Rising from the Ashes 📈
Ethiopia Airlines’ path to profitability in 2020, Ghana’s economy is recovering and MultiChoice increases stake in BetKing
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It’s been a week since Twitter has been banned in Nigeria. Avid Twitter users have turned to VPNs and gotten a feel of what it's like surfing the internet in other countries. While others have simply turned to other social media platforms. How long will this last?
Ethiopia Airlines’ path to profitability
2020 was a rough year for airlines. Lockdown restrictions meant fewer travels and this meant less revenue for airlines.
Last year, only three airlines notably made a profit: Korean Air, Asiana and Ethiopian Airlines
How did Ethiopian Airlines do this?
Converting from Passenger to Cargo.
While most airlines on the continent suffered badly during the pandemic, Ethiopian Airlines kept flying by converting many of its planes to carry cargo. The airline, which has 132 aircraft, including 12 dedicated cargo planes, refitted 25 more passenger planes to cargo planes. As a result of the skyrocketing demand, the airline doubled its cargo revenue and its cargo route expanded to 74 destinations.
What’s it been transporting?
It came in handy in transporting Norway’s fish exports and Kenya’s flower exports. It also played a huge role in transporting COVID Vaccines.
Vaccines?
Yes! As per FT, “As of June 2021, Ethiopian Airlines has carried more than 27m vaccines to 24 countries. It has a 54,000 sqm freezer facility in Addis Ababa for Covid-19 vaccines that can keep the temperature at -25C, and is developing a facility to make enough ice to keep vaccines ultra-cold when needed.”
Big Picture: Ethiopian Airlines’ revenue from its passenger business fell by $1bn in 2020. But, overall, the group made $220m in profit last year thanks to cargo, maintenance and other businesses. It did this with no government bailout request, no layoffs and no salary reductions. 👏
Ghana’s economy is recovering fast
Ghanaians seem to be eating good as the country’s inflation rate continues to drop. Its annual inflation figures for May 2021 declined to 7.5% from 8.5% in the previous month. The inflation rate dropped for a third straight month, falling below the midpoint target range of 6% - 10% set by the Bank of Ghana.
Remind me, what’s inflation?
Inflation is the decline of purchasing power of a given currency over time. When inflation occurs people need more money to buy the same set of goods and services that could have been bought at a less price a while back.
Inflation is often caused because there’s too much money in the economy or the cost of producing goods and services are too high, so it leads to an increase in the price of goods and services.
Back to the story, What’s the cause of the decline of inflation?
Food prices. Food prices have been declining as it’s a major driver of inflation since everyone has to eat. In Africa, everything competes with Food. So when food prices reduce, there’s more money for other goods and services.
Last month, Ghana’s economic policy team reduced its monetary policy rate from 14.5% to 13.5% - the minimum interest rate at which banks can lend money to members of the public. This meant that more companies and people were incentivized to get loans to kickstart, revive or grow their businesses.
Zoom out: The pandemic affected every country but Ghana's efforts in driving down inflation are commendable. Its inflation rate is less than half of its neighbouring country, Nigeria.
MultiChoice increases stake in BetKing
South African pay-TV operator MultiChoice plans to increase its shareholding in online gambling company, BetKing, to 49% in a $281.5 million deal. This is coming seven months after taking up an initial 20% stake in BetKing.
According to BetKing’s annual report for the financial year ended December 2020, its revenue grew by 42% to $77.9 million, from $54.7 million in the previous year. A massive growth
The rise of BetKing: While there are many other Betting companies in Africa, BetKing’s rise amidst many other factors can be attributed to it filling the gap left by SportPesa, a betting company that withdrew from the Kenyan market in August 2019, due to regulatory issues.
Why it matters: Multichoice’s additional investment in BetKing makes sense when you consider the fact that almost ₦2 billion ($4 million) is spent on sports betting daily in Nigeria, equivalent to nearly ₦730 billion in a year. Currently, Africa accounts for only 2% of global sports betting revenue, a hint that there’s room for growth.
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We need to redefine "hard work" to include "hard thinking."
The person who outsmarts you is outworking you. The person who finds shortcuts is outworking you. The person with a better strategy is outworking you.
Usually, the hardest work is thinking of a better way to do it.
— James Clear