No. 52 – 3AMReads: So. Tired. Need. Sleep.

Ecobank Research: Barclays brand’s exit from Africa could trigger loyalty separation

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TechCabal’s African Tech Roundup: Africa-Focused Insights From IoT World Forum 2017

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IMF: Tayo Oviosu: Technology Draws More Nigerians Into Banking Fold

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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. 39 – 3AMReads: Yaba Looks to Remain Lagos’ Startup Epicenter | $100M for Fiber Optic Company | Giant Nigerian Oil Trader Tells Origin Story

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. 

No. 36 – 3AMReads: Nigeria’s BOI Incentivizes Entrepreneurship | Cars45 CEO Speaks Out | China-Africa Trade Keeps Growing

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.

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. 29 – Three AM Reads: Education in Africa Needs $16-$18B | Dangote Refinery Signs Equipment Deal with Honeywell | Egypt Tops List of Countries for Hotel Development

Report Touts Investment Opportunity for Private Education Across Africa

DC-based Caerus Capital put together a report on the investment opportunity in private education across Africa. The authors project that 25% of school age children – 66 million children – across Africa will be in private education by 2021, up from the 21% who are currently enrolled. The authors also point out that private education across Africa needs about $16-$18B in private investment over the next five years to ensure a strong industry on the continent. One of the rough data points in the report is that ~30M school-age children across the continent are not in school right now. I’m still digesting the report, but a few things immediately come to mind:

1) African stakeholders need to be involved in funding these type reports. None of the funders of this report are African organizations.

2) The investment opportunity for education is massive on the continent, yet I’m nervous about governments not being a good partner with the private sector in developing private education. That leaves much room for private education that is all over the place in terms of quality.

Dangote Oil Refinery Company Purchases Equipment from Honeywell International

New Jersey-based Honeywell International announced that one of it’s subsidiaries will be supplying the Dangote Oil Refinery Company with an equipment package for the construction of its single-train refinery complex near Lagos. The refinery is slated to be the largest of it’s type in the world. Construction of the refinery is slated for completion in 2018, and due to be operational in 2019. I’m curious to see how many American jobs this deal will support.

Top 10 African Countries for Hotel Development

This is an interesting list of the top African countries for hotel development. According to TOPHOTELPROJECTS, Egypt, Morocco, and Nigeria take the top three spots. I’m curious about those 12 projects going on in Cape Verde. Anyone up for a vacation soon?

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.