I landed late last night in Addis, after a week in Maputo. Mozambique had a lot of mainstream news this week. Coincidence?

Too Long; Didn’t Read

• DRC - World’s largest power generation project is being revived (Bloomberg).

• Ivory Coast - Deploys R21 malaria vaccine (Bloomberg).

• Kenya - Ruto accuses Ford Foundation of inciting riots (Barrons).

• Mozambique - Rwanda wins contract to guard LNG (FT); Ex-minister faces U.S. trial (Bloomberg); and gov. removes 5,000 ghost workers from the payroll (Bloomberg).

• Nigeria - Targets bank windfall profits with new tax (Bloomberg).

• Rwanda - Kagame secures 99% of votes (Bloomberg).

• South Africa - Tourism achieves 9.7% growth (Bloomberg).

• Zimbabwe - Half of rural population faces hunger (Bloomberg) while fintech company, Mukuru, flies in USD (Bloomberg).

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Graphic of the Week 

Africa’s Vaccine Opportunity

It’s about time! By 2030 a fifth of the world’s population will be African and finally the continents leaders may be waking up to to the economic imperative and opportunity to make and distribute vaccinations. A 2016 study by Johns Hopkins University found that “for every $1 spent on immunization, $16 is saved in healthcare costs, lost wages and lost productivity due to illness.” African leaders are aiming to achieve vaccine sovereignty by 2040, requiring a 73x increase in production. With just eight African countries currently producing vaccines, the plan, led by African Medicines Agency (AMA), includes developing vaccine hubs, innovative partners, diversifying the vaccine portfolio, transferring technology, reducing regulatory barriers and rightsizing consumer prices with demand. (Data One) (Johns Hopkins) 

In Context: The initiative seems like a stretch, but if private efforts like Revital Healthcare founded in 2008 in Kenya (New York Times, previously featured) can ramp up to meet half the continent’s demand for syringes, perhaps the vaccine effort has a chance. The initiative will undoubtedly have donors and development finance institutions willing to fund production set up and off take, potentially creating lucrative opportunities for manufacturers.  

Ivory Coast 1st to Deploy R21 Vaccine

Ivory Coast has begun administering the R21 malaria vaccine, developed by Serum Institute of India and the University of Oxford, to children in Abidjan. This makes it the first country to deploy the vaccine, which is authorized in several African nations. With an efficacy of 80% (after 4 doses) the vaccine targets children under five, a group severely affected by malaria. Serum Institute aims to scale production to 100 million doses annually. Health organizations, including Gavi and WHO, are aiming to vaccinate 6.6 million children across 15 African countries by 2025. (Bloomberg)

Business & Finance in Africa 

Tight Monetary Control

African central banks are set to maintain tight monetary policies despite global easing trends. High inflation and weak currencies in Nigeria, Angola and Ghana are driving this caution. Angola and Nigeria may increase rates due to double-digit inflation. Meanwhile, South Africa, Egypt, Kenya and Ghana are likely to keep rates unchanged. Mozambique stands out, potentially continuing to lower borrowing costs. Persistent inflation and currency pressures necessitate a tight monetary stance for most nations.​ (Bloomberg)

Fintechs Fuel Dollar Demand 

Fintech companies like Mukuru are physically flying millions of USD into Zimbabwe to meet the high demand for cash. It’s no secret that Zimbabweans prefer U.S. dollars over the unstable local currency, ZiG, the sixth currency in 20 years. The mobile money sector in Africa is booming, with Mukuru serving millions across multiple countries and only flying cash into Zimbabwe. This practice highlights the adaptive nature of African fintechs in challenging environments​ (Bloomberg). “Fintechs in Africa are so much more adaptive than in the global north,” explained Mathieu Coquillon.

Ghana's $532M SME Boost

Ghana has launched a $532M initiative to support small and medium-sized enterprises (SMEs), which make up 92% of companies and 70% of GDP. President Nana Akufo-Addo announced the SME Growth and Opportunity Program, offering cheap loans for 2-5 years and training on regulatory compliance and market access. This follows Ghana's debt restructuring, which slowed economic growth but paved the way for an IMF program. The funding includes contributions from the Development Bank Ghana and the Ghana Export-Import Bank.​ (Bloomberg) 

Reviving World’s Biggest Power Project

Five development banks are collaborating to advance the Grand Inga hydropower complex in the Democratic Republic of Congo, which could produce 40 gigawatts if fully developed, surpassing China's Three Gorges Dam. Despite a history of corruption and high costs (estimates over $80B), the project is gaining momentum with support from South African and Congolese presidents. Currently, only 1.8 gigawatts are operational, mainly powering Congo's mining sector. (Bloomberg)

Tourism Boosts South Africa

South African tourism grew by 9.7% to 3.8 million arrivals between January and May, boosting the economy. Tourism Minister Patricia de Lille reported a 27.5% increase in direct spending by overseas visitors, reaching $5.3B. In 2023, tourism contributed 6.8% to GDP, totaling 458.9B ZAR. (Bloomberg)

Health in Africa 

Boosting Output with Nutrition

The Economist cover spotlights a complex, often overlooked health issue negatively shaping Africa's future: stunting and anemia. A study in the Lancet estimates that the 43% of children under five who were at high risk of poor development because of stunting or extreme poverty were likely to earn 25% less as adults. In Africa, addressing malnutrition is crucial, as half the world's children and two-thirds of women lack essential micronutrients like iron. Inexpensive improvements in diets could enhance IQ by 15 points. Malnutrition in Africa leads to stunted growth in 22% of children and widespread anemia. In some countries like DRC and Nigeria the numbers are much worse. Better nutrition can yield high returns, with $1 spent on curbing wasting generating $3.50 in benefits. Rapid progress is possible, as seen in Bangladesh's reduction of stunting from 63% to 24%. (Economist) In 2000, researchers estimated stunting and anemia costs the world 6% of GDP in lost output and in developing countries that number may double (Gavi).  

Peace & Security in Africa 

Ruto vs. Ford Foundation

In Kenya, protests continue and Kenyan President William Ruto accused the U.S.-based Ford Foundation of playing a role in inciting the riots (Barrons). Ken Apollo released Part II of his worthy macro analysis of the situation in Kenya. In summary: Kenya faces a severe fiscal crisis under Ruto, marked by declining real incomes and high public dissatisfaction. Following protests, Ruto must address systemic issues inherited from the Kenyatta administration, including debt accumulation, high inflation and weak economic growth. Efforts to stabilize the economy are hindered by ineffective tax administration and poor service delivery. To rebuild trust, Ruto needs a coherent growth agenda and improved public services (Ken Opalo). Financial Times said something similar (FT).

Nigeria Targets Bank Windfall

And Ruto is not the only one who needs a growth strategy. According to the FT editorial board this week, Nigerian President Bola Tinubu’s tough reforms (like removing fuel subsidies and allowing the naira to freefall) are insufficient to reset Nigeria’s struggling economy. Tinubu needs a national growth strategy, involving sacrifices from the political class, support for the vulnerable, tackling corruption and a coherent plan for economic growth (FT). Maybe he should fire his 45-person-strong cabinet, like Ruto did. His strategy this week is to claw back banks' windfall profits from currency gains after the naira's devaluation. The proposed 50% tax would apply to 2023 profits, with penalties for non-compliance, and is expected to pass in the legislature. Similar measures have been used in Europe, where special taxes on banks help address high interest rates and inflation (Bloomberg).

Democracy in Africa

Kagame's Predictable "Victory” 

Rwandan President Paul Kagame secured another five-year term with 99% of votes counted. Kagame, 66, faced minimal opposition, with Frank Habineza and Philippe Mpayimana receiving 0.53% and 0.32% of votes, respectively. Several other candidates were barred from running and imprisoned, including long-time critic Victoire Ingabire and businesswoman Diane Rwigara. Critics highlight human-rights abuses and restricted political space, while supporters commend Kagame for economic growth, with the IMF projecting 7% annual growth. Kagame's extended rule follows a 2015 constitutional amendment, potentially allowing him to remain in power until 2034.​ (Bloomberg) 

Climate in Africa

Drought Fuels Zimbabwe Hunger

More than half of Zimbabwe's rural population faces food insecurity due to an El Nino-induced drought, affecting nearly 6 million people by early 2025. The Zimbabwe Livelihoods Committee's report highlights a 70% drop in corn production and urgent cereal import needs to mitigate the crisis. The government and private sector are urged to ensure sufficient cereal availability for affected households. (Bloomberg)

Explorations in Africa - SPECIAL REPORT ON MOZAMBIQUE

Moz LNG Dreams & Political Drama

When I think of Mozambique, I think of stunning beaches, an unfortunate reputation for corruption and the challenge of not speaking Portuguese. Also liquified natural gas, or LNG, comes to mind. And in my travels, I am always trying to put my finger on what really drives a country’s national identity, problems and potential. Here is a bit of what we have pieced together from our Maputo conversations and desk research.

This Week’s News:

• Rwanda’s Involvement in Cabo Delgado: Rwandan security company Isco Segurança has been hired to guard TotalEnergie’s LNG project. This move has sparked criticism over Rwanda's economic interests in Mozambique (FT).

• Ghost Workers: Mozambique plans to remove 5,000 ghost workers, aiming to reduce public worker spending and unlock a $60M in IMF funding. No wonder 72% of tax revenue is spent on public wages (Bloomberg).

• Ex-Minister Faces U.S. Trial: Former Mozambique Finance Minister Manuel Chang is facing trial in New York for his involvement in a $2B bond fraud scandal involving Credit Suisse. Prosecutors allege Chang conspired with bankers to incur debt for dubious maritime projects, with at least $500M looted (Bloomberg).

Mozambique: The Hard Facts

• Demographics: 50% plus of the population is under 18. (UNICEF)

• Literacy Rates: Overall literacy is 47%,  female literacy is 28% and male literacy is 60%.(USAID)

• Mobile Penetration: 55% (Statista)

• Government Spending: 72% of tax revenue is consumed by the public wage bill. (Bloomberg) 

• Economic Growth: Projections exceed 6% for the next few years. (World Bank)

• Inflation: Under control, with a stable currency. (Trading Economics)

• Poverty: Depending upon your source 65-75% of the population lives below the poverty line, and it’s gotten worse the last 10 years. (360 Mozambique)

National Identity: Unidad National 

Mozambique achieved independence from Portugal in 1975, but a subsequent 16-year civil war between two political groups, FRELIMO and RENAMO, hindered national progress. The war, driven by demands for leadership representation from the central and northern regions, underscored the need for inclusive governance. War always sucks and a lot of people died. Mozambicans don’t want to go back to all that. So today, the phrase "Unidade Nacional" (national unity) reflects the collective understanding that national progress and cohesion depend on shared leadership across all regions. This principle is a cornerstone in evaluating policies, initiatives and business ventures to ensure they align with the country's goals for a unified future​. And of course sadly corruption is just part of the way things are done. 

Chapo’s Challenge

The national election is on October 9th, 2024 and FRELIMO's presidential candidate, Daniel "Chapo," is the first since Mozambique's independence to have no military background. Yep – read that again. He’s a lawyer, born in Inhaminga in central Mozambique. Chapo's focus on national unity is significant – not sure what that fully means, but this is what the people say. He was a governor in Inhambane Province, near Maputo, until earlier in 2024, and he is known for improving healthcare and fostering trust. He is expected to win by a wide margin due to RENAMO’s current fragmentation. Supporters hope he will make progress in infrastructure and healthcare. Critics assume he’ll be a puppet. (Africa Center for Strategic Studies)

Is the Gas Boom a Bust? 

The main players:

• TotalEnergie's Onshore Project concession is projected to produce 13.1 million tons per year. (TotalEnergie)

• ExxonMobil's Rovuma LNG Project has a planned capacity of 15.2 million tons per year, with final investment decisions delayed due to security concerns. The concession is projected to be the largest LNG project in Africa. 

• Eni S.p.A’s Coral South Floating Production has a capacity of 3.4 million tons per year, and they began exports in 2022.

LNG Timeline in Mozambique:

• 2010-2013 - LNG Discovery: Mozambique discovered 150 trillion cubic feet of natural gas reserves. Subsequent concessions were sold to major organizations.

• 2017 - Insurgency in Cabo Delgado: Began in 2017, causing significant delays and security issues.

• 2019 - Cyclone Kenneth: Devastated the economy and impacted LNG projects.

• 2021 - TotalEnergie declared force majeure in April (TotalEnergie).

• 2024 - Mozambique's sovereign wealth fund announced in March is part of the agreement with the IMF; it aims to manage $91.7B from LNG exports over the next few decades, with a focus on transparency and governance (Bloomberg).

Unique Species in “Sky Island”

And further North, Mount Mabu, Mozambique’s "sky island" rainforest, has become a conservation priority thanks to several species discoveries. Scientists have found numerous unique species, including chameleons, snakes, bats and dung beetles. (BBC)

Thanks for reading. Email us at [email protected] Next week, I will be on holiday, but we have a special edition planned for you.