Africa in the news: French president and US diplomats visit the continent, Guinea-Bissau parliament elected, and first African start-up will be listed on the NYSE
By Christina Golubski
First African startup will be listed on the New York Stock Exchange
On Tuesday, the African e-commerce platform Jumai filed with the U.S. Securities and Exchange Commission (SEC) for an initial public offering on the New York Stock Exchange. The company, which could go public as early as next month at a speculated value of $1.5 billion, would be the first African start-up to be publicly traded on the New York exchange.
Founded in Lagos, Nigeria, in 2012, Jumai offers a wide range of online services, including shopping, logistics, and payment services, to over 4 million unique users and 59,000 active sellers in 14 African countries, spanning Ghana, Kenya, Côte d’Ivoire, Morocco, and Egypt. According to the company’s CEO Juliet Anammah, the most popular items sold on the shopping platform are smartphones, washing machines, fashion items, women’s hair care products and TVs. The company also has several goods and services operations, which include Jumia Food (online takeout), Jumia Flights (travel bookings), and Jumia Deals (classifieds).
While some financial analysts have praised the move, the company has shown several risk factors to potential investors. In particular, the SEC filing shows the company’s pan-African model has accumulated losses of nearly $1 billion as of December 2018, which far exceed the revenue it has been able to generate. Further, the company has stated that it cannot guarantee to “achieve and sustain profitability” or “pay any cash dividends” in the near future. It has also faced major challenges such as a robbery of $560,000 worth of merchandise at its Kenyan warehouse. Other risks include political instability and regulatory uncertainty in African markets.
Guinea-Bissau’s ruling party wins parliamentary elections
Guinea-Bissau’s current ruling party, the African Party for the Independence of Guinea and Cape Verde (PAIGC), won the most legislative seats in March 10’s parliamentary elections. The PAIGC won 47 out of 102 seats, while second-place Madem G-15, a party formed by PAIGC dissidents, won 27 seats. The PAIGC announced that it had formed a coalition with three other parties to gain an absolute majority in parliament with 54 seats total.
In a United Nations Security Council resolution approved last week, the U.N. expressed hope that the elections would help end the political crisis that has affected Guinea-Bissau since 2015, when President José Mário Vaz dissolved the government of Prime Minister Domingos Simões Pereira due to disagreements over how to manage foreign aid. Since then, Vaz has been involved in a power struggle with the PAIGC, his own party, and has fired six additional prime ministers.
This political instability has fueled concerns that criminal groups could return in force to Guinea-Bissau, which became a transit hub for smuggled cocaine a decade ago. On March 9, authorities conducted the country’s biggest cocaine bust (800 kilograms) ever, marking a significant return of drug traffickers to the area. There are strong indications that the shipment was connected to al-Qaeda in the Islamic Maghreb.
French President Macron and top US diplomats visit Africa
French President Emmanuel Macron visited East Africa this week with stops in Kenya, Ethiopia, and Djibouti. A highlight of the trip was a pledge called “Choose Africa,” in which France plans to support start-ups and small and medium enterprises with 2.5 billion euros ($2.8 billion) in financing as well as credit and technical support.
While in Kenya, Macron joined President Uhuru Kenyatta at the One Planet Summit to discuss solutions for addressing climate change. During the summit, the World Bank and African Development Bank pledged $22.5 billion over 2021-2025 and $25 billion over 2020-2025 to fund climate change-combatting initiatives. Also while in Kenya, Macron witnessed the signing of a number of infrastructure-centered contracts such as a highway between Nairobi and Mau Summit, a 70 million euro contract for two solar power plants, and a 200 million euro contract for coastal and maritime surveillance by an Airbus-led consortium. France also committed to constructing a commuter rail between the main business district in Nairobi and the international airport.
In Ethiopia, Macron visited the African Union headquarters as well as Ethiopian President Abiy Ahmed. France’s relationship with Ethiopia is improving, largely due to reforms implemented by Ahmed. While in the country, Macron committed to $113 million to spur economic growth as well as assistance in developing the country’s navy.
In Djibouti, which hosts France’s largest military base, Macron discussed France’s security presence on the continent, which includes combatting piracy and terrorism. Security was a big theme of Macron’s agenda as this week the U.S. announced it would be scaling back its military presence on the continent by at least 10 percent by 2022.
Top U.S. diplomats were in Africa this week as well: United States Assistant Secretary for the Bureau of African Affairs Tibor Nagy is in Uganda, Rwanda, the Democratic Republic of the Congo (DRC), and Cameroon over two weeks. A major theme of Nagy’s visit was increased trade and investment on the continent, which he discussed during separate meetings with President Paul Kagame of Rwanda and President of Uganda Yoweri Museveni. He warned that African nations need to create an environment more conducive to business, “which means minimum levels of corruption, fair treatment, honoring contract and quite frankly a good governance environment because that’s what American businesses want,” he said. Nagy stopped in the DRC on March 13, and, on March 17-18, Nagy will visit Cameroon, currently in a crisis that he has suggested elevating to an international forum.
On Tuesday, March 12, U.S. Deputy Secretary of State John Sullivan set out to visit Angola and South Africa. The situation in Venezuela was at the forefront of the discussions in Pretoria, as South Africa was one of three United Nations countries to vote against the recognition of opposition leader Juan Guaidó as Venezuela’s interim president.