Every month, Africa HR Solutions summarizes the latest high-impact news for you. We aim to provide you with accurate and non-biased news from the African continent. This month, we take a look at Foreign Currency, Start-Ups, the Airline Sector and Fintech.
Nigeria Adopts Chinese Yuan as Reserve Currency
Nigeria has begun selling Chinese yuan to local traders and businesses, two months after agreeing on a 3-year $2.5 billion currency swap with China. The main motive behind this agreement is to ease Nigeria’s currency pressure after previous slides against the dollar.
When global oil price dropped in 2015, Nigeria faced a major dollar shortage as foreign reserves plummeted. This resulted in restricted access to dollars from government strict control, leading to cut down on flights and the shut down of various international businesses.
Direct trade with yuan without first converting to dollars makes it easier for local businesses to deal with Chinese counterparts. Back in 2015, The International Monetary Fund named the yuan as an alternative to the dollar. 2017 saw the European Central Bank convert £500 million worth of US dollars into Chinese yuan.
Kenya Startup Incubator to Run a $10 million Africa Grant Fund
Chinese billionaire Jack Ma has setup a “Netpreneur Prize” across the African continent. The prize is aimed at innovators coming up with digital solutions to address challenges and strengthen the African’s digital economy.
Kenya’s startup incubator Nailab has been selected to run a $10 million African entrepreneurs funding programme, established by the Jack Ma Foundation. The Netpreneur Prize will award $10 million to 100 African entrepreneurs over the next 10 years.
The funding programme was launched at the “Netpreneurs: The Rise of Africa’s Digital Lions” conference in South Africa on the 8th of August 2018. From next year on, the Jack Ma Foundation will host annual pitch competition for the shortlisted 10 best business ideas.
Ethiopian Airlines Suggests Co-ownership by African Governments
Ethiopian Airlines are without a doubt Africa’s largest airline both by revenue and by profit. Currently, the super successful state-owned carrier is looking for increased connectivity on the African continent. The government-controlled airline company is considering selling the minority of shares of Ethiopian Airlines to African countries if they are interested in buying.
Recently, Ethiopia began opening to investors on various key economic industries, including aviation and telecommunication. Earlier in August, Ethiopian Airline announced the acquisition of 45% of stakes in Zambia Airways, in an attempt revive the latter. Moreover, ET’s mentioned being the lead contestant in a tender aimed at setting up Nigeria’s new national airline.
There is no doubt that Ethiopia is looking to spread its regional footprint and strengthen its economy. The country looks set to flourish and this could be a massive opportunity for investors looking to get into key sectors such as aviation and telecommunications.
Mobile Payment in Africa
Paystack, the Nigerian payments company wants to raise $8 million for further enhancing its services and powering its growth beyond Nigeria. Paystack has been quickly progressing like wild fire in Nigeria, quickly winning merchant sign-ups and credence within the local system.
Meanwhile, Samsung Electronics announced the launch of its mobile payment service in South Africa, Samsung Pay. The service implements latest security trends, such as tokenization, to ensure the user’s card information is never exposed during any transaction. Smartphone users in South Africa is expected to reach 25 million by 2022.
The African continent seems poised to grow at a rapid pace in the coming months. This will definitely open up new opportunities for investors looking to participate in the growth of Africa.