Sudan Tribune – Juba
Revenues from oil should support agricultural sector: Kiir
Sudan Tribune – Khartoum
SPLM-N’s al-Hilu, UAE officials discuss Sudan peace stalled process
PM Abiy Visits ‘Beautifying Sheger’ Project
FM Gedu Confers with U.S Ambassador Michael Raynor
Al-Burhan: Peace is the Only Means to Push Ahead Economic Development
The New Times - Rwanda
Kagame’s New Year Message: Set your sights on 2050
The New Times - Rwanda
In 2019, Made-in-Rwanda diversified from art-crafts and food industry
The New Times – Rwanda
RSE crosses $1 billion mark in transactions
President of Seychelles wishes continued strong economy, good health for nation in 2020
The New Times – Rwanda
By: Mohamed Aw-Dahir
The writer is a Senior Officer (Programme and Partnership), FAO Subregional Office for Eastern Africa
There are a number of significant changes that are happening in Africa, the most important being that it is a continent with some of the fastest growing economies. Five of the world’s fastest growing economies are in Africa.
This has resulted in increased wealth in a segment of the population, with its attendant shift in food consumption patterns.
Africa’s population is also growing fast. For instance, between 2015 and 2050, the populations of 28 African countries are estimated to have more than doubled.
According to UN Department of Economic and Social Affairs (UNDESA), 2015 report, the population of ten African countries namely: Angola, Burundi, Democratic Republic of Congo, Malawi, Mali, Niger, Somalia, Uganda, United Republic of Tanzania and Zambia, are projected to increase by at least five-fold by 2100.
Increase in population growth in Africa, especially the youth segment, presents an opportunity to unleash the potential of the sizeable and growing demographic; it, however, also means more mouths to feed.
Combining the effects of consumption pattern changes and the high population means that the agriculture sector must respond by not only producing more food, but also food that appeals to a wealthier society.
African countries will likely continue to experience lower agricultural yields due to the impact of climate change, encroachment of agricultural lands – particularly crop and rangelands and, biodiversity loss.
In order to ensure sustainability of the agriculture sector, increased and quality investments need to be channeled into the sector.
Evidences supported by data and analysis from the Food and Agriculture Organization of the United Nations (FAO) shows that agriculture plays an important role in economic development and poverty reduction as it creates employment opportunities and contributes to household income and food availability.
A majority of Africa’s poor population lives in rural areas. Increasing investments into the agriculture sector can therefore play a critical role in poverty alleviation, especially rural poverty, since the majority of rural poor depend on agricultural activities for their livelihoods.
Further, agriculture is key not only to on-farm activities – it largely supports off-farm activities that contribute directly and indirectly to increased household incomes, hence reduction of poverty and inequality.
The agriculture sector and its associated services will therefore remain as the most important pillar for food security and nutrition. The sector will also remain a critical engine for inclusive economic growth and transformation in Africa.
Various studies by FAO and partners confirm that the sector employs more than 70 percent of the labour force especially in rural areas where the majority of the poor live.
While currently 55 percent of the world’s population lives in urban areas, Africa’s population remains mostly in rural areas, with 57 percent of its rural population living in areas where agriculture is the mainstay of the economy.
In addition to the rapidly changing population dynamics, socio-economic inequality is also an increasing trend in Africa, meaning that more and more rural communities are likely to be left behind in the continent’s quest to achieve the 2030 Sustainable Development Goals (SDGs).
Research shows that where there is less poverty and inequality, the benefits of socio-economic growth reach wider sectors of the population.
Some African countries that have recently experienced high levels of economic growth also have the highest levels of inequality.
A recent study by Oxfam reported that, although some of the social indicators have improved and poverty levels in Africa have reduced by 15 per cent for the last ten years, inequality reached a critical and alarming level.
The study further revealed that Africa’s wealth is increasingly concentrated within a few wealthy people in the continent, where the richest three billionaires own about 40 percent of the total wealth of the entire continent.
In Kenya, for instance, less than 0.1 per cent of the population (8,300 people) own more wealth than the bottom 99.9 per cent (more than 44 million people), while the richest 10 percent of people earn on average 23 times more than the poorest 10 per cent. Moreover, 75 per cent of the financial wealth of the richest people is kept outside the continent.
When such large financial resources from the continent are invested outside of the continent, tax revenues that could have accrued from such wealth and investments is lost. In addition, revenue that could otherwise be invested in sectors such as agriculture is also lost.
GDP growth as measure of success in Africa does not capture the reality of poverty and inequality, neither is it a reflection of the status of food security and nutrition at household level.
In Ethiopia, for instance, despite a high economic growth rate and reduced poverty levels from over 40 percent to 23 percent for the last ten years, inequality has actually increased.
Inequality undermines social stability, social cohesion, leads to conflict, civil insecurity, migration and extreme violence.
Given the very high number of the labour force in rural areas estimated to be engaged in the agriculture sector, increasing investment in productivity and in value chains to expand agribusiness must remain a priority to create income for rural households.
Other important factors according to FAO reports include strengthening capacity for climate change mitigation and adaptation, social protection and resilience building, knowledge management, infrastructure development and youth involvement in agriculture.
Despite its important role, public investment in the agriculture sector is, however, still low in many parts of the continent.
For instance, according to the 2017 African Union Biennium Review Report on the progress toward the Malabo commitment of allocating at least 10 percent of annual public expenditure to agriculture, only ten member states have met the target for the period 2015-2016.
Critical areas that require immediate attention include intensification of farming in order to increase yields.
This can be achieved through mechanization and transformation of agricultural systems.
In addition, improving national and interregional agricultural commodity trade and creating market access particularly for rural women and youth will contribute to household income diversification; it will also create employment opportunities across the agriculture value chains and contribute to poverty reduction.
Further, investing in infrastructure, giving access to agriculture financing and creating an enabling policy and regulatory environment will ensure that there is increased agriculture productivity and that rural populations have means to improved livelihoods.
To fight poverty and reduce inequality, Africa should increase investment in agriculture and protect land rights, because agriculture employs the bulk of the population in the continent.
By: Yomi Kazeem
As startup and innovation culture deepens on the continent, the explosion of tech hubs across Africa has shown no signs of slowing down: the number of tech hubs across Africa grew by nearly 50% over the past year. As these hubs play crucial roles for community, business incubation and ideation, their growth continues to fuel innovation on the continent.
There are also growing signs that tech hubs on the continent are starting to specialize and expand beyond individual ecosystems: in February, Co-Creation Hub (CcHUB), one of the Nigeria’s pioneer innovation hubs, launched a design hub in Kigali, Rwanda. In September, CcHUB also acquired iHub, a leading Kenyan tech hub.
Number of tech hubs (2019)
Africa’s rise as burgeoning source of computer engineering talent also remains on course: the continent is the fastest growing continent for developers globally. It’s a trend that’s seen Microsoft, the world’s largest software company, set its sights on software engineering talent in Africa as it will spend over $100 million on development centers that will employ 500 Africans by 2023.
As startup and tech ecosystems mature across the continent, local talent will have increasingly growing work opportunities on the continent. Data however shows the best African country to be a startup CEO or developer is South Africa.
One mood dampener was Andela, the poster company for developer and engineering talent across Africa, making a major business model shift. In September, the developer training and outsourcing company let go of around 400 developers in Nigeria, Kenya and Uganda as it scrapped the developer training component of its business and chose to focus on hiring and outsourcing only senior talent.
The change of tack, the company claimed, was down to the saturated market for skilled junior developers in the US, Andela’s most important market. Yet, the decision is bound to have major ripple effects across tech ecosystems of the continent.
Internet access, data and shutdowns
As the race to bridge the global digital divide continues, internet shutdowns in Africa, mainly instigated by dictators, remain a stumbling block. In the first three months of the year alone, Gabon, Sudan, Zimbabwe, Chad, and DR Congo all blocked connectivity. They weren’t alone as shutdowns remained a regular feature on the continent this year, hobbling the promise of local tech ecosystems. But Africans are not backing down meekly as they continue to seek alternative ways of staying online, as seen in Nigeria in the run-up to its February general elections.
Where internet access remains unfettered, it remains prohibitively expensive: on average, a gigabyte of mobile internet data costs 8% of average income across the continent—more than anywhere else globally. The reason for the lingering cost of access largely lies in the lack of competition between internet providers in markets across the continent. Aside cost, internet speeds also pose a problem as projections show Africa is at least five years away from faster 4G mobile networks having a major impact. In the meantime however, Google and Facebook, two of the world’s largest tech companies, are setting about boosting connectivity by circling the continent with high-capacity, underwater fiber-optic cables.
Average cost of 1GB of mobile data as percentage of average income
As internet adoption in Africa continues to grow despite the obstacles of cost and speed, data privacy and regulation concerns have become louder—and governments are stepping up. Kenya passed new data protection laws which comply with the European Union’s General Data Protection Regulation while Nigeria is investigating a popular call blocking app for privacy breaches.
For its part, Facebook has also stepped up its fight against misinformation campaigns on the continent and removed a network of Israeli and Russian accounts targeting African politics this year. The social media giant is going after fake news in more local African languages.
Africa’s most valuable company, South-Africa based Naspers, underwent evolution this year as it pretty much split into two. In September, Naspers listed its international internet assets on Amsterdam’s stock exchange and, in the process, created Prosus—the biggest consumer internet company in Europe.
Assets held by Prosus include Naspers’ renowned Tencent stake as as well as investments in Swiggy, the Indian e-commerce startup and Mail.Ru, a major Russian internet platform. The company’s South African unit also made history as it appointed the first female and first black chief executive of the 104-year old company.
Naspers’ move beyond the continent also reflected a wider trend: in pursuit of growth and profits, some of Africa’s biggest startups are increasingly making the risky bet of expanding beyond the continent.
Jumia, the largest e-commerce operator across Africa, launched a landmark IPO on the New York Stock Exchange in April. It marked the first IPO by an Africa-focused tech company on a major global exchange. But the novelty of the event has not proven enough to solve Jumia’s operational inefficiencies and seemingly unending streak of making multi-million dollar losses. In the wake of its IPO, Jumia has wrangled with internal fraud, a tanking stock price as well as tweaks to its business model.
Transsion, the Chinese-owned top phone maker in Africa, launched its billion-dollar IPO in Shanghai in October. It came after a decade of operating solely on the continent and winning over market share by producing phones with locally-tailored features (including multiple SIM slots and camera technology calibrated to darker skin tones) from its manufacturing base in Ethiopia. Transsion will also end the year as the top phone maker on the continent by unit sales as it’s done since 2017.
Transsion leads Africa's phone market by units, Samsung leads by value
MTN, Africa’s largest telecoms operator, listed its Nigerian business on the local exchange in May as part of a $1.6 billion sim dispute settlement with the Nigerian government and instantly became the second largest company on the local exchange. However, its listing by introduction meant the stock largely remained out of reach for most Nigerians as no new shares were issued.
The Year of Fintech
The trend of the global financial service companies investing in African fintech businesses continued this year. Card giants Visa co-led a $170 million investment Series C round in Branch in April and also invested $200 million for a 20% stake in Nigerian payments processor Interswitch, confirming the company’s status as Africa’s first fintech unicorn.
For its part, Mastercard followed up a previous investment in Flutterwave, a Nigerian payments company, by backing Jumia Pay, the in-house payment solution for Jumia. After more than a year of use within its e-commerce ecosystem, Jumia has announced plans for a broader PayPal-style spin-off.
Major funding rounds by Africa-focused fintech start-ups since Jan '18
Beyond payments, the continued rise of digital lending apps has remained been a key trend in African fintech. By offering users quick loans and access to credit without traditional assets as collateral and instead determining creditworthiness scores by scouring smartphone data, the use and popularity of digital lending apps has skyrocketed. But it has come at a price as there’s growing evidence suggests access to quick, collateral-free loans is causing spikes in personal debt.
But the biggest fintech trend in Africa has roots in China.
Backed mainly by Chinese investors, OPay, a payments service incubated by the China-owned Opera browser and PalmPay, a subsidiary product of China-based Transsion, jointly received over $210 million in funding predominantly from Chinese investors—staggering sums for companies less than 18 months old. One theory is that Chinese investors are looking to replicate the success of Ali Pay and WeChat Pay at home while another is that the play is to fuel quick growth in an Africa-focused fintech company with an eye on a major IPO or acquisition by a global payments company given already established interest.
For its part, OPay is driving mass use of its payments platform by launching operations in other verticals and pursuing aggressive growth. ORide, its motorcycle hailing service in Nigeria, has run heavily-subsidized promotions to edge out other players in Nigeria’s competitive bike-hailing space. And the rising ubiquity of ORide bikes, particularly in Lagos—despite regulatory concerns—suggests the strategy is working. OPay has also launched a car-hailing service in Nigeria where it will face stiff competition from Bolt (formerly Taxify), Uber and inDriver, a low profile but fast-growing Russian ride-hailing company.