Here are three big stories from Africa’s business and policy space you might have missed but should keep in mind this week:
Dash’s hopes were dashed
Dash, a Ghanaian fintech startup, is winding down its operations after five years in the market. The startup was founded on dreams of solving cross-border payments for Africans by connecting mobile money wallets. However, that idea won’t be seeing the light of day, at least not through them.
Dash’s big ambitions attracted investors so much that it raised $32.8 million in a seed round—the second largest seed round for an African startup—in March 2022. But challenges followed. That same month, the Bank of Ghana (BoG) issued a directive to suspend Spektra Technologies (doing business as Dash in Ghana) for providing services — wallet creation, cross-border payment, and utility payment — without regulatory approval. So, Dash stopped operating in Ghana and focused on Nigeria and Kenya.
Fast-forward to January 2023, Dash’s founder, Prince Boakye Boampong, gets suspended for alleged financial misreporting. The company ran an audit, and according to WeeTracker, “the numbers and transaction volumes that once touted the company’s meteoric rise were elaborate fabrications intended to mislead investors.” Now, the company is laying off staff, winding down and exploring a sale.
Niger is cutting down its budget
On Saturday, October 7th, the Niger junta made a televised announcement that the country has reduced its projected spending for 2023 by 40%. The original budget was an estimated 3.29 trillion CFA francs ($5.3 billion). But because of international sanctions that followed its coup, Niger will make do with 1.98 trillion CFA francs.
Niger’s economy has been under pressure since the July coup. So, it is deploying tooth-and-nail measures to survive. Trade blockages by the Economic Community of West African States (ECOWAS) have caused food inflation. Even before the coup, around 3.3 million of Niger’s 26 million people faced acute food shortages. Also, the country’s debt burden is through the roof. On Monday, September 4th, Ali Lamine Zeine, the Prime Minister of Niger’s transitional government, revealed that the nation’s total debt has reached 5.200 billion CFA francs.
War in the middle-East
Palestinian gunmen from Hamas infiltrated Israel on Saturday, launching attacks on troops and civilians in the most brazen militant operation in years. This attack led Israeli Prime Minister Benjamin Netanyahu to declare war against the group. And now, the conflict has at least 1,100 dead on both sides in just three days.
The violence erupted suddenly but came after a year of rising tensions between Israel and Palestinians in the West Bank and Gaza, which has been under a joint Israeli-Egyptian blockade since 2007.
The immediate impact on the markets is that oil prices have surged. Brent crude rose by 4.94%, reaching $88.76 per barrel, while U.S. West Texas Intermediate crude increased by 5.11%, reaching $87.02 per barrel. Oil prices were on a downtrend before this conflict started.
Pierre Andurand, a top energy trader and hedge fund manager, noted on X (Twitter) on Sunday that many people had asked him “if the Hamas attacks on Israel will have an impact on oil prices.” While he does not expect a big impact on oil supply or a heavy price spike in the next few days, he acknowledged that global oil inventories are low “and the Saudi and Russian production cuts will lead to more inventory draws over the next few months. The market will eventually have to beg for more Saudi supply, which I believe will not happen sub $110 Brent.”
ICYMI: Market roundup
The Nigerian stock market had a slightly positive week, as the All-Share Index gained 0.11% to close the week at 66,454.57.
The top gainers were FTN Cocoa Processors Plc (+19.21%), RT Briscoe Plc. (+16.33%), Oando Plc (+14.65%), Africa Prudential Plc (+11.90%), and Thomas Wyatt Nig. Plc. (+11.46%). Top decliners were Consolidated Hallmark Insurance Plc (-19.05%), Associated Bus Company Plc (-17.72%), UPDC Real Estate Investment Trust (-10.26%), Champion Brew. Plc. (-9.87%), and Chellarams Plc. (-9.84%).
Brent crude rose by 4.94%, reaching $88.76 per barrel, while U.S. West Texas Intermediate crude increased by 5.11%, reaching $87.02 per barrel.
The naira closed at 741.85 against the dollar at the Investors’ and Exporters’ window while trading at N1010/$ at the parallel market.
The crypto market had a slow week, with the market cap staying unchanged at $1.09 trillion. Bitcoin went down 0.61% to close at $27,918, ETH lost 5.42% to close at $1,630, and BNB declined by 3.37% to close at $211.76.
Stitch, a South African fintech, has raised $25 million in an extension round, bringing its total Series A to $46 million.
Secha Capital, a South African VC firm, has announced a first close of ZAR300 million ($15.7 million) of its second fund, the target size of which is ZAR650 million ($34 million).
Lengo AI, a Senegalese SaaS startup, secured undisclosed pre-seed funding to provide intelligence and insights to FMCG brands.
