No. 49 – 3AMReads: Kenya Finds Trump Connect | Trump’s OPIC Pick… | Nigerian Oil Company Wins Oil Block

Politico: SPG Signs Kenya

Trump-connected Stanton Park Group signed a $1.2M contract to represent the country’s interests in the US. I look forward to seeing what they accomplish.

White House: Seventeen Nominations Sent to the Senate Today

President Trump has nominated Texas real estate tycoon Ray Washburne to be President of the Overseas Private Investment Corporation. After digging into his background I’m curious to find out which emerging markets he has traveled to, if at all.

It is encouraging to know that he is influential in President Trump’s circle, considering that he was part of President Trump’s transition team. The signs have been pointing to OPIC shutting down, but perhaps he can be influential in making a case for the agency to remain operational.

Fortunately, the nominee for Executive Vice President of the Corporation is David Bohigian who has significant experience negotiating trade agreements for the US. While looking into him, I found this interesting Cordell Hull quote he shared during a 2005 testimony he gave while being vetted for a position at the Department of Commerce:

I have never faltered, and I will never falter, in my belief that enduring peace and the welfare of nations are indissolubly connected with friendships, fairness, equality and the maximum practicable degree of freedom in international trade.

Todd Moss and Jared Kalow at the Center for Global Development provide some helpful recommendations to the two nominees here.

Forbes: Nigerian Energy Group Taleveras And ExxonMobil Win Oil Blocks In Equatorial Guinea

This article caught my eye because I couldn’t recall hearing of many African-owned oil company winning oil blocks, so I checked with a friend who confirmed that only a few firms have won oil blocks like this. I look forward to seeing more of this. It would definitely help to have African-owned oil companies exploring these blocks to have more data to draw from for the R&D labs they will be investing. (Remember my saying I’m going to keep bringing up these R&D labs?)

No. 41 – 3AMReads: Azure in Africa |Facebook Invests in Fiber Optic | Volvo Takes to Kenya

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.

No. 37 – 3AMReads: Upside in African Financial Services | Lonmin Moves Ops to Marikana | China Pledges $100B

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.

No. 34 – 3AMReads: Cheap Black Market Naira | Kana TV’s Winning Ethiopia | Safaricom’s Not About That Breakup Life

Black Market Naira Trading Cheaper Than Official Naira

Nigeria’s currency situation has been a mess of late, and I’m blaming it on Billions (read my thoughts in Issue No. 24). Sure enough, hedge funds are sniffing around for a deal. This week has felt like something of a perfect storm for Nigeria with telecoms having to cut back on their broadband coverage due to forex restrictions on equipment imports to go along with a particularly rough decline in power generation. And President Buhari is out of the country for who knows how long. Sheesh.

Kana TV Has Ethiopians Watching More TV
Kana TV is gaining market share in Ethiopia, bringing hip entertainment content to a media landscape that heretofore had been relatively drab. As Ethiopia eases restrictions over various sectors it will be interesting to see how brands like Kana innovate and push the boundaries in appealing to their customers. 

Safaricom Doesn’t Plan on Letting Regulators Split Up Company 

Safaricom CEO Bob Collymore has committed the company to fighting any efforts by Kenyan regulators to break up the country’s largest company by market value, separating the mammoth Mpesa business from the rest of the company. That would mess with the company’s future plans to develop an e-commerce platform and content distribution business. Mpesa would play a huge role in monetizing such offerings. Definitely stay tuned to what happens here.  

No. 28 – Three AM Reads: Falling Commodity Prices | Kenyan Regulators Split over Bitcoin | IMF Making the Rounds

Coffee Prices Are Going to Drop 6% This Year, But My Americano Will Still Be $4

The World Bank put out its forecasts for global commodity prices last week, and it expects coffee, cocoa, and tea prices to fall 6%. Ivory Coast’s President Ouattara recently called on the country’s cocoa farmers to increase their output and quality of their beans in light of falling cocoa prices. Apparently, greater-than-expected supply of these commodities is driving the price drop, so I’m not sure how increasing output helps with that. Feel free to send me notes explaining that. Increasing cocoa bean quality could help with competitiveness in a crowded market, but cocoa is such a slow developing crop that expectations for quality to improve in a year is not realistic.

Kenyan Regulators Split on Virtual Currencies  

The Central Bank of Kenya and the Capital Markets Authority don’t agree on the use of virtual currencies like Bitcoin in Kenya. The CBK argues that the unregulated nature of Bitcoin exchanges leaves users vulnerable to losses, while the CMA has left the door open for the regulator and fintech players to feel each other out and determine how to move forward with the potential use of Bitcoin in the country. To be clear, Bitcoin startups like Bitpesa are operating in Kenya, though not without challenges. Last year, the Central Bank of Kenya effectively shut down Bitpesa’s operations by shutting down its bank accounts. Ultimately, both regulators will figure out what to do about virtual currencies. Hopefully, they won’t find themselves flat-footed like they did during the rise of mobile payments platforms.

IMF is Making It’s Rounds – Egypt, then Zambia

The IMF has a team in Egypt currently discussing a $1.7B loan, expected to be disbursed in June. Next up, Zambia is slated to continue talks with the IMF this month for a $1.6B loan. The IMF has been working with Mozambique in dealing with it’s hidden debt issue. In all, there are about 20 African countries that have taken money from the IMF. I look forward to seeing that number decrease significantly over the next decade. We’ll see how realistic of a hope that is.

No. 26 – Three AM Reads Late Edition: Kenya’s Geothermal Energy | Resilient Ivory Coast | Nigeria’s FX Reserves

Kenya Pushes Forward on Geothermal Plans

It’s fantastic seeing Kenya continue to make progress on its Vision 2030 plan to be generating 5000MW of geothermal energy by 2030. I was rooting for these projects back in 2011, so I’m glad they’re not making me look bad.

The groundbreaking for the 158MW Olkaria V geothermal site will bring Kenya’s geothermal capacity up to nearly 700MW upon completion. The country’s 5000MW goal is a ways off, but based on the progress made over these more than 15 years and the projects lined up for drilling like the Menengai field, the country could see that goal come into sight quickly.

Ivory Coast Confident Growth Will Continue

Ivory Coast is one of the more fantastic growth stories on the continent. The country was deep in civil war less than a decade ago with former president Gbagbo barricaded in his home. Today, Ivory Coast weathered the specter of another uprising and continued its push as one of the fastest African economies. Incredible.

Nigeria’s FX Reserves Getting Oxygen

The past couple of years have been rough for Nigeria’s FX reserves as oil prices continued to drop, while Nigeria’s government was operating off a budget that assumed much higher oil prices. This left Nigeria’s FX reserves on the struggle bus as the country pulled all the stops to keep things moving. While the reserves have a ways to go before Nigeria is in a comfortable position, it is an encouraging sign to see the reserves account trending up.

No. 12: 3 Tuesday AM Reads – US-China Relations and Africa | Africa’s Beer Market | Baltimore on the Rise

  1. Aly-Khan Satchu, one of the most respected equity investors in Kenya, discusses briefly how US-China cooperation would be a benefit to African countries. This aligns with comments Bobby Pittman, managing director of Kupanda Capital made at a session discussing the Electrify Africa Act. More on that sometime later this week.

  2. There are rumors of Anheuser-Busch InBev making a bid to acquire SABMiller. Here’s a good piece on how important the African beer market is to that deal.

  3. Steve Case was in Baltimore yesterday as part of his Rise of the Rest tour to highlight the entrepreneurial spirit in other cities around the country. Here’s a piece on his excitement about the city’s potential. I felt so much energy during the Baltimore Bike Party last Friday night and was amazed by the energy and excitement of participants and onlookers. We rode through parts of Baltimore that have seen hard times for a long time, including the areas where rioting took place following Freddy Gray’s death. Yet, I felt a belief and pride in the city.  Rooting for Baltimore.