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The Impact of COVID-19 on Finance and Investment in Africa

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equities Investment Strategy

By Morne van der Merwe and Wildu du Plessis

The Coronavirus (COVID-19) has resulted in mass production shutdowns and supply chain disruptions due to port closures in China, causing global ripple effects across all economic sectors in a rare “twin supply-demand shock”.

With South Africa having just reported its first cases of COVID-19, Africa is beginning to feel its full impact and plans to control and manage the humanitarian challenges of the virus are underway across the continent.

Economically, the effects have already been felt – demand for Africa’s raw materials and commodities in China has declined and Africa’s access to industrial components and manufactured goods from the region has been hampered. This is causing further uncertainty in a continent already grappling with widespread geopolitical and economic instability.

The number of cases is reportedly slowing down in China, increasing expectations that it will eventually reach a plateau and be brought under control. However, in early March the Organisation for Economic Co-operation and Development noted that “annual global GDP growth is projected to drop to 2.4% in 2020 as a whole, from an already weak 2.9% in 2019, with growth possibly even being negative in the first quarter of 2020”, with global markets plunging in the days thereafter.

Although Chinese growth will fall in the short term, it is expected to rebound quickly, some suggesting this could even happen in the second quarter of 2020 when the virus will hopefully be contained. In the meantime, central banks are implementing measures to mitigate the effects of the virus on the economy, cutting interest rates and injecting liquidity into the banking systems in some countries.

In early March, the World Bank announced it would commit $12 billion in aid to developing countries to help them to deal with the impact of the virus and limit its spread.

The bank said it would prioritise the most at-risk countries. The World Bank also introduced a pandemic bond in 2017, which, as part of the Pandemic Emergency Finance Facility intended to provide money to help developing countries in the event of a pandemic reaching certain thresholds and conditions. So far, these criteria have not been met and the bond has not paid out.

Uncertainty regarding the spread of COVID-19 is high and its impact on Africa is expected to be serious, given the continent’s exposure to China. So far, cases have been reported in Algeria, Cameroon, Egypt, Morocco, Nigeria, Senegal, South Africa, Togo and Tunisia. If there is a widespread outbreak of COVID-19 in Africa it could overwhelm already weak healthcare systems in the region.

According to ratings agency, Fitch, the Coronavirus outbreak will have a downside risk for short term growth for sub-Saharan African growth, particularly in Ghana, Angola, Congo, Equatorial Guinea, Zambia, South Africa, Gabon and Nigeria – all countries that export large amounts of commodities to China.

Impact on Merger & Acquisition activity

Africa has come through a period of prolonged political and economic uncertainty, but signs of future economic improvement, were pointing to a modest increase in M&A activity in Africa over the next few years. COVID-19 is likely to hamper this predicted upturn and result in increased short-term uncertainty in terms of how it will affect investment opportunities in Africa, the continent’s productivity and consumer demand.

There are other transactional risks. If the virus spreads rapidly in Africa, countries might have to introduce similar measures to those taken in China where areas were locked down, factories were shut, quarantines enforced and travel bans imposed.

As such, these events could potentially be significant enough to trigger a change to the terms of an M&A transaction currently in progress, and deals could be delayed as a result. COVID-19 conditions could also cause delays to M&A due diligence, necessary for a transaction to progress to finalisation. Further, the virus could qualify as a force majeure event causing more delays or terminations.

We are hopeful the rebound from COVID-19 will coincide with the implementation of the African Continental Free Trade Area (AfCFTA) in July 2020, which should provide an additional boost to deal activity in Africa the coming years. The AfCFTA is the first continent-wide African trade agreement, with the potential to facilitate and harmonise trade and infrastructure development in Africa. This boost to the investment environment will be welcome after the additional uncertainty of dealing with COVID-19 impacts.

Impact on Capital raising and IPOs

African issuers have been waiting several years for an improvement to political and economic instability in Africa before going ahead with any planned capital raising. As a case in point, Baker McKenzie’s Global Transactions Forecast showed that there were no IPOs in South Africa in 2019.

Also eroding investor confidence were the numerous global trade tensions, with capital raisers watching for signs of resolution before launching IPOs. With Africa looking to benefit from new global and regional trade agreements, the forecasts had been pointing to a potential recovery in capital markets in the next few years, but this might be delayed as the uncertainty around the impact of COVID-19 in Africa reaches its peak.

IPOs in the region are therefore expected to decline, not directly because of the virus as is the case with equities, but because COVID-19 will have an effect on the underlying business case for IPO companies, which will impact on their ability to raise capital

Impact on financial institutions

Global financial institutions are currently assessing the impact of COVID-19 and reacting to its economic impact, ensuring they are able to adjust to new and unprecedented circumstances brought about by the virus. It remains to be seen whether the huge global economic downturn caused by decreased output in China will impact on African lenders and compel financial institutions on the continent to be more lenient towards borrowers and cut them some slack.

Impact on Local Markets

Since global economic growth is a key driver of commodity prices, local prices have been driven down by the virus’s global impact. The uncertainty of the impact of COVID-19 on local markets is expected to lead to increased risk aversion from investors who are waiting to see its potential impact in Africa. On the plus side, a temporary fall in share prices provides opportunities for prudent investors.

Impact of the Insurance sector

Both businesses and individuals in Africa might find they are uninsured for any COVID-19 impacts as losses related to an epidemic or pandemic would usually not be covered in insurance policies, irrespective of whether the insurance covers business interruption, property damage, product losses or personal life and non-life insurance or even travel insurance.

As COVID-19 is a new disease, it would not have been specifically listed in existing insurance contracts. Many business interruption policies will include clauses for extended damage, but it is unlikely that these extensions will provide coverage under the current circumstances. As such, the wording of policies should be carefully checked.

Some insurance companies who provide cancelled event coverage that specifically includes references to epidemics or pandemics could be impacted. Reuters reported that financial services firm Jefferies estimated the insured cost of the Tokyo Olympics to be around USD 2 billion – including television rights, hospitality and sponsorship.

Morne van der Merwe, Managing Partner, and Wildu du Plessis, Head of Africa, Baker McKenzie Johannesburg

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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QNET’s Global Reach in 100+ Countries: What International Access Means for Local Distributors

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QNET

Global scale means market access and international supply chains. For individual distributors in direct selling, it can shape everything from product availability to income stability and long-term opportunity.

QNET, the multinational wellness and lifestyle direct selling company, positions its business model around that idea: connecting locally based independent distributors to an international operating platform. With activity spanning more than 100 countries, the company sits within a direct selling industry that, according to the World Federation of Direct Selling Associations (WFDSA), has stabilized after several relatively volatile post-pandemic years.

Global Reach Within a Stabilizing Industry

The WFDSA’s latest global report estimates worldwide direct selling retail sales at roughly $163.9 billion in 2024, essentially flat year over year. That flat performance, however, masks gradual improvement beneath the surface. Nearly half of reporting markets showed growth in 2024, and average market growth rates rebounded to positive territory.

The report estimates more than 104 million independent sales representatives globally in 2024, a figure that has remained largely stable year over year.

This stabilization sets a backdrop for companies like QNET. A global footprint is no longer about rapid expansion alone; it is increasingly tied to resilience: operating across regions with different economic cycles, consumer behaviors, and growth trajectories.

For distributors, this matters because opportunities extend beyond individual effort. They are often shaped by the health of the company’s broader channel and product reach.

A Platform Designed for Distributed Entrepreneurship

QNET’s model centers on local execution supported by centralized infrastructure. Products—ranging from nutritional supplements and wellness devices to home and lifestyle solutions—are sold through the company’s proprietary e-commerce platform. Independent distributors do not manage warehouses, shipment logistics, or customer service systems.

As Ramya Chandrasekaran, who heads communications at QNET, explained in a recent interview, the company views direct selling as a form of accessible “micro-entrepreneurship.” The idea is to reduce the operational burden typically associated with starting a business, allowing distributors to focus on product education, customer relationships, and market development.

Why Global Scale Changes the Distributor Equation

One practical benefit of international reach is product continuity. WFDSA data shows that wellness products account for roughly 29% of global direct selling sales, making it the largest category worldwide. In the Asia-Pacific region, the largest direct selling region by sales, wellness represents more than 40% of total category share.

QNET’s emphasis on wellness and lifestyle products places distributors in line with the strongest demand segments globally. Instead of relying on narrow local trends, distributors operate within product categories that have shown consistent global interest.

International scale also supports consistency in training, compensation structures, and digital tools. Distributors in different countries access identical back-end systems, tracking referrals, commissions, and orders through the same platform. This standardization reduces friction and uncertainty, particularly for individuals operating in markets where informal commerce is common.

Workforce Shifts

The WFDSA’s report highlights notable shifts in the global direct selling workforce. Women continue to make up more than 70% of participants worldwide, and representation among individuals aged 35 to 54 remains the largest cohort.

Independent Distributors increasingly value flexibility, long-term viability, and support systems that allow them to operate sustainably rather than aggressively scale. QNET’s emphasis on digital access, centralized operations, and gradual business building reflects those priorities.

For many participants, especially those balancing work with caregiving or other responsibilities, direct selling infrastructure offers a way to stay engaged at their own pace.

Training, Exposure, and Cross-Market Learning

QNET’s international conventions and training programs connect distributors across regions, creating informal networks for peer learning. Events that draw participants from dozens of countries expose distributors to varied approaches to sales, customer engagement, and market adaptation.

This mirrors one of WFDSA’s broader conclusions: direct selling increasingly functions as a global learning ecosystem, with companies providing tools and education that help individuals navigate uncertain economic conditions.

For distributors, exposure to cross-border experiences can recalibrate expectations, reinforcing that success often comes from steady engagement rather than rapid recruitment or short-term activity.

International Access, Interpreted Locally

Despite its global scale, QNET’s business ultimately plays out in local communities. Distributors adapt messaging around wellness, home quality, and lifestyle enhancement to cultural norms and household priorities. The international platform provides reach and structure, but relevance is built locally.

That balance, global systems supporting local relationships, defines much of modern direct selling. The WFDSA describes the industry not as a single growth story, but as a framework that can scale proportionally with economic conditions across regions.

For QNET distributors, international presence does not guarantee income or uniform outcomes. What it offers is access: to resilient product categories, standardized systems, training resources, and a global marketplace that extends beyond any single region. For local distributors navigating today’s uncertain global economic environment, that is an important foundation to maintain.

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FCCPC Unseals Ikeja Electric Headquarters

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Ikeja Electric

By Adedapo Adesanya

The Federal Competition and Consumer Protection Commission (FCCPC) has unsealed the headquarters of Ikeja Electric Plc in the Lagos State capital after a week under lock and key.

According to a statement on Friday, the electricity distribution company committed to a binding undertaking to comply with the remedial process following consumer rights violations.

The statement signed by Mr Ondaje Ijagwu, Director of Corporate Affairs at the commission, Ikeja Electric undertook to resolve all consumer complaints referred to it by the FCCPC within agreed timelines

The headquarters was earlier sealed on December 11, 2025, because Ikeja Electric allegedly failed to comply with a directive by the Nigerian Electricity Regulatory Commission (NERC) to unbundle a Maximum Demand account into 20 individual accounts for a customer who had been without power for over two and half years.

The FCCPC noted that following the resolution, any breach of the undertaking would expose it to renewed and escalated enforcement action under the Federal Competition and Consumer Protection Act.

Reacting, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Mr Tunji Bello, said the Commission’s intervention was necessary to enforce the provisions of the FCCPA (2018).

“Our responsibility is to ensure that consumers are treated fairly and that service providers comply with lawful decisions and directives. Enforcement is not an end in itself. Where compliance is achieved and credible commitments are made, the Commission will respond appropriately,” he said.

Clarifying further, Mr Bello said the outcome reflects the commission’s balanced approach to regulation.

“We intervene decisively where consumer harm persists, and we de-escalate where enforceable compliance is secured. What remains constant is our duty to protect consumers and uphold regulatory accountability,” he said.

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All On’s Clean Energy Access Transforms Over One Million Lives

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All On

By Modupe Gbadeyanka

The decision by a leading impact investment company focused on expanding clean energy access, All On, to support over 50 clean energy businesses and provide grants and technical assistance to more than 80 enterprises in Nigeria is already yielding positive results.

This is because the organisation’s Impact Evaluation Report indicated that more than one million lives have been transformed through clean energy access.

The report covered from 2018 t0 2024 and it was discovered that the interventions of All On enabled the connection of over 230,000 households, businesses, and public facilities to reliable energy solutions, while strengthening the operational capacity of energy providers and improving affordability and service reliability for end users.

Prior to the commencement of All On’s operations in 2016, nearly half of Nigeria’s population lacked access to electricity, and the sector faced an estimated 92 per cent annual funding gap.

In response, the group adopted a bold, risk-tolerant strategy—deploying catalytic capital, innovative financing instruments, and ecosystem-building initiatives to unlock private sector participation and drive progress toward universal energy access.

Central to these achievements is All On’s holistic support model, which combines rigorous, tailored due diligence, deep sector expertise, and active ecosystem engagement.

This approach has positioned All On as a trusted partner capable of delivering both commercial viability and systemic impact.

Flagship initiatives such as the Demand Aggregation for Renewable Technology (DART) programme have further amplified results by reducing procurement costs for supported businesses by up to 50 per cent, enabling developers to scale faster and pass cost savings on to consumers due to access to reliable, affordable, and sustainable energy solutions.

In the report, it was revealed that half of supported households reported improved air quality, enhanced safety, and reduced noise pollution, contributing to better health outcomes and improved quality of life, alongside measurable environmental benefits.

“This report confirms that our approach is delivering real results. By combining patient capital, technical assistance, and ecosystem support, we are enabling scalable and sustainable energy solutions for Nigeria’s unserved and underserved communities,” the chief executive of All On, Ms Caroline Eboumbou.

The company plans plans to scale proven models, strengthen local capacity, and expand its reach—particularly in underserved regions such as the Niger Delta.

“While the progress to date is encouraging, our work is far from done. As we look toward 2030, we remain committed to deepening our impact and creating even more meaningful connections across Nigeria,” Ms Eboumbou added.

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