Jonathan unfolds economic diversification plan
July 11, 2012 | 0 Comments
By Roseline Okere*
Lays foundation stone of Procter and Gambles’ N43bn plant
THE Federal Government yesterday, unveiled plans to develop the country as an outsourcing destination with the aim of enhancing Gross Domestic Product (GDP), domestic industrialisation and structural diversification of the economy.
President Goodluck Jonathan made this known at the foundation stone laying ceremony for the construction of a N43 billion Procter and Gamble (P&G) baby-care factory in Agbara, Ogun State.
The President, at the occasion, renewed government’s commitment to tackling the challenges militating against the growth of the country’s industrial sector.
Jonathan, who was represented by the Minister of Trade and Investment, Dr. Olusegun Aganga, said that government has opened up the key sectors of the economy to enable the participation of more indigenous and foreign investors, especially in areas where the country has competitive and comparative advantage.
He stated: “We are working on reducing bureaucratic obstacles to private sector investment and developing a strong public and private sector partnership with government as the enabler.
“The government has invested heavily in education, health, technology and infrastructure and also promoted entrepreneurship and competition within the ambit of fair, equitable and enforceable laws.
“We have opened up the key sectors of the economy to participation by more indigenous and foreign investors, especially in areas where we have competitive and comparative advantage. This is to ensure that such investments provide good returns on investment, maximum impact on the local economy through job creation, value chain enhancement and capacity development.
“It is also to develop the country as an outsourcing destination with the aim of enhancing GDP growth, domestic industrialisation and structural diversification of the economy. In this regard, we have kicked off a National Industrial Revolution Plan, working painstakingly with all stakeholders in the public and private sectors to ensure success. For the first time, we are linking industries where we have competitive and comparative advantage to innovation and skills development”.
Jonathan disclosed that the One-Stop Investment Centre (OSIC) in the Nigerian Investment Promotion Commission (NIPC) has been strengthened to achieve efficient coordination of investment facilitation between relevant government agencies and achieve a 48-hour response target for all enquiries. Businesses can also be registered within 24 hours now, he assured.
President of P&G), Laurent Philippe, stated that the company, which has been in the country for 19 years now remains committed to becoming the leading Fast Moving Commercial Goods (FMCG,) social and economic investor in the country by growing Nigeria’s economy in synergy with the President’s Transformation Agenda.
He disclosed that P&G employs over 3,000 direct and indirect employees through its offices, distributors and suppliers and has also created over 200 small to medium enterprises (SME’s) with cumulative investments of over $100 million.
He noted that the $250 million baby care plant, which is planned to occupy a land area of 16 hectares with additional 24 hectares for expansion will on completion provide 250 jobs directly and will create 300 SMEs.
“P&G has established significant investment foot-prints in Nigeria in its 20 years of operations in the country. Nigeria remains a focus area for P&G and our investments continue contributing to strong inclusive economic growth,” he said.
*Courtesy of http:www.ngrguardiannews.com
Africa Rising: when will the West join Africa?
July 6, 2012 | 0 Comments
By Eliot Pence & Bright Simons*
Discussions about Africa’s evolution tend to measure the continent’s ‘gradual’ assimilation into the global mainstream. This may have been understandable in the mid-1980s when by every indicator African economies were seen as hopelessly distorted and needed to be salvaged with what became known as ‘structural adjustment’. But African countries today appear more aligned with the Washington Consensus and Globalization’s ‘best practices’ than the West. On many of the macroeconomic indicators
used to judge conformity with the mainstream – debt to GDP ratio, current account balance, fiscal balance, inflation – Africa is situated closer to the mainstream, while key OECD countries drift away. Data tracking other kinds of flows – in cultural, innovation, and labour flows – point to a continent becoming a key player in the Global South – not just assimilating into the global mainstream, but helping to shape it.
- Population flows – Stories of African migrants struggling to find a route to Europe contrast with recent reports that Europeans are struggling to find working permits in Africa. According to NYU’s Development Research Institute, between 2006 and 2009 the number of visas issued for Portuguese entering Angola increased from 156 to 23,000. In 2012, there were nearly 100,000 Portuguese living in Angola, more than triple the number of Angolans living in Portugal. Spaniards, too, have fled high unemployment looking for work in Algeria, where many Spanish companies have relocated. No longer seeing the US as their best opportunity for professional development, waves of Nigerian-Americans (the most educated Diaspora group in the country), vie for top spots in the new Lagos offices of JPMorgan, McKinsey and Blackrock.
- Innovation and information flows – Reverse innovation, a concept describing inventions that are adopted first in the developing world, is creeping into western corporate board rooms (and publishing houses). Plans to develop a ‘Silicon Savannah‘ in East Africa build on widely successful innovations emerging out of the banking and telecom sectors and now being rolled out in US and European markets. Images of Joseph Conrad’s Dark Continent are receding as the broadband industry turns to Africa for global growth and sustained demand. African policy innovations, too, offer lessons to Europe’s troubled economic union. A recent review of the health of the West African Economic Union by the IMF suggested Europe might learn something from how Africa’s economic unions have faired.
- Financial flows – Though largely still the recipient of foreign direct investment, Africa is gobbling up distressed assets in the West. Gatwick, the United Kingdom’s second largest airport, was recently purchased by a Nigerian and Africa’s richest woman, Isabel dos Santos (daughter of Angolan President Jose Eduardo dos Santos), is the new majority shareholder in Portugal’s leading pay-TV and Internet provider Zon Multimedia. More traditional financial flows, such as remittances from Africans working abroad, are also changing. Already larger than official development assistance by a substantial margin, reports suggest remittances are now flowing to Europe from Africa. Underscoring these trends is reduced dependency on multilaterals (China alone lends more to Africa than the World Bank) and research by Standard Bank estimates that BRIC-Africa trade increased from $20bn to more than $250bn in the past 10 years.
- Cultural flows – A Financial Times editorial recently warned that the West would lose out on Africa’s ‘wave of creativity’ if it doesn’t reorient itself. To be sure, Africa’s cultural place in the larger world has always been evident, even if its recent recognition suggests it hasn’t. Nollywood, Nigeria’s answer to Hollywood, is a half billion dollar a year business and, according to UNESCO, puts out twice as many movies as Hollywood. Its growth also belies assumptions about the importance of intellectual property rights — something it largely exists without — in development. The continent’s cinematic creativity is paralleled by the emergence of its fashion industry, which is increasing in vogue — literally; an entire issue of the magazine was devoted to the continent recently. African-inspired cuisine also stands at the cusp. The “African Food Inevitability Thesis,” a phrase coined by a recent Wall St. Journal article, called Africa the foodies’ frontier and predicted a thriving commercial future for continental cuisine.
Even as a major western newspaper openly wonders how Africa will ‘join the larger world on its own terms,’ across virtually all indicators, evidence suggests it’s doing so largely on its own terms. If the West is stuck in low-growth and political paralysis, while Africa enjoys an economic renaissance, a more pressing question for Western observers might be: When will the West join Africa?
*Eliot Pence is a director at the Whitaker Group, a corporate strategy firm focused on sub-Saharan Africa. Bright Simons is the founder of the mPedigree Network (www.mPedigree.Net), and a Senior Fellow at think tank, IMANI.Previously published in African Arguments
How mobile puts business at the tip of Africa’s fingers
July 5, 2012 | 0 Comments
By Meredith Baker BBC News, Johannesburg
Across the African continent, internet penetration is low, computers are often too expensive to purchase, and online business transactions can be logistically complicated to execute.
But the surge in mobile phone use – there are currently 695 million mobile phone subscribers in Africa – has given Africans a simple and pervasive means of sharing
information and conducting business.
In recent years, a few innovative African companies have found ways to harness the e-potential of mobile commerce and information sharing, changing the way in which Africans communicate and conduct business
SlimTrader, founded by Nigerian-American Femi Akinde, is an e-commerce firm that is meant to ease the exchange of goods and widen the online markets for Africans.
Mr Akinde and the SlimTrader team created Mobiashara, a mobile technology that allows users to search for and purchase products via text message.
This technology provides retailer’s information and inventory, and also partners with mobile payment providers such as M-PESA and MTN so someone can make a purchase with a press of a button on their mobile device.
With partners such as Aero Airlines, SlimTrader even facilitates once complicated transactions such as buying plane tickets.
Umuntu Media is another African-based host website that caters to the mobile world. Umuntu was founded only one and a half years ago by Johan Nel, a native of Namibia.
The idea of Umuntu, Mr Nel explains, is to “close the local content gap, to provide users with information that is useful to them.”
Umuntu provides local news, job listings, and directories specific to each country and region in which it operates.
After only 18 months of operation, Umuntu has portals in nine countries, and its Namibia portal, iNamibia, is already the largest local website in Namibia.
After Umuntu took off in web and mobile form, Mr Nel had a vision to use it as a springboard to further tap into mobile e-commerce with the creation of the mobile site, Mimiboard, which has been live for a month.
Mimiboard (‘mimi’ means ‘I’ in Swahili) is Mr Nel’s brainchild to deliver hyper-local content in the form of a traditional notice board.
First, a mimiboard is created for a specific area. People in each community can post a notice to Mimiboard about wanting to buy or sell something, and then someone else can purchase the service posted through mimiboard.
“For example,” Mr Nel explains, “a fisherman in Mombasa can post about his catch of the day to mimiboard, then other users in the area can go buy the fish.”
It uses the same technology that radio and TV stations use to feed live streams of texts from listeners and viewers and can be accessed through text, android phones, and online.
Not only is mimiboard linked to the Umuntu sites of each country, but students from four big universities in Kenya have already started using Mimiboard as a platform to buy and sell textbooks – and a university dean in Canada has also inquired about using the product.
Mimiboard is creating a space for local mobile notices while also creating new ways for users to earn money.
The Mimiboard team has created its own currency, mimibucks, which incentivizes mobile transactions for users.
In Mr Nel’s words: “If someone wants to sell their car through a specific mimiboard, the person who created that mimiboard will receive a micropayment for the transaction.”
He anticipates that Mimiboard will have a million users in the next ten months with the help of mobile bank and mobile advertising collaborations.
One such collaboration of Umuntu/Mimiboard is the relationship the company has with Primedia Online, which represents Umuntu in the digital ad business.
Primedia Online supplies tailored news content in portals across the southern continent, in addition to providing technology and ad business to local publishers wanting to tap into the mobile market.
Primedia business development manager Susan Hansford explains that advertising on mobile phones is more competitive now amongst companies.
“E-commerce shouldn’t be in desktop form for Africa, I think the focused efforts on the mobile side of e-commerce will change the way business is done in this continent,” she says.
“It should be noted however that the mobile demographic is a little different than e-commerce on computers, which would be more middle and upper class.”
The mobile demographic is expanded to consist of people in small villages, and so it wouldn’t make financial sense for an advertiser of high-priced consumer goods to advertise to this demographic.
Ms Hansford notes that the mobile environments in Africa are better suited to financial services, citing cheap funeral insurance and student loans as some of the top mobile advertisers.
Although problems arise in the mobile e-commerce world such as product delivery, Africa has made great strides in conducting business online and on handhelds.
Companies like Umuntu and SlimTrader have seen the opportunity for Africa on mobiles, an opportunity unique to Africa because of the importance of business at the micro-level, and the lack of other forms of technology.
As Mr Nel puts it: “This type of technology we are working to develop is one that we hope will solve African problems while putting Africa on the map for innovative solutions.”
*Courtesy of BBC Africa
Kenya cancels Iran oil imports over sanctions threat
July 5, 2012 | 0 Comments
Kenya has cancelled plans to import crude oil from Iran following threats of sanctions, an official at the Kenyan energy ministry has said.
The outline deal signed last month was to import about 4m tonnes of oil from the Iranian National Oil Company.
But the US embassy in Nairobi had warned it was important to cut revenue to the Iranian government.
The US and the European Union have just tightened sanctions on Iran over concerns about its nuclear programme.
“Because of international pressure, we have withdrawn that understanding,” AFP news agency quotes Patrick Nyoik, the energy ministry’s permanent secretary, as saying.
On Sunday, a complete European Union oil embargo on Iran came into effect – in response to US legislation, which sanctions any entity that deals with Iran’s Central Bank.
“There are sanctions that are in place for people that are buying oil and products from Iran – there would be repercussions,” outgoing US ambassador to Kenya Scott Gration warned earlier on Wednesday about Kenya’s oil importation plans.
Last month, Kenya’s only refinery said that it would start buying its own crude oil, Reuters news agency reported.
According to Kenya’s Business Daily newspaper, under the proposed contract Tehran had been offering Kenya an extended credit facility of 90 days.
*Courtesy of BBC Africa
Nigeria Teams Up with US Firm to Build Six Oil Refineries
July 4, 2012 | 0 Comments
By Ricci Shryock*
Nigerian officials announced a $4.5 billion deal that will see the country partner with US company Vulcan Petroleum Resources to build six oil refineries in Nigeria, Africa’s biggest oil producer.
Vulcan said its goal is to build the first two facilities within one year and complete all six within the next 30 months. It said the various refineries will be located at different sites
throughout the country.
Umaru Dembo, a former Nigerian energy minister, said the announcement was a welcome development for the country.
“It means quite a lot…because, up to now, we seem to be dependent on refined oil from somewhere else…the three or four refineries that we have now do not supply the needs of refined products that Nigeria needs at the moment,” Dembo said.
Though Nigeria produces more crude oil than any other nation on the continent, it relies heavily on oil that is refined abroad in order to fulfill domestic energy demands. Nigeria exports more than two million barrels of crude oil a day.
Dembo added that the current refineries in the country produce more than 400,000 barrels of oil a day, and the reported 180,000 barrels a day that the six new refineries would produce is a surprisingly low number. But, he added, it was better than the alternative.
“It is better to get the refineries and have them working then have no refineries at all…than [to have to] depend upon refineries outside Nigeria,” he said.
According to Dembo, the new refineries, which are slated to all be finished in about two and a half years, could have additional benefits for the local economy.
“Definitely, it will mean more jobs for Nigerians if this comes to fruition,” he said. “There’ll be very many things that will be available for the people…we hope there will actually be electricity.”
In January, mass protests were staged throughout the country when the government said it was going to remove the oil subsidy, which was the only benefit many Nigerians said they enjoyed from the nation’s oil wealth.
After a nationwide strike and continued protests, the government later announced a partial rollback of the price hikes.
President Goodluck Jonathan has said Nigeria can no longer afford the $8 billion fuel subsidy. He promised to use the money saved for needed infrastructure and social programs.
*Courtesy of VOA Africa
Apps4Africa: Winners in Southern Africa Contest
July 4, 2012 | 0 Comments
The U.S. Department of State is pleased to announce the Southern Africa winners of the Apps4Africa: Climate Challenge, a regional competition to address local climate change challenges through the development of web-based and mobile applications. Marieme Jamme, CEO of private sector partner SpotOne Global Solutions, announced the winners on June 15 at the annual Africa Gathering event in London, England.
First place was awarded to MyHealth, a mobile application developed by a team from Botswana. MyHealth provides climate information, early warning alerts, and health monitoring features to its users to help them adapt to shifting patterns of disease and other health emergencies as the climate changes. Second place was awarded to Service Anti-Cyclone, which alerts users in Madagascar to pending cyclones, and collects data on cyclone patterns and impacts, including injuries, deaths, and property damage caused by storms. The application will also provide information to help communities prepare for future cyclones. Third place was awarded to unsApp, a web forum for improving food security in Zimbabwe where users can access climate change information and adaptive management techniques that match the needs and customs of their communities.
Through programs such as Apps4Africa and the global Adaptation Partnership, the United States is working with partners to bring together practitioners, policy-makers, and African technology innovators in order to highlight country-driven solutions to climate change adaptation in Africa.
The Apps4Africa: Climate Challenge consisted of three African regional competitions. Winners from the West and Central Africa contest were announced in December, and winners from the East Africa competition were announced in January. These contests built on the outcomes of regional climate change adaptation workshops organized by the Adaptation Partnership, which includes the United States and more than 20 other countries.
Winners will receive cash prizes. Private partners, including TED and Indigo Trust, are contributing follow-on support.
For more information please visit http://apps4africa.org.
U.S. Committed to Expanding Trade and Investment with Africa
July 4, 2012 | 0 Comments
By MacKenzie C. Babb*
Washington — The United States is committed to continuing to expand trade and investment in sub-Saharan Africa, a region that “represents the next global economic frontier,” according to Assistant Secretary of State for African Affairs Johnnie Carson.
“In addition to hosting six of the 10 fastest growing economies in the world, a recent McKinsey study documented that Africa offers the highest rate of return on foreign investment of any developing region, and has for some time,” Carson said in testimony before the Senate Foreign Relations subcommittee on Africa June 28.
He said consumer spending also continues to rise, and 43 percent of Africans currently have discretionary income, or could be considered middle-class consumers.
“Over the past decade, Africa’s growth was widespread across sectors including wholesale and retail trade, transportation, telecommunications and including manufacturing,” Carson said. “Foreign direct investment, or FDI, in Africa has also seen tremendous growth.” FDI projects in Africa have more than doubled from 339 in 2003 to 857 in 2011, according to Carson, with inter-African investment growing sharply from 27 projects in 2003 to 145 in 2011.
Combined with natural resource exports that have continued to generate significant revenues, Carson said, this steady growth has helped Africa to weather the global economic crisis more successfully than any other region in the world.
“In short, Africa is a trade and investment destination that cannot be ignored,” the assistant secretary said. “This is a continent on the move, and there are enormous opportunities for U.S. companies to enter the market, make money and create jobs” for both Americans and Africans.
“Greater U.S.-Africa trade is in the interests of both America and Africa, and we are determined to work to strengthen it,” Carson said.
Earl Gast, the U.S. Agency for International Development (USAID) assistant administrator for Africa, said in testimony following Carson that foreign direct investment is approaching $80 billion a year and trade figures have tripled during the past decade.
“This fortune is not the result of good luck,” he said. “It’s the result of years of hard work and better management, governance, capital inflows and business climate.”
To translate this growth into transformational development in poverty reduction, Gast said, President Obama’s recently unveiled strategy for engaging with Africa promotes opportunity and development while spurring economic growth, trade and investment.
The cornerstone of U.S. engagement with Africa will continue to be the African Growth and Opportunity Act (AGOA), he said.
“Since 2001, exports under AGOA have increased more than 500 percent, and the African Coalition on Trade estimates that as many as 1.3 million jobs have been created indirectly by AGOA, supporting upwards of 10 million persons throughout the continent,” Gast said. He added that many of these jobs are held by women, “a vital building block for development given that African women are more likely to invest job-related income into food security, health and education of their families.”
Assistant U.S. Trade Representative for Africa Florizelle Liser said Obama’s new strategy intends to “encourage economic growth, enhance trade and investment, support more jobs in the United States and help realize the full potential of the U.S.-sub-Saharan African economic partnership.”
The strategy was unveiled at the start of the June 14–15 AGOA Forum in Washington.
The 2012 forum brought together more than 600 participants, including top U.S. and African government officials, private-sector leaders and civil society representatives. It was preceded by a two-day civil society program June 12–13 in Washington and complemented by the African Women’s Entrepreneurship Program. The Corporate Council on Africa hosted its infrastructure conference June 18–20 in Washington, and the U.S.-Africa Business Conference was held in Cincinnati June 21–22.
AGOA, signed into law by then-President Bill Clinton in 2000, was designed to promote U.S. trade and investment ties with sub-Saharan Africa. It provides trade preferences to the 40 participating African countries through the removal of nearly all tariffs on their exports. It has broken down many trade and customs barriers in an effort to stimulate economic growth, encourage economic integration and help bring sub-Saharan Africa into the global economy.
Carson, Gast and Liser each emphasized the importance of the pivotal economic development program, and said Obama’s new Africa strategy keeps AGOA at the heart of U.S. engagement with Africa.
What Goldman Sachs thinks about investment in Africa
June 30, 2012 | 0 Comments
BY Kate Douglas*
American investment banking and securities firm Goldman Sachs believes that Africa is the place to invest, according to their Fortnightly Thoughts research report released earlier this year.
“We believe meaningful opportunities for Western consumer companies exist as Africa’s household consumption grows rapidly (it is already greater than some of the BRICs) and that failure to invest now will see others rush in,” said the editor of Goldman Sachs’ Fortnightly Thoughts, Hugo Scott-Gall.
But why should investors consider the opportunities in Africa and what are the challenges?
Africa has fallen behind in its development and has some troubling problems such as immense poverty, political instability, corruption and poor infrastructure. For this reason, Africa is often painted as one homogeneous continent. The truth is that African countries – despite having many similar problems – are considerably diverse with different resources contributing to different economies. It is because of this that investment potential varies from one African country to the next, and so do the challenges. However, a common limitation that cannot be ignored is the poor infrastructure that increases the cost and risk of investing in Africa, impeding economic growth.
Scott-Gall acknowledges the developmental movement and growth we are now seeing in Africa and describes it as a “logical sequencing in the world’s economic evolution”. Africa is swimming with precious minerals, and currently supplies 11% of the world’s fuel and mining resources. “Resources have become more scarce, and hence valuable, as more of the world is industrialised and there are more people alive than ever before,” said Scott-Gall. In this sense, the world needs Africa to succeed and Africa needs world investment to do this.
Africa is also being revolutionised by an extraordinary growth in internet and mobile communication. “Important to the speed of consumption growth is the adoption of technology, which is helping Africans skip ahead on the consumer curve, doing so without established public infrastructure in several cases,” said Scott-Gall.
Technological development has also led to the improvement of the banking system and the development of mobile and internet banking. “As the banking system matures credit growth can enable faster consumption growth as well,” continued Scott-Gall.
With improvements in governmental competence, political stability and wealth being distributed more evenly than before, Africa is heading in the right direction, and an educated investment today could yield momentous revenue over the next few decades.
So why invest in Africa? Because tomorrow’s Africa is going to be an economic force, according to Goldman Sachs. But what are the reasons for this optimism?
Firstly, it is estimated by Goldman Sachs that Africa will have the largest workforce in the world by the middle of the century. “Demographics are becoming very favourable and will be the envy of the world in 20 years time,” predicts Scott-Gall.
Secondly, Africa has abundant land in a world running out of space, and this gives African countries great potential for agricultural exports. “Africa sits on vast tracts of the world’s uncultivated land and also has a lot of existing agricultural land,” said Scott-Gall. “The world needs Africa to substantially improve its agricultural yields, and we suspect it will require private capital to help it here, along with government support and sponsorship, as has been seen in the BRICs, with Brazil a very good example.”
Where to invest?
When it comes to investment, Goldman Sachs believes the best African country to invest in would have “a healthy reserve of diverse resources, and a stable government that not only fairly distributes resource wealth to a young population, but also encourages them to spend it, by investing in infrastructure”. While it may be difficult to find an African economy like this today, it is suggested that this is the direction most African economies are developing.
It is also suggested that investors should look at cities rather than countries as a means of targeting the African consumer. “This could start to make Africa attractive to businesses with more global sourcing, or those targeting the more premium consumer (higher-value categories such as luxury goods, spirits and to a lesser extent personal care),” stated Alexis Colombo, Goldman’s consumer staples analyst.
Africa – home to world’s leading entrepreneur
June 30, 2012 | 0 Comments
BY Kate Douglas*
CEO and managing director of Kenya’s Equity Bank, James Mwangi, was this month awarded the Ernst & Young World Entrepreneur of the Year for 2012.
Mwangi was picked from 59 finalists, each of whom had already been awarded the E&Y Entrepreneur of the Year in their home countries.
“This is a global recognition for Africans who are embracing the power of entrepreneurship to change the economic and social state of Africa,” said Mwangi.
With the Chinese finalist owning the largest ship building company in the world and the Canadian finalist from the biggest pharmaceutical firm, How we made it in Africa looks at why Kenya’s Mwangi walked away with the title of entrepreneur of the year.
Equity Bank – from insolvency to banking giant
Equity Bank is renowned for being the bank with the largest customer base in east Africa, and is based in Kenya with regional operations in South Sudan, Uganda, Rwanda and Tanzania. It is home to nearly 8 million accounts, with nearly 50% of all bank accounts in Kenya.
Mwangi has led the bank from a technically insolvent building society with an asset base of Ksh. 28 million in 1993 to become a leading all inclusive commercial bank with an asset base of over Ksh. 220 billion and listed on the Nairobi Securities Exchange and Uganda Securities Exchange.
In a conversation with students at Stanford Business School in 2007, Mwangi said that Equity Bank’s strong commitment to its mission statement was significant to its success. “Focus on your vision,” he advised students. “Most of us get distracted and make our core business reacting to competitors. Focus on the customers. Ultimately, the competition is about the customers. It is not about the technology.”
From 2009 to 2010 the bank’s turnover increased by 32%, with its assets increasing by 42%.
Through strategic capitalisation, Equity Bank also managed to attract the largest capital injection (US$180 million) in the history of eastern and central Africa from Helios EB, an Africa-focused private investment firm.
Mwangi and entrepreneurship in Africa
Ernst & Young are not the only ones to notice Mwangi’s entrepreneurship skills. In 2010, the Financial Times identified Mwangi as one of the top 50 emerging market business leaders.
“An entrepreneurial spirit is very important in the world,” said Mwangi. “Entrepreneurs create jobs, entrepreneurs create wealth and, consequently, entrepreneurs compliment the thoughts of government in creating order and prosperity in the world.”
One of Mwangi’s many achievements is Equity Bank’s investment in an IT platform that can accommodate 35 million accounts, including a level four data centre which is the only one of its kind in sub-Saharan Africa. This means that Equity Bank is at the forefront of creating synergy between banking and mobile telephones. Other innovations include M-Kesho, the world’s first mobile centric bank account; Orange Money, a mobile money transfer platform for Orange Telecom subscribers; and agency banking.
Mwangi hopes that being recognised as the E&Y World Entrepreneur of the Year will inspire young Africans to take up entrepreneurship and show the rest of the world that there are plenty of investment opportunities and potential in Africa. “Having won this award from Africa, I want to tell the international community that Africa is ready for investment,” stated Mwangi. “Africa has the opportunities and is the fastest growing continent and consequently the remaining frontier for those that want to succeed in entrepreneurship.”
“Over the past 26 years, entrepreneurs have done more than any other group to stimulate innovation, job creation and prosperity during both periods of growth and in challenging economic conditions,” said Jim Turley, global chairman and CEO of E&Y. “James epitomises the vision and determination that set entrepreneurs apart and is very worthy of the title Ernst & Young World Entrepreneur of the Year 2012.”
*Culled from http://www.howwemadeitinafrica.com
Five African ‘boom towns’ that should be on every investor’s radar
June 30, 2012 | 0 Comments
By Jaco Maritz
South Africa’s economic hub Johannesburg is often cited as a classic example of the ‘boom town’ effect. The discovery of gold in the 1880s led to a gold rush that transformed the dusty settlement into South Africa’s largest city in a matter of 10 years.
Across Africa there are towns experiencing rapid development, largely off the back of newfound resources such as minerals, crude oil and natural gas. To produce this list of African boom towns How we made it in Africa sought the insight of Brett Abrahamse, a director at Johannesburg-based real estate consultancy Terrace Africa.
Abrahamse says that the towns below offer attractive opportunities from a property development perspective – especially for hotel and retail developments. While the challenges and expenses of working in Africa’s more remote locations may eat away at profit margins, these towns should be on the radar of investors and developers looking for a first-mover advantage.
The remote town of Tete, situated in the centre-west part of Mozambique, is the heart of the country’s new coal mining industry. The area around the town has some of the world’s richest coal reserves.
Rajat Kohli, Standard Bank’s global head of mining and metals, called it the world’s last substantial untapped coal reserve. “About 100 million tons per annum of coal could be produced within the next five years, and that figure could even go further,” he said at a conference last year.
Mining companies operating in Tete Province’s Moatize basin include Rio Tinto as well as Brazil’s Vale.
The coal mines are linked via rail to the port of Beira. Brazilian mining giant Vale has also announced plans to build a railway line from its Moatize mine to the north-western port of Nacala to export coal.
Tete is booming due to mining activity in the area. However, according to Abrahamse, the town has very few formal supermarkets and hotels, creating significant opportunities for more developments. Carlson Rezidor has announced that it will soon launch its new Park Inn by Radisson hotel in Tete.
Solwezi is the core town in the ‘new’ Zambian copper-belt and is also the capital of the North-Western province. From humble beginnings as a trading station servicing the nearby mines and employees, the town has now mushroomed into an important node. Solwezi has seen significant growth in recent years, driven by copper and nickel mines, which are run by First Quantum and Barrick Gold.
Abrahamse says that Solwezi has also experienced an increase in mining-related services and business activities. In addition, trade on the Congolese border 12 kilometres away is further boosting development and business activity in the town. The current airport is being upgraded, and will soon be able to accommodate Boeing 737s, which should see an increase in flights to Solwezi.
According to Abrahamse, there is a strong demand for more retailers and hotels in Solwezi. “There is a dire shortage of formal hotel accommodation in the town and this is evident by the US$200-plus room rate for a two-star room. The current hotel operations at Royal Solwezi Inn and Kansanshi Hotel are running at more than 90% occupancy with extremely high room rates,” he says.
The only formal supermarket in Solwezi is a Shoprite, which cannot alone cater for the growing demand. Abrahamse reckons that Solwezi is in need of small to medium sized commercial property developments with a retail anchor, a hospitality partner, numerous line shops and banking facilities.
First Quantum has also recently begun a new US$1 billion investment in a project called Trident. This consists of three new mines and will have an annual capacity of 300,000 tons of copper per year. The closest town to Trident is Solwezi.
Towards the end of 2010 How we made it in Africa reported that Takoradi, a small coastal town on Ghana’s west coast, was emerging as one of the new hot spots for African property developers. At the time there was considerable enthusiasm about the twin city of Sekondi-Takoradi because it was set to be home to Ghana’s emerging oil industry. Takoradi is the nearest commercial port to the country’s offshore oil fields.
Since then commercial oil production has started in all earnest, but developers and retailers have still not fully capitalised on the opportunities.
A few days ago it was announced that the International Finance Corporation (IFC) has provided a loan of US$5.45 million to Alliance Estates Limited, to build the first Protea Hotel in Takoradi. The 132-room, three-star hotel will help meet demand for business infrastructure as more investors are venturing into the oil producing region of Takoradi. “Ghana’s economy has been expanding at a high level, with growth touching 13.6% in 2011. In Takoradi, international hotels are limited, despite increased business traffic from investors interested in developing the oil and gas industry. The Protea Hotel will be amongst the first to provide international-standard rooms, rates and conference facilities,” said the IFC in a statement.
Juba (South Sudan)
“Juba, the capital of South Sudan, is one of those penny stocks, those risky ones where it could become the next Nairobi, or it could just muddle along and stay as it is forever,” says Abrahamse.
Last year South Sudan became Africa’s newest country after the region voted in favour of secession from Sudan. The referendum was a core component of the 2005 Comprehensive Peace Agreement (CPA) that ended decades of conflict between the Southern Sudan People’s Liberation Movement (SPLM) and the Khartoum government.
At independence there was much optimism that the South Sudanese economy would finally take off. The region has few industries outside the oil sector and almost non-existent infrastructure. Lately, however, there has been renewed fighting between Sudan and its now independent neighbour, South Sudan, sparking fears of an all-out war.
Although the recent fighting took place far from Juba, Abrahamse notes that the city’s fortunes are heavily dependent on peace between the two countries. He says that political risk is the major issue prospective investors in South Sudan should consider and that each business opportunity should be analysed on its merits. Juba’s potential for development is, however, certain. The city is South Sudan’s main commercial hub and one of the world’s fastest growing urban areas due to oil money.
Last year the South Sudanese government announced that the capital would move to Ramciel, some 250 kilometres away from Juba, closer to the border of north Sudan. It is unclear when this will happen.
Pemba is a port city in northern Mozambique. It is traditionally known as a tourist destination, but these days Pemba is an important centre for northern Mozambique’s offshore natural gas fields in the Rovuma basin.
US-based Anadarko Petroleum and Italian oil & gas company Eni, have both recently announced significant gas discoveries in their respective blocks. These discoveries are important because of the size of the reserves as well as Mozambique’s relative proximity to markets in Asia. “This is rather close to the largest potential market for liquefied natural gas (LNG), which is Asia. It is easier to export from offshore Mozambique to Asia than it is from many other places,” Adi Karev, global oil & gas leader at Deloitte Touche Tohmatsu, told How we made it in Africa in an interview earlier this year.
Abrahamse says that Pemba, as is the case with the other towns mentioned in this article, has a lack of accommodation and retail facilities. “An example of the problem with Pemba is there is one five-star lodge that is booked out by the oil companies. The interesting story there is that post the 2008/2009 financial crisis the resorts were struggling, but since they found gas there, these hotels and lodges have been booked out by people working on the gas fields.”
*Culled from http://www.howwemadeitinafrica.com
Barcelona FC backs bid to send one million e-books to Africa
June 21, 2012 | 0 Comments
By Tim Hume, for CNN*
London (CNN) — Stars from one of the world’s great soccer teams will be encouraging reading as part of a new project to put one million digital books in the hands of African children.
Spanish football team FC Barcelona — home to stars Lionel Messi, Xavi, Eric Abidal and Seydou Keita — joined forces Thursday with the non-profit organization Worldreader in a campaign to inspire a wave of literacy in sub-Saharan Africa through the use of e-readers.
Founded by David Risher, a former executive at Microsoft and Amazon, Worldreader works on the premise that e-readers, like Amazon’s Kindle, could help children in developing countries to “awaken their passion for reading, and improve their lives.”
“Worldreader is committed to putting a digital library in the hands of all children throughout the world’s developing countries, and we’re thrilled with the support of FC Barcelona to send one million e-books to students in Africa,” said Risher, Worldreader’s CEO.
The campaign is appealing for one million donors to each make a $5 contribution to help them reach their target of distributing one million e-books to 10,000 children in Africa. Because students bring home the devices and typically share their use with family members, friends and neighbors, it is expected the initiative will help put e-books in the hands of 50,000 people.
The e-readers will be distributed to children in Ghana, Kenya, and Uganda, where the non-profit is already operating, and soon in Rwanda, which is to become the next focus for the organization.
Football giant Barcelona will lend its weight to the campaign, with its stars sending messages via the e-readers to encourage students to read more and achieve their goals.
Worldreader believes technology can provide the best approach to encouraging literacy in parts of the developing world where books are otherwise scarce.
The program has motivated my students and instilled a joy for reading that never existed before
Jacqueline Abiso Dzifa, teacher, Kade, Ghana
Unlike traditional books — which had to be physically imported, one title at a time — a single e-Reader could provide a child with a vast array of current, relevant titles at a low distribution cost.
The increased access to reading material, it was believed, could broaden the way students think and develop their creativity by allowing them to go beyond the syllabus to follow their reading interests.
A year-long pilot of the program to 350 students in six schools in Ghana yielded promising results. Reading test scores for primary students participating in the program increased by 4.8% to 7.6% more than their peers who were not taking part, although benefits for older students were less clear.
The e-readers gave students access to a much greater variety of titles: 107, on average, as opposed to the between 3 to 11 books the average student had access to at home without the devices. They swiftly learned how to use the e-readers, despite 43% having never used a computer before.
“Worldreader has not only given us unparalleled access to books, the program has motivated my students and instilled a joy for reading that never existed before,” said Jacqueline Abiso Dzifa, a teacher at Presbyterian Primary in Kade, Ghana, whose students participated in the pilot.
The students relished their access to “a wide variety of classic and cutting-edge literature by renowned authors,” she said.
As e-readers provided a pathway into the digital world, many students also used them to read international news sites that would have been inaccessible previously.
Just one of the collateral benefits to the program was that students gained greater exposure to African writers, said Worldreader managing director and co-founder Colin McElwee.
The program was working with African publishing houses to digitize their titles and provide students with local, relevant content — which had positive impacts on local literary cultures.
“We want to digitize the curriculum, there’s a whole catalog of books you can digitize,” he said. “Once you digitize them, you can’t just sell them in Ghana or Kenya — you have a global market. So this is the first time African culture can be exported seamlessly, globally. That has an enormous impact on the potential of Africa over time.”
*Culled from CNN
Blog: How I navigated Kenya using Twitter
June 21, 2012 | 0 Comments
By Errol Barnett*
Nairobi, Kenya (CNN) — Surfers beware. There is an incredibly influential and vocal group on Twitter, using a common hashtag and blazing keyboards to ensure their African country is discussed fairly and with respect online. Kenyans on Twitter, better known as #KOT, are a 21st century phenomenon born out of the social media boom and growing economy in East Africa’s most populous city, Nairobi.
Why are they so vocal and what is it doing for the country at large? My mission for “Inside Africa” recently was to find out – and I did so with an experiment.
The concept was simple; if Kenyans are so connected I should be able to assemble a quick meet-up; I should be able to navigate Nairobi via Twitter. The entire process should teach me how tech-savvy this country really is and show me where its heading. It worked far better than expected.
Technically speaking, Kenyans are special, as they are members of an exclusive and enviable club. The country is among the top four users of the web in all of Africa, behind only Egypt, Morocco and Nigeria. What’s more impressive is the connection speed at which they surf. The Kenyan government recently installed broadband infrastructure, which behind Ghana, is the second fastest on the continent.
Also, the Kenyan Government, in coordination with the World Bank, has embarked on a multi-million dollar initiative to use information and communications technology — or ICT — to accelerate economic growth and promote transparency.
For these reasons and more, the response to my call for a random meeting was met with enthusiasm. One by one, half a dozen #KOTs approached me in the predetermined cafe (offering free wi-fi) shouting the password, “connected!” Each told me how the internet is making their lives easier from paying bills through a mobile money service called Mpesa or sending out links to their resumes via social media.
What’s more fascinating is the place they all suggested I visit, iHub. Essentially it’s a nexus of innovation with free-flowing ideas meant to serve as an incubator for future Kenyan-grown advancements. Via Twitter, users gave me advice on how to get there and who to meet.
I met the manager Tosh Juma standing amid what appeared to be a college study hall. He introduced me to software developers, web designers and tech enthusiasts all at different stages of their ICT projects. Of course there was the obligatory coffee bar, foosball table and comfy gaming seats on the floor — but there was also a real sense of responsibility for the future and well-being of the country.
One young entrepreneur is Susan Eve Oguya, eagerly telling me about her SMS or text service for Kenyan farmers, MFarm. It allows them to check up-to-the-minute market rates for their goods so devious middlemen can’t deceive them. She tells me its especially important for her since she comes from a family of people who make their living on farms.
Another developer, Nevi Mukherjee showed me a tablet-based application designed for Kenya’s school children called eLimu. It brings the country’s academic curriculum to life with pictures, video and interactive quizzes. It’s no wonder Google plucked many of iHub’s members, like Ory Okolloh of the crisis-mapping site Ushahidi, to join their African ranks.
My final stop on this online experiment was Google’s offices in Kenya. Joe Mucheru, Google’s Ambassador for everything related to Sub-Saharan Africa gave me a tour and sneak peak into new services. They include a mapping service keeping the government accountable on schools that it has agreed to build or expand — the map reveals any progress — or lack thereof. From Joe’s corner office overlooking Nairobi he tells me of his wish for his young children, “I think they are going to have a much easier life and hopefully… compete globally even more. They don’t have the same hang ups we had, that ‘we’re behind’. They think they deserve everything and should be doing everything — that’s the right attitude for young people now.”
Kenya online usage has grown exponentially. Back in the year 2000 only 200,000 were logged onto the web, at the end of 2011, that number was around 10.5 million. No one knows how many internet users – or #KOTs for that matter – there will be in 2021 but one thing is for sure; there will be many and they will be helping Kenya stand out proudly in an increasingly crowded online universe.
*Culled from CNN. Every week, Inside Africa takes its viewers on a journey across Africa, exploring the true diversity and depth of different cultures, countries and regions.