Data courtesy: Parliamentary Monitoring Group , 2019

The ANC, and Cyril Ramaphosa, emerge victorious in South Africa’s General Elections: South Africa’s ruling party, the African National Congress (ANC), continues its reign following its 57.5% victory in the country’s 2019 General Elections on 8 May. After his inauguration, President Cyril Ramaphosa announced a leaner Cabinet, instilling a new measure of hope in the government structure of South Africa. Although Ramaphosa and his new cabinet has economists optimistic, South Africa still faces economic troubles with the probability of another recession, based on the weak performance in the first quarter of 2019. Adding to the concern, the inclusion of Eskom’s debt by Moody’s Investors Service could increase the risk of South Africa losing its only investment-grade rating.

Data courtesy: Parliamentary Monitoring Group, 2019

Cyber crime increases in South Africa: South Africa has seen an increase in malware attacks, up by 22% year-on-year in the first quarter of 2019. At its annual Cyber Security Weekend, in the last few days of April, Kaspersky Labs recently stated that there are 13,842 cyber-attacks per day in Africa’s most sophisticated economy. The country has also experienced an 8% increase in malware detections in the first quarter of 2019, while mobile malware increased by 17%, which is more than computer malware. Mobile banking fraud incidents have doubled considerably with the advent of digital technology and pose a significant risk to consider as Africa continues to adopt mobile banking and other financial technology.

Promising change in South AfricaSouth Africa’s dominant ruling party, the African National Congress (ANC), won the national election in May 2019 and many are hopeful that President Cyril Ramaphosa’s forthcoming term(s) cemented by the general elections, will lead to positive change. Diverging from his predecessor’s perceived abysmal track record, marred by corruption and ‘state capture’ allegations, Ramaphosa’s approach is being received as a fresh change of pace. Recent positive trends include the creation of a new anti-graft unit headed by Advocate Hermione Cronje – a renowned prosecutor who has also worked as a consultant for the World Bank and the United Nations – and a new cabinet, reduced from 36 to 28.

With some daunting challenges, such as Moody’s inclusion of Eskom’s debt in their evaluation of South Africa’s overall fiscal-strength calculations, the change originating from ANC leadership holds the hope of recovery for the country’s economy. South Africa’s array of economic and social problems will inevitably lead back to those governing its political and financial resources. Should Ramaphosa’s government be as successful as many hope, South Africa will see a marked improvement in its investment status and ability to attract more investors, and reposition on a more sustainable economic growth path. As the most sophisticated and diversified economy in Africa, South Africa’s ruling elite have squandered numerous opportunities as the government of the past decade failed to effectively benefit from the country’s prowess. Bearing in mind Ramaphosa’s reputation as a successful businessman and a vital interlocutor between the National Party and the ANC in the Convention for a Democratic South Africa sittings in the 1990s, his rule may be exactly what the ANC and South Africa need to recoup what has been lost.

The rise of African IPOs on foreign boursesNigeria’s powerhouse online retailer, Jumia, has become Africa’s first tech startup to list on the New York Stock Exchange (NYSE). Its entry on the NYSE was however off to a rocky start after declining by almost 50% early May, just a few weeks after listing on the 12th of April 2019, following a damning paper by market research firm, Citron Research. Allegations leveled against the online retailer by Citron suggested that Jumia altered its financial figures in order to further promote its potential profitability to NYSE traders. This allegation however did not leave a lasting effect as Wall Street turned more bullish towards Jumia stocks by late May. Jumia, which has been dubbed the Amazon Inc of Africa, is slowly but surely winning the trust of traders across the world. While Jumia itself is benefitting from its NYSE listing, the broader African business landscape is also likely to be bolstered through Jumia’s success. As the international world gains confidence in Jumia, the natural next step is to seek out other hidden gems on the African continent.

The London Stock Exchange (LSE) appears to be one of the first to acknowledge the value of rising African companies. While not something the LSE does often, officials have recently looked to boost the LSE’s existing 115 African listings, particularly in Kenya and Nigeria. Jumia’s success is at the core of the LSE’s interest in Africa. This, coupled with the expanding footprint of various tech companies such as Microsoft and Google who are investing heavily in setting up innovation hubs across Africa, signals a positive upward trend for African tech startups. As more Africans seek to escape poverty and other regional social ills, more innovators will be drawn towards innovation hubs in pursuit of the success that Jumia has achieved. From a macro-perspective, the image becomes clear; the world knows that Africa is the next big market and that African startups will make the Apple and Google of the future.

The rise of African IPOs on foreign bourses Nigeria’s powerhouse online retailer, Jumia, has become Africa’s first tech startup to list on the New York Stock Exchange (NYSE). Its entry on the NYSE was however off to a rocky start after declining by almost 50% early May, just a few weeks after listing on the 12th of April 2019, following a damning paper by market research firm, Citron Research. Allegations leveled against the online retailer by Citron suggested that Jumia altered its financial figures in order to further promote its potential profitability to NYSE traders. This allegation however did not leave a lasting effect as Wall Street turned more bullish towards Jumia stocks by late May. Jumia, which has been dubbed the Amazon Inc of Africa, is slowly but surely winning the trust of traders across the world. While Jumia itself is benefitting from its NYSE listing, the broader African business landscape is also likely to be bolstered through Jumia’s success. As the international world gains confidence in Jumia, the natural next step is to seek out other hidden gems on the African continent. The London Stock Exchange (LSE) appears to be one of the first to acknowledge the value of rising African companies. While not something the LSE does often, officials have recently looked to boost the LSE’s existing 115 African listings, particularly in Kenya and Nigeria. Jumia’s success is at the core of the LSE’s interest in Africa. This, coupled with the expanding footprint of various tech companies such as Microsoft and Google who are investing heavily in setting up innovation hubs across Africa, signals a positive upward trend for African tech startups. As more Africans seek to escape poverty and other regional social ills, more innovators will be drawn towards innovation hubs in pursuit of the success that Jumia has achieved. From a macro-perspective, the image becomes clear; the world knows that Africa is the next big market and that African startups will make the Apple and Google of the future.

Data courtesy: Markets Insider, 2019

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Mobile banking fraud and cybercrime: The risks of fintechsIn the month of April, we highlighted the rise of technology in Africa, and in particular the benefits that mobile banking provides to Africans who find no real value in bank accounts. Although it is undeniable that Africa’s adoption of technology is revolutionary for the continent, it is important to remain cognisant of the bigger picture, inclusive of the dangers of technological innovation and development. According to analysts, a 10-15% internet penetration rate is the threshold for the generation of significant hacking attacks – a rate which many African countries have already surpassed. With this in mind, Africa is facing a sizeable threat to its financial infrastructure driven by its technological advances.

A key example of this reality is South Africa, which has become the country with the second highest Android banking malware attacks globally, as malicious software attacks have seen more than 10% growth in recent years. In addition to the significant increase in malware attacks, mobile banking fraud incidents from January 2017 to August 2018 increased two-fold, according to a recent report by the South African Banking Risk Information Centre (SABRIC). The SABRIC report alludes to the fact that the growth of digital technology and mobile financial services has caused a surge in both development as well as the exploitation of digital platforms by criminals. As Africa continues to drive its social and economic development through the use of technology, it becomes ever-more critical that technological developments evolve in parallel to cybersecurity developments. Investors and innovation hubs alike need to acknowledge the vital role that cybersecurity (and knowledge thereof) plays in technological developments.

Mobile banking fraud and cybercrime: The risks of fintechs In the month of April, we highlighted the rise of technology in Africa, and in particular the benefits that mobile banking provides to Africans who find no real value in bank accounts. Although it is undeniable that Africa’s adoption of technology is revolutionary for the continent, it is important to remain cognisant of the bigger picture, inclusive of the dangers of technological innovation and development. According to analysts, a 10-15% internet penetration rate is the threshold for the generation of significant hacking attacks – a rate which many African countries have already surpassed. With this in mind, Africa is facing a sizeable threat to its financial infrastructure driven by its technological advances. A key example of this reality is South Africa, which has become the country with the second highest Android banking malware attacks globally, as malicious software attacks have seen more than 10% growth in recent years. In addition to the significant increase in malware attacks, mobile banking fraud incidents from January 2017 to August 2018 increased two-fold, according to a recent report by the South African Banking Risk Information Centre (SABRIC). The SABRIC report alludes to the fact that the growth of digital technology and mobile financial services has caused a surge in both development as well as the exploitation of digital platforms by criminals. As Africa continues to drive its social and economic development through the use of technology, it becomes ever-more critical that technological developments evolve in parallel to cybersecurity developments. Investors and innovation hubs alike need to acknowledge the vital role that cybersecurity (and knowledge thereof) plays in technological developments.

Data courtesy: Internet World Stats, 2019

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Zimbabwe takes one step back, but two steps forward: Zimbabwe hiked fuel prices after the central bank withdrew a subsidy which ended oil importers’ access to US dollars at a favourable rate. Although fuel prices were increased by 46% for petrol and diesel by 49%, the government plans to inject US$ 8 million a month to subsidise public transport in order to lessen the burden on its poorest citizens. In addition, Afreximbank loaned Zimbabwe US$ 500 million dollars with the goal of securing payments for essential imports and to promote exports in order to stabilise the market.

Africa Highlights May 2019

Zimbabwe takes one step back, but two steps forward: Zimbabwe hiked fuel prices after the central bank withdrew a subsidy which ended oil importers’ access to US dollars at a favourable rate. Although fuel prices were increased by 46% for petrol and diesel by 49%, the government plans to inject US$ 8 million a month to subsidise public transport in order to lessen the burden on its poorest citizens. In addition, Afreximbank loaned Zimbabwe US$ 500 million dollars with the goal of securing payments for essential imports and to promote exports in order to stabilise the market. Africa seeing a divestment in fossil fuels, moves towards alternatives: With the rise in renewable energy, Eskom’s CEO Phakamani Hadebe, at the PowerGEN Africa conference in May, highlighted a trend in which fewer investors are still willing to fund fossil fuels. This poses a challenge for South Africa with it being heavily reliant on coal as a power source. In contrast, however, South Africa launched two giant wind projects, late May, with the goal of connecting both to the country’s national grid by August 2020. Furthermore, nuclear power across Africa has recently garnered significant attention as Russia plans to unlock Africa’s energy potential through nuclear energy investments throughout the continent, whilst Morocco and Rwanda signed a 5-year nuclear deal to collaborate on nuclear energy developments, on 8 May.

Data courtesy: Arabella Advisors, 2018

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Africa seeing a divestment in fossil fuels, moves towards alternatives: With the rise in renewable energy, Eskom’s CEO Phakamani Hadebe, at the PowerGEN Africa conference in May, highlighted a trend in which fewer investors are still willing to fund fossil fuels. This poses a challenge for South Africa with it being heavily reliant on coal as a power source. In contrast, however, South Africa launched two giant wind projects, late May, with the goal of connecting both to the country’s national grid by August 2020. Furthermore, nuclear power across Africa has recently garnered significant attention as Russia plans to unlock Africa’s energy potential through nuclear energy investments throughout the continent, whilst Morocco and Rwanda signed a 5-year nuclear deal to collaborate on nuclear energy developments, on 8 May.

Despite turmoil, South Sudan and Sudan are presenting positive change: South Sudan has taken great steps in increasing its crude production by using oil blocks that were halted during its civil war. For one, South Africa and South Sudan signed an exploration and production sharing agreement as part of a US$ 1 billion investment in the country - the second contract since South Sudan’s independence seven years ago. Following last month’s ousting of Sudan’s Al-Bashir, the Kingdom of Saudi Arabia deposited US$ 250 million in Sudan’s central bank as a support package following the overthrow.

Botswana’s former president, Ian Khama, renounces BDP membership: Former president environmentalist, Ian Khama, has left the Botswana Democratic Party (BDP) after his predecessor, Mokgweetsi Masisi, lifted the hunting ban that Khama had introduced in 2014. Khama mentioned to his supporters that he would be supporting the BDP’s main opposition party, Umbrella for Democratic Change (UDM) in the October elections. The decision to lift the ban sparked controversy between conservationists and the tourism sector, seeing it as a political move to gain votes in the upcoming elections, and rural farmers arguing that their livelihoods are being threatened.

Despite turmoil, South Sudan and Sudan are presenting positive change: South Sudan has taken great steps in increasing its crude production by using oil blocks that were halted during its civil war. For one, South Africa and South Sudan signed an exploration and production sharing agreement as part of a US$ 1 billion investment in the country - the second contract since South Sudan’s independence seven years ago. Following last month’s ousting of Sudan’s Al-Bashir, the Kingdom of Saudi Arabia deposited US$ 250 million in Sudan’s central bank as a support package following the overthrow. Botswana’s former president, Ian Khama, renounces BDP membership: Former president environmentalist, Ian Khama, has left the Botswana Democratic Party (BDP) after his predecessor, Mokgweetsi Masisi, lifted the hunting ban that Khama had introduced in 2014. Khama mentioned to his supporters that he would be supporting the BDP’s main opposition party, Umbrella for Democratic Change (UDM) in the October elections. The decision to lift the ban sparked controversy between conservationists and the tourism sector, seeing it as a political move to gain votes in the upcoming elections, and rural farmers arguing that their livelihoods are being threatened.

Data courtesy: InfoNile

Despite turmoil, South Sudan and Sudan are presenting positive change: South Sudan has taken great steps in increasing its crude production by using oil blocks that were halted during its civil war. For one, South Africa and South Sudan signed an exploration and production sharing agreement as part of a US$ 1 billion investment in the country - the second contract since South Sudan’s independence seven years ago. Following last month’s ousting of Sudan’s Al-Bashir, the Kingdom of Saudi Arabia deposited US$ 250 million in Sudan’s central bank as a support package following the overthrow. Botswana’s former president, Ian Khama, renounces BDP membership: Former president environmentalist, Ian Khama, has left the Botswana Democratic Party (BDP) after his predecessor, Mokgweetsi Masisi, lifted the hunting ban that Khama had introduced in 2014. Khama mentioned to his supporters that he would be supporting the BDP’s main opposition party, Umbrella for Democratic Change (UDM) in the October elections. The decision to lift the ban sparked controversy between conservationists and the tourism sector, seeing it as a political move to gain votes in the upcoming elections, and rural farmers arguing that their livelihoods are being threatened.

Data courtesy: InfoNile

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AngloGold Ashanti exits South Africa while Ghana becomes Africa’s top gold producer: Early May, AngloGold Ashanti announced plans to sell its remaining assets in South Africa. The sale of the world’s deepest mine, Mponeng, will be the final step of Ashanti’s exit as its focus shifts to projects with higher returns and improving the company’s valuation to investors. During the same time-period, data confirmed by the World Bank revealed that Ghana has overtaken South Africa as Africa’s top gold producer. In 2018, Ghana exported 158 tonnes of gold - a 15% increase from the previous year - while South Africa produced only 139.3 tonnes.

Africa becoming more internationally connected: Emirates Airlines and Ethiopian Airlines are expanding their presence in Africa. Emirates plans to increase its flight frequencies within its operational African markets while expanding their presence in Ghana, Morocco, Nigeria and South Africa. Emirates perceives Africa as one of its strongest performing markets over the past two years. Concurrently, Ethiopian Airlines signed and finalised a strategic partnership agreement with Ghana, on 8 May, to establish a national carrier for the country. The collaboration seeks to explore the economic potentials in Ghana’s aviation sector.

Africa becoming more internationally connected: Emirates Airlines and Ethiopian Airlines are expanding their presence in Africa. Emirates plans to increase its flight frequencies within its operational African markets while expanding their presence in Ghana, Morocco, Nigeria and South Africa. Emirates perceives Africa as one of its strongest performing markets over the past two years. Concurrently, Ethiopian Airlines signed and finalised a strategic partnership agreement with Ghana, on 8 May, to establish a national carrier for the country. The collaboration seeks to explore the economic potentials in Ghana’s aviation sector. AngloGold Ashanti exits South Africa while Ghana becomes Africa’s top gold producer: Early May, AngloGold Ashanti announced plans to sell its remaining assets in South Africa. The sale of the world’s deepest mine, Mponeng, will be the final step of Ashanti’s exit as its focus shifts to projects with higher returns and improving the company’s valuation to investors. During the same time-period, data confirmed by the World Bank revealed that Ghana has overtaken South Africa as Africa’s top gold producer. In 2018, Ghana exported 158 tonnes of gold - a 15% increase from the previous year - while South Africa produced only 139.3 tonnes.

Data courtesy: CEIC Data, 2019

Data courtesy: FlightConnections.com, 2019

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Africa becoming more internationally connected: Emirates Airlines and Ethiopian Airlines are expanding their presence in Africa. Emirates plans to increase its flight frequencies within its operational African markets while expanding their presence in Ghana, Morocco, Nigeria and South Africa. Emirates perceives Africa as one of its strongest performing markets over the past two years. Concurrently, Ethiopian Airlines signed and finalised a strategic partnership agreement with Ghana, on 8 May, to establish a national carrier for the country. The collaboration seeks to explore the economic potentials in Ghana’s aviation sector. AngloGold Ashanti exits South Africa while Ghana becomes Africa’s top gold producer: Early May, AngloGold Ashanti announced plans to sell its remaining assets in South Africa. The sale of the world’s deepest mine, Mponeng, will be the final step of Ashanti’s exit as its focus shifts to projects with higher returns and improving the company’s valuation to investors. During the same time-period, data confirmed by the World Bank revealed that Ghana has overtaken South Africa as Africa’s top gold producer. In 2018, Ghana exported 158 tonnes of gold - a 15% increase from the previous year - while South Africa produced only 139.3 tonnes.

Data courtesy: CEIC Data, 2019

Data courtesy: FlightConnections.com, 2019

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Malawi elections and Facebook’s shut down of fake accounts: Although riddled with controversy, Malawi’s President Peter Mutharika has been re-elected with a 38.57% to that of the oppositions 35.41% in Malawi’s General elections, which took place on 21 May. With African elections in mind, Facebook has shut down networks of fake accounts whose activities focused on influencing audiences across Africa including Angola, Nigeria, and Senegal. The accounts originated in Israel and have been linked to fake news - a prominent concern during election periods across Africa.

Jumia stock down and then up again while London Stock Exchange eyes Africa: Following its listing on the New York Stock Exchange in April, Jumia was off to a rough start. In May, concern was raised following accusations from Citron Research labelling the company as a fraud. These concerns subsided though and Jumia stock has recently seen a significant boost in confidence from the likes of Raymond James and Berenberg, who have upgraded their share to a buy-equivalent rating. Regardless of Jumia’s ups and downs, the developed world’s interest in Africa continues with the London Stock Exchange announcing, mid-May, that it is eagerly seeking listings from African companies.

Malawi elections and Facebook’s shut down of fake accounts: Although riddled with controversy, Malawi’s President Peter Mutharika has been re-elected with a 38.57% to that of the oppositions 35.41% in Malawi’s General elections, which took place on 21 May. With African elections in mind, Facebook has shut down networks of fake accounts whose activities focused on influencing audiences across Africa including Angola, Nigeria, and Senegal. The accounts originated in Israel and have been linked to fake news - a prominent concern during election periods across Africa. Jumia stock down and then up again while London Stock Exchange eyes Africa: Following its listing on the New York Stock Exchange in April, Jumia was off to a rough start. In May, concern was raised following accusations from Citron Research labelling the company as a fraud. These concerns subsided though and Jumia stock has recently seen a significant boost in confidence from the likes of Raymond James and Berenberg, who have upgraded their share to a buy-equivalent rating. Regardless of Jumia’s ups and downs, the developed world’s interest in Africa continues with the London Stock Exchange announcing, mid-May, that it is eagerly seeking listings from African companies.


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Malawi elections and Facebook’s shut down of fake accounts: Although riddled with controversy, Malawi’s President Peter Mutharika has been re-elected with a 38.57% to that of the oppositions 35.41% in Malawi’s General elections, which took place on 21 May. With African elections in mind, Facebook has shut down networks of fake accounts whose activities focused on influencing audiences across Africa including Angola, Nigeria, and Senegal. The accounts originated in Israel and have been linked to fake news - a prominent concern during election periods across Africa. Jumia stock down and then up again while London Stock Exchange eyes Africa: Following its listing on the New York Stock Exchange in April, Jumia was off to a rough start. In May, concern was raised following accusations from Citron Research labelling the company as a fraud. These concerns subsided though and Jumia stock has recently seen a significant boost in confidence from the likes of Raymond James and Berenberg, who have upgraded their share to a buy-equivalent rating. Regardless of Jumia’s ups and downs, the developed world’s interest in Africa continues with the London Stock Exchange announcing, mid-May, that it is eagerly seeking listings from African companies.


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