Africa Business Insights - February 2023

The US has clearly embarked on a strong drive to promote and improve US-AFRICA RE- LATIONS. It is claimed that the recent USA- Africa Summit in Washington elicited some US$ 55 billion in US commitments. This is accompanied by various US initiatives including a pledge of US$ 165 million to support elections in six ‘well-governed’ African states.

Major changes will be taking place in the UGANDA POWER SECTOR. The Electricity Bill 2022 seeks to amend the Electricity Act of 1999 by increasing the power of the regulator regarding inter alia royalties and tariffs. Uganda was one of the first African countries to liberalise its power sector but is now replacing private role players with new state entities. Eskom of South Africa will not have its operating licenses for two hydro power stations renewed and the long-standing private distributor, Umeme will be replaced by a state-owned company.

SOUTH AFRICA’S GLOBAL AGRICULTURAL EXPORTS amounted to US$ 3,7 billion for the third quarter of 2022 which was an increase of 10% over the same period in 2021.

Kenya has announced its bid to co-host the 2027 African Cup of Nations soccer tournament with other East African countries. If successful, there will be a strong need for the refurbishment or perhaps construction of SOCCER STADIUMS in the country.

A number of NEW PORTS are being developed in the Horn of Africa region including Berbera Port in Somaliland and Garacad Port in Puntland. The viability of these ports will depend a great deal on the existence and state of the connecting transport infrastructure. Where there is an absence or lack of such infrastructure, the projects will be deemed ‘stranded ports’ which will be difficult to develop to feasibility status.

The Zimbabwean government is predicting that the ZIMBABWE MINING INDUSTRY will grow 8% in production in 2023. It claims that in 2022, mining projects of over US$ 10 billion in value were commissioned inter alia in the gold, platinum and lithium sectors. Lithium is particularly interesting due to high global demand, the country’s substantial lithium resource and the appreciable number of lithium projects in exploration phase. The government recently banned the export of raw lithium and is demanding that it be used for the in-country manufacture of batteries.

Safaricom is encountering difficulties in expanding its network in Ethiopia since after much effort, it finally gained its private operating license. The state telecommunications company, Ethio Telecom is threatening to take Safaricom to court accusing the latter of damaging its COMMUNICATIONS NETWORK INFRASTRUCTURE in the Afar region.

The success of Ethiopian Airlines stands in contrast with the situations for Kenya Airways (KQ) and South African Airways (SAA). Ethiopian registered a US$ 937 million profit for the 2021/2022 year which was an improvement in the preceding year of 79%. The CEO has stated that he wishes to assist other AFRICAN AIRLINES. Meanwhile, President Ruto of Kenya has met with Delta Airlines of the USA on the possible sale of the government’s 48,9% share in struggling KQ. Clarity is still required regarding private investment in SAA.

Zimbabwe is experiencing an especially severe electricity supply crisis and retail centres are undertaking initiatives to mitigate the problem. An example is the recently opened Ridgeway Mall in the Highlands suburb of Harare which is planning to go completely off-grid. It will be installing a SOLAR SYSTEM backed up by a generator.

Lamu port on the far north coast of Kenya is being utilised for LIVESTOCK EXPORTS to Oman and other countries in the Gulf region. Camels, bulls, sheep and goats are being transported to Salalah port in Oman by special livestock carrier vessels.

Nigerian health authorities are lamenting the BRAIN DRAIN IN THE NIGERIAN HEALTHCARE SECTOR. The National Association of Nigerian Nurses and Midwives reported that 57 000 nurses left the country between 2017 and 2022. A 2022 UK immigration report found that 13 609 Nigerian healthcare workers including doctors were granted UK working visas.

The NAMIBIAN PORTS AUTHORITY (NAMPORT) has announced a 20% increase in revenue and an operating profit increase of 63% for the seven months from 1 April to 31 October 2022. Walvis Bay port is clearly registering some success in establishing itself as an alternative to South African ports.

For some time now, INDEPENDENT OIL COMPANIES or private oil companies have been filling the gap left by the major oil companies as they divest from their African interests. The trend was initially particularly marked in Nigeria where indigenous companies such as Addax Petroleum and Consolidated Oil have flourished. The trend has since taken on in Angola too with Somoil considered to be a success story.

The announcement by Centum Investment that it is writing off its investment in the Lamu coal-fired power plant in Kenya is another case of cancellation of AFRICAN COAL PROJECTS. The Kenyan courts stopped the Lamu project in 2019 ostensibly for environmental reasons. In 2021, it was reported that 1 175 Giga- watts of global planned coal-fired power projects had been cancelled since 2015. This included four pro- jects in Nigeria as well as the Musina Makhado project in South Africa. Anti-fossil fuel lobbies are pressurising finance houses to avoid funding these projects.

There is currently a major SUGAR SHORTAGE in Addis Ababa, Ethiopia. The Addis Ababa City Administration Trade Bureau and the Ethiopian Sugar Corporation are in discussions with sugar importers as well as sugar factories in an attempt to alleviate the shortage.

Eco Atlantic has reported that it has failed to find commercial volumes of oil and gas at its offshore Gaza- nia-1 probe in Block 2B of the ORANGE BASIN, South Africa. The South African government is being compelled to provide further clarity on gas as a required future transitional fuel. The gas-to-liquids (GTL) plant in Mossel Bay remains closed for care and maintenance.

At a recent National Health Research Symposium in Botswana, medical specialists have encouraged the country to research and scale up the use of TRADITIONAL MEDICINES. An example given was Hoodia Rooibos from the Kgalagadi region.

Malawi, Zambia and Mozambique are registering progress with the establishment of ONE STOP BORDER POSTS between their territories. The Mchinji-Mwami one stop border post between Malawi and Zambia has recently been officially inaugurated. One stop border posts are reportedly planned for Dedza and Mwanza on Malawi’s border with Mozambique.

Water sector specialists in Namibia are suggesting that South Africa considers implementing some of the WATER RECYCLING TECHNOLOGIES that Namibia is utilising. A notable Namibian achievement has been the conversion of municipal wastewater into drinking water. Attempts to apply this technology in South Africa have been largely unsuccessful due to general reluctance.

The BENEFICIATION OF MANGOES in West Africa has been long-awaited. The fruit grows in abundance and is often left to rot in the streets. The recently inaugurated Sinématiali mango processing plant in C?te d’Ivoire has been hailed as a major employment-generating initiative with considerable benefit for the local population of the Poro Region. The plant produces mango juice, dried mango, mango chips and mango jam.