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Pulse #66 - Inventive Africa: Andela pivots to unicorn, African facial recognition tech, 3D-printed prosthetic limbs Africa’s first central bank crypto

In this week’s Pulse:
3D-printed prostheses to ease mobility for Sierra Leonean amputees, Nigeria poised to launch Africa’s first central bank crypto, ‘hidden debt’ of China’s infrastructure financing, Covid-19 violations in Nigeria reflect Africa’s challenge in pandemic response, Africa-inspired Ikoyi recognised for culinary excellence, South African and Kenyan airlines join forces, the Africa-born women making political history, $1.5bn solution to water and electricity problems in southern Angola, and is Andela still committed to developing Africa’s engineering talent?
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The Data Room

The number of active tech hubs in Africa has more than doubled in just four years, from 314 in 2016 to 744 in 2020 (UNESCO, 2021). These co-working spaces form the backbone of the Continent’s booming startup ecosystem, which is expected to attract >$10bn in VC investment annually by 2025 (AfricArena, 2021). Nigeria has the largest number of tech hubs (101), followed by South Africa (93), Kenya (70), Egypt (55), Morocco (49) and Tunisia (41). Fintech, health, education and agriculture are the sectors of emphasis. Nonetheless, financial sustainability remains a major challenge for Africa’s tech hubs, which rely heavily on grants from foreign partners and donors - e.g. ~80% of investment in Nigeria’s tech hubs comes from offshore sources. 

Numbers in the Spotlight


$385,000,000,000
 (USD385bn) in ‘hidden debt’ owed to China by African nations and other lower- and middle-income countries

$280,000,000,000
 (USD280bn) needed to combat the effects of climate change in 35 cities in South Africa, Kenya and Ethiopia by 2050

$5,500,000,000
(USD5.5bn) wiped off the value of Africa’s 150 leading brands between 2019 and 2020 by Covid-19

$1,500,000,000
(USD1.5bn) to be raised for financing drinking water and solar electrification projects in Angola

$200,000,000
 (USD200mn) in series E funding raised by Andela - valuing the company at $1.5bn

$120,000,000
(USD120mn) in investment announced by Egyptian fintech startup MNT-Halan

$29,000,000
 (USD29mn) AfDB grant to connect 40,000 Burundian households to electricity 

>2,000 passports
 suspended by the Nigerian government over Covid-19 violations 

1st African country
 to use central bank digital currency will likely be Nigeria

On The Continent This Week

Baseline healthcare & disease protection

3D-printing customised prostheses for Sierra Leonean amputees. MIT researchers have received funding to trial a mobile clinic to 3D-print personalised prosthetic limbs in Sierra Leone. With cost a huge barrier to accessing prostheses across Africa, 3D-printing carries huge potential to make the mobility aids more affordable for the ~27,000 Sierra Leoneans who were injured and disabled during the 1991-2002 civil war. While some prostheses can cost many thousands of dollars, 3D-printing lowers the price to <$100. In 2017, Africa’s amputee population was 16mn (24.6% of global amputees), ~80% of whom didn’t have prostheses (The Borgen Project, 2021) – underlining room for helping amputees gain access to prostheses to ease mobility.

Access to financial services and products

Nigeria to become first African country to launch central bank crypto. Nigeria is readying to launch the eNaira - Africa’s first central bank digital currency (CBDC). The eNaira will be piloted in Port Harcourt, Abuja, Kano and Lagos, before going country-wide. Free for P2P transactions and payments to merchants, it’s expected to bolster savings for users, boost remittances, and magnify financial inclusion among Nigeria’s 58mn unbanked adults (as of 2020). The eNaira also aims to protect against financial crime as it’s traceable and non-duplicable. But some are concerned that the system could grant the state more control over citizens’ financial rights, and disrupt Nigeria’s booming fintech and banking ecosystems as the central bank becomes a competitor to commercial players.

Essential infrastructure, personal living-space & utilities

The cost of China-financed infrastructure in Africa. China’s Belt and Road Initiative is burdening dozens of lower- and middle-income countries (including African nations) with “hidden debts'' totalling $385bn (AidData, 2021). As much of these debts are hidden from government balance sheets through confidentiality clauses, non-state actors could be underestimating Africa’s debt obligations to China. The findings uncover the risk of Africa’s soaring infrastructure borrowing from China with many countries now having debt exposure to Beijing of >10% of their GDP. Amidst repayment difficulties, between 2000 and 2019, China cancelled $3.4bn of debt to Africa, and a further $15bn was restructured or refinanced (Johns Hopkins University, 2020). Experts warn that Beijing could in future seize assets as collateral for unpaid debt obligations, begging the question - is China a big spender or a loan shark?

High value skills development and talent repatriation 

Andela gets $200mn investment. Andela, the global engineer outsourcing startup founded in Nigeria in 2014, has announced $200mn in Series E funding that values the company at $1.5bn (unicorn status). Andela altered its model mid this year - from maintaining five offices for exclusively unearthing and upskilling emerging African talent and connecting them to global opportunities, to going fully-remote and focusing on experienced engineers sourced from around the world. The company recently announced that >30% of the applications for its engineer roles came from outside Africa, subjecting the Continent’s largely-junior talent-base to global competition. Whilst the change in model has enabled the company to flourish during the pandemic, it raises the question – is Andela still committed to transforming Africa’s junior developers into global tech leaders?

Exporting culture and identity

African-inspired restaurant gets international recognition. Ikoyi, a London-based African restaurant named after a Lagos neighbourhood, has become the first eatery in the UK to earn the prestigious ‘One To Watch Award’ by ‘World 50 Best Restaurants’, which ranks the best restaurants across the globe. The gong annually recognises restaurants whose culinary excellence distinguishes them as an emerging star in the global dining industry. Launched in 2017 by childhood friends Jeremy Chan and Iré Hassan-Odukale, Ikoyi fuses British ingredients with largely West African spices to create a rare gastronomic experience. One-Michelin star Ikoyi has demonstrated that there is unfed global appetite for African flavours.

Home-grown digital infrastructure & platforms 

Absa launches facial recognition system. Johannesburg-based Absa bank has integrated facial recognition tech into its mobile banking apps for its users to authenticate certain transactions through facial scans - possibly making it the first African financial institution to do so. Such a system developed for African-majority clientele tackles the erroneousness of Western-designed applications whose algorithms are far less accurate at identifying non-White faces. E.g. Twitter was recently forced to abandon its image-cropping algorithm after several users complained that the tool was biased against Black people and instead favored white faces. Absa ignites the race for African businesses to adopt user-friendly AI tech for the Continent’s 1.5bn people - generating opportunities in an industry which is projected to contribute ~$16trn to the global economy by 2030 (PwC, 2017).

Scaleable energy

$1.5bn water and solar deal for Angola’s dry south. US-based off-grid utility provider Sun Africa will invest $1.5bn in providing drinking water and solar electrification in Angola, following an agreement with the government of the southern African country. The projects will be located in the semi-arid south of Angola that is experiencing its worst drought in 40 years, threatening millions of people with starvation. Solar electrification is aimed at weaning the region off expensive and government-subsidised diesel generators vs. the >1,000MW surplus of mostly renewable power enjoyed in the north. The projects will therefore quench the thirst of millions, facilitate a transition to clean energies, help the government save in subsidies, make the south more investor-friendly, and cut Angola’s C02 emission.

Intra-continental connectivity, collaboration & trade

South African and Kenyan airlines agree to share assets. South African Airways (SAA) and Kenya Airways (KQ) have struck a deal with a long-term vision to create a pan-African carrier. Whilst the alliance is not an indication of plans for a future merger, it enables the two African giants to share assets and tap into one another’s strengths amidst rising costs of operation and declining passenger numbers due to Covid-19. SAA and KQ have relied on government bailouts to survive years of financial woes that have been exacerbated by the pandemic. The combined turnover of Africa’s airlines declined by $8bn between 2019 and 2020 (African Airlines Association, 2021). The SAA-KQ deal demonstrates cross-border collaboration between businesses as a pivoting strategy, which has been eased by the removal of many trade barriers under Africa’s Continental Free trade area.

Effective internal and regional security, and foreign policy

Nigeria suspends 2,000 passports over Covid-19 violations. The Nigerian government has suspended passports belonging to >2,000 people for reportedly evading tests and other Covid-19 preventive measures upon returning to the country. It’s the latest case in a long list of challenges African governments have had to overcome in public health response to Covid-19 amidst the onslaught of more contagious variants and low vaccination rates. Other challenges include vaccine hesitancy and outright rejection, weak supply chains, inadequate infrastructure, limited health personnel, lack of vaccines and other supplies, and inadequate finances. Shared responsibility in public health response between state and non-state actors has proven key in controlling the disease in countries that are gradually emerging from the crisis.

End-to-End Value

Covid-19 wipes $5.5bn off the value of Africa’s top brands. Africa’s 150 leading brands have seen their combined value decline by 12%, from $45.5bn in 2020 to $40bn in 2021 (Brand Finance Africa, 2021). The decline is largely attributed to Covid-19 and associated restrictions. South Africa continues to dominate the Continent’s valuable brands with 81 companies in the top 150 (~73% of the total brand value), followed by Nigeria (17), and Morocco (10). Denoting the abundance of opportunities in Africa, only 19 of the Continent’s 54 countries have brand representation in the ranking. Banking, telecoms, and insurance remain Africa’s most valuable sectors. This report can be seen as a yardstick for identifying entry points into overlooked but potentially rewarding business areas.

Proportional representation in politics, business and community leadership

Women making political history. This week, Najla Bouden Romdhan became the first female Prime Minister in Tunisia and the Arab world, and Eritrean-born Awet Tesfaiesus was elected the first African Black woman to the Bundestag (Germany’s parliament). These pioneering accomplishments depict the growing entry of African-born women into the political arena and their increasing influence on governance decisions across the world. The duo join a lengthening list of African-born women earning positions of political leadership across the world - including Ilhan Omar, the Somali-born congresswoman in the US state of Minnesota; Tanzania’s first female president Samia Suluhu; Africa’s first democratically-elected woman president Ellen Johnson Sirleaf; and Malawi’s first female President Joyce Hilda Banda.

Upgrade Your Life

 

Our selection of online content, courses, tools and offers to help you build your personal repertoire.

  1. Who is Najla Romdhane, Tunisia’s first female prime minister?
  2. Is China a big spender or a loan shark? - BBC News
  3. The sore problem of prosthetic limbs’ as narrated by Sierra Leonean MIT researcher  - TEDTalk
  4. Earliest European portraits of African men on show together for first time 
  5. Somali pop star helps Minneapolis children discover their heritage
  6. Check out the menu of Ikoyi Restaurant
  7. Anti-racist approaches in technology - Free online course
  8. With so many people quitting, don’t overlook those who stay - Harvard Business Review
  9. Coronavirus: Why Africa's tech entrepreneurs are booming in lockdown - BBC World Service

History Class

How big a role does China play across the African continent? - Al Jazeera
Nigeria’s 61st independence anniversary: Six images from six decades - BBC Africa
Finally...

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