Hello from Africa’s most elevated capital! This week, it’s election season at the AfDB, and while five candidates jockey for Africa’s top finance job, the U.S. is busy rebranding its Africa strategy as “deals over donations”—but China isn’t breaking a sweat, dropping $1.7B in Ethiopia last week alone. Meanwhile, Safaricom’s Ethiopia bet may be turning a corner, AI could unlock $100B in value and Elon Musk continues building partnerships to beam broadband across the continent. All this while 90 million Nigerians still don’t have electricity, women struggle to access capital and raw materials keep flowing out without much value addition. Welcome to this week’s Brief.

Africa Trivia 

Graphic of the Week

What's on Offer?

Since we are talking “trade, not aid” these days, this map felt appropriate to share. From 2020, but sadly not much has changed since then. As we know, mostly raw materials come out of Africa with a few small exceptions like Morocco’s car exports. Still, who knew CAR’s largest export is wood? And a dear friend just mentioned that Benin has really nice cotton. Yep, it seems true! 

My hypothesis is that if we could solve the SME financing gap, things could really start to change on this map. The International Finance Corporation (IFC) estimates that the financing gap for small and medium enterprises (SMEs) in Africa stands at $331B (African Business).

I sat next to a woman from Kenya at a conference last week and LOVED that her “why” for being there was that she’s an African mother and things need to change. As we know, the financing gap really hits women-owned businesses, which account for 34% of the unmet financing demand globally (SME Finance Forum). Happy belated Mother’s Day to all the moms out there. And if you are in business, keep up the fight. 

What We Are Reading

• Africa: A study by the Barcelona Institute for Global Health warns that cuts to USAID could result in 14 million additional deaths by 2030, predominantly affecting African children under five (FT).

• Algeria: Expels 15 French officials, worsening diplomatic relations with France (Reuters).

• Democratic Republic of Congo: More than 100 people have died after flooding in a village near Lake Tanganyika (Reuters).

• Egypt has signed a 10-year deal with Höegh Evi Ltd. for a floating LNG terminal (Bloomberg).

• Eswatini: The kingdom plans a $275M sovereign wealth fund to invest in manufacturing and agriculture and clear fiscal arrears (Bloomberg).

• Ghana: S&P upgraded Ghana’s credit rating to CCC from selective default after the government unveiled spending cuts and progressed on debt restructuring (Bloomberg); The Cocoa Board plans to start the cocoa harvest two months early to provide farmers with early cash and reduce smuggling (Bloomberg).

• Kenya: Safaricom expects to grow earnings by 50% this year and sees its Ethiopia business turning a corner by 2027 (Bloomberg); Government launches coordinated media campaign to shape public opinion on finance bill after last year's deadly protests (Semafor).

• Mali: The ruling junta has dissolved all political parties and banned their meetings amid growing pro-democracy protests and activist arrests (AP News).

• Nigeria: Lawmakers passed four tax bills to modernize colonial-era laws, aiming to simplify the system, boost revenue and support low-income earners and digital jobs (Bloomberg); 90 million people lack electricity, the highest number globally due to a failing grid and chronic underinvestment (The Economist).

• Senegal seeks to attract $1.7B in investments to build digital infrastructure and expand 5G coverage by 2030 as part of a plan to transform its economy (Bloomberg); Foreign overfishing, mainly by Spanish and Chinese vessels, is depleting fish stocks and driving Senegalese fishermen to migrate to Spain (AP News).

• South Africa: The first 59 white South Africans granted refugee status under President Trump’s policy, which the administration framed as support for victims of racial discrimination, are arriving in the U.S. amidst controversy (Reuters).

• Sudan: Experts estimate that 150,000 have been killed and millions displaced since the civil war began in April 2023 (Bloomberg).

• Zimbabwe: Launched a blockchain-enabled registry for carbon credit trading to enhance transparency and restore investor trust after market disruptions in 2023 (Bloomberg).

Innovation in Africa

AI in Africa: Leapfrogging Forward

Generative AI (gen AI) presents Africa with a transformative opportunity to accelerate development across various sectors. A recent McKinsey report highlights that by addressing key barriers and scaling implementation, African economies could unlock up to $100B in annual economic value from gen AI alone. 

Key Highlights:

• Economic Potential: Gen AI could contribute between $61B and $103B annually to Africa's economy, with significant impacts in sectors like retail, banking and telecommunications.

• Innovative Applications: Examples include AI-driven translation services enhancing cross-cultural communication, personalized learning pathways in education and AI-powered financial tools aiding small businesses.

• Challenges to Address: To fully realize gen AI's benefits, Africa must overcome hurdles such as limited infrastructure, regulatory uncertainties and a shortage of skilled professionals.

By strategically investing in gen AI and fostering supportive ecosystems, Africa has the potential to leapfrog traditional development stages and position itself as a leader in the global AI landscape.

SpaceX + Airtel Collab 

Airtel Africa has inked a deal with Elon Musk’s SpaceX to deploy Starlink’s high-speed satellite internet across its 14-country footprint. Licenses are secured in 9 markets—including Nigeria, Kenya and Zambia—with the rest pending.

Why It Matters

• Rural Reach: Starlink’s low Earth orbit (LEO) satellites will beam broadband to underserved areas such as schools, clinics and businesses, where traditional networks fall short

• Network Boost: Airtel plans to use Starlink for cellular backhaul, expanding mobile coverage in hard-to-reach zones (Nairametrics)

• Digital Inclusion: The partnership aims to bridge Africa’s digital divide, supporting economic growth and innovation continent-wide

The Bigger Picture

This move follows Airtel’s similar pact in India and positions the telco as a key partner in Starlink’s global expansion. With more than 7,000 satellites already in orbit, Starlink is making a strong push to reshape connectivity, one remote village at a time. 

Source: The Economic Times 

Africa’s Telco Surge: The Next 500 Million

McKinsey released some analysis this week on Africa's telecom sector. The challenge: connecting 500 million new users by 2030 could potentially unlock $170B in GDP.

Growth Drivers and Challenges

• Youthful Demographics: By 2030, 602 million Africans aged 15-34 will likely drive mobile and internet adoption.

• Subscriber Growth: Mobile penetration is projected to reach 50% (751 million users) by 2030, up from 44% (527 million) in 2023.

• Fintech Expansion: With 835 million mobile money accounts in sub-Saharan Africa in 2023, telcos are leveraging infrastructure to offer financial services.

• Low Internet Penetration: At the end of 2023, mobile internet penetration in sub-Saharan Africa stood at 27%, compared to the global average of 69%.

• Affordability: Entry-level smartphones still cost nearly as much as the average monthly income of the poorest 20% in sub-Saharan Africa.

• Operational Costs: High energy expenses, sector-specific taxation and currency devaluation are putting pressure on telco margins.

Their Recommendations

1. Optimize Costs: Implement structured cost programs to unlock a 3-4 percentage point gain in EBITDA.

2. Digital Diversification: Expand beyond core services into digital businesses like content streaming, gaming and digital advertising, aiming for 15–20% of revenues from these areas.

3. Home Connectivity: Prioritize fiber-to-the-home (FTTH) in profitable areas and leverage fixed wireless access (FWA) in regions where fiber deployment is challenging.

Embrace Gen AI: Integrate generative AI to enhance customer service, network optimization, and develop new consumer solutions.

Business & Finance in Africa 

AfDB Leadership Race

The place to be this week was the Africa CEO Forum in Abidjan. Semafor’s Africa editor Yinka Adegoke reported that two pressing questions dominated discussions: the current state of affairs in the U.S. and the impending leadership change at the African Development Bank (AfDB). With President Akinwumi Adesina's term concluding, five candidates—Amadou Hott (Senegal), Samuel Maimbo (Zambia), Sidi Ould Tah (Mauritania), Abbas Tolli (Chad) and Swazi Tshabalala (South Africa)—are vying for the position. The election is set for May 29. Read more: Semafor.

U.S. in Africa 

An Uphill Battle 

“Trade, Not Aid”

In case it wasn’t clear to anyone, a Reuters article claims that the U.S. is pivoting its Africa policy from traditional aid to commercial partnerships—envoys will now be judged by the business deals they close, not the aid they disburse.

Current State:

• Trump’s administration is prioritizing mutual prosperity over donor-recipient dynamics.

• In just 100 days, U.S. ambassadors secured 33 deals worth $6B.

• A new $550M U.S. loan will fund the Lobito Corridor, a mineral export route skirting Chinese influence.

• The strategy aims to counter China and Russia’s economic foothold in Africa. As the graphic shows, it’s an uphill battle! 

• Six targets are set ahead of the next U.S.-Africa Leaders Summit, including more business-only diplomatic trips and blended finance upgrades.

Bottom Line:
"Trade, not aid" is no longer a slogan, it’s U.S. foreign policy. I say good luck U.S.A. But maybe hedge your bets and find another game you know you can win at in Africa? This week Chinese companies announced $1.7B in new investment commitments to Ethiopia alone at an investment forum.

Explorations in Africa

Deep Blue Africa

OceanX’s 2025 expedition is giving “under the radar” new meaning. From the Mozambique Channel to the Agulhas Plateau, the OceanXplorer team is mapping never-seen seamounts, discovering new marine species and dropping submersibles into the abyss around the continent. It’s part science, part sci-fi and all happening off Africa’s shores. @OceanX on Instagram | More here.

Africa Trivia Response

B) Addis Ababa (7,726 feet / 2,355 meters above sea level) - Addis Ababa holds the distinction of being the highest capital city in Africa and the fifth-highest capital city in the world. Source: World Atlas

See you next week.

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