The second edition of Companies to Inspire Africa 2019 Report by London Stock Exchange (LSE) is out. This impressive report lists 360 privately-held companies operating in 32 different African countries. It identifies Africa’s most inspirational and dynamic private, high-growth companies to a global market.
Business growth across Africa has greatly improved from an average compound annual growth rate (CAGR) of 16 percent in 2017, to the current 46 percent in three years. The report represented the seven most important industry sectors and featured companies both small and established. These companies ranged from SMEs to giant African corporations.
Nigeria led the countries in the report producing 97 companies. Kenya came second with 66 firms in the report while Uganda provided 31. The three major sectors of Agriculture, Industry and Consumer Services accounted for more than half of all companies featured. Coming second with more than a quarter of companies represented were the sectors of Technology and Telecoms together with Financial Services. Additionally, Renewable Energy together with Health and Education sectors also registered a significant representation.
Best Sectors Inspiring African Growth
These are the represented sectors in the Companies to Inspire Africa, with their respective number of featured companies;
- Consumer Services had 79 companies, up from 49 in 2017.
- Industry had 77 companies, down from 81 in 2017.
- Agriculture with 53 companies, up from 46 in 2017).
- Technology & Telecoms with 51 companies, down from 56 previously.
- Financial Services with 48 companies, down from 66 in 2017.
- Healthcare & Education with 31 companies shooting up from 19.
- Renewable Energy had 21 companies dropping from 29 in 2017.
African-focused trade groups and investors, African government representatives and the CEOs of the featured companies, and others graced the launch of this 148-page report. The CEO of LSE Group, David Schwimmer was joined by International Development Secretary of Britain, Penny Mordaunt in welcoming the guests.
“Africa is going through a period of enormous change. And, with five of the world’s fasting-growing economies are African and by 2050 a quarter of the world’s population will live there, this growth presents unique opportunities for us all,” Mordaunt, who is also the MP for Portsmouth North, commented. She also noted that if African-initiated dreams were combined with British expertise, more investments and jobs would ensure for Africa and United Kingdom.
Companies to Inspire Africa 2019 Led By Women CEOs
An analysis of the 2019 Companies to Inspire Africa report and the sectors involved in this growth reveals some impressive trends. The average number of employees in these companies is 363 while CAGR stands at 25 percent in three years.
The number of companies led by women almost doubled this year accounting for 23 percent of the featured firms. Senior female management had the greatest bang in Healthcare & Education sector where 39 percent of companies have women CEOs. This was closely followed by Financial Services sector where women are leading as CEOs in 31 percent of companies represented. To illustrate this even more, out of the 20 Ghanaian companies in the report, 10 of them are led by women.
Companies to Inspire Africa by Regions
This report shows and reaffirms the West-East axis dominance in Africa. As noted before, the two leading countries came from the two African divides of West and East. Nigeria represented West Africa and Kenya did it for East Africa. In total, Western Africa had about 36 percent of companies (130) while Eastern Africa had about 41 percent (147).
The rest of Africa is also well represented in the report. This is because Southern Africa provided 47 companies, while Northern Africa brought 26. Additionally, Central Africa gave 6 companies to sum it up.
“These high growth companies have the potential to transform the African economy and become tomorrow’s job creators. We are committed to helping companies realize that potential and we are pleased to highlight and celebrate the company success stories behind one of the world’s fastest growing markets,” Schwimmer commented.
Pan African eCommerce Giant Jumia Makes History with NYSE listing
Jumia Technologies made history on 10th April 2019 following the approval of the Securities and Exchange Commission (SEC) allowing the pan-African e-commerce giant to sell its shares on the New York Stock Exchange (NYSE). Consequently, Jumia started trading its shares at $14.50 using the ticker symbol JMIA. This makes Jumia Technologies the first African startup to secure major global exchange listing.
Jumia is currently active in fourteen African countries including Nigeria, Ivory Coast, and Tanzania. The e-commerce platform has 81,000 active sellers with over 5,000 direct employees. According to a statement contained in its recent SEC filing, Jumia Technologies added three hundred thousand new active customers in the first quarter of 2019.
Through the sale of its American Depositary Shares, the company can raise up to $316. According to the Corporate Communications officer, Lisette Kwong, Jumia initially set its IPO at $14.50 but it opened and closed at higher prices.
Jumia’s Brief History and Growth
Jumia was co-founded in 2012 by Sacha Poignonnec, Jeremy Hodara, Tunde Kehinde and Raphael Kofi Afaedor. The company was an outgrowth of the Rocket Internet Company. However, its rapid growth allowed it to secure funding from investors like Millicom group, MTN, Orange, Goldman Sachs, and CDC. According to The Guardian, MTN is the largest shareholder with 29.7%. Rocket Internet is second on the log with 20.6%. Other investors and their stake include AXA Africa holdings (5.8%), AEH New Africa eCommerce (8.4%), and Millicom (9.6%).
The two Nigerian co-founders, Raphael Afaedor and Tunde Kehinde are credited with the creation of some of the company’s components including JumiaPay. However, they left the company in 2015 to build other startups.
What Next For Jumia?
Jumia’s share price was up by 61% in early trade. Inasmuch as NASDAQ is traditionally for technology companies, Jumia decided to list on NYSE. The Head of International Capital Markets at the NYSE, Mr. Alex Ibrahim said the company did so because they saw the benefits. According to Ibrahim, the volatility of NYSE is higher than its competitors. Speaking on the listing of the company on NYSE, the co-founders said,
“This achievement has been made possible thanks to the hard work of our teams, the trust of our consumers, as well as the commitment of our sellers and partners. All stakeholders deserve credit for this milestone, and we are just at the beginning of a long and great journey. We are going to continue to focus on our mission and to work even harder to help consumers, sellers, partners, and all stakeholders benefit from this technological revolution.”
Jumia is attracting lots of attention but the pan-African eCommerce giant is not a stranger to accolades. Some of the awards on Jumia’s archive include;
- Best New Retail (World Retail Awards 2013)
- Online Retail Brand of the year (Brand Journalists Association of Nigeria (2013)
- The innovative business of the year (Success Digest 2013)
- Leadership ICT company of the year (2013)
- Best use of Mobile App (Rima Awards)
E-commerce website of the year (Beacon of ICT Award)
Gambia’s AfCFTA Ratification Means Africa Will Soon Become The Largest Free Trade Area In The World
The dream for a Continental Free Trade area in Africa became a reality when Gambia ratified the agreement. Initially, prospects of the agreement becoming a reality were hindered by a lack of numbers—falling short on the minimum threshold. With Gambia ratifying the agreement, the bill can now be actualized.
Gambia became the 22nd African country to approve the African Continental Free Trade Area Agreement—AfCFTA. Ethiopia was the 21st country to ratify AfCFTA when it approved the agreement on March 21, 2019. Gambia parliament ratified the agreement on April 2 2019.
African Continental Free Trade Area Agreement
The African Union brokered the agreement in 2018. The agreement was then signed by 44 countries on March 21 2018 in Kigali, Rwanda—out of a total of 55 member states. Among other provisions, the agreement requires member states to remove tariffs from 90 percent of goods. In addition, member countries will be required to allow free access of goods and services across the continent.
From March 17 to March 21, 2018, an Extraordinary Summit on AfCFTA was held in Kigali, Rwanda. During the summit, the agreement establishing AfCFTA was presented to African leaders for signatures. The agreement was framed such that it goes into force 30 days after 22 countries have ratified the agreement instruments. Furthermore, ratifying states are required to deposit the instruments with the Chairperson of AUC—African Union Commission.
Gambia’s ratification and completion of all due processes satisfy this constitutional requirement to bring the agreement into effect.
Only 20 countries have ratified and deposited the required instruments with the AUC Chairperson—as of April 16, 2019. Two countries, Zimbabwe and Sierra Leone, have obtained parliamentary approval but have not deposited the instruments.
The 20 countries that have already deposited the instruments of ratification include The Gambia, Ethiopia, Egypt, Togo, Senegal, Ivory Coast, Uganda, South Africa, Namibia, Mauritania, Mali, eSwatini (former Swaziland), Guinea, Djibouti, Congo Republic, Chad, Niger, Rwanda, Kenya, and Ghana.
Notable Non Signatory
The AfCFTA is moving forward, however, Nigeria’s lack of commitment to the agreement is a big blow. Nigeria is Africa’s largest economy but only an estimated 10% of its trade volume is done with other African countries. Nigeria’s hold out has been blamed primarily on influential Labor Unions
During the 2019 African CEO Forum in Kagali last month, President Kagame of Rwanda who had championed the AfCFTA during his tenure as the African Union Chairperson shared that he had reached out to Nigerian president Muhammadu Buhari to sign the deal.
There are still concerns however about how the agreement will be executed. At the same event, African billionaire Naguib Sawiris said: “The challenges are going to be in the implementation.”
Impact of the Agreement
The AfCFTA is expected to boost free trade and investment across Africa. Once it comes into effect, the African Continental Free Trade Area Agreement area will create the largest free trade area in the world. The agreement will bring together all the 55 member states of the AU. This means the agreement will cover a market of over 1.2 billion people. The Economic Commission for Africa estimates that this agreement has the potential of boosting intra-African trade by 52.3 percent.
Mauritius and Kenya Sign New Deal. Ban Lifted on Kenya’s Produce
Kenya and Mauritius signed a new deal that saw Mauritius lifting a ban on Kenyan farm produce. The new agreement enhances trade between the two African countries. Mauritius had initially banned baby beans, baby carrots, broccoli, and avocados from Kenya. Bilateral talks between Mauritius Prime Minister Pravind Jugnauth and Kenya President Uhuru Kenya culminated in the lifting of the ban on these products.
The bilateral talks also saw the signing of the Double Taxation Avoidance Agreement—DTAA. In addition, the two leaders signed a memorandum of understanding on cooperation for the development of an Export Processing Zone in Kenya.
Kenya and Mauritius also signed an Investment Promotion and Protection Agreement. Other agreements signed include MOU in the field of arts and culture, an MOU in the field of higher education and scientific research, and an MOU on tourism.
Impact of the Deal
The signed agreements will boost Kenya’s ambitions to reach its development goals. According to President Kenyatta, the agreements will particularly boost Kenya’s manufacturing sector and create employment opportunities.
The new deal will further foster cooperation between Mauritius and Kenya. This means that the cordial relationship between the two countries is enhanced. This relationship will boost trade and investment opportunities in both countries.
Both Kenya and Mauritius have long coastlines, and more benefits can be derived in their blue economies through cooperation. President Kenyatta stated that there is a need for the two countries to look for ways of enhancing maritime transport by linking the Port of Mombasa to Port Louis. An established link is considered a catalyst for growing trade and businesses in the two countries.
The key benefit to Kenya from the deal is the promotion of its agricultural produce. Mauritius lifted a three-year ban on Kenyan avocado. Kenya lost the avocado market in Mauritius in 2015. The ban was due to the Mauritian National Plant Protection Office citing low hygiene standards of the Kenyan avocados. Lifting of the ban will now see more exports of avocados to Mauritius, along with other farm produce such as baby carrots and broccoli.
Kenya’s deal with Mauritius follows an initial pact with China. In 2018, Kenya signed deals with China and the Republic of Korea that opened opportunities for farmers to export more agriculture products to the two countries. The Kenya-China agreement opened opportunities for Kenya to export meat, flowers, and a selection of fruits and vegetables to China.
Kenyatta’s visit to Mauritius for the deal makes him the first Kenyan president to visit Mauritius.
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