🔅 Global warming will reduce Africa's growth by two thirds
Today’s Issue: Jumia heads step down, you can drill for Seychelles’ oil but there’s a twist, and Senegal has a (very expensive) plan to combat inflation… ☕
Markets
🔻 Nigerian SE: 43,808.25 (-0.02%)
🔺 Johannesburg SE: 73,098.91 (+0.38%)
— Ghana SE: 2,450.64 (0.00%)
🔺 Nairobi SE: 127.88 (+0.02%)
🔺 US S&P 500: 3,999.25 (+1.06%)
🔺 Shanghai Composite: 3,134.08 (+1.64%)
*Data accurate as of close of markets across the continent
Ghana and Tanzania: Ghana's inflation rate rose to 40.4% in October, up from 39.3% in September. This increase was higher than expected and puts pressure on the central bank to continue raising interest rates. Ghana's economy is already struggling. Meanwhile, Tanzania's economic growth slowed to 4.8% in the second quarter, while inflation rose to 4.9%.
Global Markets: Binance CEO Changpeng Zhao has called for new regulations in the wake of the bankruptcy of the cryptocurrency exchange FTX. The events have wiped billions off the market value of cryptocurrencies. Zhao also announced plans for a recovery fund to help struggling crypto businesses.
CLIMATE CHANGE
Global warming to reduce Africa's growth by two thirds
What is Happening?
Global warming could have a devastating effect on Africa's economy. A study from Christian Aid found that current climate policies will likely result in temperatures exceeding the pre-industrial average by 2.7C.
This would lead to a 20% reduction in African growth rates by 2050, and a 64% reduction by 2100. Even a 1.5C rise in temperatures would reduce growth rates by 34% by the end of the century. These findings highlight the need for significant investment in climate adaptation in order to protect Africa's economy from the damaging effects of climate change.
Why Does it Matter?
The impact of climate change is already being felt in Africa, and the growth rate is estimated to have been reduced by over 13% between 1991 and 2010 due to warming temperatures.
Economic growth is essential for lifting countries out of poverty and improving living standards, so the potential for such drastic reductions in growth rates is cause for serious concern. The study suggests that under their modelled scenario, economic growth in Nigeria would decline by 75%. The study
Without adequate investment in climate adaptation, Africa's economy could be severely damaged, with far-reaching consequences for the continent's people.
ACROSS THE CONTINENT
Other Headlines
🇸🇨 Seychelles has signed an agreement with a Canadian firm to explore oil but plans to use its eventual reserves as leverage to get rich countries to help finance its transition to renewable energy. Rising sea levels and climate change threaten the archipelago nation, and oil would give it the bargaining power they need to get assistance. Seychelles is also working on a project to map the seagrass in the Indian Ocean to protect this vital carbon sink.
🛒 Jumia, an Africa-focused online retailer, has seen its share of losses since going public in New York, and co-heads Sacha Poignonnec and Jeremy Hodara have both stepped down from their positions. Jumia has faced many challenges since its inception, including a lack of formal addresses and city mapping. With the departure of Poignonnec and Hodara, Jumia will be looking to new leadership to help turn the company around and return it to profitability.
🇸🇳 To ease the pressure on households that are struggling with inflation, Senegal has unveiled a plan that will cost the government $760 million. The measures will include price caps on fuel and essential goods and reductions on school fees and rents. Some believe that these measures may signal that President Macky Sall will be running for a third term.
AROUND THE WORLD
We are now eight billion people on Earth
What Happened?
The world's population is growing at an unprecedented rate and is projected to have reached 8 billion people by 15 November 2022.
The growth has been unprecedented in the last 100 years, where Earth's population doubled from 2 billion in 1925 to 4 billion in 1974, and again to 8 billion today.
We are now so many because of increased human lifespans thanks to technology and medicine, and because of high levels of fertility in some countries.
Why it Matters:
The overall growth rate is slowing, and the world population is expected to peak in the 2080s at 10.4 billion people.
This will have major negative implications for shrinking societies, which will have fewer productive members of society, while at the same time more elders to take care of.
But other countries, including many in Africa, will see tremendous increases in their population, which conversely makes it harder for societies to provide to the newer members of society — think of schools, health facilities, etc. Just the other day we wrote about Tanzania, and its president’s concerns about the ballooning population.
FOOD FOR THOUGHT
Proverb of the Day
“Even as the archer loves the arrow that flies, so too he loves the bow that remains constant in his hands.”
— Nigerian Proverb.
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