Africa in the News – October 2018

Goldman Sachs backs up South African fintech JUMO

South Africa-based financial technology firm JUMO plans to expand in high-growth Asian markets after securing the backing of Goldman Sachs in an equity funding round, the company’s chief executive said. Since its founding in 2014, JUMO, which helps individuals and small businesses access savings and credit products through their mobile devices, has mainly focused on Africa where the adoption of mobile money has transformed the banking landscape.

Led by Goldman Sachs’ first-time investment in the company, JUMO raised $52 million in the fundraising round. Other investors included Proparco, Finnfund, Vostok Emerging Finance, Gemcorp Capital, and LeapFrog Investments.JUMO’s partners include telecoms firms MTN, Airtel, Telenor and banks including FNB, a unit of South Africa’s FirstRand, and Pakistan’s Telenor Microfinance Bank.

Ethiopia moving to VISA-on-arrival for African

Ethiopia will soon allow African citizens to enter without obtaining visas in advance. Currently, all travellers, except those from Kenya and Djibouti, have to get a visa before departure or receive it on arrival. Relaxing visa rules in Africa’s second most populous and one its fastest-growing economies also sends a message to other African states, small or large, to follow suit.

The decision to relax the visa regime will likely be a boon for the country’s hospitality and conference tourism sectors. The move will also likely be a windfall for Ethiopian Airlines, the state carrier that has dominated Africa’s airspace. This will significantly boost the hospitality sector and may represent new business opportunities.

Kenya is planning to launch its own locally-built mobile phone

The Kenyan government is putting aside one billion shillings ($10 million) to boost startups working in the mobile telephone software and hardware industry. In many ways, the East African nation’s economy is “mobile first”: almost 98% of the population having access to a mobile phone, according to the Communications Authority of Kenya. This increasing ownership has also driven subscriptions to mobile money with the dominant player being Safaricom’s M-Pesa service, itself a global leader in the sector.

The rapid mobile uptake has been augmented by increasing internet speeds: one study shows Kenya’s mobile average data connection speed in the first quarter of 2017 was almost twice as fast as the global average. Despite this, developing phones locally and making them attractive to consumers will be a difficult task. Chinese handset maker Transsion Holdings will also prove a serious challenge for any Kenyan brand: using its research centres in Kenya and Nigeria and factories in Ethiopia, the Shenzhen-based company produces phones in and for the continent, some as cheap as $10!

Angola is now open to investments

Recently, Angola's government leaders unanimously passed revisions to the country’s Private Investment Law, which supports Angola’s diversification efforts in job opportunities and trade. This is particularly helpful when there are price fluctuations in oil, metal, and other commodities that are top sources of revenue for the country. In the past, the Private Investment Law had required foreign investors to partner with Angolan citizens, public capital companies, or Angolan companies, and hold at least a 35 percent stake in the share capital of the companies.

Under the new bill, private investors must employ Angolan workers and provide them with favourable training, salaries, and social conditions, without discrimination. This is a great step in providing concrete opportunities for Angola residents and building upon other investment opportunities with high manufacturing intensity. The new law assigns four development areas, or zones, within Angola. The priority trade sectors are: food and agriculture; forest resources; textile, clothing and footwear; hotel business, tourism and leisure; construction; public works; telecommunications and information technology infrastructure; energy and water; and education, training and investigation respectively.