11th January 2024
Naspers Faces Amazon Challenge
Naspers, Africa's largest company, is increasing investment in its South African online retailer, Takealot, ahead of Amazon's entry into the country's growing e-commerce market. Naspers aims to be well-prepared for the competition, leveraging its knowledge of the local market. While e-commerce constitutes only 4% of South African retail, the market offers substantial growth potential. Naspers owns Takealot, which has been expanding services, including one-hour delivery, anticipating Amazon's launch. South Africa's e-commerce sales reached ZAR 55 billion ($3 billion) in 2022, growing 30%, making it an attractive market for global retail giants.
China's Resurgence in Africa
China is anticipated to increase lending to Africa for the first time since 2016, with a focus on new countries and projects ranging from renewable energy to natural gas, according to Standard Chartered. While not reaching the 2016 peak of close to $30 billion, this potential rise in Chinese lending could offer support to African economies facing challenges in international capital markets. The shift may lead African nations to seek funding from other sources, such as the UAE, Turkey, India, and Japan. Chinese lending is expected to concentrate on select African countries and focus mainly on private sector investment.
Cadbury's Naira Fix
Cadbury Nigeria plans to convert $7.7 million of foreign-currency loans from Cadbury Schweppes Overseas into equity to alleviate high financing costs due to the naira devaluation. The move, pending shareholder approval, aims to cut exposure to forex risk, reduce finance costs, and enhance profitability. Cadbury Nigeria had borrowed $23 million over three years but struggled with interest payments amid Nigeria's dollar shortage. President Bola Tinubu's foreign-currency reforms triggered a 50% naira depreciation. The debt-to-equity conversion aligns with efforts to mitigate forex challenges faced by Nigerian companies amid economic shifts. *Meanwhile Nigerian stocks ended an eight-day rally, declining 1.4% as investors took profits from the liquid banking sector. The All Share Index dropped to 82,024.38 points, after crossing the 80,000-point threshold on Monday. The index of Nigeria's top 10 banks fell 7.97% on the day.
Change in fortune for Ex-CBN Chief
The High Court of the Federal Capital Territory has ruled that the detention of former Central Bank of Nigeria (CBN) chief, Mr. Emefiele, by the Economic and Financial Crimes Commission (EFCC) and Department of State Service (DSS) during their investigation was a violation of his right to liberty. The judge restrained the government and its agents from re-arresting Emefiele without obtaining an order from a competent court. The former CBN chief faces allegations of procurement fraud, which he vehemently denies. The court held that Emefiele's 151-day detention exceeded the legal 48-hour limit, ordering damages in his favor.
