HUSTLE & FLOW #6: Organizing the resistance to COVID-19, a roundup of rescue initiatives for African entrepreneurs

Dear colleagues and friends,

Last week saw the coronavirus-related deaths of two popular figures of the African media space: the iconic Cameroonian Afro-jazz legend Manu Dibango, who passed away at 86 in a French hospital, and 30-year-old Zimbabwean star TV journalist Zororo Makamba. Prevention measures also took a violent turn in Kenya, South Africa, and other parts of the continent as countries called on the police to impose lockdowns and curfews.

But despite the grim news, bright spots also emerged in the African fight against the virus, as wealthy individuals, startups, and governments came together to organize the resistance. Perhaps the most high profile example of this new kind of collaboration is the major donation of essential medical supplies by Chinese billionaire Jack Ma, founder of Alibaba, and the dispatch of these items free of charge throughout Africa by Ethiopian airlines.

In this edition of HUSTLE & FLOW, we will do a roundup to date of these rescue initiatives, especially those that can be leveraged by the Entertainment sector to limit the economic impact of the crisis. I don’t believe there’s any other comprehensive resource on this topic, so don’t hesitate to share this email with your network, and especially with the entrepreneurs in your portfolio if you are an investor.

We’ll also continue to look at how entrepreneurs can best protect their businesses and prepare themselves for a future that will offer different kinds of opportunities. Already, experts and commentators point to the urgency now for African countries to invest in their own value-added industries and supply chains. Not a new idea of course, but one that might finally have come of age as the continent realizes that it cannot count on China or anyone else for its strategic needs.

I always love to hear from you, so continue to email me your comments, questions, mailing list referrals and Zoom meeting requests at marie@restless.global. And remember that you can always visit www.restless.global/hustleflow (pw: hardouthereforapimp) to access previous editions of this newsletter. 

Happy reading to all,


Marie

 

GLOBAL RESCUE MEASURES

In the past few days, global finance and development aid institutions have gotten into formation to provide generous packages to help African countries deal with the impact of the COVID-19 pandemic. The World Bank and the International Monetary Fund have called on all official bilateral creditors to suspend debt payments from qualifying countries. Afreximbank has announced a $3-billion facility, named Pandemic Trade Impact Mitigation Facility (PATIMFA), while the African Development Bank (AfDB) also raised $3 billion through a record-breaking “Fight COVID-19” Social Bond. The United States will be providing $274 million in emergency health and humanitarian assistance to the most at-risk countries, including 19 in Africa. France has also hinted at a future economic rescue package for Africa. Regionally, the Central Bank of West African States has pledged FCFA 450 billion (about 700 million euros) to help the 8 countries of the West African Economic and Monetary Union (WAEMU / UEMOA in French). 

In Nigeria, in an unprecedented move the government and the country’s powerful private sector have come together to devise a concerted response to the crisis. President Buhari approved a total of N15 billion ($40 million) in financing for health initiatives, while Tony Elumelu’s United Bank for Africa (UBA) announced a donation of N5 billion ($13 million) and several wealthy members of the private sector contributed N1 billion ($2.7 million) each. The Central Bank of Nigeria, on behalf of the Bankers’ Committee and in partnership with the private sector led by Aliko Dangote Foundation and Access Bank, have come together to form the Nigerian Private Sector Coalition Against COVID-19. The Lagos State government has also partnered with Guaranty Trust Bank (GTB) to set up a new 110-bed isolation and treatment centre at the Mobolaji Johnson Arena (formerly Onikan Stadium). 

In South Africa, the country’ wealthiest families, the Motsepes, the Ruperts and the Oppenheimers have each pledged R1 billion ($57 million) to assist the government’s efforts, as well as small businesses and their employees affected by the coronavirus pandemic. And in Zimbabwe, billionaire Strive Masiyiwa is offering protective clothing, cash, life and health insurance and transport for nurses and doctors for the country’s health-care workers.

The above initiatives mostly seek to address the health emergency first. When it comes to support to the private sector, South Africa has announced various measures including a temporary Employee Relief Scheme, tax reductions, and cash or loan support for businesses worth a total of R3.5 billion ($200 million). Kenya followed suit with a raft of tax reductions, Ksh10 billion ($95 million) in cash transfers to the elderly, orphans and people living with disabilities, and the fast tracking of various payments to improve liquidity in the economy. Last night, Nigerian President Buhari announced a 3-months moratorium on various government-backed loans, including on loans from the Bank of Industry (BOI) that includes those to the creative industries.

More business support measures are likely to be on their way across the continent, and I will do my best to keep track of them here. Globally, over $14.5 billion in COVID-19 capital relief is newly available for entrepreneurs, as compiled by Duke University’s CASE program. However this great tool needs to be updated with African resources as they become available. Regarding the creative industries, Germany has put other countries to shame with its staggering $50 billion dedicated aid package. In Africa, support to the sector can only come from international developmental organizations, which will probably come out with their own schemes. In Kenya for example, creative industries financier HEVA Fund is asking creative practitioners to fill in a survey on the impact of the crisis on their business in order to inform future support measures.


INTERNET AND MOBILE

Meanwhile, everyone is hanging out on the internet. According to a report by First Figures, COVID-19 has already led to a 70% increase in internet use, and 12% in streaming globally, especially in China and Italy. In Africa, operators continue to cut prices to encourage usage, such as Orange Cameroon which reduced prices to its services and products and waved Orange Money charges last week, and South African data provider Rain, which accelerated the launch of its unlimited 4G data offering at R479 ($27.3) per month. In Kenya, Airtel is offering free internet access to the Longhorn e-learning site to allow students to continue studying despite the school closures.


TECH

The African tech community has reacted fast to the #COVID19InnovationChallenge call for solutions, especially in Nigeria where VC fund Ventures Platform pledged both financial and structural support to tech founders, developers, and enthusiasts who can use their skills to develop technologies that can help the government in the fight against COVID-19. Lifebank, a health startup that finds and delivers blood to patients has created a national register to track hospitals with working ventilators and respirators - it has only found 100 devices so far. Booking platform Hotels.ng has partnered with hotels to create isolation centers across the country. Genomics research startup 54gene has launched a $500,000 fund to boost local testing capacity for coronavirus. 

And as mentioned last week, the funding initiatives from innovation incubator CcHub and investment fund EquaLife Capital are still ongoing.

Going further than the immediate focus on health, technologist Moses Kemibaro provides an interesting point of view from Kenya, which I like to call “a country of early adopters”, on how the Corona-tech boom will impact local lifestyles. In particular, he notes the churches’ forced move to live streaming, the strengthening of the already hot on-demand logistics sector, and the growth of Direct 2 Consumer digital businesses. I see these trends as potentially very beneficial to the African Entertainment sector in the long term as the health emergency is forcing investment in distribution networks (both digital and physical through on-demand delivery) that were cruelly lacking, but also the adoption of new behaviors.


E-COMMERCE

Talking about new behaviors, e-commerce is already seeing a revenue boost worldwide, which experts say could represent an added $175 billion (5% increase) in 2020. In South Africa, according to investor Manuel Koser from Silvertree Holdings, online health shop Faithful to Nature has seen order volumes double in the last two weeks, PetHeaven has seen a huge increase in sales, and UCOOK has had record order volume on cook-at-home meal kits. Meanwhile, leading pan-African platform Jumia has announced that it will donate certified face masks to health ministries in Kenya, Ivory Coast, Morocco, Nigeria and Uganda, drawing on its supply networks outside Africa. The company has also offered African governments use of its last-mile delivery network for distribution of supplies to healthcare facilities and workers, and will reduce fees on its JumiaPay finance product to encourage digital payments over cash. As I said last week, this crisis is a big opportunity for African e-commerce platforms to establish themselves as an essential service in the mind of thousands, if not millions, of new customers.


BROADCAST

Also driven by increased demand from people stuck at home, many of them with children, broadcasters across the continent continue to adapt their offering. Francophone pay TV operator Canal+ has made its channels accessible for free across Africa until April 30th. Forced to pivot by the cancellation of all live sporting events, MultiChoice’s SuperSport will convert its normal line-up to thematic channels for the foreseeable future, showing sports documentaries and other sports-related content. It will also feature a Viewers’ Choice block where viewers’ social media suggestions on their favorite sporting moments will determine the content. Radio programming is also impacted: the various stations owned by the Kenyan Broadcasting Corporation (KBC) will start broadcasting school programs from Monday to Friday. I am making a bet here that African broadcasters are realizing the dearth of quality local kids and educational programming and will start investing more in this type of content in a post-corona world.

Following the lead of Netflix and the BBC, MultiChoice has announced a series of measures to support out-of-work media staff. The Pay TV leader has set aside R80 million ($4.5 million) to ensure that current productions are able to pay full salaries of cast, crew, and creatives for the months of March and April, and will guarantee the incomes of freelancers on its SuperSport productions. Considering that MultiChoice is the single largest producer of content in Africa, this should shield a considerable number of industry practitioners from immediate disaster. Through the MultiChoice Talent Factory, Multichoice’s new online learning portal will also support over 40,000 members of the industry to gain access to courses and online masterclasses during the confinement period.


MUSIC

Leading streaming platform Spotify has announced that it will match up to $10 million in donations to organizations supporting artists in need through its COVID-19 Music Relief project. Quite a few African artists make money through Spotify and might be eligible to access these funds. Spotify is also working to add a new feature to its Spotify for Artists platform that will enable artists to fundraise directly from fans, waiving its revenue share from Music talent marketplace SoundBetter, and offering extended free trials for educators on its audio recording platform Soundtrap.


FASHION

Vogue editor Anna Wintour and designer Tom Ford have launched a Coronavirus Relief Fund for those in the American fashion community who have been impacted by the COVID-19 pandemic. In Africa, the African Development Bank has established itself as the leader in the fashion space through its Fashionomics program, but Afreximbank, the British Council and others have also traditionally been quite active. We can hope that these institutions are currently at work on a dedicated rescue initiative for the fashion industry.

According to The Africa Report, in east Africa, where hundreds of millions of dollars have been invested in the garment industry, hundreds of thousands of people stand to lose their jobs as US and European orders for African garments have dried up. A coordinated response could include wages subsidies for workers, a subsidized training package to retain manufacturing capabilities, and a retooling of garment factories to produce garments for medical needs. The Kenyan government has already reached out to the fashion and textile sector to assess its capacity to make face masks and other protective gear.


VOD

South Africans are getting more options to watch premium content online. Amazon has announced it is making its kids content including series and movies available for free on its global streaming service, including in South Africa. MGM will also be launching its new sVOD (subscription on-demand) service for the South African market, which will be available as a standalone Micro Pass subscription and also be part of Vodacom’s Video Play Premium service. The offering will take advantage of MGM’s large film and TV catalogue including TV series like The Pink Panther, The Handmaid’s Tale, Teen Wolf, Stargate SG-1, and movies like The Hobbit and Legally Blonde


MOBILE VIDEO

Continuing our exploration of mobile video models adapted to Africa, here’s one that is screaming for a Nigerian adaptation: Snoop Dogg-backed app Cameo is having a moment, as its revenue surged 30% last week, and orders are up 83% since the beginning of March. Founded in 2017, the venture, which has raised more than $65 million, lets anyone remotely famous essentially sell virtual autographs. Cameo currently features 30,000-plus (mostly B-List) celebrities, who set a price for a personalized video they send out, with Cameo taking a 25% cut of each. Nigeria’s fame-obsessed society seems like fertile ground for such a service, but I can see it working in several other countries as well. Something to chew on if your tech/video/music business has suddenly ground to a halt.


ANIMATION

The Hollywood Reporter has a fascinating article on how the US animation industry has adapted to remote working without missing a beat, with series like Fox’s The Simpsons and Bob's Burgers, Netflix's Hoops, Apple's Central Park, and Warner Bros.’s Animaniacs, and Gremlins: Secrets of the Mogwai still in production and pumping out new episodes on schedule. 

I hope this can inspire African animators, who are already used to learning and working at home, to persevere in their craft. To finish on a hopeful note, it’s also worth noting that in January, Cartoon Network Africa’s Shesha Fest, which showcased several shorts wholly produced in Africa such as Garbage Boy & TrashcanMajitu and Intergalactic Ice Cream, outperformed some of Cartoon Network and Boomerang’s favorite shows in the same month. Nine months from now, on top of a baby boom and a divorce boom, will we see an animated content boom?