Crypto News: Next Africa: Forest fight

Welcome to Next Africa, a weekly newsletter on where the continent stands now — and where it's headed.

Gabon, where nine-tenths of the landmass is covered by trees, is seen as a test case for whether there's money to be made in forest preservation.

That's recognized by global leaders such as France's Emmanuel Macron who this week traveled to the central African country of two million people to talk about forests.

Global financial markets are having none of it.

Gabon is pushing hard for the right to be rewarded in the carbon offsets market for keeping its forests intact as a key part of the Congo Basin and a carbon-absorbing sink.

The Nyanga River in Gabon at sunset. Photographer: Guillem Sartorio/Bloomberg

The current world order allows those who can show that they've improved on environmental practices to generate and sell carbon credits. There is no mechanism to reward nations like Gabon that have kept their forests largely untouched.

That's a problem for heavily forested countries.

As Akim Daouda, the head of Gabon's sovereign wealth fund, explains: Either the country gets compensated for keeping its trees standing or it will need to find a way of meeting the needs of its people. The easiest route to replacing some of the revenue from dwindling oil production is relaxing its strict controls on logging.

Already the lumber industry, where sustainable logging practices are enforced, generates about $1 billion a year. It could be a lot more.

Gabon is mounting a concerted campaign to have its argument accepted and to create securities that don't currently qualify as carbon credits.

If it fails, forests from Suriname to Papua New Guinea may be under threat and with them one of the last defenses against global warming.

— Antony Sguazzin

New Leader | Bola Tinubu won't have much time to celebrate his victory in Nigeria's presidential election. Africa's biggest economy is facing a deepening fiscal crisis, acute shortages of cash, and insecurity. Dealing with those issues is being undermined by a gasoline subsidy that will cost about $13 billion this year. Meanwhile Peter Obi, who ran an upstart campaign from outside the two main parties vowed to overturn the election result in court after he finished in third place.

Tinubu, wearing a red hat, with supporters in Abuja on March 1. Photographer: Kola Sulaimon/AFP/Getty Images

Debt Burden | FirstRand, Africa's biggest bank by market capitalization, has written off more than half the value of its holdings of Ghanaian bonds as the country grapples with a debt restructuring. Ghana's eurobonds took a hit after the country missed a self-imposed deadline to restructure its bilateral liabilities and S&P Global Ratings warned that bondholders face larger losses. In other news, a cargo of Russian oil headed to Ghana, suggesting that traders could be scouring the market for new buyers of Russian barrels.

No Way Out | A growing pile of copper and cobalt worth about $1.5 billion is stranded in the Democratic Republic of Congo, caught up in a standoff over the future of one of the world's biggest battery-metal mines. The resources are owned by China's CMOC Group, which is in a dispute with its Congolese state-owned partner over royalty payments. While exports were blocked in mid-July, CMOC's Tenke Fungurume mine continued operating, stockpiling the extra metal until it can resume shipments.

Africa Inc. | Airtel Africa plans to increase its capital expenditure by 14% to as much as $750 million this year as it moves to build its mobile-money business across the continent, Chief Executive Officer Segun Ogunsanya said in an interview. Meanwhile New York-listed IHS Holding is weighing a bid for Telkom's cellphone towers unit. Deliberations are focused on the structure of the potential deal, although the South African company remains open to other offers.

An Airtel Africa mobile money kiosk outside a convenience store in Mayumba, Gabon in October. Photographer: Guillem Sartorio/Bloomberg

Diamond Deals | In Botswana's Okavango Delta, an offshoot of the Lundin mining dynasty is extending its search for the biggest diamonds. Lucara Diamond is sinking an 800-meter shaft to ensure the kimberlite orebodies at its Karowe mine keep producing the 1,000-carat-plus gems that set it apart. The miner's plan, however, also involves changing the way diamonds are sold, indirectly posing a challenge to industry giant De Beers.

Political Update | South African Deputy President David Mabuza tendered his resignation to parliament ahead of Cyril Ramaphosa's anticipated cabinet reshuffle. In Kenya, President William Ruto said same-sex marriages won't be allowed, as he rebuked the East African nation's Supreme Court for a decision in favor of LGBTQ freedoms.

Data Watch

Kenya's annual inflation quickened for the first time in four months in February to 9.2% as prices of imports such as gasoline, wheat flour and cooking gas remained elevated.
South Africa's unemployment rate fell to 32.7% in the three months through December, its lowest level in almost two years.
Uganda's annual inflation rate dropped to 9.2% in February, compared with 10.4% in January.

A "cooking" summer holiday season in South Africa's Western Cape province, which includes the tourist mecca of Cape Town, spurred a surge in hiring. The coastal region created 167,000 jobs in the three months through December, a 7% increase from the previous quarter.

Coming Up

March 6 Nigeria fourth-quarter trade balance
March 7 South Africa fourth-quarter GDP, as well as gross and net reserves and central bank bond purchases for February, Mauritius inflation and gross reserves and Seychelles consumer prices, all for February
March 8 BER business confidence for the first quarter
March 9 South Africa fourth-quarter current account balance
March 10 Rwanda February inflation

Other nations are gaining ground "because they are taking African countries seriously," French President Emmanuel Macron said in comments about his nation's relationship with Africa at a briefing at the Elysee Palace ahead of his trip to the continent.

Tanzanian President Samia Suluhu Hassan, European Council President Charles Michel and Macron in Brussels, February 2022. Photographer: Valeria Mongelli/Bloomberg

Chinese businessman Lei Cheng was left in a bind over the weekend, announcing the temporary closing of his store in Kenya less than two months after it opened and drew crowds of customers. The suspension of shopping at China Square in the capital, Nairobi, follows Kenyan Trade Secretary Moses Kuria saying on Feb. 24 that he'd offered to buy out the store's lease because of its potential effect on local traders. The supermarket in a university-owned building about 11 miles from the central business district, has since its opening become popular for selling a wide range of relatively cheap household items. "We welcome Chinese investors to Kenya but as manufacturers not traders," Kuria said on his Twitter Account. If he takes over the lease, it will be handed to local city traders, the minister said. The incident trended on Twitter in Kenya, fueling debate on the balance between fair competition and protectionism.