No. 50 – 3AMReads: Moody’s Downgrades Eskom | DRC Asks for Joint Bid | Ghana President Wants More Parliament

Moody’s downgrades South Africa’s power utility Eskom

South Africa continues to face challenges as bad news continues to emerge from week to week. On Monday, Eskom’s chairman resigned. On Tuesday, Moody’s downgrades the power utility’s credit rating.

The question in my mind is what is the path forward for South Africa. President Zuma, who has played a central role much of these recent issues, will be stepping down as leader of the ANC next year, hopefully. He is then to step down as President in 2019. Who will fill that void?

The ANC is still pretty firmly in Zuma’s control, evinced by the ANC voting not to remove him from the presidency a few weeks ago. Who within the ANC could step up? The party’s Youth League has put its weight behind Nkosazana Dlamini-Zuma, but she is also backed by President Zuma. Who outside the ANC could step up? One of the most high profile political leaders in the country, Helen Zille, just apologized for a problematic tweet about colonialism being good for Africa. I think it’s pretty safe to bet she won’t be getting a ton of votes.

South Africa needs leadership to right the ship over the next several years and it’s not apparent that folks are in position to take on that mantle. Hopefully, someone emerges over these next couple years.

Congo tells consortia to form joint bid for Inga 3 hydro project

The Inga 3 dam has been under development for what seems like forever, something like 14 or 15 years. The Democratic Republic of Congo just asked two massive companies from China and Spain to work together on a joint bid, and it seems like a pretty strange request. Let’s see what more information comes out about this.

Ghana Leader Favors Constitutional Change to Boost Finances

President Nana Akufo-Addo wants parliament to have more oversight of the country’s public finances, which would require constitutional changes. Ghana already has a central audit agency structure. I think a nice addition would be to create an agency similar to the Government Accountability Office, an independent agency that works for Congress and investigates how the government spends public dollars. GAO has already done with staff at Ghana Internal Audit Agency, and I’m sure would be more than happy to help establish a similar organization that works for Ghana’s parliamentary structure.

No. 27 – Three AM Reads: Cars45 gets $5m | Ethos Makes a Sugar Play | Ghana’s Illegal Mining Problem

Cars45 Gets $5M to Streamline Nigerian Used Auto Sales

Jake Bright reports that Cars45 raised a nice Series A round from Frontier Car Group that has backing from some serious names in the venture capital space – Balderton Capital, EchoVC, TPG Growth, and Maryland-based NEA. Seeing that Cars45 raised its round from this one group got me curious. Two of Frontier Car Group’s directors are on the founding team of Cars45. What is more interesting is that the Spring, Texas-registered Frontier Car Group has raised nearly $22M from 28 investors. It doesn’t make a lot of sense to invest a quarter of your fund in one company. Perhaps the group is raising a larger fund? Late last year, the Group filed that it had raised $18M. The $22M size of the fund was filed as an amendment in mid-April. Very interesting. Look out for more here.

Ethos Takes Controlling Stake in South African Beverage Company

According to Africa Capital Digest, Ethos Private Equity has taken a controlling stake in Little Green Beverages, a South African beverage company. This is interesting timing for the close of this deal considering South Africa’s sugar tax is slated for implementation at some point this year.  We’ll see what Michael Benjamin, former General Manager at SABMiller, can do to navigate that while improving the company’s products.

Illegal Mining a Sore Spot for Ghana-China Relations

Ghana has been trying to figure out what to do about illegal gold mining for quite some time now, but apparently hasn’t made much headway. This Financial Times piece outlines the issue as the Akufo-Addo Administration tries to take a broad stance against illegal mining, while others point the finger directly at Chinese driving of illegal mining. China’s response has been to remind Ghanaian officials of all the money China could pull out of Ghana if it doesn’t get it’s media to be “objective” about its coverage of illegal mining in the country. Illegal mining is going to continue to be a thorn in Ghana’s side with its terrible child labor issues and environmental impact, on top of navigating relations with a world power. Nonetheless, Ghana must keep trying to pull the thorn out.

No. 17: 3 Thursday AM Reads – Kweku Adoboli Tells His Story | S2G Ventures Closes $125M Food and Agriculture Fund | Ace Harris Releases Solid African Vibes

  1. I was embarrassed when Kweku Adoboli’s name went across the screen for losing $2.3B while trading ETFs at UBS. A Ghanaian brother had done something really bad. What impact would this have on the perception of Ghanaians? Here’s a fascinating piece on him now that he’s out of jail, but still not in the clear. He still faces deportation back to Ghana since he isn’t a British citizen.

  2. S2G Ventures closed a $125m fund that will be used to invest in food and agriculture companies that operate at any point. From the looks of the announcement and their website, the firm is focused on investing in US-based startups. Examples of their investments include $8m into a startup that is developing mushrooms that can remove gluten from wheat, and other unwanted components from crops. I hope they are not solely US-focused, so they can take a look at Hello Tractor.


  3. I listened to Ace Harris’ new album four times yesterday. ATLLiberia mashes up afrobeat, more traditional African rhythms, and EDM – it’s solid.  Tuma’s Song and Light Your Night set your sights on making a difference in this world. African Star rocks that “proud to be African” vibe. Ife took my mind to my favorite characteristic of South African music – that driving bass drum that gives all the layers space to move. The guitar riff on that track took my mind to when Sango Malamu first visited my dad’s church and I fell in love with African music. Whinin’ It and Drop will make you sweat, as will Yansh, though it’s my least favorite track on the album. I look forward to hearing his next project. While we’re on the music front, check out the visuals for Baloji’s Unite’ and Litre – a strong message against the power wielded by the telecoms and breweries in DRC.

    Photo Credit: Adama Jalloh

No. 6: 5 Thursday AM Reads

1. Fascinating piece on Sam’s Cafe in Tehran. I look forward to reading more about life in Iran as business opens up with the rest of the world. 

2. One of the benefits of the Internet is the transparency it enables. Here’s an interesting post from Zirtual CEO Maren Kate on why Zirtual failed and how the company was saved. 

3. Helpful piece on how Ghana’s fiscal troubles have clouded the pretty good management of its oil revenue.

4.  Interesting perspective on how social media encourages performance bias. 

5. Really good piece on the bias built into some mobile apps. 

No. 4: Thursday Lunch Views and Reads

1. Clint Smith shares his experience teaching a creative writing course at a prison and coming to terms with his socialized view of people who are incarcerated. (via Clint Smith)

2. I wish I was in Ghana to check out this cool looking art exhibition. (via Bessie Akuba Winn-Afeku)

3. Sometimes, these assurances that we have nothing to worry about when it comes to artificial intelligence feels like my back is being rubbed with the flat side of a freshly sharpened sword. (via Marc Andreessen)

4. Ryan Leslie has done the music business differently for a long time. I like the way he thinks minus the 20-hour days. (via Ryan Leslie)

5. The controversy surrounding Justin Gatlin being the fastest person in the world after serving two doping bans frustrates me. He paid his dues, yet people continue to demonize him. (via Track and Field News)

Mother Ghana is Struggling

My neck hurts after shaking my head while reading this Economist piece on Ghana’s economic woes. Some highlights:

  • Public debt could reach 70 percent this year
  • The Ghana Cedi has lost over 99 percent of its value to the dollar (Keep in mind Ghana switched from the New Cedi to the Ghana Cedi)
  • Since 1966, Ghana has sought IMF help 16 times

Elections are coming up next year, so we will probably see more spending. President Mahama has a lot of work on his hands in the lead-up. I imagine he will cite progress made on addressing power issues and the exploding budget, and that he should be re-elected to continue righting the ship.

Elections are a lot of work. Perhaps, the better move would be to not seek re-election, double down and get reforms right over the next 18 months, and hand off an improving situation to his successor.

Why You Should Pay Attention to Africa’s Retail and Fashion

For us, today, Africa is more important than the U.S. In five to 10 years, Africa can become the new frontier for luxury. – Ermenegildo Zegna

While reading this Quartz piece on Africa’s fashion opportunity, I came across this Global Retail Development Index put together by A.T Kearney. The Index ranks the top 30 developing countries for retail investment based on market attractiveness, country and business risk, market saturation, and time pressure. Time pressure relates to how quickly a country’s retail sector is growing. If it is growing really quickly, a retail investor needs to move fast to take advantage of growth before it’s too late.

Botswana (18th), Nigeria (23rd) and Angola (30th) are on the list for 2015, with Ghana, Zambia, and Namibia on the verge of breaking onto the list.

The report points to Sub-Saharan Africa mirroring China in 1987 when retail brands were beginning to enter the country. Nearly 30 years later, retail growth is extremely fast and retailers are beginning to really focus in on profitability now that they are approaching scale. The authors of the report believe Africa could be at this point in 2040 or so, though it will probably be a bumpy ride.

One of my mentors was recently telling me about the tens of thousands of dollars of champagne his clients bought during a night on the town in Lagos a few years ago. It’s no secret that Nigeria’s wealthy have a lot of disposable income and that champagne is in demand on Banana Island. I had no idea, though, that retail sales of champagne in Nigeria was second only to France. The report authors point to this as an anecdote on the opportunity for luxury brands in Sub-Saharan Africa.

Speaking of luxury, Hannel Rupert, a South African entrepreneur, wrote an op-ed in Business of Fashion calling for luxury brands to partner with Africa’s fashion industry, moving beyond fashion for charity campaigns or one-off collaborations. A good place to start, in her opinion, is to bring some end-process manufacturing to countries like Ethiopia, Cameroon and South Africa which have strong capabilities in areas like leather crafting.

I worked on a retail project a few years ago, working with a client who had quality issues with its product lines but wanted to figure out a way to tap in the U.S. retail market. Established brands bringing their expertise on details like this could help deal with issues like this. At the same time, there are already a burgeoning number of African fashion shops that put out really high quality material. Having access to end-process manufacturing that matched their products could help them reach scale in Africa and the rest of the world.

As an aside, I finally watched Jidenna’s Classic Man music video. Does anyone know if Ikire Jones made the white blazer Jidenna wears in the film?

As a further aside, Angola made the list for the Global Retail Development Index. I’m sure a lot of folks immediately thought about Luanda’s high cost of living. The New Yorker has a piece in its June 1 issue on the inequality of Angola’s oil boom. The author cold have spent more time on the U.S.-Russia proxy war. Over the decades that Angola was in civil war, how U.S. support did Jonas Savimbi and UNITA get? What more detail can we get about the Heritage Foundation, Grover Norquist and Jack Abramoff supporting Savimbi? How was President dos Santos able to maintain control in the face of a U.S.-supported rebel group? How did all of that contribute to Angola’s current political and economic environment? Just a few questions the author could have explored.

Back to fashion. The Quartz Africa piece mentions McKinsey’s Lions on the move report that came out in 2010. The authors forecasted spending power in Sub-Saharan Africa reaching $1.4 trillion by 2020. Perhaps a halfway-point check-in on how the continent is doing relative to that forecast is in the works?

This African fashion conversation is very exciting and I look forward to seeing where it goes. As of late, President Muhammad Buhari’s swagger has had me thinking about taking Traditional Wear Fridays to the next level and pulling out the Fugu.

Photo credit: Daily Mail | Nigeria