‘There is pent-up demand’ The CEO of South Africa’s largest bank by assets is optimistic about the country’s growth prospects thanks to the Covid-19 vaccination roll-out and President Ramaphosa’s reforms. He outlines the bank’s strategy for a sustainable recovery

92

Thumbs up for Godongwana

SANI

Further cause for optimism, according to Fuzile, comes from Ramaphosa’s appointment of Enoch Godongwana as finance minister in August. Analysts such as Jacques Nel at NKC African Economics have argued that Godongwana has shown “statist impulses” in positions he has taken as head of the African National Congress (ANC)’s economic transformation committee.

In July 2020, the committee released a discussion document saying that Covid-19 had ‘legitimised a greater and more active role of the state in guiding the economy’.

Godongwana has given few early hints of his reform priorities. Fuzile’s view is that the new finance minister understands and E BAS

South African reforms have the potential to lift the country’s rate of growth above historical trend levels, Lungisa Fuzile, CEO of Standard Bank of South Africa (#4), tells The Africa Report. Structural reforms being carried out by President Cyril Ramaphosa mean that the country’s long-term growth rate of 2% is likely to “tick up” over the coming years, says Fuzile, a former director general of the national treasury. This year, the country is poised for a “somewhat strong rebound” to a GDP growth rate of about 4% after the 2020 Covid-19 lockdowns, he adds: “The internal dynamics of the South African economy are positive.

There is pent-up demand.”

The government has been “diligent” in pursuing reforms, says Fuzile, pointing to Ramaphosa’s decision in June to allow private companies to generate their own power up to 100MW without a licence. That is likely to reduce corporate reliance on state provider Eskom and the risk of load-shedding this entails. The move “opens up the path to investment in renewable energy,” Fuzile says.

“That’s huge.”

Fuzile argues that the global economic backdrop is likely to remain favourable, despite signs of a

Chinese economic slowdown. Progress towards collective Covid-19 immunity through vaccination means that Europe may be able to compensate for weaker Chinese growth, he says. He is confident that South Africa can catch up with European vaccination rates. Most businesses in the country have reopened, he says, and there is “a bit of a positive mood”. “Supply constraints on Covid-19 vaccines in South Africa now seem a thing of the past.”

PIERR

By DAVID WHITEHOUSE

can navigate complex ANC policy-making processes.

“He is not a newcomer to ANC politics or economic policymaking,” Fuzile says, pointing to Godongwana’s role in putting the finances of the Eastern Cape provincial government on a sustainable footing. He describes Godongwana as “very decisive” and “an insider through and through”.

Some analysts question whether Ramaphosa’s reforms go far enough, and whether he will be able to sustain the momentum. South Africa is “not moving on the toughest structural reforms,” says Charles Robertson, chief economist at Renaissance Capital in London. South Africa will reach 4% growth this year, Robertson says. He is encouraged by investments in the country by Amazon and Ford this year. But, he argues, 40 years of South African history show that such a growth rate is unlikely to be maintained.

2% to 3% – but that, he adds, is not enough to make people feel better off.

Standard Bank Group (#1), which is Africa’s largest bank by assets, has 9.7 million customers in South Africa.

It recovered strongly in the first half of 2021, with group headline earnings up 52% on the previous year. The rebound was led by South Africa, where earnings were almost three times higher than in the first half of 2020.

‘Retailers have got space they don’t fully utilise. This will radically change our distribution strategy’

Distribution overhaul

The bank is counting on an overhaul of its distribution strategy to sustain the recovery in South Africa. The bank can now onboard individual customers digitally for its low-cost MyMo accounts.

The accounts, which cost R4.95 per month, reward customers with free mobile data. The bank now has more than 1m MyMo accounts.

The concept of branches is also being redefined. In July, the bank partnered Demographics don’t add up with the retailer Pick n Pay to open Robertson’s view of growth prospects branches within their stores, starting in emerging markets is based on demography. Large in the Western Cape and Gauteng. Discussions have average family sizes of five or six children, he says, started with “one or two” further retailers to expand are unable to sustain rapid economic growth. That, in the concept, Fuzile says. turn, means that banks are unable to cheaply finance The Pick n Pay branches run according to the retailer’s the private sector or government. trading hours rather than traditional banking times.

South Africa, according to Robertson, stands out as They typically use two bankers and an area of six to a country that has long had a promising demographic 10 square metres within an open retail space. That profile but has failed to take advantage of it. Historical represents a huge saving over full branches of between 100 and 300 square metres, Fuzile says. growth rates of 1% to 2% are about 3% below what should The roll-out will lead to a “far more effective distrihave been achieved given low family sizes, he says. Over the long term, he says, South Africa has bution network” and will take up to two years to complete, he says. “This is the been “the biggest underperformer in emerging markets”. future. Retailers have got space they don’t AN EYE FOR fully utilise. This will radically change Robertson argues that this trend is NUMBERS our distribution strategy,” Fuzile says. likely to continue due to high minimum January 1997 Began wages, which hinder job creation. South A further contributing factor to the working at Statistics Africa has “priced a large share of the bank’s recovery was its decision not to South Africa “pull the handbrake” on lending during workforce out of jobs,” but it is politically very hard for Ramaphosa to roll back the the pandemic, unlike some of its competMay 2011 Became legislation, Robertson says. The result, itors. “We kept our doors open,” Fuzile director general of South Africa’s national treasury he says, is that mass unemployment is says. “Home buyers came our way.” likely to continue, adding to political The bank in July offered to buy out the January 2018 Named remaining shares in financial services risks for businesses. Multinationals CEO of Standard Bank of and property holding company Liberty looking to start new factories will find South Africa lower minimum wages and well-educated Holdings, in which it currently holds 54%, workforces in countries like Egypt and to achieve greater scale in insurance and July 2019 Appointed to Vietnam, Robertson says. “Why would asset management. The agreement still the board of directors of you go to South Africa?” His base-case needs regulatory approval, but Fuzile Business Leadership scenario is for South Africa to muddle says “the signs look good” that it will South Africa be secured. along after 2021 with growth rates of

94

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

FINANCE

BLUE PLANET STUDIO/STOCK ADOBE

Will AI risk analysis expand access to credit in Africa?

For informal-sector workers and the unbanked, the nascent adoption of artificial intelligence (AI) by banks for credit risk assessment could open up channels to loans

By OLIVER NIEBURG

lenders, First National Bank of South Africa (#14), Kenya’s NCBA Group (#66) and Equity Bank Group (#38), and Orange Bank in Côte d’Ivoire have been early adopters.

By analysing new-age mobile and web data, fintechs are starting to expand credit to individuals and small and medium-sized enterprises (SMEs) without a financial Selfies not just for fun footprint. Traditionally, African lenders use credit bureau scores, assessing, for instance, if a customer Singapore-based CredoLab, established in 2016 and has a history of missed credit-card payments. When present in South Africa, Nigeria, Kenya and Ghana, no history exists, they evaluate social demographics: uses mobile metadata to assess credit risk. The fintech is the customer female (in which case they are likelier embeds a mobile software development kit (SDK) into to repay), do they work in a stable job market and can lenders’ banking apps and collects privacy-consented they prove a regular income? But this micro-behavioural data points on Android can exclude those who are unbanked or and iOS. These include the percentage of informally employed. selfies on a customer’s phone, the number Michele Tucci, chief product officer at of games installed, videos created per fintech company CredoLab says: “African month, if a virtual private network is used and even the speed at which they type – all lenders lack data to make good credit of African banking collected once one applies for a loan. decisions, and social demographic data customers cannot procure can bring you only so far.” He estimates Aristide Ouattara, a partner and risk a loan through credit that 70% of African banking customers advisory leader at Deloitte Afrique, says: bureau scores, according have no credit bureau score and are simply “African banks are still setting the minimum to one estimate. rejected by lenders. Indeed, 57% of Africans base of credit-risk management tools and frameworks.” But he says such methods remain unbanked, have a cash-in-hand are the future and expects more banks to join in soon. income or prefer to use debit over credit cards.

CredoLab lacks visibility on financial inclusion, but Alternative credit scoring began emerging in the mid-2010s, driven by artificial intelligence (AI) tools says it is likely that for every million applications it has built into Safaricom’s M-Shwari mobile-credit services processed in Africa, 200,000 borrowers were given access in Kenya. to credit, 180,000 of whom were first-time borrowers.

Ultimately, however, loan decisions rest with lenders, Home-grown fintechs such as Cape Town-headquartered which have mainly focused on the strongest applicants Jumo and Nigerian start-up KiaKia have since emerged, during the pandemic. while overseas players like CredoLab and US-based To read the full article, see www.theafricareport.com/107432/ Branch are also gaining traction in Africa. Among

70%

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

95

Ade Ayeyemi INTERVIEW

‘Nigeria is a long-term strategic, important market’ The CEO of Ecobank says Nigeria is crucial to the pan-African bank’s fortunes and that the troubles exacerbated by the Covid-19 crisis will not hurt its long-term trends Interview by PATRICK SMITH As one of the pioneering pan-African financial institutions, Ecobank (#18) should be enjoying its halcyon days with the region’s economies accelerating plans for integrating their markets and using new technologies to bring banking services to a fast-widening customer base.

Ecobank’s headquarters in Lomé, Togo, is a short drive from the newly built secretariat of the African Continental Free Trade Area in Accra, Ghana – the nerve centre of the continent’s single market.

But history intervened. First, in the shape of the legacy of management ructions a decade ago, which included some bad investment decisions. Then, weaker commodity prices hit the export economies of Ecobank’s key markets in 2016, to be followed by the shock of the Covid-19 pandemic.

Instead of hitting boom time, Ecobank has had to take tough decisions on costs, business direction and shareholder dividends. The current management team, headed by group chief executive Ade Ayeyemi and chairman Alain Nkontchou, has fought back hard, winning a reputation in the markets for prudent liquidity management and contingency plans in a volatile era.

The outcome was, Ayeyemi tells The Africa Report, that the group’s results for the last financial year were better than many had expected, with revenues growing by 4%.

“We had good growth of our customer deposits, by $2bn,

and we were also able to use that period to increase the acceleration of digital adoption,” says Ayeyemi.

Building on its commercial navigation of the pandemic in 2020, the group launched two fundraising operations this year. Ecobank Transnational Incorporated (ETI), the bank’s holding company, floated $350m of sustainable bonds on the London capital market in June. And then, in September, Arise BV, which has a 14% stake in the Ecobank group, invested another $75m into its balance sheet.

In May, Fitch affirmed its rating for ETI at B- with a stable outlook, but added a proviso on its concerns about the group’s ‘double leverage’. The bank holding company has used a debt offering to buy a stake in a subsidiary bank.

Prudence, and no dividend Fitch says the ratio is heading in the right direction: ‘We expect ETI’s double leverage to decrease to 140% by end-2022, in line with management guidance, supported by resumed dividends from subsidiaries, stronger performance and continued earnings retention at the bank holding company,’ the agency says.

For shareholders, the prudence has a downside: they have not received a dividend for the past four years.

That looks set to change next year, according to Fitch.

Last year, Ecobank’s corporate and investment activities grew by 34% but commercial bank activities fell by 54% and consumer bank operations were down by 37%. Those trends aren’t an indicator of the direction the bank is taking, argues Ayeyemi: “In economics, there is this thing that you guys call ‘discontinuity’ in the trend.

You can’t use 2020 as a basis of a forecast because it’s a one-in-100-years event.”

So, rebalancing Ecobank’s operations last year may prove to be a temporary expedient: “We'll find opportunities to enable our corporate and investment bank to also serve customers, serve governments and serve institutions in a

‘YOU CAN’T USE 2020 AS A BASIS FOR A FORECAST BECAUSE IT’S A ONE-IN-100YEARS EVENT‘

96

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

from almost 20,000 to close at 14,000 people,” Ayeyemi says.

The other big story for Ecobank is Nigeria – its historical hits and future growth. Chief among the hits was Ecobank’s purchase of Oceanic Bank back in 2011. Some $159m of the one-off $164m goodwill charges on Ecobank’s 2020 accounts relates to its purchase of Oceanic.

Apart from Oceanic, there are Ecobank Nigeria (#58)’s non-performing loans. These stood at 19% last year, compared to 3.5% in the CFA franc zone and 8.9% in Central, Southern and Eastern Africa. “We’ve got a challenge in Nigeria,” concedes Ayeyemi, but he says it is more specific than it looks: “That 19% [of non-performing loans] is dominated by two names […]; those two names together are $200m out of the $484m of the non-performing loans.” One is an oil and gas project put on hold by the pandemic; the second is a pipeline that has been delayed by tax liabilities; and a third is to an oil company that has gone into restructuring.

More to Nigeria than oil Take those away, says Ayeyemi, and the Nigerian loan book looks much more sustainable, given the size of the market and business potential. Neither, he insists, are the bad loans an existential threat to the bank or a reason to shift much of its focus away from Nigeria.

“Nigeria is a long-term strategic, important market for us. By 2050 Nigeria will be about 400 million people – that will be number four in the world. Second, if you take oil away, there are a lot of other things, whether technology, unicorns, startups of new technology business and fintech.”

The N64bn questions for Nigeria, says Ayeyemi, are about A BANK OF policy: “The problem of the counEXPERIENCE try is lack of supply, not lack of demand […]. A supply problem 1988 Joined Citibank Nigeria is easier to solve with your own savings and foreign investment, March 2006 Became whereas investment is looking Citibank’s head for for yield.”

Kenya, Uganda, Tanzania Key to the supply of almost anyand Zimbabwe thing in Nigeria is access to energy.

And again, for Ayeyemi, there are September 2013 positive signs as the country’s enerAppointed as Citibank’s gy transition takes shape – its new director for sub-Saharan oil and gas laws bringing in more Africa investments, specialising in gas-to1 September 2015 power projects but also more solar Became CEO of Ecobank and wind-energy projects. For all Transnational Inc. those reasons, as well as having a market offering the fourth-largest 2017 Named noncountry customer base in the world executive director of by 2050, Ecobank’s fortunes will be Ecobank Nigeria closely tied to those of Nigeria.

GUILHEM ALANDRY/DOCULAB FOR JA

way that allows us to add a cushion [to offset] the decline in some other businesses,” Ayeyemi says.

Households are the bedrock of Ecobank’s business, according to the CEO: “The household, in terms of financial leverage, is normally about half of the financial leverage of the overall economy […] whether in mortgages, car loans, auto loans, school loans, student loans – so we need to start being able to provide financing to the households.”

The bank is also striving to cut its cost-to-income ratio. That went down to 62.7% last year and the target is 55% by the end of next year.

“We’ve trimmed our structural costs, we’ve reduced our branch network from about 1,300 in 2015 to about 680 now […] and we’ve reduced our people

N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

97

HASSAN OUAZZANI FOR JA

Attijariwafa Bank headquarters, Casablanca

MOROCCO

Attijariwafa shows its digital agility Since 2016, the leading Moroccan banking group has accelerated the digitalisation of its operations and services – a major effort that has won the support of its customers

By FAHD IRAQI in Casablanca

Bank (#189), are also working on digital technology, AWB has made a fundamental effort to modernise all its business lines, including insurance products.

“In this respect, it is ahead of its Moroccan rivals, Banque Centrale Populaire [#9] and BMCE Bank of Africa [#12], and is closing the gap that could separate it on the continent from an international bank such as Société Générale,” says Yoann Lhonneur, director of Devlhon Consulting.

In 2020, AWB recorded 12 million customer logins per month, up 60% in one year. It also claims pole position in Morocco for the number of transactions integrating electronic payments, with 39% of this market in 2020.

Five years ago, Attijariwafa Bank (AWB, #8), the leading bank in Morocco, set the tone: the group’s ambition was to position itself as ‘the top customer-centred bank, focused on satisfying the needs of its clients [by] taking advantage Facial recognition of new technologies linked to digitalisation’. With 27 major programmes and 105 projects, its strategic plan AWB’s 100% digital bank, L’bankalik, launched in 2016, illustrates this trend. In a service launched in February, ‘Energies 2020’ put the emphasis on digital technologies.

At this time, the bank set up an entity called Wenov “opening an account is now done through a simple selfie, dedicated to digital and entrepreneurial innovation, incorusing the latest technology in facial recognition and electronic signatures,” says a bank executive. porating WeLab, a technological laboratory. In mid-2021, AWB’s management announced that this facility had led Across AWB, four out of five transactions by clients are to collaborations with 120 startups. now carried out via digital channels. The digital strategy, In 2019, the group integrated a digital centre into the using big data, has also made it possible to refine loan information systems department to develop its products applications. Between 2014 and 2020, the number of and processes. This centre brings together around 250 decision-making strategies and scores increased from people and operates on the basis of ‘agile’ methods, a five to 20. The group is currently working to ensure that all subsidiaries can use these tools. multidisciplinary approach and a lighter methodological framework. The idea is for This digitalisation will continue throughthe Moroccan giant, which has more than out the implementation of its 2021-2025 20,000 employees, to become more flexible. strategic plan. The challenge for the group While the bank remains somewhat conis to improve its operational efficiency, while its branch network and the increase servative, and some of its smaller competIncrease in customer in operating costs impact its results. logins at AWB in 2020 itors, such as CIH Bank (#37) and CFG

60%

98

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

#fintech #digitization #financialinclusion

https://tagpay.fr/en/

FINTECH

Three’s a crowd in the credit-card crunch China’s UnionPay is giving the US payments giants Visa and Mastercard a run for their money in Africa; fighting back, the two are investing in new financial services, from purchasing fintechs to buying stakes in telecoms firms

By QUENTIN VELLUET

“Fintechs that want to expand geographically can quickly be held back if they do not have the support of investment funds or industrial operators,” says Lhonneur. “Players like Visa and Mastercard have enormous advantages because they have a network role that allows synergies and offers international growth prospects.” According to data provided by Devlhon, Visa and Mastercard processed about €23.5bn ($26.8bn) in transactions on the Absa Bank network in 2019, compared with €395m ($450m) for the rest of their competitors (UnionPay, American Express, Discover, JCB, etc.).

Issuing bank cards in Africa, where cash and mobile money are king, is a strange sort of bet. But, for the past 15 years, the two United States payment giants Visa and Mastercard have been fighting a battle for supremacy in the payments space, which the Covid-19 pandemic and the accelerated development of fintech have only intensified.

In recent years, their duel has been shaken up by the arrival on the continent of China’s UnionPay, which has been targeting the position of Mastercard. Since 2018, the Chinese heavyweight, which was launched back in 2002, has been keen to increase its The number of countries activity in African markets and has been on the continent where active in seeking partnerships with local China’s UnionPay has financial institutions. established a presence Following on from its 2018 deal with South Africa’s Standard Bank and Nigerian fintech giant Interswitch, the company, which brings together 175 Chinese banking players, announced an alliance with PostBank in Uganda in November 2020, The amount Mastercard and with Bank of Africa in Morocco in invested in Airtel Money May 2021. UnionPay is present in Africa to help it gain market in more than 40 countries. intelligence

40

$100m

Visa’s African advantage In contrast with Mastercard, Visa still has some leeway, holding a leading position in almost all its markets, especially in the Union Economique et Monétaire Ouest Africaine zone, where Mastercard has only a small presence (7% market share in 2018) compared to Visa’s 47% hold on the market. “In Southern Africa and the Eastern region, the game is becoming more balanced”, says Yoann Lhonneur, of the Paris-based strategy consulting firm Devlhon Consulting.

Like Visa, Mastercard has several trump cards to play to develop its services quickly. First, the US group, whose 2021 turnover is expected to be close to $19bn, can use its financial power to buy companies that threaten its development or can expand its customer base.

100 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

Platform purchases

Mastercard’s March 2019 investment of $300m in Network International is the perfect example. The operation enabled Visa’s rival to develop a partnership with this specialist in payment solutions in the Middle East for the development of services in Africa. The partnership resulted in the creation of a digital platform in early 2021 that allows merchants to accept different types of payments, from USSD (a protocol that allows data to be sent and received without internet access) to QR codes, mobile money or NFC (contactless phone).

In April, Mastercard, led since January by Michael Miebach, invested $100m in Airtel Money. There are several advantages for a card provider to invest in mobile money, as the head of a pan-African operator explains: “As a financial partner, it is easier for them to know what these companies are planning to do and thus become privileged partners. It is also a way for them to diversify, taking into account the threat that mobile money represents to their core business [payment by card].”

The company that can kill costs will win. “The problem in Africa are the margins being made,” says Jean Sideris, a former employee of Visa and Mastercard, now at consulting firm Edgar, Dunn & Co. “For an average transaction of around $3 on the continent – compared to around $50 in Africa and Europe – the charges and commissions of the current operators are too high.”

CÔTE D’IVOIRE 2021 • 2025

© BRUNO LEVY / JA

Succeeding together and building a nation “We and the government have done our best to consolidate peace and stability in our country, to revive our economy and to strengthen Côte d’Ivoire’s leadership in the sub-region and the world.

We have strived to improve our citizens’ living conditions. We have worked tirelessly for every Ivorian and for Côte d’Ivoire, our beautiful country...

Now we’re taking it to the next level.

Our programme for the period 2021-2025 will accelerate Côte d’Ivoire’s economic and social transformation, with an even bigger involvement of all stakeholders, including the private sector and civil society, for even more inclusive growth and a more united Côte d’Ivoire.”

Alassane Ouattara – President of the Republic of Côte d’Ivoire

UNION – DISCIPLINE – WORK “Emergence is staking a claim on the future. We are planning the future while building emergence in a spirit of peace, serenity, dialogue and social cohesion.”

ADVERTORIAL

© LUC GNAGO/REUTERS

President Alassane Ouattara with Prime Minister Patrick Achi.

C

ôte d’Ivoire currently has a population of more than 26 million and a gross national product (GNP) of almost $45 billion. It is also the leading economic power in the West African Economic and Monetary Union (WAEMU). The country is central to regional defence and security strategies. Its stability and its vision of a modern Africa are crucial to the sub-region.

President Alassane Ouattara and his devoted team have thrown themselves into the development and preparation of the country’s economy, and the result of this unwavering commitment is 10 years of uninterrupted growth, a diversified economy, an abundance of agricultural and energy resources, a healthy macroeconomic framework, controlled debt, and an international network of relationships.

On 25 November 2020, the world sent a strong signal of confidence in the country

ADVERTORIAL

and in President Alassane Ouattara and his team when a €1 billion Eurobond with a yield of around 5% was issued. On 12 February 2021, Côte d’Ivoire raised another €850 million at 4.7%.

Reconstruction The years 2011-2020 constituted a decade of incredible change for Côte d’Ivoire.

Alassane Ouattara’s rise to power set in motion a sustained programme of reform.

After 20 years of stagnation, division and violence, Côte d’Ivoire has once again become the leading country in the region.

The authority of the State was reinstated and it has assumed its essential functions of education, access to healthcare, electricity and housing for all. Institutions have been restored and strengthened. In times of crises, they are the bulwark and ensure the continuity of the State.

Succeeding together and building a nation

Côte d’Ivoire’s diplomatic revival was confirmed when it was elected to one of the non-permanent seats on the UN Security Council after having been absent from this institution for a quarter of a century. All these changes were achieved through the collective work of a motivated and united team that is now ready for a new phase in the country’s emergence. President Alassane Ouattara’s objective is to maintain a long cycle of growth, for a better distribution of wealth and a united Côte d’Ivoire.

Preserve and pursue In spite of the country’s tragic losses in early 2021 with the death of two of its loyal collaborateurs, Amadou Gon Coulibaly and Hamed Bakayoko, who had been working with President Alassane Ouattara for many

© RENAUD VAN DER MEEREN/ÉD.DU JAGUAR

Abidjan-Yamoussoukro highway.

years, the system had to be overhauled. The emergence of Côte d’Ivoire is still on course.

President Alassane Ouattara took back the helm to address these numerous challenges in exceptional circumstances and, under his experienced leadership, Côte d’Ivoire is set to stay strong and united.

Prime Minister Patrick Achi, along with Amadou Gon Coulibaly and Hamed Bakayoko, was one of the architects of the 2020-2025 economic programme. At his side, a number of 40- and 50-year-olds, who cut their political teeth in the ranks of the RDR/RHDP, ensure its implementation.

A symbol of this continuity is 40-year-old Abdourahmane Cissé, appointed Minister and Secretary General of the Presidency.

A graduate of Paris’s prestigious École Polytechnique, he was an economic adviser and then Minister of the Budget, and is at the frontlines of government action.

© SIA-KAMBOU

It is up to the State to serve the nation, to concern itself with vital infrastructure and the well-being of its citizens. It also has to be able to consolidate national unity, fight tribalism, and strengthen the values of peace, justice and democracy.

Abdourahmane Cissé, Minister and Secretary General of the Presidency.

© DR

© DR

© DR

PresidentAlassane Ouattara with German ChancellorAngela Merkel…

… French President Emmanuel Macron…

2021 • 2025 A modern and united Côte d’Ivoire Another new challenge that Côte d’Ivoire has to meet is maintaining a high rate of growth throughout the coming years. This is a key condition for increasing national wealth, absorbing the growing population, guaranteeing jobs and obtaining tangible results in terms of human development.

The programme for the period 2021-2025 is designed to accelerate economic and social transformation and is based on five pillars:

> PILLAR ONE: peace, security and social cohesion. These are the essential prerequisites for Ivorians to be able to plan a future into which they can project and invest themselves with peace of mind. > PILLAR TWO: job creation. The State must play a leading role in driving the structural transformation of the economy through industrialisation, organising the economic sectors accordingly and motivating the national private sector.

ADVERTORIAL

… His Majesty King Mohammed VI of Morocco…

> PILLAR THREE: creating a pleasant quality of life and an attractive investment environment throughout the country.

• Pursue endeavours for the sustainable management of solid, liquid and hazardous waste to ensure a healthy environment.

• Improve the organisation of waste collection and transport.

• Ramp up the building of social housing in urban and rural areas. In terms of housing, this entails the implementation of a programme to secure and service land.

• And for a pleasant quality of life, gradually educate the population in environmental protection.

> PILLAR FOUR: building a more efficient and committed administration that serves the private sector, the regions and citizens. This involves the rise of a genuine

“MADE IN CÔTE D’IVOIRE” LABEL A proactive policy for the local manufacture of industrial or semi-industrial products has been put in place. Projects include the setting up of factories for assembling transport, electronic and medical equipment.The development of an automobile industry with assembly plants is also on the cards.The processing of local products will give rise to the “Made in Côte d’Ivoire” label.There is excellent potential for investment, production, marketing and job creation!

Succeeding together and building a nation

meritocracy within the public administration.

Decentralisation must be stepped up in the regions by ensuring the viability of local authorities and the establishment of a development charter.

The threats are real, ranging from floods, disruption to rainfall patterns, coastal land loss and rising temperatures, which could jeopardise agricultural production and put cities such as Abidjan or Grand-Bassam at risk.

> PILLAR FIVE: people. Central to a united Côte d’Ivoire is the new Ivorian.

Every Ivorian, whatever his or her origins and social standing, must become an agent of development and contribute through his or her work to the creation of wealth and the development of the country. They must be infused with the nation’s values, and their skills must be appropriately rewarded. People are the end as well as the means to achieving these ambitions.

Rapid deforestation is a problem, as tropical forests play a crucial role in combating local climate change and regulating rainfall temperature. The national priority is restoring forest cover to 20% by 2045, which equates to almost 3 million hectares of forest. The cost of the action plan is estimated at around 700 billion CFA francs, or more than 2 billion euros over the next decade.

This is an enormous undertaking, which must also be carried out within the framework of sustainable development.

Sustainable development is a priority

© NABIL ZORKOT / ÉD. DU JAGUAR

The management of natural capital is key to maintaining high growth. Climate change and the requirements of the energy transition are major challenges that Côte d’Ivoire is facing.

This has encouraged Côte d’Ivoire, which is seeking to establish itself as a leading tourist destination, to contemplate a different kind of tourism. From North to South, the potential is huge, with a lagoon system that is unique in Africa, national parks, rare species, UNESCO heritage sites, Ramsar Convention-listed wetlands of international importance, the primary forest that needs to be preserved, as well as the once abundant wildlife that is now unfortunately endangered. From now on, there is only one objective: to preserve the environment, to regulate tours and to meticulously supervise projects.

© JACQUES TORREGANO / JA

Succeeding together and building a nation

Abidjan: the Plateau district and its administrative, financial and commercial towers.

If successful, this experience could serve as a model. The same applies to the development of cities, which has

to be rethought, taking into account past experiences. For example, Abidjan which, driven by the economic boom, went overboard without always thinking about the needs of tomorrow’s cities. The government is aware of this imperative because in 2040 Abidjan will have a population of 10 million and two out of three Ivorians will live in cities. However, Abidjan is once again a welcoming city, a transit hub and a major cultural platform.

Côte d’Ivoire remains concerned about the security situation in the country and the sub-region.

© RENAUD VAN DER MEEREN/ÉD.DU JAGUAR

CÔTE D’IVOIRE IN FIGURES 2010 Population in millions

21,9

26

Population growth

2,6%

2,4%

Poverty rate

51%

37,2%

Infant mortality rate

95,1

65,7

89.30%

103.03%

Primary school enrolment rate Growth rate

Cocoa trees near San Pedro.

ADVERTORIAL

2020

— 4% (2011)

8%

Internet users

2.7 %

46.8%

GDP in billions of CFA francs

12,324

34,447

JAMG / DIFCOM / DF - PHOTOS © PRESIDENCY OF THE REPUBLIC OF CÔTE D’IVOIRE UNLESS OTHERWISE MENTIONED.

This also means that, alongside business tourism, a different approach to development must be taken to ensure qualitative and ecological tourism that promotes green travel and the discovery of Côte d’Ivoire’s local culture and natural and cultural heritage. It is an extremely important reform requiring the investment of all, and the training of managers and staff linked to this activity.

INSURERS Our exclusive ranking and analysis of the continent’s largest insurance companies shows how the sector continues to grow but faces challenges from Covid-19 and the low take-up of insurance products in Africa

By PIERRE-OLIVIER ROUAUD and HONORÉ BANDA

F

asten your seatbelts! For the African insurance world, 2020 was a year like no other, marked by the Covid-19 pandemic and a halt to the rapid expansion seen in recent years. Prior to the coronavirus crisis, McKinsey consultants predicted compound annual growth rates for the sector of around 7% between 2020 and 2025. Once the dust settles after the crisis there is every likelihood of a return to rapid growth.

Africa remains the least insured region of the world. In 2019, the insurance penetration rate (insurance premiums compared to gross domestic product) stood at 2.78%, compared to a global average of 7.2%.

McKinsey is bullish about the continent’s insurance potential. In a December 2020 report, it said: ‘The pandemic is profoundly affecting both lives and livelihoods, and consumers are cutting back on discretionary expenditure

— including insurance — in the face of income and market volatility. However, this impact is expected to delay rather than alter the pattern and potential of future growth. And in some cases, the crisis may accelerate existing trends — notably the shift toward digital and remote channels, which has the potential to offer new opportunities to both insurers and consumers.’

The McKinsey report sets out what has been helping the insurance market to grow in Africa: ‘Africa’s insurance sector is being driven primarily by economic growth rather than deepening market penetration. And where penetration is occurring, it is mostly accompanied by structural reforms. Market liberalisation and deregulation, the enforcement of compulsoty insurance, increased access through wider distribution, public-private partnerships and regulation to support innovation and access have all been shown to build consumer trust and develop more resilient insurance industries with better-protected populations in comparible markets.’

Ambition and resilience Our exclusive ranking of Africa’s Top 100 insurers shows the resilience of the major players. At $50.11bn, their cumulative turnover was up 0.3% compared to 2019, when it had jumped by 19.4%.

While the sector is now re-establishing its dynamism, most markets experienced a recession or at least a sharp slowdown last year. This was the case in Morocco, where the sector’s turnover grew by a meagre 2% to Dh45.8bn ($5.1bn), according to the Autorité de Contrôle des Assurances et de la Prévoyance Sociale – a rate two to three times lower than in previous years. Morocco is in second place in our ranking, with 15 companies included in the Top 100.

32

North Africa Central Africa West Africa East Africa Southern Africa

TOP FIVE FOR REVENUE GROWTH %

25

+62 15 1

2020 revenue ($m)

+46

+41

+38

2 226

103

292

57

+29 80

SPA (Morocco)

WAICA Re (Sierra Leone)

SCR (Morocco)

Swan (Mauritius)

COMAR (Tunisia)

27

TOP FIVE FOR REVENUE DECLINE %

TOTAL REVENUE & PROFITS 2019

2020

Revenue

Profits

$49.98bn

$4.71bn

$50.11bn

$2.02bn

108 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

2020 revenue ($m)

SUNU AV CI (Côte d’Ivoire)

Trustco GH (Namibia)

Leadway (Nigeria)

SONAS (DRC)

CNMA (Algeria)

103

42

140

-69

-44

98 -18

-58

52 -24

SOURCE: THE AFRICA REPORT RESEARCH

NUMBER OF INSURERS

BY REGION

In South Africa, which is by far the continent’s largest market, insurance revenue fell by about 8% in 2020. The sector is not expected to return to pre-Covid levels until 2024. The 15 South African companies represented in our rankings still account for 66.1% of total premiums and South African insurers hold nine of the top 10 places. There is one Moroccan group in the top 10, Saham (#8) but it is also now part of the South Africa’s Sanlam (#1).

Sanlam, meanwhile, is not dialling back on its ambitions. The group has declared a goal of having 50 million customers by 2025. Announcing a partnership with South Africa-based telecoms giant MTN in September 2021, Sanlam CEO Paul Hanratty said in a statement: ‘We anticipate strong long-term growth in mobile financial services, and insurance and investments are no exception to this.’

In Nigeria, the market plunged 15.3% last year, according to the National Bureau of Statistics. AIICO Insurance (#39) is Nigeria’s largest retail insurer, working in the life and non-life sectors. In September, AIICO’s CEO, Babatunde Fajemirokun, said that diversification is a priority: “The firm has revised its vision and the board has given the management the approval to look beyond Nigeria’s insurance space and explore opportunities across sub-Saharan Africa. Despite [the fact] that Nigeria has one of the lowest penetration rates in Africa, we still believe that, in terms of our business models to improve the level of diversification, is important to look outside.”

Egypt, meanwhile, stands out for its resilience. Its economy has weathered the crisis well and this is reflected in the insurance market, which jumped 16% in fiscal year 2020/2021, according to the Financial Regulatory Authority.

Nigeria’s AIICO is looking for opportunities to diversify across sub-Saharan Africa

‘We are bullish in the long run about Africa.

The demographics are fantastic.’

PAUL HANRATTY CEO of Sanlam (#1)

Rank 2021

Profits

2020/2019 Profit change

9 065

248

-14%

4 944

-365

- 4%

South Africa

4 691

1 230

-1%

Discovery Health

South Africa

3 396

12

11%

5

Liberty Holdings

South Africa

2 675

-183

-6%

6

Santam

South Africa

2 611

44

2%

7

Momentum Metropolitan Holdings

South Africa

2 271

20

-13%

8

Sanlam Pan Africa (Ex-Saham Finances)

Morocco

2 226

ND

62%

9

Rand Merchant Investment Holdings

South Africa

1 104

130

3%

10

Munich Reinsurance Co. of Africa

South Africa

957

ND

23%

11

Wafa Assurance

Morocco

930

45

2%

12

Compagnie d’Assurances et de Réassurances

Tunisia

854

18

21%

13

African Reinsurance Corp.

Nigeria

805

56

-5%

14

Royale Marocaine d’Assurance

Morocco

763

ND

9%

15

Mutuelle Attamine Chaabi

Morocco

643

ND

22%

16

Hollard Insurance

South Africa

599

26

-1%

17

Saham Assurance Maroc

Morocco

569

16

2%

18

Atlanta Sanad Assurance (Ex-Atlanta Assurances)

Morocco

551

49

11%

19

Axa Assurance Maroc

Morocco

541

ND

13%

20

Metropolitan Life

South Africa

483

ND

-4%

21

Sunu Group

Côte d’Ivoire

373

13

14%

22

Avbob Industries

South Africa

323

1

9%

23

Société Centrale de Réassurance

Morocco

292

31

41%

24

Jubilee Holdings

Kenya

271

37

-5%

25

Botswana Insurance Holdings

Botswana

264

49

9%

26

Britam Holdings

Kenya

262

-106

-3%

27

Compagnie Centrale de Réassurance

Algeria

254

31

-15%

28

La Marocaine Vie

Morocco

240

7

3%

29

Société Nationale d’Assurances

Algeria

219

17

-10%

30

Zep-Re (PTA Reinsurance)

Kenya

208

17

1%

31

The Rand Mutual Assurance Co.

South Africa

202

153

-6%

32

Mutuelle Centrale Marocaine d’Assurance

Morocco

200

ND

26%

33

Swan Group

Mauritius

198

19

-7%

34

Britam Kenya

Kenya

191

ND

-13%

35

Jubilee Insurance Kenya

Kenya

183

-17,35

-4%

36

Compagnie Algérienne des Assurances Transports

Algeria

187

21

-9%

37

Allianz Assurances Maroc

Morocco

175

ND

14%

Insurer name

Country

Revenue

1

Sanlam

South Africa

2

Old Mutual Life Assurance Co.

South Africa

3

Indequity Group

4

38

Kenya Reinsurance Corp.

Kenya

169

27

-2%

39

AIICO Insurance

Nigeria

162

13

18%

40

CIC Insurance Group

Kenya

155

-3

-11%

41

Custodian & Allied Insurance

Nigeria

152

33

17%

42

Clientele Life Assurance Co.

South Africa

152

22

-6%

43

UAP Holdings

Kenya

150

-12

-5%

44

Conduit Capital

South Africa

144

-45

-1%

45

Leadway Assurance Co.

Nigeria

140

30

-44%

46

Mauritius Union Assurance Co.

Mauritius

138

9

13%

47

Enterprise Group

Ghana

134

25

19%

48

Société Tunisienne d’Assurances et de Réassurances

Tunisia

133

6

0%

49

Continental Reinsurance Co.*

Nigeria

131

16

40%

50

African Trade Insurance Agency

Kenya

126

39

12%

2020 results in millions of US dollars; *in italics 2019 results; ND: no data

110 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

SANLAM

1-50

Axa Mansard (#51) in Nigeria recorded a 22% rise in gross premiums in the first half of 2021, compared to the first half of 2020.

37.2 bn

51-100 Rank 2021

Profits

2020/2019 Profit change

Insurer name

Country

Revenue

51

Axa Mansard Insurance

Nigeria

124

12

4%

52

Mutuelle Agricole Marocaine d’Assurance

Morocco

121

ND

14%

53

Jubilee Insurance Uganda

Uganda

121

7

22%

54

Compagnie Algérienne d’Assurance et de Réassurance

Algeria

113

9

-12%

55

Swan Life

Mauritius

112

14

-10%

56

Nico Holdings

Malawi

110

24

7%

57

Compagnie d’Assurances des Hydrocarbures

Algeria

106

5

-1%

58

CICA-RE*

Togo

105

9

14%

59

Sunu Assurances Vie Côte d’Ivoire

Côte d’Ivoire

103

6

-69%

60

WAICA Reinsurance Corp. – Sierra Leone

Sierra Leone

103

13

46%

61

Sanlam Côte d’Ivoire (Ex-Saham Assurances Côte d’Ivoire)

Côte d’Ivoire

98

ND

1%

62

Caisse Nationale de Mutualité Agricole

Algeria

98

14

-18%

63

APA Insurance

Kenya

91

5

-2%

64

State Insurance Co. of Mauritius

Mauritius

82

15

-7%

65

Compagnie Internationale d’Assurance et de Réassurance*

Algeria

82

ND

-2%

66

Old Mutual Malawi

Malawi

81

22

-3%

67

Cie Méditerranéenne d’Assurances et de Réassurances

Tunisia

80

9

29%

68

Sanlam General Insurance Kenya

Kenya

79

-1

16%

69

Compagnie d’Assurances Transports

Morocco

77

ND

8%

70

Groupe des Assurances de Tunisie

Tunisia

70

6

13%

71

Santam Namibia

Namibia

66

ND

-11%

72

NSIA Vie Côte d’Ivoire

Côte d’Ivoire

66

ND

27%

73

Suez Canal Insurance

Egypt

63

3

1%

74

Assurances Maghrebia

Tunisia

69

ND

12%

75

Maroc Assistance Internationale

Morocco

62

ND

6%

76

Liberty Kenya

Kenya

61

6

-7%

77

Tanzania Reinsurance Co.

Tanzania

60

3

-1%

78

Société Tunisienne de Réassurance

Tunisia

58

5

1%

79

NEM Insurance

Nigeria

58

13

6%

80

Swan Insurance Co.

Mauritius

57

7

38%

81

Swaziland Royal Insurance Corp.*

Swaziland

56

11

22% -24%

82

Societe Nationale d’Assurances – DRC

DRC

52

-2

83

Mutual Benefits Assurance

Nigeria

52

13

2%

84

Allianz Assurances Vie Côte d’Ivoire

Côte d’Ivoire

52

ND

14%

85

Mutuelle D'assurances des Transporteurs Unis

Morocco

51

ND

20%

86

Allianz Assurances Côte d’Ivoire

Côte d’Ivoire

50

ND

16%

87

Mutuelle Assurances de l’Enseignement

Tunisia

50

1

16%

88

Groupe Sonam Assurances

Senegal

49

ND

1%

89

Sanlam Assurance Vie Côte d’Ivoire

Côte d’Ivoire

49

-2

12%

90

BH Assurances

Tunisia

47

4

13%

91

Cornerstone Insurance

Nigeria

46

6

28%

92

Salama Assurances Algérie*

Algeria

45

ND

4%

93

Ghana Reinsurance Co.*

Ghana

44

5

5%

94

Fidelidade Angola

Angola

43

2

-5%

95

Kenindia Assurance Co.*

Kenya

42

-2

27%

96

Trustco Group Holdings

Namibia

42

-23

-58%

97

SIC Insurance Co.

Ghana

41

1

11%

98

Axa Assurances Côte d’Ivoire

Côte d’Ivoire

41

ND

18%

99

NSIA Assurances Côte d’Ivoire

Côte d’Ivoire

40

ND

20%

Coronation Insurance (Ex-Wapic Insurance)

Nigeria

40

3

-5%

100

2020 results in millions of US dollars; *in italics 2019 results; ND: no data

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

111

CONSTRUCTION DOSSIER

A tale of new cities

112 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

The New Administrative Capital takes shape, viewed from the 385m-high Iconic Tower

Glittering, futuristic and amibitious, Egypt’s new cities will benefit the military, foreign and local contractors and the rich.

But who will be left behind?

SUI XIANKAI/XINHUA/REA

By SHERIF TAREK Situated nearly 45km east of Cairo, Egypt’s New Administrative Capital has already taken shape and hosted several glitzy events.

The aptly named new capital, which Egyptian officials liken to South Africa’s Pretoria, is where the new government headquarters stand, and the relocation of some 50,000 state employees is planned to begin within months.

The first phase of construction has been under way for the past five years, with $20bn of investments pumped into an area covering 40,000 feddans (16,700ha). When all three phases are finished, the fully developed new capital should accommodate up to 6.5 million people on 70,000ha – almost the size of Singapore.

It has been a boon for construction companies both domestic and foreign. China State Construction Engineering Corporation won a deal in 2017 to build 20 big towers in the New Administrative Capital.

They are due to be completed by next year. The building boom is also helping local company Orascom Construction, which signed $1bn in projects in the last quarter of 2020 - almost two-thirds of them in Egypt.

In September, Orascom, The Arab Contractors and Germany’s Siemens signed a deal with the

government to build a high-speed rail link from Ain Sokhna to Alexandria. The Arab Contractors is building the new Senate, the new parliament and a huge Islamic cultural centre in the new city.

Hundreds of kilometres to the west, New Alamein, Egypt’s second most prominent mega-development, has been growing since 2018 on a 20,160ha parcel of land. It aims to house two million people.

Like the new capital, New Alamein bristles with towers and skyscrapers, which are rare in Egypt, as well as government offices.

More green spaces Both projects are among 37 smart cities either at the planning stage or already being built, under the auspices of the government and the military, which is heavily entrenched in the contracting business. Part of Egypt’s 2030 Vision policy document, the projects are hailed by the government as ‘fourth-generation cities’ designed to alleviate congestion in existing urban areas. Their infrastructure is more advanced and eco-friendly, and their green spaces are considerably larger than in the old districts.

Khaled Tarabieh, associate professor of sustainable design at the American University in Cairo (AUC), says: “The current activity is healthy, as the intent

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

113

CONSTRUCTION DOSSIER / A tale of new cities

now is directed towards a greener economy that is resilient enough to sustain its growth in the middle of an unstable global economy.”

However, he underscores key challenges that he says ought to be addressed in order to operate the infrastructure of smart cities, such as energy and water accessibility.

“Water raises questions about the availability of the proper technology to resolve future shortages expected due to climate change or any other reason,” he tells The Africa Report.

“Accordingly, the key issue now with building new cities is how to operate them, and what level of governance will be implemented to cope with the new challenges, such as the integration of technologies into day-to-day life.”

The new cities are hosting gated developments of different sizes.

Such developments have gained in popularity over the past three decades among the well-off and the upper-middle class.

The management team of each new city is in charge of selling plots of land to developers.

Compounds – where residential units are often more luxurious and expensive than those in standalone buildings – are a favourite choice of major homebuilders.

“Compounds will definitely be more prevalent as the big developers continue their land acquisitions,” Mariam Elsaadany, a senior real-estate analyst at Egyptian investment bank HC Securities, tells The Africa Report. “We should continue to see the upper-middle [class] segment move more and more towards these projects, mainly in West and East Cairo,” she says. “But I believe at [a] slower pace as affordability becomes more of an issue for buyers.”

The success of this trend outside greater Cairo “will depend on the

AMIR MAKAR/AFP

Key issue is governance

wealth in these cities as well as the infrastructure and services provided to these areas,” Elsaadany adds.

The AUC’s Tarabieh reckons that “the level of success of this new generation of cities […] will depend on the willingness of the younger generations to relocate and contribute to their prosperity. This [in turn] will depend on the ability to create lasting economies of scale that can lift up these cities in the future.”

The real-estate market primarily targets the wealthiest 10% of the population and will continue to do so with the new smart cities, says Salma Hussein, an Egyptian economic researcher.

“Until before corona[virus], 80% of wealth in Egypt was concentrated in real estate,” she tells The Africa Report. “There are around

20m

Number of unoccupied apartments in Egypt as the richest 10% hedge their wealth in real estate

114 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

20 million unoccupied apartments.

This means the wealth is pretty much concentrated in the hands of a small number of people […] and with the expansion comes more inequality of wealth.”

Class segregation Real estate is “hedged against everything; inflation, devaluation [and] what have you,” Hussein says.

“There is usually some stagnation in prices and then it takes up again,” she adds, shrugging off fears of a bubble that may burst at some point in the future.

“The demand for real estate is always sustained by population growth,” which has been high for decades, Hussein argues. Egypt’s population exceeds 102 million, with one birth estimated every 13 seconds, despite the government’s efforts to reduce the birthrate.

Elsaadany says that gaps between supply and demand will vary from one target class to another according to their attractiveness for developers. “For the luxury segment, which is a niche

MENA CONSTRUCTION GROWTH PROJECTIONS (Construction industry value, real growth, percentage year on year)

Qatar

12

Saudi Arabia

United Arab Emirates

Egypt

Oman

8 4 SOURCE: FITCH

0 -4 -8

2019

Symmetry for sale: New Mansoura, 50km north of its namesake, on the Mediterranean coast

2020

2021

Hussein, the economic researcher, commends the social housing that the government has been providing over the past years to slum residents, who comprise around a quarter of the population.

All the same, she says the initiative has thus far covered a negligible percentage of the informal district dwellers, estimating it at about 5%.

Don’t junk the old cities market that is relatively profitable for developers, we are more likely to see demand lower than supply,” she says. “The upper-middle segment will definitely have the highest level of demand, so developers catering to this segment will have more business.” But members of the lower-middle class will find it harder since “developers do not like to work in this sector for several reasons, including lower margins and risk of default by buyers”, Elsaadany says. The Central Bank of Egypt has launched initiatives to increase the supply to this segment.

The ongoing trends support Egypt’s already marked class segregation. “This [scenario] is likely to remain, unless initiatives such as social housing units and mortgage finance initiatives are large enough to support a greater portion of the working-class segment into buying houses in the new districts,” Elsaadany says. What such populations really need is subsidised rent, she continues. “So far, no social residence programme has been targeting that.”

Tarabieh says that the government should not ignore old cities. “The level of development that could be directed to our old cities should be more focused on preservation of memory. There are worldwide practices to preserve and revive the older quarters of a city, and [they] can be transformed to be an economic engine as well as a landmark for our identity and culture.” In August, the government revealed that E£30bn ($1.9bn) has been earmarked for refurbishment works in historic Cairo.

At the business and macroeconomic level, building smart cities certainly bodes well, says Elsaadany, as a growing real-estate market spurs other industries and encourages more investment.

“Developers who have exposure to the new capital, such as [Egypt’s largest developer] Talaat Moustafa Group Holding, have been successful in generating sales,” she says.

“The New Administrative Capital Company [which is 51% owned by the military] has also benefited as it sells land for different purposes, including residential, commercial

2022

2023

and other services.” As much as 80% of the first phase’s land is already sold.

The ongoing urbanisation also “reflects well on the growth rate of Egypt’s GDP,” Elsaadany points out. “The sectors benefiting are numerous and include all the building materials, contracting, cement and steel.”

A source familiar with the construction industry in Egypt echoed these sentiments, saying that national projects have offered a lifeline to the beleaguered sector: “In recent years, national projects have contributed around 30% of local steel demand and around 40% of local cement demand.”

Yet, a glut that has caused yearslong losses in the cement sector has barely been assuaged, says the source, who wished to remain anonymous. “No demand, however big, can do away with the cement oversupply problem because the gap is something like 30m tonnes per annum.” This has “partially made up for subdued demand from private homebuilders, which was affected by low purchasing power from Egyptian pound devaluation [in 2016], and later Covid-19, besides the government’s crackdown on informal housing and halting building permits.”

Ratings agency Fitch predicts that Egypt’s construction sector will grow by 10% year-on-year in 2021 and continue at nearly that pace for the rest of the decade, as the government continues to roll out its pharaonic projects.

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

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CONSTRUCTION DOSSIER

CHINA

Tshisekedi puts mines-for-infrastructure deal under the microscope DRC president Félix Tshisekedi is revisiting deals done by his predecessor, and finds two Chinese companies have built only a fraction of what they promised

By STANIS BUJAKERA TSHIAMALA

universities, were included in the deal. However, according to a technical note from the Agence Congolaise des Grands Travaux (ACGT), the Chinese groups have not fulfilled their commitments.

Kinshasa wants to review its relationship with Beijing. Only a handful of projects have been launched since the two capitals signed their 2008 cooperation agreement, which provided for the construction of public buildings and roads worth $9bn.

Thirteen years on from the agreement, which was signed during Joseph Kabila’s time in office, “the DRC’s infrastructure deficit is still hindering its development,” President Félix Tshisekedi said on 10 September. The head of state has asked his ministers for mines and infrastructure to evaluate the technical and financial data of various construction projects.

A tenth of the budget spent ‘Given the delay in implementing the mining project [intended to pay for the infrastructure works], the Sino-Congolese programme’s overall budgetary envelope has now been reduced to $1.05bn,’ the document states. No modern university has been built nor has a

0/31

Of the 31 new hospitals promised in the 2008 Sino-Congolese infrastructure deal, not one has been built

Ambitious plans

Tshisekedi visits the Sicomines joint venture

XINHUA/MAXPPP

In 2008, Kabila bartered Congolese copper and cobalt – notably extracted by the Chinese-Congolese company Sicomines in Katanga – for the construction of infrastructure worth $9bn, which was renegotiated to $6bn in 2009 after some pressure from the IMF. Two Chinese companies – Sinohydro and China Railway Engineering Corporation – were assigned to carry out this infrastructure work.

More than 3,500km of roads, as many kilometres of railways, road infrastructure in Kinshasa, 31 hospitals with 150 beds and 145 health centres were planned.

No less than 2,000 social housing units in the capital and 3,000 in the provinces, as well as two modern

116 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

single hospital been erected. Only 356km of paved roads and 854km of dirt roads have been completed.

Several stadiums and buildings are being rehabilitated, but the construction is not finished. According to the ACGT, almost $900m (a tenth of what was promised in 2008) has been spent on these completed and ongoing projects.

Tshisekedi, with support from the United States, has decided to revisit all the contracts signed under his predecessor, including those with the Chinese. Although Beijing has not officially reacted to the recent statements of the Congolese head of state, its diplomats are currently working to restore collaboration. Zhu Jing, China’s ambassador to Kinshasa, has met with mines minister Antoinette N’Samba Kalambayi and Senate president Modeste Bahati Lukwebo.

Experience the Progress.

www.liebherr.com info.lex@liebherr.com www.facebook.com/LiebherrConstruction

CONSTRUCTION DOSSIER

INTERVIEW

Solomon Baumgartner Aviles

The Lafarge Egypt CEO talks to The Africa Report about overproduction in the Egyptian cement market, prospects for consolidation and the importance of green production Interview by DAVID WHITEHOUSE Egypt’s cement industry will be running out of options if production limits imposed by the government fail to lift prices, Lafarge Egypt CEO Solomon Baumgartner Aviles tells The Africa Report. Prices in the country are “very, very low”, Aviles says from Cairo. If that does not change, cement production in Egypt is “a losing proposition”.

In July, the country’s competition authority approved a request by cement makers to impose output cuts. The production quotas came into effect on 15 July for a one-year period. Lafarge, which is part of the Switzerland-based Holcim Group, has been losing about 20% of its sales in volume terms due to the quotas, and Aviles wants prices to rise by 30% to 35% by mid-October. Lafarge, alongside others in the industry, will consider pulling out of the quota system if prices do not rise fast enough.

The month of August saw a “very rocky and difficult start” to the scheme, which covers production but not pricing, as government entities continued to sell cement heavily at the old price. “The government has to play the game,” he argues. Many producers “can’t take another month like that”.

Rising costs The government pushed ahead with quotas without a viable enforcement mechanism in place, Aviles says. “The decision is the easy part.

Implementation is more difficult.

There has to be trust that the cap works. That has not yet happened.”

Rising costs for raw materials and energy are putting further pressure on producers. “Egypt is not such a low-cost place” for cement production compared with Algeria or Turkey, he says. The 25m tonnes oversupply could take several years to be eliminated, and the one-year quotas may have to be extended.

118 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

LAFARGE

‘There has to be trust that the cap works’ Aviles says the steps taken so far are going in the right direction and he is optimistic about the longerterm outlook, arguing that the government has, since 2016, achieved stability and sustained growth. “I feel we have bottomed out in 2021,” he says. “We should see a recovery in the cement sector next year.”

Per-head consumption of cement in Egypt remains low, at about 450kg per year, a figure Aviles says should be in the high 500s to low 600s. Population growth and urbanisation will drive consumption higher, he says.

Aviles wants to see green production and low CO2 emissions as the criteria used to limit cement production. At present, he says, Egypt lacks a “holistic” system to monitor green criteria in cement. This, he says, would leave the market free to operate, and could serve as a trigger for industry consolidation as profitable producers of green cements will want to scale up their technology. He says the government is “working on it” but suspects that Egypt may still be 12 to 18 months away from having such a system. In the meantime, he adds, producers “need air to breathe”.

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TOP 40 DIGITAL LEADERS IN AFRICA

TOP 40 DIGITAL

LEADERS IN AFRICA Tech builds the future for Africa’s youth, providing jobs, opportunities and access to knowledgee. As A the th ecosystem geets ever more crowde ed with talent, The Africa A Report launcches its first ranking of the digital econo omy’s power playerrs

120 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

121

TOP 40 DIGITAL LEADERS IN AFRICA

education. Even governments have started to use them in the hope of bridging the gap between citizens and administrations.

Alongside MTN, Vodacom, Orange and others, thousands of startups, investors, incubators, fibre-optic network operators, data centres and influencers are enriching the ecosystem. This profusion of players has inspired The Africa Report’s first ranking of the top 40 personalities who make up digital Africa, with the goal of updating it every year.

To select 40 from this crowded field was an ambitious undertaking. It includes telecom operators with hundreds of millions of subscribers, the heads of specialised investment funds and founders of startups that have become unicorns, but also African representatives of the FAANG (Facebook, Amazon, Apple, Netflix and Google) giants and finally some public decision-makers.

By JULIEN CLEMENÇOT and HONORÉ BANDA

I

If there is one industry that has continued to exceed expectations in Africa, it is telecommunications. Today, the continent has more than 500 million mobile phone users. That is almost one in two Africans. It is far beyond what Rwandan-Congolese businessman Miko Rwayitare, creator of the continent’s first mobile network, Telecel International, could have imagined in 1987. At the time, the entrepreneur was only targeting a few thousand of the happy few, and his phones, which could not even send an SMS, were still the size of a brick.

In three decades, operators have gone through global crises without a shudder.

After the development of 2G networks, then 3G and 4G networks, submarine cables and mobile-mobile payments, the continent has taken a new technological leap – that of the platform economy. It first appeared in the field of e-commerce, which has been active for a few years now, to be joined by financial services, energy, agriculture, health and

Innovation, funding, leadership

$1.1bn Amount raised by African tech startups in the first 8 months of 2021, according to Disrupt Africa

122 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

For our ranking, we used a series of criteria ranging from innovation capacity to financial strength and the size of funds raised, as well as leadership and notoriety, with the main focus on events that occurred during the period 2020 to 2021. This ranking cannot claim to be an objective truth, but it presents our vision of a revolution that we have followed since its beginnings.

We could have immediately placed the top 10 telecom operators, without whom very little would be possible, but we also wanted to highlight the adoption of e-commerce, the explosion of fintechs, particularly in Nigeria, the growing interest in energy-access services, the development of data centres, and the first truly significant projects from the FAANG companies in Africa, particularly in infrastructure.

Finally, we note that women are still in the minority in this ecosystem, and particularly in the top roles. However, they are far from being absent. In addition to the personalities in our ranking, we would like to mention Odunayo Eweniyi, co-founder of the startup Piggyvest, Coura Carine Sene, who runs Wave mobile money in Senegal, Fatoumata Ba, whose fund, Janngo Capital has pledged €60m ($70m) for women-led startups, and Andreata Muforo, partner of the investment company TLcom.

We hope to see more women in the elite of the sector in 2022, so watch this space.

RANKING

The shapers of Africa’s digital landscape The Africa Report’s exclusive ranking of the infrastructure builders, telco CEOs, startup founders, e-retailers and policymakers creating the continent’s digital future Infrastructure

Rank 2021 1 2&3

Startup

Telecom

Finance

Policy

E-commerce

Media

Name

Nationality

Position

Organisation

Strive Masiyiwa

Zimbabwe/UK

Founder & Executive Chairman

Econet Paystack

Shola Akinlade & Ezra Olubi

Nigeria

Co-founders & CEO

Olugbenga Agboola

Nigeria

Co-founder & CEO

Flutterwave

K. Bekker & P. Mahanyele-Dabengwa

South Africa

Chairman & CEO for South Africa

Naspers

7

Ashraf Sabry

Egypt

Founder & CEO

Fawry

8

Mitchell Elegbe

Nigeria

Founder & CEO

Interswitch

4 5&6

9

Ralph Mupita

Zimbabwe

President & CEO

MTN Group

10

Peter Ndegwa

Kenya

CEO

Safaricom Vodacom

11

Shameel Joosub

South Africa

Group CEO

12

Alioune Ndiaye

Senegal

CEO

Orange Middle East & Africa

13

Issam ‘Sam’ Darwish

USA

Chairman & Group CEO

IHS Towers

14

Michael David Francois

USA

Network Infrastructure Strategy TL – EMEA

Google

15

Nunu Ntshingila

South Africa

Regional Director for Africa

Facebook

16

Mostafa Kandil

Egypt

Founder & CEO

SWVL Technologies

17

Michael Seibel

USA

Managing Director & Group Partner

Y Combinator

18

Tayo Oviosu

Nigeria

Founder & Group CEO

Paga

19 & 20 Jérémy Hodara & Sacha Poignonnec 21

France

Co-founders & Co-CEOs

Jumia

Ismail Ahmed

Somaliland

Founder and Chairman

WorldRemit

22

Jan Hnizdo

South Africa

CEO

Teraco Data Environments

23

Moustapha Cissé

Senegal

Director of the Africa AI Center, Accra

Google

24

Ryosuke Yamawaki

Japan

General Partner

Kepple Africa Ventures

25

Zhu Zhaojiang

China

President

Transsion Holdings

26

President Paul Kagame

Rwanda

President

Rwanda

27 & 28 Tope Lawani & Babatunde Soyoye

Nigeria

Co-founders

Helios Investment Partners

29

Sim Shagaya

Nigeria

Founder & CEO/former CEO

uLesson, Konga.com, E-Motion

30

Jason Njoku

Nigeria

Co-founder & CEO

iROKOtv

31

Iyinoluwa Aboyeji

Nigeria

Co-founder

Future Africa, Andela, Flutterwave

32

Zhou Yahui

China

Founder & CEO

OPay

33

Moulay Hafid Elalamy

Morocco

Founder/Minister of Industry, Trade & Tech.

Saham Group/Govt. of Morocco

34

Akshay Grover

India

Acting Group CEO

Cellulant

35

Jesse Moore

USA

Co-founder and CEO

M-Kopa

36

Kim Reid

South Africa

Founder & Group Chairman

Takealot

37

Ory Okolloh

Kenya

Director of Investments

Omidyar Network

38

Funke Opeke

Nigeria

CEO

Main One Cable Company

39

Rebecca Enonchong

Cameroon

Founder & CEO

AppsTech

40

Harvesh Kumar Seegolam

Mauritius

Governor

Bank of Mauritius

THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

123

AFRICAN N LEADERSHIP Insight, conviction and a touch of idealism sent these pioneers where others feared to tread.

Now they are the power players in Africa’s digital space, and it’s only the beginning

By JAYSIM HANSPAL

Africa is often associated with the ‘digital divide’, as the internet and its manifold benefits remain out of reach for the majority of the continent’s population – only 28.2% of Africans had access to the internet in 2019, according to the International Telecommunication Union’s estimate. At the same time, the continent is a breeding ground for innovation and homegrown initiatives that have changed Africa’s digital landscape, paving the way for economic transformation.

As the need for social distancing brought by Covid-19 continues to affect families and businesses alike, the digital sector has provided solutions. From cashless transactions to digital health technology and online educational tools, African pioneers have invested in innovations that both predated and will outlast the Covid-19 pandemic. After studying the impact of technological change in Nigeria, Senegal and Tanzania the World Bank is categorical about the power of digital tools: ‘One key takeaway is that the more digital access Africans have, the more likely they are to reduce poverty over time,’ the Bank says in the introduction to its findings.

As the young population increases, there will be new opportunities for African businesses. Digital innovation could greatly improve the economic growth of many countries, creating jobs, helping to alleviating poverty and improving quality of life. Africa is famous for its leapfrogging – for example, from no phone to cell phone. But education systems will also need to keep up if young Africans are to be the inventors of a new future rather than simply the users of technology developed elsewhere.

A focus on the following trailblazers raises important questions about the future of an expanding digital sector on the continent, and how it will deal with issues like data privacy, promoting inclusive access, and the dominance of a handful of players who create popular platforms that quickly become ubiquitous.

124 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

HALDEN KROG/BLOOMBERG/GETTY

DIGITAL #5&6

Koos Bekker SAVVY CHOOSER

N

aspers is the Africa’s biggest digital media powerhouse. It owes its financial firepower to a single investment that skyrocketed in value. In May 2001, Naspers bought 46.5% of Chinese internet company Tencent. The man in charge at the time was Koos Bekker.

Bekker is a big name in South Africa. After founding one of the first two pay-television services outside of the US, he took his success to Naspers as CEO in 1997.

Naspers, or De Nasionale Pers

Phuti MahanyeleDabengwa

D

UTT EAN H

ON/BL

OOMB

ERG/G

#5&6

ETTY

IN TECH WE TRUST

Beperkt as it was originally called, was started in 1915 as a publishing company. It now has a value of $78bn and has expanded its activities to include online retail and venture-capital investments.

Before joining Naspers, Bekker founded M-Net/Multichoice pay-television service, which now operates in 48 African countries.

He was also a founding director of South Africa-based telecoms giant MTN, now the largest mobile network operatator in Africa.

Public apology Naspers owns Africa’s largest publishing company, Media 24, and South Africa’s largest online retailer, Takealot.com. Naspers has not always been on the side of progress, however, and made a public apology in 2015 for funding the National Party during apartheid. The same year Bekker sold 70% of his shares in Naspers and became chairman of the board.

Tencent is now in Beijing’s crosshairs, as policymakers seek

to regulate the country’s tech giants. Such a move may encourage Naspers to focus on other opportunities for growth. In 2019 it listed its global internet investment business unit Prosus on the Euronext bourse, retaining a 56.92% stake.

Naspers had already sold some of its stake in Tencent for $10bn in 2018 to have funds for other ventures, including a stake in Russia’s Mail.ru Group.

“E-commerce is not a get-richquick business. […] You need a good amount of patience,” Bekker told media.

On 31 August, Naspers announced a deal for its Prosus company to buy Indian payment platform Billdesk for $4.7bn. This marks an increased interest in the Indian market, with more than $9bn spent since 2014. The Billdesk deal is its biggest investment so far.

Moving on from its ignominious past, Naspers in 2019 created the role of CEO for South Africa and appointed the influential entrepreneur Phuti Mahanyele-Dabengwa.

A child of Soweto who was 23 when South Africa gained its freedom, she was CEO of Shanduka Group, founded by South Africa’s current president, Cyril Ramaphosa, before forming her own black economic empowerment (BEE) investment company, Sigma Capital, in 2015.

Inclusivity inc.

Mahanyele-Dabengwa is a big believer in the power of technology, telling reporters: “We need greater connectivity for inclusivity. […] Technology can transform our economies, create jobs and boost growth and make possible the transition to a more sustainable and equitable society.” She says the focus on “healthcare connectivity” and e-commerce is a priority for Naspers moving forward, with an eye on Brazil, Russia, India, China and South Africa.

As South Africa CEO, Mahanyele-Dabengwa also oversees Naspers Labs, a social impact organisation with the aim of creating tech jobs for the unemployed in South Africa, and Naspers Foundry, a $1bn investment vehicle for early tech companies. Seven startups, including Aerobotics, WhereIsMyTransport, and Food Supply Network have received R400m ($28 million) in funding.

In July, the Foundry backed digital insurance advice firm Ctrl $2.3m and in early August it invested $8.3 million in the artificial intelligence insurtech startup Naked.

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TOP 40 DIGITAL LEADERS IN AFRICA

Mitchell Elegbe CHAMPION OF CASHLESS COMMERCE

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RICCARDO SAVI/GETTY FOR CONCORDIA SUMMIT

itchell Elegbe founded Interswitch in 2002, after his first encounter with an ATM swallowed his card in Scotland. An alumnus of the China Europe International Business School (CEIBS) Global CEO Programme and the African Leadership Institute’s Archbishop Tutu Fellowship Programme, he now wants to help transform African economies and push towards a cashless marketplace.

Interswitch is a Nigerian digital payments company and one of the continent’s first unicorns. In 2010, shareholders decided to sell

two-thirds of the company to raise more funding. Nine years later, after a $200m cash injection from Visa, it was valued at $1bn. Its planned initial public offering in London, though, has repeatedly been delayed and does not yet have a launch date.

Pan-African designs Interswitch’s main market is Nigeria, but it is set on becoming a pan-African digital payments platform. This year, it is expanding its Quickteller Business ‘seamless payment solution’ to businesses in East and West Africa.

Z

imbabwe’s Strive Masiyiwa is a digital innovator through the Econet Group, both in Zimbabwe and beyond through Econet Wireless, and through Liquid Intelligent Technologies, which has built fibre-optic networks in 13 African countries.

Liquid is also helping to experiment with new technologies in partnership with Alphabet, the parent company of Google. With Project Taara it is testing ways to send data through space, which

#1

126 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

With Elegbe at the helm, Interswitch has grown at an incredible rate; now it provides fintech and digital services such as technology integration to governments, banks and high-net-worth individuals.

In alliance with the Cross River State government, Interswitch developed software responsible for digitalising all government departments. Elegbe says that digital tools need to be rolled out in many other sectors to help African economies to grow, calling for Nigeria’s national ID programme, which was launched in 2014, to

had a successful test this year in Brazzaville and Kinshasa.

In September, Afreximbank’s Fund for Export Development in Africa announced an investment in Liquid Intelligent Technologies solutions, adding to the list of big international backers of Masiyiwa’s digital business ventures.

Billionaire Masiyiwa has also backed other initiatives in the digital space, with the EcoCash mobile-money platform becoming so important to the Zimbabwean economy that the authoritarian government of Emmerson Mnangagwa sought to weaken its role. Econet Wireless became the first African telecoms company to buy a bank in order to carry out its fintech plans. The government looks set to continue

#8 services, helping local startups to grow and develop. Digital payments will not cover the payment landscape overnight, so Interswitch has about 11,000 ATMs across different banks.

Funding innovation

those markets already exists. But in West, Central and East Africa, there is still room for development, so we felt we should begin to spread our tentacles across these regions,” he said.

Through its credit card company, Verve, Interswitch has supplied more than two million cards and has 190,000 businesses using its

using regulations and the threat of lawsuits to manage the activities of the mobile-money sector more tightly. And so, with the Zimbabwean business environment tied to the current political power structure, London-based Masiyiwa is keeping a more continental view.

electric ride-hail taxi network in 2020. But Kwese TV, the satellite TV broadcaster, failed to become a profitable business and closed down in 2019.

Masiyiwa’s influence extends far beyond the continent, as he sits on the board for numerous international companies including Netflix, Unilever and Stanford University. His foundation has provided scholarships to more than 250,000 young Africans. During the early days of the Covid-19 pandemic, he and other business leaders used their negotiating

skills to set up the not-for-profit Africa Medical Supplies Platform, enabling African governments to purchase items such as personal protective equipment online.

As the African Union’s coronavirus envoy, Masiyiwa has been fighting the continent’s corner: “We want to make clear to all suppliers […] if you want a long-term future with us now, you produce from Africa.” Meanwhile, his daughter Elizabeth now runs Akello, a subsidiary of Econet, which aims to use tech to improve African education systems.

TAIWO OYEMADE

create digital identities and make them easily verifiable.

Fintech expansion in Africa can have varying levels of success. In a 2013 interview with Forbes, Elegbe said that Interswitch may not be successful everywhere. “Southern Africa is quite developed and so chances are that any payment infrastructure you need to have in

Interswitch also wants to put its money into African fintech. It launched a $10m venture arm in 2015, which the following year acquired Vanso, a Nigerian fintech security company. At TechCrunch Disrupt in 2020, Elegbe said: “We’ll be very selective in the companies we invest in. They should be companies that Interswitch clearly as an entity can add value to. They should be companies that help accelerate growth by virtue of what we do and the customers that we have.”

Data and determination Africa Data Centres is building more digital infrastructure in Africa. Last year, Masiwiya’s project received $300m from the World Bank’s International Finance Corporation to fund its expansion into other parts of Africa.

Masiyiwa and Econet have got involved in a slew of other startup activities. Distributed Power Africa works on off-grid renewable energy and signed a partnership with EDF in March. Vaya Africa launched an

Strive Masiyiwa CONNECTING PEOPLE

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Ralph Mupita

investors seem to like Mupita’s style: the group’s shares were up 124% between late August and the start of 2021 – and this despite MTN’s suspension of its dividend payment in order to pay off debt and deal with the uncertainties of the Covid-19 pandemic.

Under Mupita’s leadership, the value of transactions on its MoMo mobile-money platform rose 88% year-on-year in the first half of 2021. At the end of 2020, MTN had 46.4 million mobile-money users in its subscriber base.

AT THE TOP OF A TELCO TITAN

Focus on Nigeria MTN is planning to get out o of operations outside of its main focus in Africa, meaning g that Nigeria is likely to be cen ntre stage for the telco. But th he relationship with the authorities in Nigeria’s capital, Abuja, have been fraughtt over the years and there are no signs of a long-terrm rapprochement.

Mupita became CEO of o the group on 1 Septembe er 2020, taking over from the long-serving Rob Shuter. His background is as a high-level manager rather than a telecoms specialist, having studied civil engineering and

128 THEAFRICAREPORT / N° 117

business administration. He spent more than a decade at financial services group Old Mutual before joining MTN as its chief financial officer in 2016.

MTN has some 277 million customers in 21 markets in Africa and the Middle East. It plans to invest big in technology, for example, with plans to roll out 5G networks in Ghana next year. And

Spinning off operations

CHRIS RATCLIFFE/BLOOMBERG/GETTY

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he continent’s top telco is gearing up to get leaner and meaner for its next transformation. Under Zimbabwean CEO Ralph Mupita, South Africa-based MTN Group is betting on mobile money, fintech innovations and building platforms to expand its bottom line. In Nigeria, the group’s biggest market, data revenue is soon set to overpass voice revenue for the first time.

While the Nigerian auth ii thorities are stonewalling MTN’s attempts a to get a full mobile-money licence l – potentially of one of the last great growth markets on the co ontinent – this was not enough to pe ersuade Mupita and his team to be et big on a licence in Ethiopia th his year, after they lost out in a first round to Safaricom. Mupita say ys he is planning to continue a divestment programme worth about $1.6bn over the next three to five e years.

Other investor-friendly options h table bl for f MTN include on the M d listing its fibre spinning off and ney businesses. and mobile-mon dia this year that Mupita told med “within the core [connectivity business] there are a some infrastructure assets and platforms that is putting we believe the market m e on”. little to no value Mupita wants to use MTN as a ng other actors into platform to brin a. In September, the digital arena MTN and South African insurance a partnergiant Sanlam signed s ship allowing the sale of the financial services company’s products and investments to mobile customers.

Mupita said in a media release that the alliance is focused on ‘driving financial inclusion across the continent and providing customers with c insurance and nvestment products in taiilored to the eds of the African nee conssumer’.

#9

RICHARD DREW/AP/SIPA

#32

Zhou Yahui PLANTING THE SEEDS OF A DIGITAL HARVEST

A

mobile-money platform also known for its motorcycle-based delivery service in Lagos, Nigeria, OPay has become one of Africa’s rare unicorns (a startup with a valuation of more than $1bn). The company’s value is estimated at $2bn, after it raised $400m during an August fundraising round that included Japan’s SoftBank.

Opay is part owned by Chinese billionaire Zhou Yahui, founder of Kunlun Tech Co, a web game developer in China. OPay is an important company to watch as it is also part of the widening and deepening interest of Chinese players in Africa’s digital space, from telecoms provider StarTimes, to mobile manufacturer Transsion and telecoms big players like Huawei and ZTE. Zhou controls OPay through Opera, a Norwegian company based in the Cayman Islands. He got his start in the digital sphere by creating a website for sharing animations while at Tsinghua

University and then went on to work for social media platform Renren. He is chairman of the Board and co-CEO of Opera, which runs a mobile browser and news service.

Eyes only for OPay

In January, Opera, which is listed on the NASDAQ stock exchange, denied claims by short-seller Hindenburg Research that its lending practices breach Google’s Play Store rules. Opera Mini, Opera’s browser, says it has more than 100 million users and is rolling out new chat programmes and other services. Company statistics show 25 million active users for the Opera News service.

Zhou is no longer in a leadership role at Beijing Kunlun and is focusing his attention on the development of OPay, where he is the CEO, with eyes on the wider African market. Through agent banking, OPay gives individuals the ability to act as a payment processor, handling $3bn a month,

according to the company. It also claims to operate 80% of mobile banking transfers in Nigeria, a market that has big potential but has been further behind in developing mobile money than the likes of continental leader Kenya.

The mobile payment service and consumer platform incorporates banking but also allows users to order food and groceries.

OPay developed the bike-hailing app ORide, the loan application OKash and food-ordering platform OFood in the Nigerian market.

The app market in many African countries is spurring big competition from global players like US-based Uber, Spain’s Glovo and Africa-focused e-retailer Jumia.

After raising the $400m in August, Zhou told media: “We want to be the power that helps emerging markets reach a faster economic development.” Summing up his long-term view, he told Chinese media outlet Xinhua: “The utilisation of internet data will speed up the establishment of a credit system, improve the overall commercial credit and tech ecosystem, thus optimising the investment environment in the long run. […]

It may be a long and difficult process, but we will ultimately reap a harvest.”

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FOCUS /

BENOIT DECOUT/REA

MAURITIUS

Looking for a new economic miracle 130 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

FOCUS

By KERVIN VICTOR in Port Louis Mauritius is often cited as a symbol of resilience in Africa, having defied the odds and entered the select club of high-income countries in 2019. For the first time, Mauritius’s gross national income per capita exceeded the $12,535 threshold needed to be included in this elite group.

The island country was hardly able to savour its success before it was hit by a series of challenges. Cases of Covid-19 were first detected in Mauritius on 18 March 2020. The government reacted swiftly, closing its border to international arrivals and imposing a strict lockdown to limit infection. Consequently, the country recorded a decline in its GDP of 15% last year. Financial services and information and communications technology (ICT) were the only sectors to record growth, at 4.9% and 1% respectively. The tourism sector declined by 80%.

Back to square one

Port Louis looks forward to buzzing again after borders open on 1 October

With tourism deflated, regulators on the prowl and reeling from a series of procurement scandals, the government of Prime Minister Pravind Jugnauth needs new growth strategies to win back respect

This crisis has underlined Mauritius’s economic dependence on tourism. The absence of tourists caused a sharp decline in foreign exchange and fiscal revenues, curbing the country’s public spending capacity.

Earnings from the tourism industry fell from Rs63bn ($1.5bn) in 2019 to Rs17.7bn in 2020.

Back again in the high-middleincome trap, Mauritius also saw its local currency, the rupee, nosedive.

In its economic statement published in September 2021, the Mauritius Chamber of Commerce and Industry reported that the rupee had depreciated 22.7% against the US dollar between January 2020 and 30 June 2021. ‘The outcome has been destructive to the competitiveness of businesses in Mauritius, coupled with an exorbitant hike in freight charges,’ the report said.

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MAURITIUS FOCUS / Looking for a new economic miracle

The country further recorded an 8.4% GDP contraction in the first quarter of 2021, but the IMF projects that Mauritius’s GDP will grow by 5% in 2021, assuming some recovery in the tourism industry.

Mauritius opens its borders for fully vaccinated travellers on 1 October.

Despite the resilience shown by the financial sector, which accounted for 13% of GDP in 2020, Mauritius remains under the international spotlight due to concerns about tax justice and governance.

The Financial Action Task Force (FATF), an international intergovernmental organisation, placed the country on its grey list in February 2020, after identifying deficiencies in Mauritius’ anti-money laundering and combating the financing of terrorism (AML/CFT) regimes. The European Union included Mauritius on its black list in October 2020.

More rigour required Since then, the government has gone to great lengths to fill the gaps identified by the FATF. In June 2021, the FATF said the country had made progress. A visit

by FATF officers took place on 13-15 September. The FATF will make its decision on whether to remove Mauritius from the grey list in its plenary in October.

As the country emerges from the pandemic, the government led by the Mauritian Alliance is far from enjoying the unanimous support of the population. The alliance is composed of the Militant Socialist Movement (MSM) and its allies, Plateforme Militante and Muvman Liberater. Prime Minister Pravind Jugnauth and his government face

FABIEN DUBESSAY/MCB ST JEAN

The financial sector is working to improve its image

sharp criticism that they have mismanaged the country and failed to fight corruption and fraud.

Thousands of Mauritians have taken to the streets over the past 12 months to demand the government’s resignation.

Among their grievances are the poor management of the worst ecological disaster the country has ever faced – the 1,000tn oil spill caused by a Japanese bulk carrier MV Wakashio, which ran aground in July 2020. Citizens are also riled by the sharp depreciation of the rupee, which is affecting Mauritians’ purchasing power, by the fuel tax introduced to finance the purchase of anti-Covid-19 vaccines, and by revelations concerning the granting of public contracts to those close to the government.

‘The whole public procurement process, including current legal provisions and procedures, must be reviewed with a view to strengthening accountability and transparency and ensuring that emergency procurement does not become a fertile ground for the commission of financial abuses

and malpractices at the expense of taxpayers,’ recommended the National Audit Office in its report for the financial year 2019-20.

Another ‘bombshell dossier’ arrived with the discovery in a sugar cane field at Moka on 18 October 2020 of the partially burnt body of MSM activist Soopramanien Kistnen. It forced the minister of commerce, Yogida Sawmynaden, to resign in February 2021. Before his death, Kistnen was about to contact the anti-corruption agency about bidding practices at state-owned corporations.

Death of a whistleblower A police investigation ascribed the death to suicide. It took the perseverance of a panel of lawyers, including former justice minister Rama Valayden, for a judicial inquiry to be launched. The revelatory hearings, worthy of a thriller TV series, ended in June but the magistrate’s conclusions have not been made public.

Kistnen’s was merely the start of a troubling series of untimely deaths.

Pravin Kanakiah, a procurement

3,899 MAURITIUS

776 1980

1985

132 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

2,506

1990

1995

officer at the finance ministry, was found dead on 11 December 2020.

A few days later the body of Sarah Boitieux, a civil servant working at the prime minister’s office, was found under suspicious circumstances. In January 2021, Deven Vythelingum, secretary of the State Trading Corporation, died after facing intense stress at work.

Ivan Collendavelloo, the number two of the government and leader of Muvman Liberater, was dismissed as energy minister in June 2020 following a report from the African Development Bank that he was involved in corruption around the Saint Louis power plant.

The government is also facing a series of petitions aimed at invalidating the 2019 election of several of its members, including that of Prime Minister Jugnauth.

Economic reset One of the government’s lifelines to try to regain popularity is to boost the economy by supporting businesses, limiting defaults and preserving jobs. Unemployment reached 9.8% at the end of June.

Then public debt reached 95% of GDP and inflation hit 5.9%.

Mauritian economist Kevin Teeroovengadum tells The Africa Report that Mauritius is struggling to develop new sectors. “We have been depending on the same economic pillars for over 15 years, and we haven’t been able to

Mauritius will invest Rs1bn in biotechnology, including vaccine production launch anything new. […] For more than a decade now, we have been talking about the emergence of the blue economy [the exploitation, preservation and regeneration of the marine environment], but, in reality, we are still struggling to launch this sector.”

Kee Chong Li Kwong Wing, a former chairman of the State Bank of Mauritius Holdings, says the administration needs to push the reset button: “The government should show capacity and competence to shift to a new economic model and the mindset to face a changing global economic environment post-pandemic.”

Political scientist Avinaash Munohur argues: “The emergence of China as a superpower capable of offering a new vision of globalisation different from the American hegemony, and the immense challenges linked to climate change are two major axes that will redefine our public policies and

the relationship of our country to its region.”

In his presentation of the 2021/2022 budget in June, finance minister Renganaden Padayachy announced a new three-fold strategy: giving an exceptional boost to investment, creating a new economic architecture and restoring confidence.

The government has earmarked Rs65bn for infrastructure projects.

It plans to generate 60% of Mauritius’s energy from green sources and to phase out coal by 2030. It also wants to seize opportunities created by the pandemic.

The government announced an investment of Rs1bn in biotechnology for the production of vaccines and other pharmaceutical products, accompanied by fiscal incentives.

Padayachy said that the government is following the philosophy of the late Anerood Jugnauth, who died on 3 June, aged 91. Jugnauth is often cited as the father of the Mauritian economic miracle. It was under his prime ministership that the country diversified its economy, with new sectors such as financial services, the free port and ICT, among others. It may take a new miracle for Mauritius to emerge from its current quagmire.

MAURITIUS’S GDP PER CAPITA ROLLER COASTER Current US$

11,208 9,197

12

10,153 9,260

10

8,030 8,622

5,388

7,318

UPPER MIDDLE-INCOME COUNTRIES

8 5 4

SUB-SAHARAN AFRICA

2 0 2000

2005

2010

2015

2020

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MAURITIUS FOCUS /

INTERVIEW

Ken Poonoosamy

‘We believe that we can position ourselves as a manufacturing hub’ The CEO of the Economic Development Board (EDB) talks with The Africa Report about Mauritius’s strategies and policies to attract foreign investment Interview by KERVIN VICTOR in Port-Louis

Ken Poonoosamy thinks of the Economic Development Board (EDB) as Mauritius’s “think tank” generating ideas to attract investment and develop the country’s export potential. He has been a top official in the field since heading up the Board of Investment – the EDB’s precursor – in 2011.

What is the role of the EDB in promoting investment?

Acting under the aegis of the ministry of finance, economic planning and development, the EDB’s main role is to attract and retain productive investments, and to amplify their development benefits through policies.

The relevance of synchronising investment and export policies is becoming globally more and more evident. Whilst acting as the apex body for both trade and investment initiatives, the EDB also undertakes research and planning to analyse national and global economic, technological and social trends, and to advise on, or shape, strategies and policies accordingly.

With the Covid-19 pandemic hitting Mauritius, how do you

expect FDI inflows to evolve in the coming years?

Mauritius witnessed decades of continuous positive GDP growth before the Covid-19 pandemic struck us. During this current crisis, private-sector investment remains a key driver of growth and all efforts are being deployed by the government and the EDB to facilitate projects within a reasonable time frame to give an exceptional boost to investment.

For the year 2021, we project a relatively modest recovery in FDI inflows due to persistent uncertainty on access to vaccines by many countries, the emergence of virus mutations and the revival of economic sectors.

What new measures are there to encourage investors?

Major reforms are being carried out to further improve our business

‘THE FREE-TRADE AGREEMENTS CREATE HUGE OPPORTUNITIES IN VAST MARKETS’

134 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

climate. One of our new products is the Premium Investor Certificate, which allows companies investing at least $12m to benefit from negotiable incentives. Also, a high-level committee chaired by the Prime Minister will be meeting on a regular basis to facilitate the obtention of permits, licences and approvals of investment projects.

What about visas and residency?

[We have advocated] a series of amendments to make it easier for investors and professionals to move to Mauritius combining the ‘work, live and play’ concept.

Occupation-permit holders are now given a 10-year permit outright, while permanent residence permits are given for 20 years. We have also alleviated the burden on retired non-citizens: a foreigner aged 50 or above can now retire to Mauritius with just $1,500 monthly to benefit from a 10-year residence permit.

[Plus, a new] long-stay premium travel visa allows digital nomads and other individuals to work and live in Mauritius for a year.

Which are the Mauritian economic sectors offering the best prospects for foreign investors?

In collaboration with our parent ministry, we have set the foundation for Mauritius to propel itself towards its next phase of development, which will be driven by innovation and [sustainability] while embracing inclusive growth.

EDB

The EDB also participated in implementing the strategy for the financial services sector, which relates, first, to enhancing the status of our financial centre, and, second, to deepening its service offerings and being compliant on anti-money laundering/combating the financing of terrorism matters.

Our free-trade zone is also developing as one of the most attractive zones in the region and it has been ranked ninth out of 61 zones globally by fDi Intelligence.

Other prominent sectors we are promoting include the ‘blue economy’, where we are maximising the potential of the fisheries sector, and the biotechnology and pharmaceutical industry.

Mauritius recently signed freetrade agreements with India and China and also plans to take advantage of growth on the African continent. How do you balance all those relationships?

The Comprehensive Economic Cooperation and Partnership Agreement (CECPA) with India, the China free-trade agreement and the African Continental Free Trade Area (AfCFTA) create huge opportunities in vast new markets that could provide demand for more complex Mauritian products.

We believe that these agreements are complementary and Mauritius has a prime role in making sure that the benefits are larger than the sum of their parts. The EDB has already initiated […] capacity-building of our exporters to make the most of these opportunities. India and China are amongst the two major trading partners of Mauritius. With the entry into force of the AfCFTA, we strongly believe that we can position ourselves as a manufacturing hub as well as a jurisdiction of choice for Indian and Chinese businesses to service Mauritius.

For the full interview, visit theafricareport.com

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MAURITIUS FOCUS /

MAFH

Networking at an MAFH event

FINTECH

Play and profit inside the sandbox Innovation is the focus of the government’s recent regulations in the financial services space, with the goal of making Mauritius a hub for African fintech

By KERVIN VICTOR in Port-Louis Many in Mauritius’s finance sector and government hope that fintech innovations will help boost the critical sector as Covid-19 hammers tourism. Michal Szymanski, CEO of the Mauritius Africa Fintech Hub (MAFH), says fintech in Mauritius is just in its early stages.

The MAFH was launched in 2018 to help Mauritius develop the sector. “The role is to be the fintech ecosystem facilitator. Our role is to identify the gaps that exist in the ecosystem […]. We’ve identified four key areas that we feel, based on the feedback of the main stakeholders, that we need to tackle to be able to be a truly premier fintech hub in Africa. Those are: regulations, skills, innovation and deal flow,” says Szymanski.

Paul Perrier, CEO of Fundkiss, the first peer-to-peer lending platform in the country, agrees with a lot of what Szymanski has to say. “The Mauritius Fintech sector is in an emerging but very promising state. […] Over the past three years, Mauritius has witnessed the rise of an ecosystem, with incubators such as Turbine and La Plage Factory, and structured business angel investors like Mo Angels. Public institutions, such as the Mauritius Research and Innovation Council, are also

$20m

The amount raised by Finclusion Group from Lendable, which it will deploy in Southern and East Africa

136 THEAFRICAREPORT / N° 117 / OCTOBER-NOVEMBER-DECEMBER 2021

supporting innovation through grants,” Perrier says.

Recent fintech activity in Mauritus includes the August launch of ARIE Finance’s digital ‘know your customer’ service for companies in financial services.

Mauritius is also a source of investment for African start-ups, with Port Louis-based Finclusion Group investing in South Africa’s HelloHR payroll startup in September.

Mauritius has sought to promote innovation through the creation of a ‘regulatory sandbox’ that allows companies to operate and experiment while the authorities decide on how fintech activities should be regulated. The central bank, the Bank of Mauritius, and the country’s Financial Services Commission issue sandbox licences for banking and non-banking financial services.

Digital rupee The island nation also plans to have its own digital currency. The central bank has announced the introduction of a ‘digital rupee’ on a pilot basis. The latest amendments to the banking legislation already provide provisions for the launching of a digital currency. Perrier says: “There is also a strong political will to develop the fintech sector in Mauritius as we need to reinvent our financial industry. Slowly but surely, things are taking shape.”

For MFAH’s Szymanski, the fintech sector is critical to the long-term success of the Mauritian financial sector. “The country has had an amazing 30 years as an international financial centre. The revolution of fintech or technology in the financial sector that has happened over the past decade or so has not only [produced] a rise in new jobs, new opportunities. We have also found, across the globe, that all the small jurisdictions are maintaining competitive advantage with the use of technology.”

LAST WORD

WHAT THE PAPERS DON’T SAY AFRICA NO FILTER

MOKY MAKURA Executive director, www.AfricaNoFilter.org

By the end of 2021, 13 African countries will have held presidential elections. That’s 13 different opportunities for global media to paint the same picture of rigged and, in some cases, violent elections. This has become the single story of democracy in Africa.

Is it an African election if it’s not unfair, violent or marred by chaos and social-media shutdown? We won’t have long to wait for an answer because in the next three months Somalia, Cabo Verde, Gambia and Libya will hold their elections.

Elections in Benin, Chad, Djibouti, Niger, Congo, São Tomé e Príncipe, South Sudan and Uganda have done little to change the narrative, so it was with great interest that I kept my eyes on Zambia’s August elections for the country’s next president. It was a race with two frontrunners: President Edgar Lungu, who had been in office since 2015, and businessman Hakainde Hichilema, who won 59% of the votes.

Contrary to the dominant narrative in the reporting, Zambia is not new to democratic elections. Hichilema himself has participated in five previous elections and will be the country’s seventh president since the late Kenneth Kaunda, Zambia’s first president, who served from 1964 to 1991 and died earlier this year.

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With a free and fair election now under Zambia’s belt, and with the benefit of hindsight, many of the media headlines and predictions appear almost laughable. For The Economist, a free and fair election was not on the horizon. ‘Zambia’s election is crucial,’ the magazine reported some days before election day, ‘but it’s not a fair fight.

Hakainde Hichilema deserves to be elected, but the world should prepare for a rigged vote.’

The Economist wasn’t the only news platform that predicted chaos. ‘Zambians head to the polls, but hopes of a free election are slim,’ said South Africa’s Business Day Live.

CAJ News Africa declared the country had hit ‘rock bottom’ after Lungu initially rejected election results. However, Lungu went on to accept the results and subsequently congratulated the new president in a handover of power that was free from violence.

Reports that didn’t suggest that the elections would be unfair said poverty, economic woes and Covid-19 underscored the polls. Zambia’s economy is indeed in recession due to Covid-19, but this is a global issue that also created a public health and economic crisis in the US. The Zambian election had its expected clichés. The internet was shut down, but the law prevailed when the High Court ruled that access should be fully restored. There were accusations and counteraccusations of violence against members of the campaigning parties, and even a military presence on election day.

Still, there was a high turnout at polling stations. It showed that Zambians had faith in the democratic system working, as evidenced by the peaceful handover of power in previous general elections.

This stereotypical framing of African elections is problematic and feeds a narrative about this continent that many Africans and their leaders are trying to move away from.

Elections in Africa are not a test for democracy; they are proof that democracy and institutions meant to uphold the system work, despite the typical politicking of elections everywhere.

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