Hello from somewhere over the Atlantic, flying sheepishly toward Climate Week in New York. Surely someone’s made it easy to atone for this carbon footprint! Let us know if you are in NY this week.

Read on for this week’s news and be sure to spread the love!

Africa Trivia 

Graphic of the Week 

Africa’s Little AI Market Can Pack a Big Punch 

Everyone around the world is watching the AI industry evolve and unfold. Many are mystified by its potential and how it actually works. Some of us are terrified. 

• Africa is no exception: AI is cropping up more and more in pitch decks that come across our desk and we’re seeing the pipeline of potential mature. 

Like many, governments and the private sector have great hope for AI’s potential in their economies. In Africa, AI could boost the economy by $2.9T (or 3% of GDP) by 2030—if it gets it right. 

• Despite representing just 2.5% of the global AI market, AI in Africa is at work in agriculture (49%), climate action (26%) and energy (24%). 

• Rwanda's gearing up for the Global AI Summit next April, but before that, MWC Kigali (Oct 29-31) will tackle AI, fintech and digital inclusion. We’ll be there, of course, taking notes and meeting founders. 

• Given that Africa is the last great market to emerge, we believe AI could shape Africa’s economy more than any other region in the world. 

We’d love to hear your thoughts on this - where do you see the AI opportunities in Africa?

TL;DR

• Africa: Rate cuts find their way to Africa too. Central banks set to alter interest rates as inflation eases (Bloomberg).

• Botswana: A 1,094-carat diamond was discovered at Karowe mine, the second major diamond discovery in a month (Bloomberg); Botswana awards Giyani Metals a 15-year license, paving the way for its first battery-grade manganese production (Reuters).

• Congo, Republic of the: Russia to build a fuel pipeline connecting the port of Pointe-Noire to Brazzaville (Reuters).

• Egypt: Saudi Arabia’s crown prince directs the kingdom’s sovereign wealth fund to invest $5B in Egypt as the initial phase of new investments (Bloomberg).

• Ethiopia: Ethiopian Airlines won the 'Outstanding Tourism Transportation Award' (Ethiopian Airlines).

• Ghana: Ghana’s economy surged by 6.9% in Q2 2024, its highest growth since 2019, led by expansion in mining and industry (Reuters).

• Mozambique: WHO-certified National Medicines Factory is ready to produce drugs for global distribution, with plans for expansion into vaccines and injectables (360 Mozambique)

• Niger: U.S. military completes withdrawal from Niger (Reuters).

• Nigeria: Oil prices hiked again after purchase agreement with Dangote refinery (Reuters); Nigeria and Google launch AI Fund to boost tech startups and innovation (Further Africa).

• Rwanda: Economy grew by 9.8% in the second quarter of 2024 (allAfrica).

• South Africa: Consumer confidence rises to pre-pandemic levels in the third quarter (Reuters); Rand remains steady ahead of the upcoming U.S. Federal Reserve policy decision (Reuters). 

• South Sudan: Crude oil exports through Sudan moving closer to restarting after halt due to conflict (Reuters).

• West Africa: Floods have displaced over 4 million people and killed nearly 1,000 across Chad, Niger, Mali and Nigeria (Bloomberg).

• Zimbabwe: The World Bank calls for 12 months of economic stability to advance $21B debt talks (Bloomberg); gov’t to cull elephants due to drought (Bloomberg).

Business & Finance in Africa 

Us Too? Major Africa Markets Cuts Rates

A cautious shift is occurring across Africa as central banks balance inflation and currency stability.

• South Africa and Kenya are set to cut interest rates in 2024 as inflation cools.

• Morocco and Ghana are also expected to follow with modest cuts.

• Nigeria, Angola and Tanzania are likely to hold rates due to inflation and currency issues.

• Lesotho may cautiously follow South Africa's lead amid high inflation.

Petrostate Paradox

Nigeria is Africa's second-largest oil producer, but also its biggest importer of refined petroleum.

• Fuel subsidies drain foreign reserves and stifle human capital investment, costing as much as 3.9% of GDP (2022) and four times the public health budget.

• Meanwhile, child mortality and education outcomes suffer, with the World Bank estimating that with proper food, schooling and healthcare, Nigerian children would be up to 2.8 times more productive.

• Despite vast oil resources, Nigeria exports crude oil and re-imports refined products.

• As we mentioned last week, change is coming: the Dangote refinery started operations this month, with a capacity of 650,000 barrels per day which is expected to meet domestic demand.

But will the Government keep its word and let the market drive prices?

Health in Africa

Mozambique’s Medical Milestone

Mozambique's National Medicines Factory has been certified by the World Health Organization (WHO), enabling it to expand drug production internationally. 

• The company has the potential to produce 83 drugs at a capacity of one billion doses a year. 

• This week, President Filipe Nyusi highlighted the company’s role in combating counterfeit drugs and boosting access to safe and locally-made medicines. 

• The certification positions Mozambique as key to Africa’s healthcare self-sufficiency.

Tech & Society in Africa

Africa’s M&A Market Heats Up

This week’s tech news: Nigerian fintech Rise acquires Kenyan fintech Hisa. Read more here from The Kenyan Wall Street.

 What it signals:

• Consolidation will likely happen across many sectors in Africa, with more in the tech space happening even in the coming months. While rates are dropping, the funding winter will take time to thaw. 

• Good companies that require cash may have no choice but to be consumed by their regional competitors. 

Climate in Africa

Rising Waters, Rising Costs for Africa

More than 4 million people have been affected, with many displaced in Nigeria, Chad, Mali and Niger as catastrophic floods worsen food insecurity. 

More facts:

• Despite contributing less than 10% of global emissions, Africa faces severe climate impacts, with adaptation costs soaring.

• Africa is warming faster than the global average, facing up to 5% GDP losses annually from extreme weather.

• Nigeria is severely affected, with more than 610,000 displaced, key infrastructure damaged and rising food prices.

• Meanwhile, in Southern Africa, Zimbabwe is planning to cull 200 of its 100,000 elephants due to a severe drought affecting its vast herds. 

• In August, flood waters from heavy rains also impacted an estimated 300,000 people in Sudan during the civil war.

China in Africa

China Dominates Africa’s Smartphone Market

Shenzhen Transsion Holdings, maker of Tecno, Infinix and Itel, rules Africa’s smartphone market. The company offers affordable, feature-packed phones tailored for local needs—like multi-SIM slots and cameras optimized for darker skin tones. 

Why it matters:

• Despite rising inflation and currency woes, Africa's smartphone market surged 12.5% in Q4 2023, hitting 19.8 million units. 

• Feature phones are fading, with shipments dropping to 7.8%, signaling Africa’s shift to more advanced tech. 

But with Xiaomi, Samsung and Apple upping their game, can Transsion keep up the pace? (Bloomberg).

U.S. in Africa

UN Seats: A Divisive Offer?

The U.S. has proposed allocating two permanent seats on the UN Security Council to Africa, aiming to address the continent's long-standing call for greater representation. 

• This step comes as the U.S. seeks African support ahead of the UN Summit of the Future next week in New York. 

While the proposal is seen as a significant step, it has sparked considerable debate within Africa. 

• Critics warn that this could lead to deepened divisions among African nations, as choosing just two countries for the seats may weaken collective African interests and exacerbate existing power imbalances. 

• Additionally, the proposal falls short of granting veto power, which many African leaders view as crucial for meaningful reform. 

President Paul Kagame of Rwanda put a proposal forward on X:

Explorations in Africa

Luck Strikes Twice in Botswana

Lucara Diamond Corp found a 1,094-carat diamond at Botswana's Karowe mine, weeks after unearthing a 2,942-carat gem in August.

• Karowe’s track record includes the 1,109-carat Lesedi La Rona and an 813-carat diamond, both fetching record prices.

• Advanced x-ray tech assists successful recoveries, as the mine plans expansion to 2040.

Africa Trivia Answer 

Answer: 2
Fact: 70% of consumers in Tanzania still use cash, while only 20% of consumers in China use cash. The move to digital currency in Africa is picking up but there’s still a long way to go. The slow adoption comes down to costs. In Africa, the fees to make cashless payments are still high, but coming down fast. Read this great write-up by John Haule after his trip to China. 

Thanks for reading! Be sure to make use of our Africa startup guides. And as always, please spread the word about the Africa Brief. This is Mary Ann, Shaynerose, Ruth, Andrew and I signing out.