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

Mobility Takes the Lead in Africa’s Slow Funding Year.

Mobility startups received the most funding in Q1 2024, attracting $178.6 million. According to research firm, Africa: The Big Deal, the mobility sector raised a total of $178.6 million, led by Nigerian mobility fintech company Moove. Moove secured $110 million, including a $100 million Series B round led by Uber. This investment marks the culmination of a partnership that began in 2020. Moove’s model allows ride-hailing drivers to own vehicles without upfront payment, but it has faced criticism in Nigeria regarding driver repayment plans. However, Moove’s driver repayment plan has faced criticism in Nigeria due to rising operational costs. Moove’s fundraise translates to 24% of the total funds raised by African startups in Q1. Other notable mobility startups securing funding include Planet42 ($16 million) and Ampersand ($12 million).

Meanwhile, the fintech sector, often a major player in African startup funding, saw a different picture. Fintech startups only secured a combined $38 million across the three months. Overall, African startups secured a total of $466 million in the first quarter (Q1) of 2024. Compared to Q1 2023, funding for African startups plummeted by 62%. Startups only raised $329.5 million across 51 deals in Q1 2024. This stands in stark contrast to the $873.9 million raised during the same period in 2023, though heavily influenced by a single large investment – MNT-Halan’s $400 million raise.

CBN drops interest rates on 1-year treasury bills to 20.7%

The Central Bank of Nigeria (CBN) conducted its latest auction of Nigerian Treasury Bills (NT-bills) last week, and it attracted significant investor interest. The auction attracted a massive amount of investor interest, with total subscriptions exceeding the offered amount by over 11 times. This indicates strong investor confidence in Nigerian Treasury Bills as a safe and reliable investment option. This strong demand is particularly interesting considering the recent decrease in yield rates. Although the CBN raised the benchmark interest rate to 24.75% in March, the yields on offer for these NT bills were lower. Analysts suggest this didn’t deter investors due to limited investment alternatives, particularly with a volatile foreign exchange market. For some investors with a high tolerance for risk, the returns on NT bills may still be attractive.

Breaking down the auction details, the CBN offered a variety of bill tenors – 91-day, 182-day, and 364-day – with a total value of N149.64 billion. All three tenors witnessed significant oversubscription, ranging from over 800% to over 1100%. This strong demand highlights the investor appetite for these low-risk government securities. The CBN did allocate funds across all tenors, with stop rates set for each. The stop rate determines the maximum yield that investors receive. Interestingly, the stop rates for the 91-day and 182-day bills remained unchanged from the previous auction. However, the stop rate for the longer-term 364-day bills did reflect the lower yield environment.

Niger and China sign $400 mln crude oil deal

Niger has struck a significant economic deal with China, solidifying their ties in the oil sector. A $400 million memorandum of understanding (MoU) was signed between Niger and China National Petroleum Corporation (CNPC), a state-owned Chinese oil giant. The agreement reportedly centers on the sale of crude oil from Niger’s Agadem oilfield. However, specifics regarding the volume of oil or the timeframe of the deal haven’t been made public. This MoU highlights Niger’s deepening economic relationship with China. Prime Minister Ali Mahaman Lamine Zeine emphasized the strong ties between the two nations during the signing ceremony, which was broadcast on RTN. Chinese ambassador Jiang Feng echoed this sentiment, suggesting a potential shift in Niger’s foreign partnerships.

This economic development is particularly interesting in light of Niger’s recent political upheaval. The country experienced a coup d’état in July 2023, which ousted President Mohamed Bazoum. Despite this political instability, Niger has managed to maintain its economic momentum. The country has become Africa’s fastest-growing economy in 2024. A game-changer for Niger’s oil industry, the recently completed Niger-Benin pipeline boasts a capacity of 110,000 barrels per day. This critical infrastructure is expected to transform Niger into a major oil exporter by quintupling its crude production. This suggests that Niger’s resource wealth and economic potential remain attractive to foreign investors like China. However, some uncertainties linger. The coup has raised concerns about Niger’s long-term political stability and governance. Additionally, the country’s reported anti-Western sentiment as it carves a new path for itself may have implications for future international relations.

ICYMI: Market roundup

  • The Market opened for two trading days this week as the Federal Government of Nigeria declared Tuesday 9th – Thursday 11th, 2024 as Public Holidays to commemorate the Eid al-Fitr celebration. The NGX All-Share Index depreciated by 1.09% to close at 102,314.56 points. The top gainers were Morison Industries Plc. (20.75%), Oando Plc. (10.57%), Transnational Corporation Plc (10.33%), Deap Capital Management and Trust Plc (9.68%), and Omatek Ventures (8.97%). The top decliners were Access Holdings plc (-14.60%), United Capital plc (-13.92%), Guaranteed Trust Holding Company Plc (-13.75%), Flour Mills Nig. plc, (-13.55%) and Sunu Assurances Nigeria Plc. (-13.24%).
  • The naira closed the week at ₦1142.38/$1 on Friday at the investor’s and Exporters’ window.
  • Brent crude closed the week at $90.10 while US West Texas Intermediate (WTI) crude closed at $85.39.
  • The global cryptocurrency market cap stood at $ 2.43 trillion, as of 9 a.m. Monday, the 15th of April. Bitcoin stood at $66,723.31, a 7.78%, decrease over the week, Ethereum decreased by 10.08% to trade at $3,255.23 and Binance coin also increased by 1.90% over the week, to trade at $582.10.
  • Hewatele, a medical oxygen producer in Kenya, secured a $20 million funding package from Finnfund, DFC (the U.S. International Development Finance Corporation), SEDF (Soros Economic Development Fund), UBS Optimus Foundation, and Grand Challenges Canada.  
  • SunCulture, an African solar irrigation startup that offers a Pay-As-You-Grow option that allows small monthly installments, raised a $27 million equity funding round co-led by billionaire co-founder of Netflix Inc., Reed Hastings, and Eric Schmidt, the former chief executive officer of Alphabet Inc. 

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