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Clean food
It’s almost certainly the case that when we tote up the dollar numbers for African startup funding in 2019, fintech players will have raised the most cash. But it’s also likely, as we see in our weekly Dealmaker section below, clean energy startups will be a closer second than they were a year ago.
Of course, it’s not a competition and these sectors have different scales of funding requirements. The reasons clean energy startups—predominantly in the solar energy space—are expanding rapidly across the continent are obvious to anyone who operates in almost any country, particularly in Sub Saharan Africa. African energy demand is predicted to grow twice as fast as the global average over the next two decades however nearly 530 million people will still not have access to electricity in 2030, says the International Energy Agency.
Many African cities have expanded rapidly in recent decades but the electricity infrastructure has not kept pace and such urban areas have to cope with erratic supply while those who can afford it have to rely on petrol or diesel generators with all the health risks those bring.
But rural areas have almost been forgotten in these discussions and that’s where many of the hundreds of millions without electricity live. The problem is often that if an African country is unable to provide stable electricity supply via the grid in already densely populated cities the chances of expanding the grid to sparsely populated rural areas is slim.
There are many reasons why some say ignoring rural electricity needs is a wrongheaded approach to development. One of those reasons would be food security, says a new report (pdf) from the International Food Policy Research Institute’s Malabo Montpellier Panel.
As agriculture modernizes across Sub Saharan Africa, the focus is gradually shifting from subsistence farmers to large scale agribusiness operators doing everything from food processing and storage to managing distribution. All this requires reliable energy.
With case studies in Ethiopia, Ghana, Morocco, Senegal, South Africa and Zambia the report says renewable off-grid electricity combined in some cases with extension of the grid to rural areas could play a significant role in transforming agriculture and boosting local economies.
One of the report’s key recommendations is for policymakers to help enable “scaling investments in off-grid and mini-grid solutions especially via startups and businesses to leapfrog outdated and dirty technologies.”
Expect more clean energy startup investments in 2020.
— Yinka Adegoke, Quartz Africa editor
Stories from this week
Motorcycle-hailing startups are paying a heavy price in bribes and levies to operate in Lagos. Bike-hailing companies are now a mainstay of transportation in Lagos, Africa’s largest city. But, the regulatory grey area in which they operate also means they have become vulnerable, high-profile targets for official and illegal rent-seekers.
West Africa’s oral histories tell a more complete story than the post-colonial narratives we’re used to. Much of Africa’s history has been documented in books and literary collections as dictated by European-led academia. Yet, as Lavinya Stennett explains, growing recognition of West Africa’s nuanced oral histories as rich and detailed alternatives is forcing wider appreciation for how historical records should be kept.
The distorted narratives about Islamic schools deflect from ugly truths about Nigerian society. The discovery of “torture houses” at Islamic schools in parts of Nigeria has invoked criticism of the decades-old Koran-based educational system. However, Hadiza Kere Abdulrahman argues that the recourse to these schools as outposts for people supposedly in need of rehabilitation speaks to Nigerian society’s poor handling of a myriad of social welfare problems.
African startups are making the risky bet of expanding beyond the continent for growth and profits. The promise of Africa’s youthful and fast-growing markets is seemingly no longer enough for some startups on the continent. Yomi Kazeem reports on the well-funded startups with emerging market solutions that have started looking beyond African markets with ambitious moves that pose both great risks and potentially large rewards.
The success of Ghana’s Year of Return is being oversold with bad data. Ghana has already reaped significant benefits from its Year of Return campaign from far-reaching endorsements from tourists, including celebrities, to tons of favorable international press. But Bright Simons’ scrutiny of the data suggests government’s official numbers for tourist arrivals and expected economic impact are being overblown and could have damaging consequences.
Liberia’s controversial school outsourcing experiment has mixed results. When Liberia’s government announced plans to outsource the running of nearly 100 schools to various for-profit and non-profit organizations—both domestic and international—there was huge outcry from local and global teachers unions among others. Jenny Anderson reports on the experiment’s mixed results after reviewing the first public, independent analysis of the project in the three years since it started.
The Dealmaker
Rensource, a Nigerian off-grid solar startup, raised $20 million to power local markets and merchants. Rensource, a three-year old off-grid solar energy firm, raised $20 million in a Series A round jointly led by African venture capital fund, CRE Venture Capital and impact investor, Omidyar Network. Rensource’s focus on supplying electricity to local open markets means it positions itself as a solar-powered micro-utility.
This week 4G Capital completed its second round of fundraising by securing a $2 million debt facility from Ceniarth, bringing the total its raised to $4 million. The plan is to use the investment for lending to its customer base of informal micro, small and medium-sized enterprises across Kenya and Uganda…In Cameroon, upOwa, a solar energy company, raised $2.8 million as part of its Series A round from investors including Renewable Energy Performance Platform and Colam Impact. For its part, upOwa offers pay-as-you-go financing options to low income families in the central African country.
Chart of the Week
This is how we cut the price of internet access in Africa. Countries on the continent are typically listed among those with the lowest internet speeds yet with the most expensive communication and internet costs globally. But a solution to the twin problems of speed and cost might lie in new advanced technologies and telecoms’ mast architecture.
Other things we liked
Why the African fiction writer struggles to find an African publisher. Indigenous African book publishers have mostly focused on educational texts for financial reasons and this has a long history dating back to colonial days, notes Stanley Gazemba for The Elephant. “The best efforts to find a successor to the hugely successful African Writers Series have so far failed to bear fruit while the indigenization of the book trade has seen the neglect of the African writer of fiction.”
The “collateral damage” of United States’ unofficial war in Somalia. In recent years the US military has used”precision strikes” from thousands of feet in the air on targets in Somalia in a bid to root out al-Shabaab operatives in the troubled country. But for In These Times, Amanda Sperber reports that instead of making locals feel safer from the deadly terrorist group, these strikes have created a climate of uncertainty and paranoia as civilians suspect each other of being targeted members.
ICYMI
UNESCO residency for female filmmakers. The UN agency is offering two–week filmmaking programs to 10 young African women filmmakers from Burkina Faso, Kenya, Nigeria, Senegal and South Africa. (Jan. 10)
Inclusion Africa Program for Fintech Startups. A fully-funded week-long bootcamp in Luxembourg for early-stage African working to boost financial inclusion. (Jan. 15)
Keep an eye on
Afrochella Festival, Accra, Ghana (Dec. 28). The third edition of the music and culture festival is primed as one of the attractions of Ghana’s Year of Return campaign.
*This brief was produced while listening to Gargajiya by ClassiQ (Nigeria). [Spotify]
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