Nigeria: Stolen Oil, Stolen Revenue
October 18, 2012 | 0 Comments
With influential individuals possibly complicit in oil bunkering, concerted and coordinated efforts will be needed to end the costly practice.
BY UCHE IGWE*
Figures outlined by Ngozi Okonjo-Iweala, Nigeria’s finance minister, suggest that illegal oil bunkering could be as high as 400,000 barrels per day (bpd) and have led to a 17% fall in officials sales in April 2012. Shell Petroleum Development Company (SPDC), however, estimates the loss to be much lower at 150,000 to 180,000 bpd, approximately 7% of production.
Either way, the costs of theft are huge. If we take the official figures for barrels lost to bunkering, Nigeria and its operating partners may be losing around $40 million per day (assuming a flat price of $100 per barrel) which translates to around $15 billion in revenue per year. Add to this the loss of life from the dangerous activity and the damage done to the environment due to spills and the urgency of the problem becomes clear.
Despite much political rhetoric over the importance of combating oil theft, the menace seems to be growing in sophistication. While a large amount of mystery surrounds methods of tapping oil, experts suggest that they range from local artisanal bunkering to highly organised and complex methods suspected to occur at the export terminal.
This level of skill and sophistication suggests the possible involvement of powerful individuals behind the scenes. Many allege that high-level politicians, former and serving military officers, militant leaders and oil company employees may all be complicit in the practice. And given their ineffectiveness, some believe there could also be collusion amongst regulatory oversight agencies. Observers also point the finger at international cartels which operate ships illegally to transport stolen crude and sell it on the global market.
However, until recently, multinational companies operating in the Niger Delta have not been overly concerned about oil theft, largely because the economic loss to them has been manageable. This is partly due to the fact that, in the absence of reliable data regarding the number of barrels of oil produced, oil companies pay taxes and royalties not based on production but on the number of barrels exported.
In order to combat bunkering and enable the flow of oil to be more closely accounted for, the Nigerian Extractive Industries Transparency Initiative (NEITI) in 2011 recommended the installation of a robust metering infrastructure at flow stations and terminals in line with international best practice. With meters installed at flow stations – and with oil taxed at rates of production rather than exportation – oil companies would bear a significant economic burden of lost oil. At current royalty rates (20% in the case of onshore and 18.85% in the case of offshore shallow waters) companies would pay around $8 million each day for the estimated 400,000 barrels currently lost to thieves. Unfortunately, however, the NEITI recommendations have not become law.
Capping the leak
Even if oil companies were pushed to find solutions, the deep-rooted and complex problem would prove difficult to tackle.
To begin with, there are reportedly thousands of illegal refineries scattered around the Niger Delta. In just the first quarter of 2012, the Joint Task Force (JTF) in the Niger Delta claimed it had destroyed nearly 4,000 illegal refineries and seized hundreds of barges, boats, fuel pumps, tanks, and other equipment belonging to oil thieves. Governor Sanusi Lamido Sanusi of the Central Bank of Nigeria has suggested illegal refineries should be bombed, but this would not solve the problem which runs a little deeper.
Many of the young men partaking in the business are ex-militants or even ex-oil industry workers with a shortage of alternative opportunities. What is needed then is not just the short-term removal of illegal refineries but also the creation of sustainable ways to offer young people long-term employment. As well the $1 billion needed to clean-up the environment around the Niger Delta, according to the United Nations, resources must also go into creating alternative livelihood opportunities for the youth.
Another important step toward reducing oil theft is a concerted overhaul of the security system in the Niger Delta to ensure coastal waters and pipelines are policed by accountable agencies and that those charged with theft are prosecuted effectively. On past occasions, the trials of suspects have been impeded, leading some to accuse powerful individuals of intervening.
Finally, bunkering could be reduced through the use of new technologies that can ‘fingerprint’ crude oil in order that its originating field can be identified.
A long-term necessity
Though efforts to end bunkering will prove difficult, plugging leakages in oil production will put more money on the table in the long-term.
Platform, a UK-based research organisation, reported that Shell spent about $383 million on third parties to secure their facilities in the Niger Delta from 2007-2009. Since the declaration of the Niger Delta Amnesty Programme for thousands of militants in 2009, the security challenges have reduced and those resources could now be used to fund a robust metering infrastructure at flow stations. This would stop confusion over how many barrels of oil the country produces and increase accountability. However, there is no sense in only blaming oil companies for oil theft. Oil companies, security agencies, government and all other stakeholders must work together.
President Goodluck Jonathan, as a son of the Niger Delta, perhaps bears a particular moral and personal responsibility to end these unpatriotic acts of criminality.
* Source http://thinkafricapress.com.Uche Igwe is a former Africa Policy Scholar at Woodrow Wilson International Center for Scholars in Washington DC, USA, and Chevening Fellow on Goverment Relations with NGOs and Civil Society at the University of Glasgow, United Kingdom. He is currently based at Institute of Development Studies, University of Sussex, and also a Visiting Scholar at Africa Program (SAIS) in Washington DC.
Angola launches $5 bln sovereign wealth fund
October 18, 2012 | 0 Comments
By Shrikesh Laxmidas*
LISBON (Reuters) – Angola on Wednesday launched a $5 billion sovereign wealth fund to invest in domestic and overseas assets by funnelling its vast oil wealth into infrastructure, hotels and other high-growth projects.
Africa’s second-largest crude oil producer is looking to diversify its oil-dependent economy by developing infrastructure outside the energy industry. The country was devastated by a 27-year civil war that ended a decade ago.
Nigeria, the continent’s top oil producer, has already set up a similar $1 billion fund, although its progress has been hampered by political wrangling.
“The Nigerian fund is mainly for liquid, low-yield assets, while the Angolan fund’s mandate is broader, with investment in the real economy domestically,” said Richard Segal, head of emerging markets strategy at Jefferies in London.
The Angolan Sovereign Fund (FSA), which will also invest in financial securities, will be headed by President Jose Eduardo Dos Santos’ economic affairs secretary, the fund’s board said in a statement.
Jose Filomeno dos Santos, one of the president’s sons, will also sit on the three-person board, an appointment likely to raise further questions about government transparency. President Dos Santos has led the country for 33 years and was sworn in for a new five-year term last month.
The fund said its first investments will be in projects to develop agriculture, water, power generation and transport, with an early focus on the hotel industry in sub-Saharan Africa.
Until now the southwest African country was one of the few OPEC member states without a sovereign wealth fund.
Oil revenues represent over 95 percent of Angola’s export income and around 45 percent of gross domestic product. After years of double-digit growth, Angola’s economy suffered a rapid slow down after oil prices tumbled in 2008.
GDP, which the World Bank estimated at $101 billion last year, is set to grow between 8 and 10 percent this year thanks to higher oil prices and output.
Filomeno dos Santos told Reuters in a telephone interview the fund was not a stabilisation tool in the event of an oil price shock, but was aimed at diversifying the economy and creating wealth.
It will grow from further oil revenues transferred by the government and from returns on its investment projects, he added, although he declined to estimate the fund’s growth.
“There may be a lot of good intentions, but in a country where there is no transparency, corruption is high and key places go those close to the leader, we see little chance of this plan working to help Angolans,” Alcides Sakala, spokesman for main opposition party UNITA told Reuters.
The FSA board said it will be assisted by a council composed of senior ministers and the central bank governor, and will publish accounts annually and have them audited by an international audit firm.
“The transparency of the fund will be guaranteed by our strict reporting and auditing rules and an investment policy to be announced soon,” Filomeno dos Santos said.
It was not immediately clear when the investment policy would be announced, or if it would be enough to assuage concerns about governance.
“It seems there will be more transparency on this than is typical in Angola, but it will still be less than in other countries’ funds,” Jefferies’ Segal said.
Goldman Sachs Appoints Nigerian Banker To Its Board
October 18, 2012 | 0 Comments
By Mfonobong Nsehe*
Ogunlesi, 59, is the chairman of Global Infrastructure Partners (GIP), an infrastructure investment firm he co-founded.
Ogunlesi is popularly referred to as The Man Who Bought Gatwick Airport in African business circles- a reference to a 2010 deal in which he led GIP’s $2.4 billion acquisition of London’s Gatwick Airport. Ogunlesi also led the company’s acquisition of London City Airport and Edinburgh Airport in 2006 and 2012, respectively.
In a press statement, Goldman Sachs CEO Lloyd Blankfein said that Goldman Sachs’ shareholders will benefit from Adebayo’s “wealth of knowledge and rigorous thinking”. “He has advised companies and institutions around the world and invested in many of the most important sectors in the global economy,” Blankfein said.
According to a brief biographical sketch from Ventures Africa, Adebayo (known as Bayo) Ogunlesi is the son of Nigeria’s first professor of medicine. He attended the prestigious King’s College Lagos, received a B.A with first class honors in Philosophy, Politics and Economics from Oxford University, a law degree and MBA from Harvard University. He practiced law for two years at Cravath, Swaine & Moore after clerking for U.S. Supreme Court Justice Thurgood Marshall. He then pursued a career on Wall Street. From 1983 to 2006 he held various positions at Credit Suisse Investment Bank and its predecessor firms. Ogunlesi is also the Chairman of Africa Finance Corporation, a Pan-African infrastructure investment firm.
* Source http://blogs.forbes.com/mfonobongnsehe .Follow author on Twitter @EmperorDIV
Africa’s Leadership Fails Billionaire Mo Ibrahim’s Test, But Technocrats Rise
October 18, 2012 | 0 Comments
By Calestous Juma*
The Mo Ibrahim Foundation has announced that it could not find a winner for its US$5 million prize for good governance in Africa. The selection panel said no candidate had met all of the criteria, as was the case in 2009 and 2010.
The foundation has set high and commendable standards for performance, which African leaders should aspire to achieve as the continent works to strengthen other democratic institutions. Two decades ago Africa’s leadership was dominated by autocrats, many of whom had risen to power through military coups. (For an opinionated take and some bacon the Mo Ibrahim Foundation’s Award, see this post).
But it appears that the road to democracy is being bridged by a rising technocracy.
While the Mo Ibrahim Foundation was announcing the “no winner” in London, the African Union was installing a South African medic, Dr. Nkosazana Dlamini-Zuma, as its new chairperson in Addis Ababa. In 2012 alone, Angola, Egypt, Ethiopia, Senegal, Tunisia and Somalia elected engineers to top political offices. Eritrea and Nigeria are headed by an engineer and a fisheries scientist, respectively.
Technical aspirations among African leaders have at times been truly inspirational. When the founding father of Namibia, Sam Nujoma, stepped down from the presidency in 2005, he registered as a masters student in geology at the country’s national university. He graduated in 2009.
Then only three African presidents had technical training. Today the number stands at eight. In addition, nearly 40% of Egypt’s cabinet is made up of engineers. This is remarkable for a continent that has generally provided limited opportunities for training in the engineering fields.
The change in the technical background of African leaders may appear random, but it represents a significant realignment of Africa’s top positions with the continent’s contemporary development challenges. Infrastructure concerns (energy,ransportation, irrigation, and telecommunications) as well as health tend to dominate local political platforms.
For example, Angola’s last elections were marked by the inauguration of new infrastructure projects by the ruling party. The government has put forward a US$17 billion plan for electricity generation by 2016. And Senegal has recently scrapped its Senate, saving the country nearly US$15 million per year that will be invested in flood control, which is largely an engineering initiative. Senegal’s President Macky Sall is an engineer by training.
It is not possible to meet development and integration needs without building a strong engineering base for the design, construction and maintenance of infrastructure facilities. In addition, Africa needs “soft infrastructure” in the form of laws, regulations and other institutional support systems for effective management of physical infrastructure.
The main challenge is the lack of alignment between infrastructure strategies and the need to expand engineering training. As a result, there are very few engineering programs in African universities. There is also a perception that engineering is associated with large projects that tend to be linked to high costs, corruption and ecological degradation.
Much of the economic advice to Africa, which focuses only on the macroeconomic impacts of large infrastructure investments and less on the microeconomic benefits of such financial outlays, is standing in the way of common sense.
It is estimated that the continent will need to invest nearly US$93 billion per year over the next decade to meet its infrastructure needs. Mobilizing financial resources is critical. But more importantly, training opportunities will need to be expanded to include non-university institutions, especially institutes of higher learning that are located in various line ministries (including ministries of defense).
The telecoms sector is already stimulating electronic and electrical engineering training that includes the creation of dedicated telecoms universities in Kenya, Egypt and Ghana. Uganda, on the other hand, has created a Military University of Science and Technology whose graduates are now involved in the rehabilitation of rural railway networks.
Private and public enterprises can also provide critical in-house, university-level training that meets growing market demand. Other strategic interventions include engineering training facilities as part of all new major infrastructure projects.
Coordinating such efforts will need to be supported at the highest level in government by science and technology advisors to presidents and prime ministers at par with economic advisors. Today no African president has a dedicated office of science and technology advice. It is not enough to leave this critical function to presidents and prime ministers just because they have technical training.
It is too early to tell what the impact of the new leaders will have on the continent. But Africa’s democratic transition will require the helping hand of engineers, medics, scientists and entrepreneurs. This is a trend that Dr. Mo Ibrahim, a Sudan-born electrical engineer, might want to watch.
* Sourcehttp://www.forbes.com/sites/mfonobongnsehe/2012/10/15/ . Calestous Juma teaches at Harvard Kennedy School and co-chairs the African Union’s High Level Panel on Science, Technology and Innovation (Twitter @calestous) .
Will South Africa’s struggles overshadow its potential?
October 16, 2012 | 0 Comments
BY Mark Mobius*
Africa is a continent many investors bypass, but from my perspective as a long-term investor, I think that’s a mistake. South Africa has faced some struggles recently, but I think they can be overcome, and a brighter future could be ahead there for its people.
South Africa is the largest economy in Africa, and is the only country on the continent where I think the “frontier” market label doesn’t apply. Some have added an “S” to the end of the “BRIC” acronym to include South Africa in the grouping of emerging market economies of Brazil, Russia, India and China. Others include South Africa as part of a newer grouping of younger, diverse emerging markets comprised of Colombia, Indonesia, Vietnam, Egypt and Turkey (the “CIVETS”). Whichever label you use, many investors have recognised South Africa’s power and potential in the emerging markets world.
I’ve invited Johan Meyer, our SVP and managing director, South Africa, based in Cape Town, to share some of his insights on the challenges and opportunities facing South Africa today.
Throughout its history, South Africa has faced some unique and often divisive social and economic challenges. But it is also a country that has proven able to reinvent itself politically and economically. While significant social and economic problems still persist today, I believe South Africa and its people appear potentially well positioned for greater long-term prosperity.
Commodities, particularly metals and minerals, are very important to South Africa’s economy. South Africa is one of the world’s leading mining and mineral processors, with roughly three-quarters of the world’s platinum production and a significant share of others including palladium, gold, manganese and diamonds.
Strikes in South Africa’s mining industry have certainly been receiving a lot of press coverage recently, including events at one of the largest platinum mining companies in the world, which really brought to light the harsh conditions these miners endure. We have begun to see some progress being made toward achieving resolutions to the disputes, including wage increases that will hopefully end the violent protests. Still, from now on we expect investors to focus on labour relations in much more detail, especially considering the spread of the strikes to other industries and the potential impact thereof on economic activity across the country.
While the strikes haven’t had a marked impact on the equity market as a whole, we believe it will be important to achieve the right balance between corporate performance, executive compensation and wages going forward. The longer these strikes continue, the more pronounced the impact could be on corporate performance, with knock-on effects likely being felt in state income (tax revenues) and consumer spending power. It is therefore imperative that a solution is found to this issue as soon as possible.
The impact of commodity price fluctuations
Those familiar with our investment philosophy know that when we evaluate our investments, we always take a long-term view. We closely monitor the valuations and the growth prospects, and if we see any dislocation in terms of price relative to our long-term expectations, we would likely consider adding to our positions.
Generally we prefer companies that have a discernible advantage when it comes to costs because we believe these tend to be the companies that can weather tough times and can do well in good times. One area of the South African mining industry we aren’t favouring right now is gold mining, because we remain concerned about rising costs related to labour, mining equipment and utilities such as electricity and water, especially with the deep level mines in the country.
Given the economy’s dependence on commodity exports (the mining sector accounted for 8.6% of GDP in 2010), if the global economy improves, higher commodity prices could be a boost to the South African economy. While there is some concern inflation on a global scale could accelerate given the easy monetary policies and stimulative measures central banks (particularly in developed markets) have been engaging in, at the moment inflationary pressure appears to be contained in South Africa, with higher food and fuel prices up to now being largely offset by strength of the South African rand relative to the US dollar and other currencies. If recent rand weakness becomes sustained, inflation on imported goods will start to tick up.
The South African Reserve Bank recently lowered its benchmark rate to a record low of 5%, reflecting concern of the potential impact of slowing global growth on the South African economy. We believe this has the potential to translate into sustained growth in consumer spending, so we continue to like investment opportunities in the consumer sector.
By our measure, valuations of some companies in this sector appear rather pricey right now, so in some cases we are waiting for a more attractive entry point. Generally, all our investment decisions are based on relative valuation, growth prospects and risks.
Without a doubt, deteriorating education and the sustained high level of unemployment are the most significant issues the country faces today. The unemployment rate remained stubbornly high at above 24% in the second quarter of 2012. This leads to other challenges such as a high prevalence of crime and a higher burden on tax-paying individuals in order to fund welfare spending. Government, corporates and individuals have to start working together in a more cohesive way if they’re to stand a chance at tackling this enormous issue.
As mentioned, the corporate and individual tax rate is quite high, particularly when compared with many developing countries around the world. If these rates could be lowered or if there were greater concessions to incentivise job creation, I think it would be positive for investors. Greater labour market flexibility would also likely encourage companies to employ more people, with the resultant impact of broadening the tax base, lowering the reliance on welfare grants and greater consumer spending power.
In spite of these challenges, South Africa’s financial system is regarded as highly developed, relatively liquid and it boasts the 18th largest stock exchange in the world. Many companies listed there offer a way to tap into the African continent’s growth potential, and GDP growth in South Africa has remained positive this year. The IMF projects growth of 2.6% in 2012 and further improvement in 2013. South Africa’s corporate governance is held in high esteem by many in the global investment community. For these reasons, I think we are in a good position to seek opportunities arising from the long-term growth potential in South Africa, and across this vast, developing continent.
*Mark Mobius is executive chairman of Templeton Emerging Markets Group. Source http://www.howwemadeitinafrica.com/will-south-africa
Women Entrepreneurs Drive Growth in Africa
October 11, 2012 | 0 Comments
By JOSH KRON*
KAMPALA, UGANDA — Far too often, in the view of Africa’s budding female entrepreneurs, their continent is characterized as the recipient of aid that enables residents just to struggle by, and as a place that mistreats and marginalizes its women.
Late in 2010, after a visit to the Democratic Republic of Congo, the United Nations’ special rapporteur on sexual violence called that country the “rape capital of the world.” Last month, a South African politician named her own country the “rape capital of the world.”
Data analysis from Google shows that since 2004, the most common single term related to searches from theUnited Statesfor “Africa” has been “AIDS.” This year, the charity Save the Children namedNigerthe “worst place to be a mother.” On the United Nations’ Web site,Africais the only continent listed under “Issues.”
It was into this world, and against it, says Bethlehem Tilahun, that her shoe company SoleRebels was born.
“I kept hearing over and over the phrase ‘poverty alleviation,”’ said Ms. Tilahun, now a footwear mogul whose company grossed $2 million in sales this past year. “The media, preoccupied with a singular narrative about ‘Africa’ that missed the story of Africa — part of a larger spectrum of endless entities that have monopolizedAfrica’s image, our brand.”
With SoleRebels, she said proudly, “We’ve inverted the whole paradigm.”
Ms. Tilahun, 33, is one of a cresting wave of African entrepreneurs who are harnessingAfrica’s businesses and brands as the continent enjoys its greatest economic success in generations. The International Monetary Fund now forecasts, admittedly in a recession-plagued world, thatAfricawill have the fastest-growing economy of any continent over the next five years.
Many of the new entrepreneurs ofAfricaare women.
Ms. Tilahun became one with shoes.
Beginning in 2004 as a recent college graduate in Ethiopia with a handful of artisans from the neighborhood and a workshop on her grandmother’s plot, Ms. Tilahun has built SoleRebels (pun-intended) from a handmade sandal shop into a multimillion-dollar enterprise, whose iconic footwear — still handmade and eco-friendly — sells abroad for $60 and up.
Now her company employs roughly 100 workers, and it recently opened its flagship store in centralAddis Ababa, where SoleRebels’ Ethiopian-branded fusion of Abyssinian and Western taste is on display. With each pair of shoes, she said, she seeks to change people’s minds aboutAfrica.
“We’ve flipped the concept of non-Africans writing the script,” Ms. Tilahun went on. “We’ve basically taken back control of our destiny by controlling the marketing message.”
Indeed,Africamay not be as badly off as indexes sometimes imply.
According to a World Bank report released this month, more than 20 sub-Saharan African countries, totaling more than 400 million people, have gained middle-income status.
This year, the World Bank said, one-third of the economies of the 49 sub-Saharan African countries will grow at a clip of 6 percent or more; meanwhile, the number of people living in poverty has fallen roughly 10 percentage points over the past decade.
It has as much, or more, to do with trade as aid. And it is compounding a surge of female entrepreneurs.
“Women in the private sector represent a powerful source of economic growth and opportunity,” said Marcelo Giugale, the World Bank’s director for poverty reduction and economic management forAfrica.
“In Africa, you see women working a lot,” noted Markus Goldstein, a development economist in the gender department of the World Bank inWashington. “They are very active in the labor market.” According to World Bank data, nearly two-thirds of women are participating inAfrica’s labor force.
Women doing business in ways that support families include the myriad cross-border traders found throughout sub-SaharanAfrica; women selling used clothes and tin kitchenware; hair stylists; and owners of fashion salons, small food stores and even watering holes (catering almost exclusively to men).
Those are all businesses that are seen as more traditional. In 21st-centuryAfrica, businesswomen are pushing into the national scenes of their countries as movers and shakers of industry.
In South Africa, Sibongile Sambo has been a pioneer for women in aviation. She leads an exclusive charter-aircraft company. In Kenya, Ory Okello, 23, helped found Ushahidi , a Web 2.0 crowdsourcing software initiative that changed the game in real-time tracking of emergency events via cyberspace. It was originally geared toward political violence afterKenya’s bloody presidential election in 2008, and now is used by Google.
In Nigeria, Adenike Ogunlesi has built a regional children’s clothing empire from scratch — she started by selling pajamas out of the trunk of her car.
In lakeside Uganda, Lovin Kobusingya has brought fish sausages to the dining table.
“I always knew I was a businesswoman,” said Ms. Kobusingye, 29, a mother of two. “When I was in high school, I used to sell illegal sweets. And I made money. I made a lot of money.”
Her company, Kati Fish Farms, sells 500 kilograms, or about 1,100 pounds, of fish sausage a day, and moves 8 tons of fish a week.
“I am very happy and proud” at being a female entrepreneur, she said. “When I was young, they said: ‘A woman is a woman — a man should take care of you.”’
“But women are actually contributing a lot more than men. We always find ourselves multitasking,” she said, between working and raising a family. “If it could be equated in terms of currency, it would be 80 percent of the economy.”
The rate of female entrepreneurship is higher inAfricathan in any other region of the world, the World Bank says. And even African countries criticized for abuses of human rights and civil liberties are progressive on gender.
It may not be a coincidence that a number of Africa’s economies doing the best without many resources — likeEthiopiaorRwanda— have austere, orderly, patriotic, aid-efficient governments that simultaneously spurn charity aid and focus on foreign-direct investment and private enterprise.
InRwanda, a change in land-title laws to allow wives to be registered alongside their husbands led to a nearly 20 percent increase in female-registered farms.
Both Ethiopia and Rwanda have been criticized for restrictions on civil liberties yet have also given birth to targeted marketing of U.S. consumers — including Rwanda’s Bourbon coffee chain and Ms. Tilahun’s SoleRebels — efforts that may help alter Africa’s image.
“As I entered college,” Ms. Tilahun noted, “it had become clear to me that ‘poverty alleviation’ is a myth.”
“People don’t want to be ‘not poor,’ they want some form of prosperity. That doesn’t mean millionaires or billionaires, but prosperous,” Ms. Tilahun said. “And to create prosperity you have to create something world class.”
She started with the basics — fibers. These have been part of survival and ingenuity inEthiopia— along withChina,IndiaandEgypt, one of the world’s most ancient civilizations. “Footwear was an excellent platform,” she said. SoleRebels footwear — including shoes, sandals and slippers — is made from a variety of hand-woven, locally made materials, including recycled car tires and traditionally grown koba fiber.
Over the years, her company used new thread types and weave designs, revamping customer service to incorporateEthiopia’s culture of hospitality. As a woman growing up and working inEthiopia, she said, there were people who tried to limit her because of her gender, “but I never felt any limitations.”
Moreover, she felt that she was doing something genuine — “people want their brands to be real,” she said.
As her shoes have caught on, so has an image ofAfricathat consumers are willing to buy, and not simply fund.
SoleRebels has become one of Africa’s best-known shoe companies, its products advertised in hip magazines fromTorontotoBerlin. Consumers and investors from donor-aid nations have responded. Ms. Tilahun was named by Forbes magazine as one of 100 women to watch in 2012 and invited to speak at the 2011 World Economic Forum.
There is an “urgent need,” she said, to create more African-owned brands delivering world-class products to the global market, to drown out charitable organizations “selling their variety of messages about and images ofAfrica.”
“Let’s face it,” she said, “it’s pretty hard to convince someone to buy what you are selling when someone else has convinced them you are solely occupied with swatting away flies from your face.”
Is Africa’s digital revolution under threat?
October 5, 2012 | 0 Comments
By Dele Fatunla*
Back in the 1990s, before everyone had two mobile phones and Skype was still a distant dream, if you were an African living elsewhere, with a need to call home, you either made frequent visits to a local call centre or you bought an international calling card. Getting through to your loved ones or business contacts was a gamble, and every successful call was a triumph of hope over adversity.
The arrival of mobile phones and, just as significantly, cheap and easy access to the internet for many people across Africa and the African diaspora, was an understated miracle based on a relatively small shift in government policies. Now it’s possible that another shift in government policies could kill this revolution before it has fulfilled its potential.
Over the course of the nineties and early noughties, a telecommunications revolution took hold across Sub-Saharan Africa as many governments relaxed rules governing involvement in the telecoms sector, allowing private players to enter the market – notably, Mo Ibrahim, who established Celtel (now trading as Airtel). Many global companies are now itching to get into Africa, thanks in part to the success of telecoms companies.
The African Development Bank (ADB) estimates that there are 473 mobile phones per 1, 000 people on the continent, a significantly higher level of mobile phone penetration than anywhere else in the world. It certainly beats the 15 fixed line phones per 1,000 users across Africa. The mobile phone revolution, still in its infancy, and the nascent internet revolution – which began with the laying of fibre optic sea cables, funded by a range of interested parties – has made Africa more connected to the rest of the world than it has ever been before.
A vast range of services, businesses and movements are emerging out of the connections that Africans are making globally, not least with their kith and kin in the diaspora. Take the example of Light Up Nigeria, a social movement that aimed to raise awareness of Nigeria’s power electricity access. The campaign was conceived by Nigerians in the country and in the diaspora over the BlackBerry messenger service, where much of the co-ordination of its successful protests and events also happened.
Ushahidi, a crowd-sourcing’website, which relies on text messaging to obtain information, was crucial to tracking the political violence in Kenya during the tumultuous 2007 elections. Crucially, it was the relatively inexpensive nature of text messages which made Ushahidi and developments like it viable.
Internet Revolution Under Threat
Yet, increasingly aware of what looks like a booming and profitable sector, some governments on the continent are contemplating more taxes on internet and mobile related activity. Meanwhile, industry bodies, such as ETNO [European Telecommunications Network Operators’ Association] are pushing for the introduction of a mechanism called ‘sending party network pays’ which would treat content providers as “call originators” , similar to the way any consumer making a phone call bears the cost of initiating it.
ETNO, a body made up of many of the large telecoms companies in Europe, wants this policy to become international law. Currently, for most of the companies, the cost of providing data, say a video, is expensive and outstripping capacity to carry the data, requiring significantly more investment. A report, written by Rohan Samarajiva, former Director General of Telecommunications for Sri Lanka and CEO of Lirne Asia, an ICT think-tank, predicts dire consequences for the development of the internet and Africa’s prosperity if governments do shift to a “sending party network pays” model.
The report says that a global agreement to move to a “sending party network pays” policy would have a detrimental effect on regions by providing a blank cheque to providers to raise prices for consumers. This would have a deadening effect on the burgeoning digital economy in regions like Africa. It also assumes that content providers value providing access to information enough to pay for others to consume it. In essence, says Rudolf Van Der Berg, a researcher at the OECD (Organisation for Economic Co-operation and Development) ‘Effectively putting a charge on traffic assumes that the person from whom the content originates somehow values that it is read or seen by someone in Ghana or anywhere else. Quite frankly they may not care enough to pay for it. So instead of paying they may shut down access to it.’ He goes on to give a pithy explanation of how charges might affect Africans and diasporans.
“It also works the other way round. What if Ghana had content that might be relevant to non-residents and non-Ghanaians and the rest of the world puts a cost on traffic from Ghana. Would Ghana actually be capable of paying the charges? My neighbour in The Netherlands is from Ghana; however that is not visible when he is on the internet. So maybe he will not be able anymore to access content in Ghana, because his ISP doesn’t receive any money from Ghanaian telcos. Or the Ghanaian content owners block access. That might also mean that the business he and his family are running between Europe and Africa would not function as efficiently as it did before.”
The OECD’s joint study with UNESCO on the development of local content points to the dire impact increased regulation could have on access to the internet in Africa and its economic benefits. The study found that countries with lower charges all round for accessing the internet also had a higher percentage of local content – that is content relevant to audiences in a country and more often than not delivered in local languages by local providers.
Despite the overwhelming dominance of English as the language of the internet, the study holds true even for countries like Poland, that share their language with no other countries. According to the report, where countries increased charges for mobile calls and activity, calls to those countries from the United States dropped significantly, indicating that similar charges on internet content providers will have similar effects;
The Ghanaian government has put out a statement in response to Lirne Asia’s report repudiating ETNO’s proposals, but it remains to be seen whether other African governments will take as enlightened a position. Many of them will take a decision on ETNO’s “sending party network pays” model at a conference on telecommunications from the 3 -14 December – the future of the internet in Africa could very well be determined in those 11 days.
* http://africanarguments.org.Dele Meiji Fatunla is RAS website editor and also of Diaspora Debate.
Is Brazil the inheritor of the Portuguese empire in Africa?
October 5, 2012 | 0 Comments
|China has been under scrutiny as it invests in Africa, but another player has been largely ignored: BrazilBy Nikolas Kozloff*|
Though much ink has been spilt on Beijing’s rising economic presence in Africa, few have written about the continent’s most recent up and coming player: Brazil. It’s not clearwhy commentators have ignored such important geopolitical developments. Under Luiz Inácio “Lula” da Silva as well as his protégé Dilma Rousseff, Brazil has been conducting a big push into Africa which could have far reaching consequences.
Brazil’s rise on the international stage has not escaped notice by the American right. Recently, a columnist at Henry Kissinger’s National Interest wrote that one cannot overlook “Brazil’s inheritance of the Portuguese Empire’s mantle in Africa”.
To an extent, Brazil’s push into Africa is only natural. With the financial downturn taking its toll in most nations of the world, Brazil sees the Sub-Saharan region as one of the few bright spots for economic growth. Concerned that the eurozone crisis may pose a financial threat to her country, Rousseff has placed great importance on Brazil’s African expansion. Indeed, Brazil’s trade with Africa has snowballed, from just $4bn in 2000 to more than $27bn in 2011. In a sign of the times, Rousseff recently travelled personally to South Africa, Mozambique and Angola in an effort to shore up economic co-operation.
Though certainly dramatic, Rousseff’s Africa pivot is nothing new: Under predecessor Lula, Brazil opened an impressive 17 new embassies in the continent. The South American juggernaut’s giant corporations, which now operate in 21 African countries, have plunged into such diverse sectors as mining, oil exploration and tropical agriculture. Traditionally present in the Lusophone, or Portuguese-speaking African countries, Brazilian firms are now pushing into Francophone and even Anglophone nations such as Nigeria.
With such an impressive and growing presence, Brazil could one day challenge China in the scramble for Africa’s vast mineral deposits and consumer markets.
New Portuguese Empire?
As it reaches across the Atlantic, Brasilia has pursued largely economic goals by propping up its own corporate agenda, though in time the South American juggernaut could develop political interests in the region as well. Will Brazil be perceived as an interloper or a benevolent presence in Africa? As the South American nation expands its African footprint, Brazil will have to tread lightly.
Indeed, Brasilia’s political and economic elites are aware of the need for shrewd public relations. Former President Lula has remarked, “Africa cannot be looked at like it used to be seen, as a simple supplier of minerals and gas… We have to find African partners. We don’t want hegemony; we want strategic alliances.” The corporate sector, meanwhile, stresses the need for environmentally and socially sustainable policies. “We need to increase dialogue with local society, because we don’t want to come across as imperialists,” the CEO of Brazilian mining firm Vale has remarked.
In an effort to ingratiate themselves in host countries, Brazilian companies tend to hire and train local Africans and offer social projects to foster domestic development. In Angola, Brazilian construction firm Odebrecht is the largest private employer of local people in the country. During a recent trip to the African nation, Rousseff reinforced the need to hire such labour and to observe and respect domestic laws. Perhaps, it is no coincidence that Rousseff issued such statements in Angola, where Chinese companies have been criticised for not employing African workers.
Unlike China, which is enmeshed in a struggle to secure major resources, Brazil is already a resource-rich country and a major oil exporter in its own right. Brazil then sees Africa as a means of diversifying its export markets in such sectors as food, seeds and agricultural machinery while internationalising production of its major companies such as oil and biofuels giant Petrobras and mining colossus Vale. As it ventures into Africa, Brazil has also stressed its commitment to human rights, an issue which China tends to gloss over.
For the time being, such PR moves may go down well but Brazil must be careful lest it be perceived as imperialist. Brazil’s national development bank – or BNDES – is thinking about accelerating its financing for projects in Africa, including possible hydropower projects in Mozambique.
Given the bank’s tawdry environmental record, that could spell bad news for people living in the crosshairs of Brazilian investment. The BNDES corporate colossus, which seeks to create strong Brazilian multi-nationals via below-market loans, is fast outstripping even the World Bank and has rapidly become the bane of South America’s indigenous peoples.
Indeed, throughout vast areas of South America the left and indigenous peoples are just as prone to attack Brazilian imperialism as Washington’s foreign policy. From Paraguay to Guyana to Peru to Ecuador, local residents have protested Brazil’s large boondoggle projects.
In Bolivia, when BNDES announced it would support road construction through remote indigenous territory, the effort sparked protest from local Indians who characterised President Evo Morales as a foreign lackey. In Peru meanwhile, BNDES has been linked to the infamous Inter-Oceanic Highway, designed to connect Brazil to Pacific ports via Amazonian road networks.
Underside of energy colossus
In yet another sign which hardly bodes well, Brazilian state energy giant Petrobras is also making a big push into Africa.
A corporate colossus, Petrobras is the eighth-largest publicly traded firm in the world, and enjoys privileged political access at the top. Indeed, Rousseff herself formerly worked as chairwoman of the board at Petrobras, and the firm receives credit from BNDES. Currently, the corporation has operations in a whopping 28 African countries. On Africa’s west coast, Petrobras’ main goal is to find light oil in tandem with the company’s strategy to seek opportunities in ultra-deep waters.
Though Petrobras is known as a world leader in deep water drilling technology, the corporation has seen its share of environmental disasters. In 2001, for instance, Petrobras lost the world’s largest floating oil platform off the Brazilian coast following a series of explosions which killed nine workers. Moreover, environmental groups like Greenpeace charge that Petrobras’ plans to develop deep water “pre-salt” oil reserves 200 miles off the Brazilian coast will add 35bn tonnes of carbon dioxide to the atmosphere over the next four years.
In another ominous development, Brazilian company Eletrobras is considering building a $6bn hydroelectric power plant in Mozambique, possibly with the assistance of BNDES. Eletrobras has been a partner in developing the controversial Belo Monte dam along the Xingu River in the Amazon. Indigenous peoples are concerned that the project will dry up the river and drive them from their ancestral lands. Moreover, if Brazil assists Africa in constructing dams then this could exacerbate climate change. As I’ve noted before, hydroelectric plants lead to emissions of methane that are formed when vegetation decomposes at the bottom of reservoirs devoid of oxygen. That is troubling, since methane is 20 times more powerful a greenhouse gas than carbon dioxide.
Could biofuels help Africa out of the energy trap? To be sure, some African countries could use help as they are obliged to import energy. It is doubtful, however, whether Brazil can provide the continent with clean and sustainable alternatives, and in fact biofuels may exacerbate social tensions.
While sugarcane ethanol is certainly less ecologically destructive than some other biofuels, the industry’s boosters have overlooked one key fact: You’ve got to plant sugarcane somewhere. In Brazil, sugarcane crops have led to deforestation of the rainforest and, paradoxically, more carbon emissions.
In Mozambique and Kenya, the aforementioned Petrobras has been pushing biofuels projects as well as ethanol and sugar enterprises. Meanwhile, in Angola, Brazilian firm Odebrecht and BNDES are investing in a project aimed at using sugarcane to produce sugar, ethanol and power.
By turning arable land over to biofuel production, however, Brazil may wind up taking food from the hungry. According to Friends of the Earth, biofuel demand in Africa is already driving a new land grab and protests in Tanzania, Madagascar and Ghana have targeted foreign companies which acquired rural property.
Africa, a continent which has suffered from recurring food shortages and needs to feed its growing population, looks enviously at Brazil. Indeed, over the last 30 years Brazil has reversed its status as a food importer to become an important agribusiness producer of soybeans, amongst other products. As part of its big overseas push, Brazil set up a credit line to Africa to promote farmers’ purchases of agricultural equipment, and meanwhile, the Rousseff government is providing technical assistance in rural areas.
There have already been some bright spots in this Brazilian-African agricultural exchange. In 2010, for example, farmers from Mozambique, Namibia and South Africa visited Brazil to learn about the planting and harvesting of Creole or native seeds. The farmers, who were interested in developing community seed banks and strengthening family farming, met with the Brazilian Landless Peasant Movement (known by its Portuguese acronym MST). During their visit, the Africans learned about biodiversity conservation and organic farming techniques.
Such advances, however, stand to be overshadowed by Brazilian agribusiness which has created a social and environmental disaster in the Amazon and adjacent areas (for more on the soybean industry and its activities, see my book No Rain in the Amazon: How South America’s Climate Change Affects the Entire Planet). Currently, the Brazilian soybean industry is already up and running in the Sudan and is poised to leap into Mozambique as well.
Blunting corporate message
If it wants to be perceived as something other than a mere corporate juggernaut, Brazil should find other, more progressive means of interacting with the African continent. To her credit, Rousseff has already pushed a social agenda which could wind up benefiting millions.
Take, for example, Brazil’s provision of cheap and generic anti-retroviral drugs to Mozambique which will help those infected with HIV. Brazil has longtime expertise in tropical medicine too, and Rousseff has helped to finance hemophilia and sickle-cell anaemia centres for Africa.
Furthermore, the Rousseff government has awarded scholarships to Mozambican students to study in Brazilian universities. Meanwhile, from Cape Verde to Guinea-Bissau, Brasilia has been building vocational training centres
In the social arena, too, Brazil has much to offer. Under former President Lula, Brazil carried out the so-called Bolsa Familia programme which disbursed cash payments to the neediest. In less than ten years, Brazil lifted 20 million people out of poverty, and today countries such as Angola are seeking to replicate the success of such programmes. Finally, Rousseff has also provided grants to Africa to help ameliorate local food shortages.
It’s up to civil society
Up until now, Brazil’s foreign policy role in Africa has been a decidedly mixed bag. While Rousseff has championed a variety of social programmes for the Continent, such overtures could be overshadowed by Brasilia’s corporate agenda. In the short-term, there’s little danger that Africans will associate Brazil with other imperialist powers which historically played a nefarious role in the region’s affairs, much less China which is voraciously eating up resources in the present day. Yet, as Brazil deepens its presence in Africa, the South American nation may find that it needs to articulate a more over-arching vision. Brazilian civil society, which traditionally hasn’t played much of a role in foreign affairs, should try to steer the agenda in a more progressive direction.
Specifically, it will be interesting to see whether the Afro-Brazilian community seeks to shape the larger contours of Rousseff’s foreign policy. Presently, African cultural influence is extremely pronounced in Brazil. Indeed, it’s almost redundant to speak of Afro-Brazilian culture since almost 90 million Brazilians share African roots. During the colonial period, African slaves from Angola, Congo and Mozambique were imported into the port of Rio de Janeiro, and the new arrivals brought with them their religion, music, dance and cuisine.
To this day, many Brazilians eat dishes based on palm oil, beans and okra; dance to samba; practice an African-based martial art called capoeira, and follow candomblé, an African religion. In recent years, the Brazilian “black movement” has come into its own, helping to push new policies such as the compulsory teaching of Afro-Brazilian and African history in public and private schools. What is more, several Brazilian universities have picked up on the shifting cultural mood within the country and have begun to target admissions toward Afro-Brazilians.
Having both suffered through centuries of colonisation, slavery, poverty and oppression, Brazil and Africa share a common historical legacy. “It’s time for Brazil to pay off its enormous debt with Africa, African blood was spilled in the plantations and the ‘quilombos‘ [escaped slave communities],” Lula remarked recently. Yes, but the South American giant has yet to decide how to pay off such a debt, and so it will probably fall to civil society to steer foreign policy toward a more just and fair social agenda as opposed to narrowly defined corporate interests.
*Source Al Jazeera.Nikolas Kozloff is the author of No Rain in the Amazon: How South America’s Climate Change Affects the Entire Planet.Follow him on Twitter: @NikolasKozloff
Banro Foundation’s “Celebrate the Congo” Event Raises $112,000 for New Hospital in Maniema Province, DRC
October 5, 2012 | 0 Comments
|– Banro Foundation fundraiser highlights a year of spending on health care in the DRC, including construction of four new medical facilities
– Banro Foundation and the Panzi Hospital, Bukavu, inaugurate new multi-purpose women’s health unit
– New Salambila Hospital represents Banro’s 2012 “Commitment to Action” as a member of the Clinton Global Initiative
|TORONTO, ONTARIO–(Marketwire – Sept. 25, 2012) – Banro Corporation (“Banro” or the “Company”) (TSX:BAA)(NYSE Amex:BAA)(NYSE MKT:BAA) is pleased to report that the Banro Foundation, a registered charity in the Democratic Republic of the Congo (the “DRC”), is on track to complete its most ambitious year to date in advancing the quality and availability of health care in six communities of the eastern DRC.
“Celebrate the Congo” Fundraiser
A major highlight of the Banro Foundation in 2012 was the success of its fundraising event, “Celebrate the Congo,” which was held in Toronto on September 14, 2012 and attended by approximately 140 people. This celebration of Congolese art and music received outstanding financial support from Canadian and international companies active in the mining industry, as well as the guests at the event, raising a total of $112,000. Proceeds from the event are being used for the construction of a new $165,000 hospital in the town of Salambila, Maniema Province, DRC.
Among the financial contributors to the fundraising event were Banro Corporation, GMP Securities, Norton Rose LLP, Dorsey & Whitney LLP, MDM Engineering, Aggreko plc, BMO Capital Markets, Civicon Congo SPRL, Dalbit Petroleum, Loncor Resources Inc, SGS, SRK Consulting, Deloitte, TD Securities, RBC Dominion Securities and Macrae Design.
The Salambila Hospital is also Banro’s 2012 Commitment to Action as a member of President Bill Clinton’s foundation, the Clinton Global Initiative (CGI).
Inauguration of Multi-purpose Women’s Health Unit, Panzi Hospital
On August 30, 2012, the Banro Foundation and the Panzi General Referral Hospital in Bukavu, DRC officially inaugurated the new multipurpose women’s health centre at the Panzi Hospital. The new facility supports prenatal consultation, family planning and HIV sensitization, child health and other activities related to women’s health.
The new $121,000 unit was constructed by the Banro Foundation for the Panzi Hospital with funds raised through a golf tournament held near Toronto in 2011. The Panzi Hospital has earned a global reputation for its outstanding work in providing medical care for women, including women who have been victims of sexual violence. The Panzi Hospital treats an average of 3,500 women each year, free of charge.
2012 Health Care Commitments
In addition to the two projects above, the Banro Foundation is currently constructing the new Tukolo Health Centre, Phase 1 in the town of Kamituga and the new Biyombe Health Centre at Lugushwa. Both towns are in South Kivu Province and in areas that have been without proper medical care. The new health centres will open in December 2012.
Another major initiative was the delivery of a new ambulance to the Ifendula Hospital in the town of Luhwindja, South Kivu province on August 29, 2012. The new Toyota Land Cruiser, whose operations will be partly funded by Banro Foundation, replaces a 25-year-old vehicle.
Together with Banro’s mine development team at the Company’s Namoya project, the Banro Foundation underwrote the cost of transporting medical equipment from Kinshasa to Kindu, Maniema Province, for use in a hospital and schools in the town of Kasongo. The arrival of the equipment was celebrated in a public ceremony in Kindu on September 2, 2012.
Improving the quality of medical care remains a challenge in the eastern DRC. While the quality of care provided by the Panzi Hospital and its 150 satellite clinics is considered to be outstanding, the same is not true for many regional health centres. To help improve the quality of medical care, the Banro Foundation has begun discussions with a leading health NGO to assume health care management of all medical facilities built by the Banro Foundation.
The Banro Foundation
Established in 2005 and based in Bukavu, DRC, the Banro Foundation is funded by the Company with a mandate to improve the lives of thousands of people living in South Kivu and Maniema provinces through strategic investments in education, health and infrastructure development and to provide humanitarian assistance as needed. Approximately 60 projects, costing a total of approximately $3.5 million have been completed during the past seven years.
By the end of 2012 this will include construction of 10 new schools and rehabilitation of two additional schools plus the introduction of scholarships and other programs to promote educational opportunities, construction of six health care facilities, two shipments of medical equipment from Canada to the eastern DRC, the building of potable water systems including a system serving 18,000 people in four villages, the rehabilitation of over 100 kilometres of roads and bridges and many more projects.
The Banro Foundation works closely with local communities in selecting, building and promoting the maintenance of facilities. Among the principles guiding the work of the Banro Foundation is a focus on projects that benefit communities as whole and promotion of opportunities for women.
Photographs of Banro Foundation projects and events can be viewed at www.banro.com/s/CorporateResponsibility.asp. The Company’s comprehensive commitment to Congolese economic and social development is discussed at length in the Company’s 2012 Sustainability Report, A New Direction for the Eastern Democratic Republic of the Congo, which is posted on the Banro website, www.banro.com.
Clinton Global Initiative (CGI)
Established in 2005 by President Bill Clinton, the Clinton Global Initiative (CGI) convenes global leaders to create and implement innovative solutions to the world’s most pressing challenges. CGI Annual Meetings have brought together more than 150 heads of state, 20 Nobel Prize laureates, and hundreds of leading CEOs, heads of foundations and NGOs, major philanthropists, and members of the media. To date CGI members have made more than 2,100 commitments, which are already improving the lives of nearly 400 million people in more than 180 countries. When fully funded and implemented, these commitments will be valued at $69.2 billion. CGI’s Annual Meeting is held each September in New York City. CGI also convenes CGI America, a meeting focused on collaborative solutions to economic recovery in the United States, and CGI University (CGI U), which brings together undergraduate and graduate students to address pressing challenges in their community or around the world. For more information, visit clintonglobalinitiative.org and follow us on Twitter @ClintonGlobal and Facebook at facebook.com/clintonglobalinitiative.
Banro Corporation is a Canadian gold mining company focused on production from the Twangiza oxide mine and development of three additional major, wholly-owned gold projects, each with mining licenses, along the 210 kilometre long Twangiza-Namoya gold belt in the South Kivu and Maniema provinces of the Democratic Republic of the Congo. Led by a proven management team with extensive gold and African experience, Banro’s plans include the construction of its second gold mine at Namoya, at the south end of this gold belt, as well as the development of two other projects, Lugushwa and Kamituga, in the central portion of the belt. The initial focus of the Company is on oxides, which attract a lower technical and financial risk to the Company and will also maximize cash flows in order to develop the belt with minimal further dilution to shareholders. All business activities are followed in a socially and environmentally responsible manner.
For further information, please visit our website at www.banro.com. Follow us on twitter @Banrocorp and Facebook at http://www.facebook.com/pages/Banro-Foundation/123995677734860. The Banro Foundation blog is http://banrofoundation.tumblr.com/.
Wealthy Nigerians spend $6.5bn on 130 private jets
September 23, 2012 | 0 Comments
By Tunji Abioye*
The growing penchant for private jets acquisition has cost wealthy Nigerians a sum of $6.5bn (N1.02tn) in the last five years. Aviation sources reveal that the luxury trend, which rose by 650 per cent between 2007 and 2012, is encouraged among the rich by the need for privacy, fear of insecurity and the urgency required by modern business, TUNJI ABIOYE reports
Private jet ownership in Nigeria has grown by 650 per cent, from 20 jets in 2007 to over 150 jets in 2012.
According to documents sighted in aviation agencies, the development means that wealthy Nigerians acquired, at least, 130 private jets with a sum of N1.02tn ($6.5bn) within the last five years.
This put the private jets aviation market in Nigeria (the monetary value of all private jets in the country) at N1.18tn ($7.5bn), using $50m as the average cost of each brand new private jet.
A private jet goes for between $40m and $65m, according to the websites of major private jets manufacturers, like Bombardier of Canada; GulfStream and Hawker Siddley of United States; and Embraer of Brazil.
According to findings, the common brands of private jets in Nigeria are Gulfstream 450, 550 and 650; Bombardier Challenger 604, 605; Global Express; Embraer Legacy and Falcons; and Hawker Siddley 125-800 and 900XP.
Top aviation officials told our correspondent on Friday that Nigeria currently rivalled China as one of the two fastest growing private jet markets in the world.
An official with in-depth knowledge of the situation, who spoke under condition of anonymity because he was not authorised to comment on the matter, said most of the jets were bought by top politicians, oil magnates and other business moguls in Nigeria.
He explained that the economic downturn in Europe and the United States had made Nigeria and China to become two of the fastest growing private jet markets in the world.
He said, “Two countries buying private jets now are China and Nigeria. Europe and America are going through turmoil; so, their people are no more buying. This accounts for the trend that whenever some of the private jet manufacturers develop any new jet, they take them to Nigeria and China.”
“The private jets in Nigeria are owned by top politicians, oil magnates and business moguls. It is difficult to get the real identities of owners of some of the private jets in Nigeria because they buy them through some foreign companies in North America, especially the US. The foreign company then leases it to another company in Nigeria.”
Investigation by our correspondent also revealed that there were still several private jets on order by wealthy Nigerians. Some of the jets, it was learnt, would be delivered this year, while others would be delivered in 2013 and 2014.
A top official of the Nigerian Civil Aviation Authority, who asked not to be named, said representatives of the owners of the private jets on order had already notified the agency about the order. This, he said, was necessary for the purpose of registering the aircraft in Nigeria. According to him, some of the private jets also come with foreign registration credentials.
The Managing Director of Aero Airlines, Captain Akin George, had recently commented on the increasing number of private jets being parked at the Nnamdi Azikiwe International Airport, Abuja.
He particularly lamented the fact that most of the private jets carried foreign registration credentials. He had subsequently called on the authorities concerned in the country to make registration processes in Nigeria friendly and attractive.
During a recent visit to Abuja, our correspondent observed that over 40 private jets were parked at the terminal.
The CEO of another airline also said that during political meetings or big functions in Abuja, over 50 private jets were usually seen parked at the Abuja airport.
These, he said, were different from the ones parked at the Lagos and other major airports across the country.
“If you go to the old local wing at the Abuja airport, there is virtually no place to park private jets again,” he said
Just on Thursday, a team of officials from the headquarters of Bombardier in Canada arrived at the Executjets Private Hangar at the Murtala Muhammed Airport, Lagos, to showcase one of their latest private jets, Global 6000.
The team was led by the Sales Director, Africa, Bombardier Business Aircraft, Mr. Robert Habjanic, who said that the team was on a tour of 12 cities in Africa, including Lagos. Habjanic, who spoke with a few aviation journalists, told our correspondent that Nigeria was the company’s largest market in Africa, with about 35 Bombardier-made business aircraft currently flying its airspace.
He said the team had also showcased the relatively new business jet in other parts of the world.
He confirmed that “private business in Nigeria has been growing tremendously in the last five years.”
He attributed this to the fact that “Nigeria is an emerging market.”
The growth in the purchase of private jets in Nigeria has also led to the development of multimillion dollars private jets hangars, where repairs and maintenance could be done in the country. Some of these include Execujets Nigeria Hangar, Caverton Hangar and EverGreen Hangar, all located at the Lagos airport.
Speaking on the development, industry expert, Mr. Olumide Ohunayo, said, “The economy is expanding, with increasing investments within the country and the region. This will invariably necessitate instantaneous travel that scheduled airlines cannot provide.
“Also the privacy needed in a country filled with paparazzi can be an issue. Increasing political and religious issues are contributory. By and large, it will continue to increase if the economy continues with a lot of diversification inputs that naturally spread wealth.”
Young African Billionaire Ashish Thakkar
September 21, 2012 | 0 Comments
By Obed Boafo*
Creating wealth has almost become an art for most of Africa’s young people. It is the reason some continue to stay in business even in the face of a lack of support systems and favourable economic climates.
In recent times, there have been encouraging stories of how the continent’s young people are making it big in their respective fields. Gradually, a new generation of young and sophisticated minds, looking out for new challenges, is emerging and retiring mediocrity to the bench.
From Nairobi through to Lagos to Accra and Johannesburg, there is the sound of a new Africa – one that sees only prosperity. It is a wave that has got the rest of the world to begin to have a rethink (that mindset that still believes nothing good comes out of here), to a more respectable tag – that says “in Africa we trust”.
Young Ugandan billionaire of Asian origin Ashish Thakkar, Managing Director of the Mara Group of companies, who was recently listed by Forbes as one of ten Young African millionaires to watch, is an embodiment of the new Africa.
In the Ugandan capital, Kampala, he presides over a 4500-workforce group that has operations in some 17 African countries. A success story that started about 15 years ago, Thakkar has slowly but aggressively rolled out what is today a respected group that is holding their own against other multinationals.
Born in the United Kingdom, Thakkar moved to Uganda at age twelve and started charting a dream that has led him on to greater things.
Keen on a breakthrough as a young entrepreneur, he started selling computers during school holidays to friends, colleagues and professionals.
Today, the Mara Group has several units under its operations, with holdings in Information and Communications Technology, Real Estate and Hospitality and Manufacturing and Services.
‘An Ecosystem For African Entrepreneurs’
A most recent addition to the group’s tall list of business interests is the all new Mara.com, an offshoot project that has three units; namely Mara Jobs, Mara Dating and Mara Mentors, and which is expected to be a “transformational project that will nurture an ecosystem for African entrepreneurs and youth while improving skills and emerging talent”. It also seeks to be the “first multi-lingual online portal for youth mentorship and entrepreneurship”.
Mara.com, the group has said, “will be entirely free to all users, but the network’s complementary jobs and dating sites will utilize third party advertising and other revenue generating models to financially support the platform”.
The foundation of the group’s success comes from “Thakkar’s extensive experience as a successful entrepreneur and company builder”.
Highly appreciated across the world, a typical example being the World Economic Forum Community of Global Growth Companies (GGC) that selected his company as a dynamic high-growth company, he’s on several advisory panels to some of the sub-Saharan African region’s head of states. He is also is a member of the Commonwealth Business Council.
‘A Dynamic African Brand’
Also started recently by Thakkar and his Mara Group is a venture capital firm which aims at supporting young entrepreneurs.
“Mara Launch Uganda Fund, totaling UGX 100 million ($41,000), which will be scaled up to UGX 1 billion ($407,000), would be made available for investments in diverse sectors, including IT solutions, Tourism Services, Agriculture & Agro processing and Manufacturing amongst others,” its been suggested.
A dynamic African brand led by a Chief Executive who has an inspiring story to tell, the group is “synonymous with integrity, innovation and entrepreneurial flair”.
“We take pride in creating an energized environment with socially responsible investments across Africa,” they say.
“Mara’s competitive edge lies in its understanding of Africa and its experience in operating businesses across the continent, leveraging off the family’s history in the region which goes back four generations. The group’s structure reflects its “drive to build a diversified platform for expansion, while ensuring integrated operational efficiency”.
Mara and Thakkar’s passion also lies in its non-profit social enterprise; Mara Foundation, whose focus is on youth entrepreneurship and giving back to society every now and then.
The success story of Thakkar is so big an inspira
tion; Africa’s youth can always refer to it as a workable case study. There is no turning back for this young entrepreneur, and the same can be said of his empire, the Mara Group.
Interview: The man behind Africa’s answer to the iPad and iPhone
September 15, 2012 | 0 Comments
By Jaco Maritz*
Vérone Mankou is the 26 year old entrepreneur behind the African designed Way-C tablet computer. The tablet was launched earlier this year and attracted significant media attention. Mankou’s company VMK, which is based in the Republic of the Congo, this month also unveiled its first smartphone. How we made it in Africa asked Mankou about the business and how his company competes with the likes of Apple and Samsung.
Why did VMK decide to launch the Way-C tablet?
The project began in 2006. I was working at an internet service provider (ISP) and wanted to design a cheap computer to give access to internet for more people. After one year, when Steve jobs unveiled the first iPhone, I changed my plan and the project became the “big iPhone”, meaning a tablet.
Earlier this month VMK also introduced its first smartphone, just days before the launch of the iPhone 5. Why enter the smartphone market?
You know, when I was working on the tablet, I noticed that the biggest difference between a tablet and a smartphone is the screen size. After we launched the tablet we decided to work on a smartphone project, and now the project is finished. It’s a Android phone called the Elikia (which means “hope”).
Your products are designed in Africa, but assembled in China. Tell us a bit more about the design and manufacturing process.
You know it’s like building a house. Firstly you have an architect who draws the house and after you have the workers who will build that house using the plans of the architect, but the architect need to be there every time to check if everything is okay. And for the designing of a tech product, it’s the same.
You mentioned in a previous interview that you will roll out 3G enabled tablets.
The first version of the tablet was Wi-Fi only, and many people didn’t like this. They asked us to develop a 3G tablet, so now we are working on a 3G tablet that we will launch in the beginning of next year.
How do you compete with multinational tablet manufacturers such as Apple and Samsung?
For me Apple and Samsung are not interesting in Africa, because their cost is so high. My goal is to put a tablet in the hands of all Africans, their goal is just to make money. It’s different.
VMK has also launched a market place for African-focused apps. Tell us more about this.
I noticed that in Android Market, now called Play Store, more than 99% of apps are not developed in Africa and/or are not developed for Africa. When you search African content, it’s hard to find good ones. We decided to launch our own marketplace to help us promote African content. And for the smartphone Elikia we decided to launch a new version of our market, called VMK Market, with the possibility to buy apps via our gift card, called VMK Market Card. So now we are developing a real environment (including devices, content and monetisation) to help developers.
Our biggest challenge is just to get funding, because it’s needed to produce more products and for marketing purposes.
What is needed for Africa to become a serious player in the tech industry?
Funding and innovation.
What does the future hold for VMK?
We decided to launch a tablet and smartphone. It’s done. Now I want to give all African households access to technology, and develop a new tablet for education priced at about US$100.