Hello from Marrakech, Morocco. We’re at GITEX Africa. It’s hot (literally and figuratively) and invigorating to be here. The organizer told us it's twice as big as last year - in line with other trends we’re seeing across Africa. She continued that this year, 40,000 people are attending representing 700 companies. GITEX is claiming to be the largest tech and startup show in Africa. Depending upon your focus, it’s an Africa event to consider in 2025! 

If you are enjoying the Africa Brief, we’d love for you to spread the word, Africa is the future! 

TL;DR

• Egypt: In the fight for economic health, Egypt is quadrupling subsidized bread prices (FT.com) and reaffirming its relationship with China. (AP News)

• Ghana: The countries proposal to restructure $13 billion of Eurobond debt is back on track. (Bloomberg) 

• Kenya - Revital is making African healthcare self-reliant by producing 300M syringes in Kenya (nytimes.com)

• Mega Cities: Cairo, Kinshasa, Lagos, Luanda, Dar Es Salaam, Khartoum, Johannesburg, Abidjan, Alexandria and Addis Ababa are the continent’s fastest growing cities (Business Insider)

• Seychelles: Luxe developers continue to invest in The Seychelles. (Bloomberg)

• South Africa Election Watch: Election results are expected this weekend and early results show the A.N.C. losing a majority. (nytimes.com)

• Zambia: The country is successfully resolving four years of sovereign debt crisis. (FT.com)

Graphic of the Week

Investment Tip: Urbanization in Africa

Do you know the top 10 fastest growing African cities? Four out of 10 of the world’s next megacities will be African by 2050 (Statista). Nairobi and Dar es Salaam are expected to double in size by 2050. By 2033, the share of urban dwellers in Africa will exceed 50%, the first time in human history that more Africans live in cities than in rural areas. 

Though the OECD reported that urbanization was responsible for  30% of Africa’s growth in GDP per capita, Africa’s urban migration patterns still pose challenges. This spring, at least 473 have died and more than 410,000 have been displaced by extreme rainfall and flooding across East Africa. According to the World Weather Attribution,  a group of scientists that analyzes the impact of human behavior on the climate argued that urbanization has increased flood risks. African cities are struggling to develop housing and infrastructure fast enough to meet demand, thus increasing informal settlements including settlement in floodplains.

Many African cities could use massive private investment in urban development and real estate. A powerful example of successful private investment and development is happening now in Kenya’s Tatu City, a satellite city in Nairobi’s suburbs. Read more about how private urban developers have developed a thriving economic center in Nairobi’s suburbs in the Economist. This month, CCI Global, a leading outsourcing firm, opened its Tatu City Call Centre. The project resulted in a $50M investment into Kenya’s growing BPO industry and will create 5,000 jobs.

Democracy in Africa

South Africa, a Nail-Biter, Still Waiting

Awaiting Results on South Africa - Official results are expected this weekend, in South Africa’s historic election. Markets are shaky and the rand is weakening against the dollar. Black elites are losing faith in the African National Congress (ANC), which according to projections will likely receive less than 50% of the vote for the first time since 1994. Fifty-one parties are seeking votes, but for all the ANC’s struggles, trust in the alternatives is low. What’s next: Results should come out in the next few days and pollsters predict that the ANC will be forced to ally with other parties to form a government. Be sure to watch friend of the Africa Brief and adjunct Columbia Business School professor, Colin Coleman on Bloomberg TV shedding light on the real problem in South Africa. And if you are a history buff, don’t miss www.nytimes.com overview of South Africa’s first democratic election and Nelson Mandela’s epic rise to power in 1994.

Business & Finance in Africa 

Africa Tech Raises Big Bucks…

“Africa’s winning formula,” an article in Inc.Africa this week provides a positive perspective on the theme of urbanization and population growth: The continent’s youthful population, equipped with access to information, ingrained with resilience and ready to partner at global standards. 

100 Million Dollar Club - 26 startups have raised $100M + in the past 5 years. More than 80% of them are HQed in a Big Four country (Kenya, Nigeria, South Africa or Egypt). All 26 have male CEOs and sadly only four of them have at least one female founder. And of course the rumors run rampant on the continent about a few of these 26 startups that have run into serious snags. 

Bring it home, Zambia - The country is resolving four years of sovereign debt default in agreement with 90% of its bondholders. China finally came onboard to the plan to extend maturity dates and cut bond values by a fifth. There’s more hurdles to overcome, including the financial strain from the drought, but this is a big step. Next up, Ghana? And hopefully Ethiopia. 

Stay in the Game, Ghana - Ghana's proposal to restructure $13 billion of Eurobond debt is back on track due to stronger-than-expected economic growth in 2023, which was nearly double the IMF's forecast. The West African country’s updated analysis, coming in June, is likely to show that it can meet debt targets. 

What's a ZiG? The IMF is set to visit Zimbabwe in June, a step forward for the country to reenter the international capital markets. The country is moving forward with other efforts, including launching its 6th currency in 15 years and preparing to compensate some of the 1,300 commercial farmers who lost land in the noughties. With Zimbabwe’s track record, skepticism is warranted and the country is now struggling with deflation. The currency, called the ZiG (great name!) is short for Zimbabwe Gold and is reportedly backed by 2.5 tons of gold and $100 million in foreign-exchange held by the central bank. 

Bread Prices Quadruple in Egypt - As of June 1, the price of subsidized bread in Egypt will rise from E£0.05 to E£0.20 per loaf. It’s the first time in 35 years, the government has attempted to raise bread prices and many fear unrest as an estimated 70 M Egyptians rely on the subsidy. Bread will remain heavily subsidized at a state cost of E£1.05 per loaf. This decision comes amid high inflation and efforts to cut government spending due to significant debt servicing. Since 2022, inflation has surged following the war in Ukraine, leading to a foreign currency crisis and import restrictions. In March, Egypt moved to a flexible exchange rate to secure an $8 B IMF loan, part of a $55 B international bailout, causing the Egyptian pound to drop significantly and further straining families' purchasing power. 

China in Africa

Lands of Dragons and Pharaohs Unite - During Egyptian President Abdel-Fattah el-Sissi's visit to Beijing this week, Egypt and China celebrated a 10-year-old strategic partnership and signed agreements to deepen their cooperation. These agreements include collaboration on Egypt’s infrastructure development, with China investing billions in Egyptian projects like the Suez Canal Economic Zone and the new Administrative Capital. Last year China invested $14 B in 2023, compared to $16.6 B in 2022.

Health in Africa 

Clean Sharps for Africa - Revital Healthcare, a factory on the Kenyan coast, produces 300 million syringes annually, meeting more than 50% over half of Africa's immunization needs, wrote the New York Times this week. Its first aim is to make African healthcare self-reliant, but Revital also supplies syringes globally, including to India during the COVID-19 pandemic.

Tech & Society in Africa

More Internet? Yes Please - Google will be the first to connect Australia to Africa via an undersea fiber optic cable. The cable will start in Kenya and travel through Uganda, Rwanda, Congo, Zambia, Zimbabwe and South Africa before crossing the ocean to Australia. The cable aims to improve internet coverage and reduce outages in Africa, which recently faced connectivity issues due to damaged cables in both East and West Africa.

U.S. in Africa 

Kenya’s Nuclear Leap - During his U.S. visit, Kenyan President William Ruto and President Joe Biden agreed to deepen US-Africa nuclear cooperation, with Kenya set to build its first 1,000 MW nuclear plant by 2032. Kenya will host the second U.S.-Africa Nuclear Summit in August. Leading in renewables, Kenya generated and consumed nearly 90% of its energy from renewables in 2021. Electricity access surged from 37% in 2013 to 75% in 2022.

Middle East in Africa

A Nuanced and Structured Strategy

Dubai, Gateway to Africa? - The UAE is not messing around in Africa with massive and strategic investments across the content. FT writers detail the growing and giant commercial, strategic and financial role of the UAE that leave African governments acquiescing. The country pledged $97 billion in 2022-2023, three times more than China, and their total investments hit $110 billion across diverse sectors like renewable energy, ports, mining and real estate. As of 2022, more than 26,000 African companies had set up in Dubai, and DP World poured $3 billion into African ports. Key deals include a $650 million stake in Mozambique's Rovuma gas basin, a 2,000-hectare property development in Angola, and a 25-year gold supply monopoly in the DRC. With a $300 million investment in Berbera port and strategic port concessions, the UAE seems to be the hand behind Ethiopia’s growing partnership with Somaliand. Many believe they provided military drones to Ethiopia and engaged in Sudan's conflict. The UAE's bold financial commitments and strategic investments are reshaping Africa's economic and political landscape. If you have 12 minutes, read the FT.com article. The UAE is super supportive of the continent's tech and start-up space as demonstrated here in Morocco at GITEX.Africa organized by Dubai World Trade Center.  

Peace & Security in Africa 

Who is Behind Ethiopia’s Somaliland Play?

Recognition in Exchange for Sea Access - This week, Somaliland's leader, Muse Bihi Abdi, claimed that the agreement signed with Ethiopia, signed earlier in the year, will boost Red Sea navigation freedom and protect the vital Bab al-Mandeb strait, a key route for 8.7% of global trade. Houthi attacks in the strait have drastically reduced trade volume to Djibouti and Ethiopia since November 2023. For Ethiopia, the deal also resolves its longstanding need for sea access. 

Strongmen Strong Arm Burkina Faso - The country’s military leaders extend rule until 2029, abandoning the elections that were initially promised for this year. This decision, made amidst a violent insurgency, solidifies the junta’s control beyond the original 21-month transitional period. Interim leader Ibrahim Traoré, who signed a new charter effective July 2, will become president and "supreme leader" of the armed forces, eligible to contest future elections. Burkina Faso sits in the Sahel region, which has sadly been dubbed “the coup belt.” The region faced several coups since 2020 including ones in Sierra Leone, Gabon, Niger, Burkina Faso, Guinea, Chad and Mali.

Tourism in Africa

No, This Picture Is Not AI Generated

Dreaming of Another World - Yes, please, The Seychelles, really does feel like paradise. The 115-island archipelago continues to position itself as the ultimate luxe-vacation destination in the Indian Ocean, rivaling the Maldives. Along with ~ 350,000 tourists in 2023, the country is attracting high end development including the newly opened Waldorf Astoria Seychelles Platte Island and the upcoming Cheval Blanc resort. Put that on your bucket list! 

P.S. Shoutout to Renew Capital’s Andrew Larsen who did some serious heavy lifting this week as I enjoyed the energy of GITEX.Africa. And as always from Oxford, our academic Josh Parker Allen is keeping us on the straight and narrow. Grateful to be in Marrakech, this is Laura Davis, over and out.

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