Microsoft Announces First Public Cloud in Africa
Microsoft announced today that it was going to stand up two data centers in South Africa, the first public data centers on the continent. Let that sit with you for a bit. Hopefully, this is the beginning of public clouds proliferating across the continent. The benefits of this reach from public sector revenue generation to auto mobility technologies I was fretting over yesterday. GM, come back, maybe?
Facebook Invests in Fiber Optic in Uganda
I missed the news earlier this year that Uganda was investing $170M in a fiber optic project in Uganda. East Africa landing $270M in fiber optic investments over the past couple months, including Google investing $100M in Csquared, is definitely a good look. Keep it coming!
Volvo Expanding Truck-Building to Kenya
Volvo announced yesterday that it was opening its third truck assembly plant on the African continent, this time in Kenya. I look forward to seeing how this operation performs considering the work the East African Community has done to ensure cross border trade is as strong as possible.
Africa Finance Corporation CEO Makes Case for Infrastructure Investment
Andrew Alli is one of my favorite people to follow on Twitter. He is witty and always provides forthright analysis. During the celebration of the Africa Finance Corporation’s 10 years in business, Alli shared some observations on the importance of infrastructure in Africa. His admonishment to focus on working with companies that can scale and fixing the currency situation so that deals aren’t be done on US currency which is more risky.
GM Sells Off South Africa Operations
The auto industry is going to be really interesting to watch across the continent over the next several years. As global automakers fight for market share in a pending environment where ridesharing, autonomous driving, etc will be royalty, African countries still tangling with blackouts/brownouts just isn’t acceptable for a player like GM. The company can take its investment in a market like South Africa and drill down a bit further in a market like China where the path to seizing on huge growth potential is more visible.
News like this crystallizes Andrew Alli’s statements about the critical role infrastructure investment plays in unlocking wealth on the continent. Foundational infrastructure combined with a wealthier consumer makes a more attractive investment for a GM.
This piece also just brings back thoughts of where we’re going with technologies like artificial intelligence. Africa has to get the infrastructure right to be able to play in these spaces.
CcHub Pushes to Keep Yaba’s Startups Clustered Together
I struggled to parse out whether there’s really cause for concern for Yaba’s future as Lagos’ tech hub, or whether this piece was a veiled branding for CcHub. Perhaps, it was some of both. All the same, it’s cool to see CcHub making plans for the long-term in creating an environment for startups to thrive in a central location.
I’m definitely on board with Bosun and other stakeholders trying to take advantage of economies of scale on pushing for broadband and better power supply. While Andela is a big fish in Lagos’ startup scene, I think their leaving the neighborhood is more something to pay attention to, while stakeholders continue thinking long term in creating the right environment to keep these type startups. Yaba isn’t fighting to maintain relevancy after two startups leave.
Fiber-Optic Company Csquared Secures $100M Investment
Not that long ago, the big news for broadband across the continent were the undersea cables bringing broadband to Africa’s shores. The big question then was how to ensure the terrestrial reach of this newfound connectivity.
A number of companies have been working on this, including global players like Google. Csquared, a spin-out of Google’s Project Link, landing this $100M is huge and I look forward to seeing more of this type deal activity. I’m sure iRoko CEO Jason Njoku would appreciate Csquared rolling out some fiber in Lagos to get his data costs down!
Commodities Trader Ighe Sanomi Tells Taleveras’ Origin Story
Oil traders in Nigeria make big bucks, and Ighe Sanomi is near the top of that list. This is an interesting piece that maps out Sanomi’s beginnings in the oil industry all the way to now where he is restructuring the companyafter a couple challenging years for his company.
For some time now, I’ve been thinking about how commodity dependent countries like Nigeria can diversify their economies while taking advantage of their core competencies. Oil is that for Nigeria and I think traders like Sanomi would do well to allocate some of their balance sheets to investing in R&D in various parts of the oil and gas value chain – new models for swaps contracts, oil exploration technologies, etc.
I could just be naive since oil is definitely not my core competency, but I think there could be discoveries there that could lead to new revenue streams in the long term.
What a day! Apologies for the late post! Here we go.
Oxosi Continues Building Brand and Afromodernism
African fashion e-commerce platform launched in late 2015, and continues to take it’s game to the next level. Get you some gear!
Vodacom Takes 35% Stake in Fellow Vodaphone Subsidiary Safaricom
Yesterday, news came out that Vodaphone-subsidiary Vodacom is acquiring a 35% stake in Safaricom from Vodaphone. I wrote last week about rumors of the Kenyan government pushing for Safaricom to break up at some point. It along with Vodacom have 35% stakes. At some point, I’ll look back to see the extent to which Vodacom has done any share buybacks, as having two shareholders with stakes that large and breakup threats makes me uncomfortable. I’m curious about the strategy behind Vodacom taking over the Safaricom stake and would appreciate ideas from you all. Feel free to send me ideas at email@example.com.
African Export Import Bank Investing $500M in The Gambia
It’s good to see investment dollars headed The Gambia’s way after former President Yahya Jammeh’s defeat in last year’s elections. I’m curious how well the current administration under President Adama Barrow is tackling the country’s debt problem. Apparently, President Jammeh left the country’s finances in a pretty big mess with at least $1B in debt. The country getting tax revenue in place and effectively leveraging investment dollars like this deal with the African Export Import Bank will be critical in ensuring that the country keeps moving forward.
Investor Highlights African Financial Services Opportunity Despite Headwinds
Kurt Davis surveys the financial services industry across Nigeria, Ethiopia, Kenya, Democratic Republic of Congo, and Cote d’Ivoire as ones where investors will find an upside though the current state of the industry isn’t the prettiest to look at. His projection of Cote d’Ivoire becoming the centerpiece of regional financial services action in West Africa is a really interesting that makes sense given the countries growth trajectory so far. Before that happens, I’m going to need the military to improve its operations, find money to pay soldiers, and decrease the specter of mutiny.
Lonmin Moves to Marikana
My mind immediately went to the Marikana Massacre a few years ago when I saw the news that Lonmin was moving it’s Johannesburg office to Marikana where dozens of Lonmin workers were killed by South African police during a wildcat strike. A couple years after that, the company along with the rest of South Africa’s platinum miners went through a very long strike that really put a dent in South Africa’s already struggling growth rate. Lonmin CEO Ben Magara got his start working in the mines and says that he wants to be closer to the company’s operation. Relations between the company and its employees aren’t getting any better with workers protesting last week. Hopefully this move helps improve relations.
China Pledges $100B to Finance Projects Globally
Chinese President Xi Jinping hosted several global leaders for China’s One Belt, One Road Forum. A year or so ago, China launched this effort as part of its aims to connect 60+ countries through a vast transport and logistics network to drive trade. Kenya and Ethiopia’s presidents were in attendance, and both have already seen hundreds of millions of dollars in investment as part of this effort. China’s trade with African countries is already sizeable at $39B for Q1 2017, and we can expect that number to grow significantly in the coming years if China is able to execute the projects it targets and gets paid back. If not, there could be a lot of debt floating around the world. African countries, particularly the ones that have issued large bonds in recent years, would do well to really ensure they have revenue streams to cover more debt should they pursue it.
Nigeria’s Bank of Industry Provides Interest-Free Loans to National Youth Service Members
Nigeria’s Bank of Industry has developed a Graduate Entrepreneurship Fund in partnership with the country’s National Youth Service Corps. The program provides NYSC members with loans they can use to further establish their businesses, and it seems like a nice program. Nigeria requires recent college graduates to participate in the NYSC, completing a year of national service in another part of the country. The program came about after the Biafra War in order to foster national pride and encourage understanding between the various parts of the country. This year, the BoI has distributed about $834,000 to 177 Corps members, an average of $4700 per member. Over the two years of the Fund, the BoI has distributed about $1.8M. I look forward to seeing how the program grows.
Video: Cars45 Explains Online Used Car Marketplace
Last week, I posted about Cars45 raising $5M for it’s online used car platform. Here’s an interview CNBC Africa did with Etop Ikpe, CEO of the company, this morning.
China’s Trade With Africa Keeps Growing
China’s commerce ministry says that the country’s trade with African countries totaled nearly $39B in Q1 2017, driven by a steep increase in agricultural imports. For comparison, the US did about $37B in trade with African countries over the whole of 2015. There’s been much discussion about US-China competition across the African continent. In terms of sheer volume, China continues to win out, while US stakeholders hang their hats on the quality of US-Africa partnerships. The difference in scale of trade levels is just incredible though. I look forward to seeing how China’s trade data takes shape over the course of the year and what stories come out about this sharp increase in demand for agricultural imports.
Author Calls For African Entrepreneurs to Talk About Failure
Idril Abshir penned this interesting piece arguing that African entrepreneurs should talk about failure more, indicating that they will find resilience in discussing failure. She cites the culture among Western entrepreneurs of acknowledging failure. While the stories in the piece were compelling, I don’t know that the West’s approach to failure is the bar African entrepreneurs should try and attain. Silicon Valley has championed failure as a means for learning, though I believe it has enabled bad behavior as well. I hear too many stories of founders leaving investors high and dry due to not communicating the struggles they were having. Anyone remember Clinkle? Fab? Rothenburg Ventures? I also think African entrepreneurs have proven their resilience in the face of conditions of which American entrepreneurs have no concept.
IMF Projects 2.5% Growth Across Africa (Free Subscription)
The IMF highlighted concern about African economies operating at two speeds, with some countries driving high growth levels and others serving as a drag on growth. The debt situation of countries like Mozambique is also concerning. These countries which raised a bunch of money on bond issuances several years ago are now struggling to handle them. It would be frustrating to see a bunch of defaults like Mozambique in the coming years.
Cameroon is Hosting a Digital Economy Conference…
After shutting off the internet in the English speaking portion of Cameroon for 94 days, the government is hosting a conference on the digital economy promoting it’s efforts to be a global leader in that space. Seriously? Let’s work on not shutting of people’s internet connections, first.