Friends of the Africa Brief,

This week we come to you from Charlottesville, Virginia, a growing hub of investors with their sights on Africa’s start up scene. 

TL; DR

• AI. Related startups in Africa raised $458M in 2023.

• Benin. The country has agreed to allow crude oil exports from landlocked neighbor Niger through its port (DW).

• Clean Cooking. Big oil is a part of a 2.2bn clean cooking effort (FT.com).

• Kenya. President Ruto is headed to the U.S. for an official State visit (The Standard).

• Morocco. 12 companies made the FT list for top growth. (FT.com)

• South Africa. Ahead of the May 29 elections, Former President Zuma’s new political party is gaining traction (New York Times).

• Qatar Airlines to make an investment in Southern Africa airline (Reuters). Yay!

• Zambia. IMF halves the drought-hit country’s 2024 growth forecast (Bloomberg).

Graphic of the Week

According to the 2023 Democracy Index only 43 of the 70+ elections worldwide are expected to be fully free and fair. In Africa, 19 elections are expected in 2024 of which 5 rank in the flawed or full democracy categories (Botswana, Ghana, Mauritius, Namibia and South Africa) according to the index. By the 2022 numbers, public support for democracy remains high, with about 70% of sub-Saharan Africans preferring democratic governance, according to Afrobarometer.

In recent election news, Senegal transitioned to a new administration led by Bassirou Diomaye Faye in March 2024 and on May 6, 2024 Mahamat Déby was confirmed as the winner of the Chad presidency continuing his family’s 30+ year leadership. Mozambique’s Frelimo party named its candidate Daniel Francisco Chapo ahead of October elections. 

May’s Africa Election Watch: 

• South Africa - May 29, 2024 - The African National Conference (and the country for that matter) are struggling and people expect the election to be a close race. Read more in the Economist or AP’s guide to the candidates. 

• Madagascar - May 29, 2024 - Parliamentary elections are scheduled to be held to elect the National Assembly.

To look further out, visit the African Argument’s interactive election map and calendar or settle in with a few cups of coffee to read the Africa Center’s analysis.

My take: Many of us come from pro democracy perspectives. But I am trying to view the continent’s leaders with more openness to different systems and forms of leadership, an approach that may yield better partnerships and influence over the long term. The U.S. for one, may need to try a new strategy. 

Also On Our Radar…

The Big Newcomer Is: Morocco - the North-West African nation made a massive jump on the FT’s annual list of the 125 fastest growing companies in Africa growing from three last year to twelve this year. 

AI-driven startups in Africa raised $458M in 2023, with just 15 related deals closed. Are investors starting to find credible AI-related deals on the continent? Maybe…though I believe a healthy dose of skepticism may still be warranted. Dig deeper? African Business wrote AI: The African opportunity recently. We will keep the skepticism coming! Meanwhile, U.S. startup Iozera.ai announced it is building a 386MW AI data center in Morocco.

Where the Wealth Is Concentrated - The Big Four you know, but the fifth country on the list? Yep, there it is again: Morocco. Saw the same content from a Moroccan news source a month ago, positioning the country as part of the “Big Five”. Brilliant. For the country’s stake, I hope it sticks. We are headed to Marrakech for GITEX Africa to see what the hype is about. 

Another Sign the Middle East is Moving In - This week, Qatar Airlines announced they are making an equity investment in an unknown southern Africa airline, after investing 60% of 1.3bn in 2019 for a new airport in Rwanda that will come online in a few years. I am on pins and needles. Which airline will it be?

It was Sharks, Right? Internet Blackout Déjà Vu - For those of you living in East Africa or trying to communicate with people in Kenya, Tanzania and Rwanda, it is old news that the underwater internet sea cable north of Durban, South Africa was damaged this week. As service was restored, the shark jokes flowed on virtual calls . But wait, didn’t that just happen in West Africa in March due to seismic activity? Déjà vu. According to one firm, the outages in March cost central and West African economies at least $112.5 million USD in economic productivity. And the case for Starlink grows. The service is approved and available in Eswatini, Kenya, Malawi, Mozambique, Nigeria, Rwanda, and Zambia. And it is reported that Benin and Ghana are joining the ranks. 

Early Shout Out to U.S. Amb. to Kenya Meg Whitman! President William Ruto of Kenya is visiting Washington on May 23. According to Amb. Whitman, Ruto will be the first African head of state to be invited for a state visit since 2008 (timestamp 2:20). 

Zambia - It’s said to be the worst drought in 40 years and the IMF is halving economic growth projections, while commending last year’s fiscal management improvements. Meanwhile Kenya is still cleaning up from the floods that killed a reported 238 people.

Big Oil Gets Onboard with Clean Cooking - 2.2B has been committed by a consortium of players including TotalEnergies and Shell. “An estimated 950mn people in Africa, who could not afford gas or electricity, burnt charcoal or firewood often in enclosed spaces for cooking, subjecting them to the effects of smoke inhalation, according to the UN.” (FT.com)

Takeover Thwarted, Anglo American Restructuring On Its Own - BHP is eagerly eyeing Anglo American's assets, but Anglo isn't having it. Rejecting a $43 billion bid, Anglo has its own restructuring plan. Investors are happy as Anglo looks to improve its complicated conglomerate structure, boosting its value and making it a leaner, more attractive target for future bids. BHP might have to play the long game and wait for Anglo to slim down before making another go at a merger. (WSJ.com)

Benin’s Powerplay Worked! - A quick summary of a complex few months: After the July 2023 coup in Niger, Ecowas sanctioned the country; Niger closed its border with Benin; Benin shut down Niger’s oil pipeline to the sea. The conflict, which hurt both economies, was finally mediated by China, ensuring oil exports and easing tensions and trade. Benin's blockade was a power move to force border reopening, crucial for both nations' economic stability.

Cont'd: #DiscoverMyAfrica - this week don’t miss The Power and Beauty of African Guitar Greats from the NYT. Spotify. Note: NYT Amplifier playlist changes every Tues. and Fri. which means the article playlist oddly doesn’t work. Don’t give up. 

For the Foodies - We hosted a dinner last night to discuss perception on Africa (one of them being there’s not great food). The dinner included olive oil and harissa paste from Tunisia, cocoa from Ghana, tahini and berbere from Ethiopia, coffee from Rwanda, hibiscus tea from Nigeria, couscous and olives from Morocco, rooibos tea from South Africa and some Procera gin from Kenya. The quality and uniqueness of food and beverages coming from all corners of the continent is just plain yummy! Now if we can just do some branding! 

Long Read - If you have a few minutes over your morning coffee, skim The General History of Africa, a detailed look at states and societies across the continent's entire history. Context matters.

Picture It: The Economy Beyond Tourism - In our line of work at Renew Capital, we spend considerable time sharing that there’s more to the continent than epic safaris. And there IS. But who doesn’t love a heart stopping encounter with Africa’s wildlife? We ran into these five beauties earlier in May in Akagera National Park in Rwanda, one of the oldest parks on the continent. According to a report by Space for Giants and the UN Environment highlighted in Conservation Mag, there are 8,400 protected areas on the continent which create employment for 24M people, generate $48B in spending and drive 8.5% of the economy. The report says that nature-based tourism is growing at ~ 10% per annum, which is substantially more than global tourism as a whole and by 2030 the number of tourists in Africa will more than double to 134 M. Don’t wait, book your tickets. We are planning a trip to Gorongosa National Park in July! 

Thanks for reading. Hope to see you next week. 

P.S. It’s me again, your curator, Laura Davis. This week’s Africa Brief was written by various lovely colleagues from Renew Capital and pressure-tested by Josh Parker Allen in between his dissertation efforts at Oxford. Email us at [email protected] with your comments and ideas. 

_{About: The Africa Brief aims to provide accurate and insightful information and opinions related to Africa’s macro trends. We hope to stay apolitical and present information in a balanced and objective manner. If you have feedback for us, please email [email protected].}

_{Disclaimer: This newsletter provides general information only and is not investment advice. It does not consider any subscriber’s individual investment objectives, financial situation or means. It does not offer investment recommendations or solicitations. Consult your financial, legal and tax advisors before acting on any information in this newsletter. The Africa Brief is not responsible for actions taken based on this newsletter. Opinions herein may change based on economic and market conditions. Data from third-party providers is obtained from what are considered reliable sources but accuracy cannot be guaranteed.}