Do they have two heads?

Why Ghana is one of the best African countries to conduct business, Kenya’s new port opens for business and SPACs in Africa.

Hello there,

Two weeks ago, an African founder tweeted about how they invested over half of the investment received from investors into crypto. After making over six times the amount invested in profit, he advised other founders to follow suit.

Well, it appears the ‘god’ of crypto (if there’s anything like that) heard that and responded. By Wednesday, bitcoin was down by 30%, Ethereum, the second-biggest coin, sank more than 40%, while joke token Dogecoin lost 45%. 

The coins are recovering but it’s a reminder that people should take advice with caution.

Do they have two heads?

Ghana has been on a winning streak this year, from receiving the COVAX vaccine first to being the choice for Twitter’s African Headquarters. Now it’s just announced that it’s been taken off the European Union anti-money laundering list and it’ll be the base for the manufacturing of vaccines in Africa.

Earlier this week, Ghana’s Ministry of Communications announced that its residents will have to re-register their SIM cards with Ghana Card, the country’s smart national ID.

Isn't that what Nigerians have been doing since December 2020?

Yeah. But the difference is in Nigeria, the government gave two weeks for about 200 million people to re-register their SIMs. While In Ghana, about 29 million people were given six months to perform the same exercise - with a month’s notice ahead of time.

Why this matters: These milestones and sound policies by the Ghanian government reinforces the notion that it’s one of the best African countries to conduct business. 

One more thing: There was a lot of backlash on Friday that the Nigerian government was going to require people to submit their International Mobile Equipment Identity (IMEI). It’s false, that information would be gotten from the network providers.

Kenya’s new port opens for business

First container ship to dock in the new Lamu Port- photo from LAPSSET

Kenya’s president, Uhuru Kenyatta, recently led a group of dignitaries in the country for the first official opening of the new sea transport corridor, Lamu port

A little detail: Although not yet completed, Lamu is being built by China Communications Construction Company (CCCC). The project was initially conceived in 1975 but never took off. It was later revived in 2008 and included in Kenya’s vision 2030 by the sitting president, Mwai Kibaki. 

Kenya’s Vision 2030: This is the country’s development program pegged to kickstart from 2008 and run through to 2030. It was set by President Mwai Kibaki to transform Kenya into a "newly industrializing, middle-income country providing a high quality of life to all its citizens by 2030 in a clean and secure environment.”

Similar projects: Lamu transport corridor is just one of the flagships of that vision. It was stipulated to comprise a road network, an oil pipeline, Oil refinery, International Airports, Port at Lamu, a resort. However Kenya also already has one deep-water port in Mombasa- Port Mombasa. The Lamu port is projected to cost $3 billion to complete over several years.

What this project means to Kenya

With Lamu port, the country hopes to attract large cargo and open a new transport corridor linking its vast northern region and neighboring nations to the sea. It is expected to have roads, rail and pipelines connecting the port to other regions like South Sudan and Addis Ababa.

While aiding economic development, it will offer transshipment services where large vessels bring in cargo for onward distribution by smaller ships. 

Who said you can’t eat your cake and have it?

In 2020, 50.3% of the total number of IPOs in the US stock market were issued by Special purpose acquisition companies (SPACs). In February 2021, African Gold Acquisition Corporation was the first African SPAC listed on the New York stock exchange. It raised US$360 million (a little over the $300m it initially planned to raise) ahead of its listing on the New York Stock Exchange.

Wait what are SPACs?

Think of it this way, a group of people form a company, raise some money while taking it public. The company’s mission in life is to help another private company to go public by acquiring it. Once the company is acquired, the initial company that bought it ceases to exist. 

As per Vox, SPACs are shell companies that go public with the express purpose of raising money to buy private companies — effectively bringing private companies public much faster than if they were to do a traditional IPO.

To be successful, a SPAC needs to merge with a private company within two years or return investors’ money. A share of a SPAC typically costs $10, and buyers are allowed to get their money back if they don’t like the eventual merger.

For Investors, it’s like the best of both worlds, they can invest in a shell company that they hope would make a good acquisition. If they don’t like the acquisition they ask for their money back, if the shell company fails to acquire any company within two years, they get their money back. No scamming involved here.

Have there been any African companies acquired by a SPAC?

Not yet. Tidjane Thiam’s $300 million SPAC company formed in January is on the lookout for African tech companies but hasn’t found any yet.


A possible explanation is that there just aren’t ‘SPAC worthy’ African companies. Some of the best-performing SPACs have returned as much as between 300 - 1,000% in returns to investors. A bit of an unrealistic expectation from many African companies.

Also, going public sounds appealing because it offers increased access to capital-raising opportunities and offers existing investors a way out, many African companies aren’t just yet ready to leave the comfort of staying private. Public companies face endless scrutiny. 

Jumia for example has to report its financial performance every three months and there’s the endless speculation of whether it’ll ever be profitable. 

Worth reading 📚

Quote 💭

Creativity is based on the belief that there’s no particular virtue in doing things the way they’ve always been done.

– Rudolf Flesch