Hi, Quartz Africa readers!
Cape to Cairo II
A few weeks ago we wrote about the prospect of connecting Africa’s 55 countries and over one billion people via better road networks, and the challenge of raising the billions of dollars needed to turn a decades-old vision into reality.
While the investment in building and maintaining intra-country road networks has been slow in coming, connecting Africa via the internet has lately made more progress. This week, French telecom giant Orange struck a deal to invest in the West Africa-based Main One Cable company, whose landing stations are in Nigeria, Ghana and Portugal. It will enable Main One to extend its 7,000-kilometer system to Dakar, Senegal and Abidjan, Côte d’Ivoire by mid-2019.
Liquid Telecom, a unit of Zimbabwe’s Econet Wireless, has confirmed financing and partnerships to expand its system over 60,000 kilometers from Cape Town through all southern, central, and eastern African countries up to the Sudan-Egypt border. This is the other Cape to Cairo.
But what happens when these networks open for business? Remember internet access still has to be bought, packaged and resold to consumers via local telecom operators. On the ground, the reality is African countries have the world’s most expensive internet access, according to a study by the Alliance for Affordable Internet. Few African countries come close to the UN Broadband Commission’s target that a gigabyte of data should not cost more than 2% of average monthly income.
As we’ve noted, it’s a problem for many developing countries, but it’s particularly acute in Africa. One reason why is a lack of meaningful competition in some countries, particularly smaller African economies that struggle to support more than a couple of network operators. Research by Ecobank showed the average cost of buying 1GB of data in countries with two or fewer operators is more than twice than in countries with four or more.
Competition is key, and it should not be measured simply by the number of operators. For example if a country with three or four operators is dominated by a dominant player with say 70% share (Hello? Kenya?), it’s what economists refer to as a market being too concentrated.
Building out infrastructure is undoubtedly a positive step in Africa’s development, but so is a functioning, competitive marketplace that will be able to deliver the best economic outcomes for citizens.
— Yinka Adegoke, Quartz Africa editor
Stories from this week
Netflix is putting its $8 billion original production budget to work in Africa’s largest movie industry. Netflix has picked up worldwide rights to Lionheart, its first original movie in Nigeria’s Nollywood movie industry, writes Yomi Kazeem. The acquisition is a major boost as the industry—the world’s second largest by volume—evolves by placing more emphasis on quality rather than quantity.
MTN and the multibillion dollar perils of Nigeria’s regulatory minefield. Africa’s largest telecoms company MTN is facing hefty claims totaling $10 billion from the Central Bank of Nigeria over forex dealings and also from the taxman over alleged unpaid bills. Feyi Fawehinmi explores how the telecoms giant’s made its entry into Nigeria and why it led to the company going from model corporate citizen to pariah status overnight.
The leadership lessons from the failure of a major African sporting event. Andrew Alli looks back to last month’s Africa Senior Athletics Championships in Nigeria’s southern city of Asaba and chooses not to dwell on the late visas, athletes stranded at the airport or collapsing buildings that riddled the event. Instead he looks at the key leadership lessons we can take from organizational failure. There’s a lot to learn.
Kenya’s fuel levy is undermining its ride-hailing services. In early September, Kenya’s treasury introduced a 16% value added tax on all petroleum products in order to narrow budget deficits. The move has been controversial, but especially among drivers of e-hailing services like Uber and Taxify, who tell Abdi Latif Dahir it’s eating into their daily profit margins.
How Chinese companies took over the hair extensions business from Indian rivals in Africa. Bundles of hair extensions are big business on the continent—the black hair industry in South Africa alone was estimated at $450 million. Customers don’t want Chinese hair hairdressers in Dakar tell Ilaria Maria Sala but they never look at the label on the packaging.
Researchers tested conventional foreign aid against cash in Rwanda. Cash won. Research has shown billions of dollars in foreign aid are wasted every year and sometimes it’s not tracked at all. Michael J Coren writes on an academic study in Rwanda which found that giving cash directly to the recipients of aid had much more effective outcomes than aid distributed through large development NGOs.
Quartz announcements
Quartz Africa Innovators is back! On Thursday Aug. 20, Quartz Africa will be unveiling Africa Innovators 2018. It is the fourth edition of a list which features some of the leading creative, entrepreneurial and technical minds on the continent. You can see our 2016 and 2017 lists here.
Leaders from across Africa will travel to New York for the 73rd UNGA session. Sign up for our pop-up brief to receive a daily rundown of the most important policy implications, innovation practices, and surprising discoveries from the session, affecting Africa and beyond.
Chart of the Week
Africa is home to some of Airbnb’s fastest growing markets. Of the 3.5 million guest arrivals at Airbnb’s 130,000 listings in Africa, around half arrived last year. Seven countries across the continent all recorded a more than 100% increase in Airbnb guest arrivals over the past year. And of those Nigeria, Ghana and Mozambique all rank among Airbnb’s eight fastest growing markets globally.
Other Things We Liked
The stunning collapse of private equity firm Abraaj Group. On Jan. 25, Abraaj’s founder shared a stage with Bill Gates in Davos, eight days later news broke that investors including, the Bill & Melinda Gates foundation, had hired forensic accountants to investigate the finances of the Dubai firm which once managed $14 billion in assets. “It was a house of cards” said a former employee to Rachel Savage for The Africa Report.
The Somali mothers preventing crime in Stockholm’s streets. Following the deaths of several boys in gang-related violence in the notorious Rinkeby neighborhood in Sweden’s capital, a group of Somali women took a stand for a change. Al Jazeera English follows their story as they don orange puffer jackets and patrol the crime-ridden streets.
Nigeria’s underfunded education system is on the verge of collapse. There is often an emphasis on addressing the physical infrastructure deficit of Nigeria among its myriad of challenges. But few government officials or opposition politicians are focused on building human capital by fixing the struggling education system, finds Tope Alake for Bloomberg.
Appropriating pan-Africanist thinkers to justify racism in Europe. “Red-brownism” is an idea that involves twisting the thoughts of anti-imperialists like Thomas Sankara and Samora Machel and using them to support nationalist political positions. In Africa is a Country, Cristiano Lanzano explains how this ideology came to be and looks at the African activists willingly perpetuating these ideas.
Keep an eye on
United Nations General Assembly (Sept. 18-Oct. 5). The 73rd session of UNGA will open on Tuesday in New York. It’ll be two weeks and hundreds of events at “the world’s most important meeting”. Here’s a guide to help you navigate.
The Minna Books and Arts Festival (Sept. 18 – 21). Taking place in Minna, Niger state, Nigeria this year is the debut of the festival whose theme is Northern Nigeria Creative Development: The Valley and the Boundary. The headline speaker is professor Zainab Alkali, the first woman novelist from Northern Nigeria to be published in English.
*This brief was produced while listening to You Are My Heart by Rex Williams (Nigeria).
Our best wishes for a productive and thought-filled week ahead. Please send any news, comments, suggestions, suggestions for African Netflix Originals and affordable original Chinese hair to africa@qz.com. You can follow us on Twitter at @qzafrica for updates throughout the day. This newsletter was compiled by Kemi Lijadu and Abdi Latif Dahir and edited by Yinka Adegoke.
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