Here are three big stories from Africa’s business and policy landscape you (probably) didn’t miss but should keep in mind this week

Africa hit with Internet disruptions

Last week, widespread internet outages hit 13 African countries after damage to undersea fiber optic cables. The outages, which began in West Africa and rippled south, affected at least 13 countries, including Nigeria, Ghana, and South Africa. While some countries like Gambia and Guinea experienced brief disruptions lasting around 30 minutes, others faced longer outages. As of this morning, internet access remains limited in Benin, Burkina Faso, Cameroon, and Cote d’Ivoire.

Network providers like MTN and Vodacom confirmed the disruptions stemmed from damage to multiple submarine cables. However, The exact cause of the damage is yet to be determined. Microsoft identified several affected cables, including the Africa Coast to Europe (ACE) and the West Africa Cable System (WACS). This incident comes on the heels of disruptions earlier this month in the Red Sea, further impacting overall internet capacity for Africa. Undersea cables are critical for global internet connectivity, carrying an estimated 99% of intercontinental traffic. Repairs for such damage can be lengthy, as evidenced by Tonga’s reliance on satellite internet for over a week in 2019 after a similar cable break.

Airtel Africa Considers $4 Billion IPO for Mobile Money Unit

Airtel Africa is contemplating taking its mobile money division public, with a potential valuation exceeding $4 billion, according to Bloomberg. However, discussions are still in their early stages, and the company may ultimately choose against an Initial Public Offering (IPO). Airtel Money stands out as Airtel Africa’s most dynamic segment, boasting a 31.8% revenue surge in 2023 despite a nearly 99% drop in overall company profits due to currency devaluation. The mobile money arm currently operates in 14 African countries. This potential IPO aligns with earlier hints by Airtel about a future public offering for its fintech arm. These intentions were further fueled by significant investments in 2021 – $200 million from TPG and $100 million from Mastercard – valuing Airtel Money at $2.65 billion at that time.

Airtel Money faces stiff competition from M-Pesa, the Kenyan mobile money giant, and MTN Momo in Nigeria. However, a recent increase in transaction limits – from KES 300,000 to KES 500,000 – could enhance its competitiveness. The move reflects a broader trend of investor confidence in African mobile money providers. Three years ago, Mastercard acquired a $100 million investment in Airtel Money. Last year, Mastercard acquired a minor stake in MTN’s mobile money arm.

South Africa Takes a Step Forward in Regulating Cryptocurrency

South Africa’s financial watchdog, the Financial Sector Conduct Authority (FSCA), has granted operating licenses to 59 cryptocurrency businesses, marking a significant step towards regulating the digital asset class in the nation. This move comes after the FSCA declared crypto assets as financial products in 2022. Regulation aims to protect consumers from potential risks associated with cryptocurrency, prevent money laundering, and combat terrorist financing. It also empowers the central bank to monitor crypto transactions. According to Felicity Mabaso, a high-ranking FSCA official, the FSCA received a total of 355 applications, with 262 still under review. These licensed companies offer various cryptocurrency services, including exchange management, payment processing, advisory services, and fiat-to-crypto conversions.

The FSCA is actively pursuing unlicensed cryptocurrency operations and has warned of repercussions for non-compliance. This initiative follows the establishment of a Crypto Assets Regulatory Working Group in 2018, which issued recommendations on cryptocurrency regulation in July 2021. South Africa’s move towards regulating cryptocurrency positions it as a leader in financial innovation within Africa.

ICYMI: Market roundup

  • Nigeria’s equities market moved upwards over a 5-day trading week, with the NGX All-Share Index appreciating by 3.71% to close at 105,085.25 points. The top gainers were Julius Berger Nigeria Plc. (30.58%), Omatek Ventures Plc. (23.08%), MTN Nigeria Plc (20.96%), NEM Insurance Plc (20.91%), and Guaranty Trust Holding Company Plc (17.88%). The top decliners were International Energy Insurance plc (-27.38%), Sunu Assurances plc (-19.11%), Lasaco Assurance plc (-14.53%), Consolidated Hallmark Holdings plc (-13.07%), and Unity Bank Plc (-10.00%).
  • The naira closed the week at ₦1602.75/$1 on Friday at the investor’s and Exporters’ window.
  • Brent crude closed the week at $85.34 while US West Texas Intermediate (WTI) crude closed at $81.07
  • The global cryptocurrency market cap stood at $ 2.6 trillion, as of 8 a.m. Monday, the 3rd of March. Bitcoin stood at $68,496.02, a 0.77%, decrease over the week, Ethereum also decreased by 6.12% to trade at $3,629.86 Binance coin increased by 12.37% over the week, to trade at $583.91. 
  • At the beginning of the week, South Africa-based car subscription company, Planet42, raised $16 million (R300 million) in local-currency debt and equity funding from Standard Bank to repay costly euro-denominated loans.
  • Youverify, a Nigerian provider of identity verification and anti-money laundering (AML) solutions for banks and startups, secured a $2.5 million investment from Elm, which specializes in offering ready-made and customized digital solutions to public and private institutions in Saudi Arabia.

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