Happy New Year, Quartz Africa readers!
What to expect
Last year, Africa had some of world’s fastest-growing economies and 2020 won’t be very different.
A few of the countries on the top 10 list may have changed but the IMF, World Bank and other institutions all expect above global average GDP growth.
The top performers will be South Sudan (8.2%), Rwanda (8.1%) Côte d’Ivoire (7.3%), Ethiopia (7.2%), Senegal (6.8%), Benin (6.7%) and Uganda (6.2%) along with Kenya, Mozambique, Niger and Burkina Faso all expecting 6% growth.
While these countries help push up Africa’s overall average economic growth rate forecast to 3.8% (or 3.6% for Sub Saharan Africa), these averages are brought down below the global average (3.4%) by the two largest economies, Nigeria (2.5%) and South Africa (1.1%).
Since 2020 is seen as the start of a new decade, Brookings Institution’s annual Foresight Africa report looked at the average economic growth forecasts for the next five years till 2024. This predicts Senegal (8.3%), Rwanda (7.9%), Niger (7.3% ), Uganda (7.2%) and Mozambique (6.9%) as the five fastest growing over that period.
While these forecasts are promising, most economists and investors are paying more attention to how the reality of climate change will impact their economic prognostications. Brookings highlights research which shows lowered crop yields, lower labor and agricultural productivity and damage to human health due to climate change will significantly decrease GDP in Africa. Global temperatures rising as much as 3°C by 2100 would have a disproportionate impact on Africa with aggregate GDP potentially dropping by as much as 8.6% after that year.
But on a more hopeful note Brookings analysts say there’s a $16 billion opportunity if African countries fully implement the African Continental Free Tree Agreement (AfCFTA). In the ideal scenario where there’s a 100% liberalization of tariffs across African member states under the agreement, the continent’s aggregate GDP would jump to $3 trillion by 2030 from $2.1 trillion today. In this scenario there would be a 33% increase in intra-African exports and 1.2% increase in employment.
One less optimistic economic highlight from the last few years has been loudening concern about Africa’s rising debt and this continues into 2020. Most of the worry has been about eurobond debt with African countries issuing some $26 billion in eurobonds in 2019 more or less equivalent to 2018. Or, put another way, Africa issued more eurobonds in 2018 and 2019 that it did in all the years combined from 2003 to 2016.
While African eurobonds have been great for international investors seeking higher yields away from US treasuries, “the scale of issuance keeps prompting questions about default even though it amounted to just 1% of Africa’s 2019 GDP ($2.4 billion),” writes Charles Robertson of Renaissance Capital.
But of course, Africa is not a country and there will be trouble spots if care is not taken.
— Yinka Adegoke, Quartz Africa editor
Stories from the last fortnight
Zambia has 17 million people, a stroke epidemic, and no neurologists. Zambia has long depended on visiting international neurologists unfamiliar with cultural nuances and some even with questionable motives for treating patients with neurological diseases. But as Oliver Staley found in Lusaka, a pioneering training program at the country’s biggest hospital may provide the first crop of homegrown neurologists to tackle the herculean problem.
Nigeria had the biggest drop in visitors to the US last year as Trump’s visa policies took hold. Nigerians were on the receiving end of travel clampdown measures last year ranging from interview waivers to hiked application fees. There’s now growing evidence those measures are starting to have a clear and, potentially, long-term effect, found Yomi Kazeem and Dan Kopf by studying the data.
A surprise provision in a Trump defense bill granted a path to citizenship for 4,000 Liberians. After nearly a year in limbo and facing the risk of deportation from the United States, Liberian immigrants who fled two civil wars now have real hope. As Chidinma Irene Nwoye reports, the Trump administration is now offering about 4,000 Liberian immigrants a path to full citizenship.
How startups raise funding in Libya’s war-torn economy. The promise of Africa’s technology ecosystems is often touted while discussing companies in major and high-growth economies—and building a startup in war-torn Libya does not fit that bill. Yet, Dominic Dudley investigates how startups in the North African country are tapping up capital from unlikely sources, including anonymous local business owners who fear being kidnapped.
A pan-African CFA activist is the face of rising anti-French sentiment in Francophone West Africa. The symbolic decision by the West Africa’s CFA monetary union to cut financial links with France has been hailed as a big move. But away from the global spotlight, the rising sentiment pushing against French centuries-long economic involvement in West Africa is being led by a defiant activist, Clair MacDougall reports from Quagadougou.
Why Angola had to freeze the personal assets of Africa’s richest woman. Isabel dos Santos, daughter of Angola’s former president, has been caught in a high-level government clampdown on corruption and crony capitalism. For her part, dos Santos repeated claims to Quartz that her now frozen assets, including stakes in the state telecoms operator to a supermarket chain, are all products of her hard work and business savvy.
The Dealmaker
Startup funding in Africa broke more records in 2019. Startups operating on the continent received a total of $1.3 billion in startup funding—the first time annual Africa-focused startup funding has crossed the billion-dollar mark. Nigeria and Kenya jointly accounting for 81.5% of investment received in 2019. The bumper rounds were the first time more than 100 African startups raised at least $1 million.
Global startup generator and early stage venture capital firm, Antler, has raised $50 million for its various global funds which includes Nairobi. Its new investors include Facebook co-founder Eduardo Saverin. For its African operation Antler plans to use the new funds to build “more high caliber tech startups.” It’s also looking to recruit for its second cohort of African entrepreneurs to join the program in Nairobi starting Mar. 2.
Chart of the Week
Africans can now travel across more than half of the continent without getting visas beforehand. For the first time, Africans have travel access to just over half the continent’s countries and now only need visas to travel to fewer than half of other African countries. Of the 51% of countries Africans can access more freely, 26% offer visas on arrival while 25% do not require prior visas from African travelers.
Quartz Membership
The world is getting older. In the US alone, 10,000 baby boomers turn 65 every day. Over the next 30 years, many of them will move into nursing homes and assisted living. As they do, they’ll redefine what senior living looks like, writes Quartz’s Lila MacLellan in this week’s field guide, giving birth to an era of “geriatric cool” and a new luxury industry that caters to it.
Other things we liked
China’s role in Africa in 2020 (podcast). Eric Olander and Cobus van Staden of the China Africa Project podcast discuss their predictions for the role of China on the continent in 2020. Their highlights include the increasing boldness of Chinese officials in African diplomacy, especially in taking a leaf out of Trump’s playbook on Twitter; Chinese investors playing a more significant role in boosting sustainable energy in Africa and, of course, Chinese debt.
Reducing corruption in poor countries takes a specific type of investment. “Societies don’t develop because they’ve reduced corruption. They’re able to reduce corruption because they’ve developed,” says Efosa Ojomo in this TED Talk. The co-author of the Prosperity Paradox argues conventional thinking about using “good laws” and enforcement to tackle corruption doesn’t work. Instead he makes the case for how countries can address their “prosperity paradox.”
Kenya is anticipating a political fallout from president Kenyatta’s legacy. President Uhuru Kenyatta would love to ride off into the sunset when his term ends, but he’s going to leave behind a messy legacy of corruption and cronyism with many ethnic tensions likely to be stirred, writes John Githongo for the The Elephant. The challenges include managing Kenyatta’s succession and fixing an increasingly broken economy.
ICYMI
Royal Society Africa Prize 2020 for research scientists. The prize recognizes “outstanding research scientists based in Africa who are making an innovative contribution to the sciences.” (Jan. 27)
United Nations Information Services Graduate Program. An opportunity for “outstanding graduate and postgraduate students from all over the world to deepen their understanding of the principles, purposes and activities of the United Nations.” (Mar. 2)
Keep an eye on
French president hosts leaders of five Sahel military alliance countries (Jan. 13). On Monday (Jan. 13), French president Emmanuel Macron will host the presidents of Burkina Faso, Chad, Mali, Mauritania, and Niger at Pau, France as members of the G5 Sahel military alliance. The anti-jihadist summit will address France’s military presence in the region even as anti-French sentiment rises.
African presidents meet in Lomé to ink fake medicine pact (Jan 17-18). The presidents of Congo Brazzaville, Niger, Senegal, Togo, Uganda, and the Gambia meet in Lomé, Togo on Jan. 17-18 to sign the Lomé Initiative, for legislation to stop the traffic of falsified medicines.
*This brief was produced while listening to Nhanhado by Messias Maricoa (Mozambique).
Our best wishes for a productive and ideas-filled year ahead. Please send any news, comments, suggestions, ideas, bags of Eco bank notes and US visas for Nigerian visitors to africa@qz.com. You can follow us on Twitter at @qzafrica for updates throughout the day.
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