Photograph — The Economist

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

MTN contests Vodacom’s Spectrum allegations

The South African telecommunications industry is embroiled in a legal battle between network giants MTN and Vodacom. The dispute centers on MTN’s spectrum pooling agreements with Cell C and Liquid Intelligent Technologies, which Vodacom claims are illegal. In May 2024, Vodacom took legal action against the Independent Communications Authority of South Africa (ICASA), seeking an interdict to halt MTN’sclandestinespectrum pooling deals. Vodacom argues that these agreements, allegedly granting MTN an unfair competitive advantage, were approved by ICASA in a secretive manner, breaching legal protocol.

MTN strongly refutes these accusations. The company maintains that South African regulations permit such spectrum-sharing arrangements. According to an MTN statement, the company and its partners strictly adhered to the Electronic Communications Act and secured proper approval from ICASA. Furthermore, MTN has filed a counter-suit in the Pretoria High Court against Vodacom’s lawsuit.MTN dismisses Vodacom’s claims of secrecy, asserting complete transparency throughout the process of forming spectrum pooling agreements with other network operators.

However, Vodacom’s suspicions regarding MTN’s superior network speeds prompted an investigation, as outlined in an affidavit by Andrew Barendse, Vodacom’s managing executive for regulatory affairs. Vodacom alleges that MTN might be utilizing more spectrum than officially licensed by potentially sharing resources with Cell C and Liquid, giving them an unfair edge. MTN acknowledges its spectrum-sharing practices but argues that Vodacom’s interdict, if successful, would negatively impact MTN’s network quality, potentially affecting a significant portion of South African mobile phone users. MTN further contends that Vodacom has failed to provide substantial evidence to support its interdict and believes the request should be dismissed. Cell C has also joined the fray, announcing its intention to oppose Vodacom’s interdict, emphasizing that the regulatory body followed the appropriate legal procedures.

Nigerian and Ghanaian creators can now earn on Facebook and Instagram

Good news for content creators in Nigeria and Ghana. Meta, the parent company of Facebook and Instagram, has finally opened up monetization options for creators in both countries. This means creators can now earn money from ad revenue displayed on their content. Previously, creators with Nigerian or Ghanaian addresses were excluded from Facebook monetization unless their page was managed from a different country.

This policy change follows an announcement by Meta’s President of Global Affairs, Nick Clegg, in March 2024, stating the feature would launch in June.Monetization won’t be limited to just Instagram,Clegg said. Nigerian creators eligible to use our monetization products will be able to also monetize on Facebook as well. This is a significant development considering the massive user base in both countries. According to NapoloenCat data from May 2024, Nigeria boasts over 50 million Facebook users, while Ghana has more than 10 million.

However, with this new monetization avenue, creators in Nigeria and Ghana may be subject to taxes on their earnings. In April 2024, Ghana implemented a taxation policy for content creators and influencers earning on platforms like YouTube, X, and TikTok. This could potentially extend to income generated on Meta platforms now that monetization is enabled.

Nigeria’s debt to GDP ratio reaches a record high, crosses 50%, crosses 50%.

Meanwhile, Nigeria’s public debt has surpassed 50% of the country’s Gross Domestic Product (GDP) for the first time. This news comes after the Debt Management Office (DMO) released the latest public debt figures. According to the DMO, Nigeria’s total debt now sits at N121 trillion, with domestic debt accounting for N65.6 trillion and foreign debt reaching N56 trillion (converted from $42.1 billion). While Nigeria’s GDP grew modestly by 2.74% in real terms by December 2023, reaching N229.9 trillion nominally, the debt increase has pushed the debt-to-GDP ratio above 50%. This ratio can also be calculated using the trailing four quarters of GDP data, resulting in a figure of 51.2%.

Previously, Nigeria viewed its lower debt-to-GDP ratio compared to regional peers like Ghana (84.9%), South Africa (72.2%), Kenya (70.1%), and Egypt (95.8%) as a sign of economic resilience. However, the challenge has always been servicing this debt, given the high debt-to-revenue ratio. With the debt-to-GDP ratio exceeding 50% and continuing to climb, Nigeria’s ability to borrow further to address economic challenges becomes limited. This situation raises concerns about the country’s fiscal sustainability and its ability to meet future debt obligations. The rise in Nigeria’s debt profile is attributed to ongoing fiscal challenges over the past eight years. Low crude oil revenue coupled with rising government spending has created a situation where borrowing has become necessary to cover budget shortfalls.

ICYMI: Market roundup

  • Nigeria’s equities market went upwards over a 5-day trading week, with the NGX All-Share Index appreciating by 0.32% to close at 100,057.49 points. The top gainers were CWG Plc. (44.55%), FTN Cocoa Processors Plc. (22.39%), United Capital Plc (21.84%), John Holt Plc (20.31%), and Mutual Benefit Assurance Plc (19.64%). The top decliners were Jaiz Bank plc (-11.36%), Daar Communications (-10.53%), Champion Brew Plc (-10.49%), University Press Plc, (-9.09%), and Beta Glass Plc. (-8.62%).
  • The naira closed the week at ₦1505.30/$1 on Friday at the investor’s and Exporters’ window.
  • Brent crude closed last week at $85.00. While the US West Texas Intermediate (WTI) crude closed at $81.54.
  • The global cryptocurrency market cap stood at $ 2.33 trillion, as of 8 am Monday, the 1st of July. Bitcoin stood at $63,308.43, a 1.17%, increase over the week, Ethereum increased by 3.50% to trade at $3,484.47, and Binance coin also increased by 2.52% over 7 days, to trade at $584.75.
  • Last week, PFintech startup Cadana, raised $7.1 million in seed funding to revolutionize remittances for African professionals.
  • Also, Noki Noki, a Congolese-based logistics company specializing in food delivery and grocery shopping, secured $3 million in seed funding.

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