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
In Zambia, Bush Joins Fight Against Cervical Cancer
July 4, 2012 | 0 Comments
LUSAKA — Former President George W. Bush is in Africa this week to promote cervical cancer detection and treatment programs for women, many of whom are living with
HIV. While Bush’s tenure in office was marked by unpopular wars and what critics say were failed economic policies, since leaving office he has been quietly building upon his success as president in fighting AIDS in Africa.
In Kabwe, Zambia’s second largest city, former President George W. Bush and his wife Laura opened of a new health clinic that specializes in the early detection and treatment of cervical cancer in women.
“We care because we believe that to whom much is given, much is required,” said Bush. “And those of us who live in America, live in the most blessed nation ever and therefore when we see suffering, we ought to act.”
Through his George W. Bush Center and other partner organizations, the former president has raised more than $85 million for cervical cancer programs.
He says his goal is to build upon one of the great bipartisan achievements of his presidency.
His 2003 AIDS initiative that initially funded $15 billion-worth of anti-retroviral drugs and treatment to extend the lives of millions of Africans with HIV and AIDS.
Zambia now has the second highest number of cervical cancer cases in the world, in part because many of the women infected with the disease are also living with HIV and have weakened immune systems.
“But the saddest thing of all is to know a lady’s life has been saved from AIDS but died from cervical cancer,” said Bush. “And so starting in Zambia, the Bush Center, along with our partners, are going to put on a cervical cancer crusade to save lives.”
Jane Chanda, who is HIV positive, is one of the first women at the center to undergo the screening. The health worker applies vinegar to the cervix area – to turn any cancerous nodes white – and then uses a digital camera to locate any potential problems. The screening shows Jane to be cancer-free and she says she is grateful to former President Bush.
“He’s a very nice person,” said Chanda. “I thank him and I am wishing you [him] a happy life, a good life.”
At home Bush’s presidency remains a controversial subject, dominated by the terrorist attacks of September 11th, 2001, prolonged wars in Afghanistan and Iraq and a deep global recession.
But in Zambia and much of Africa, he is remembered for saving lives. A mother in Kabwe who just gave birth named her baby George in honor of his visit.
J. Stephen Morrison, director of the Health Policy Center at the Center for Strategic and International Studies, says. Bush deserves the credit. He says in 2003, Bush saw AIDS in Africa as a humanitarian disaster – that if left unchecked could destabilize the entire continent.
“When the president came forward and said, ‘HIV/AIDS – we can save lives,” said Morrison. “We can enhance lives. We can stabilize societies.’ It was with a very powerful ethical and moral rationale as much as it was about a security rationale.”
In his post-presidency Mr. Bush says he will continue to advocate for global health issues. For him, he says, it is a labor of love.
*Courtesy of VOA 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.
USAID, Western Union Boost African Business
July 4, 2012 | 0 Comments
Washington — African entrepreneurship received a boost June 25 at the second African Diaspora Marketplace (ADM II) when 17 U.S.-based entrepreneurs were awarded grants to fund innovative business plans and promote economic growth in sub-Saharan Africa.
The grants will match ADM winners’ own funds to support growth of their businesses.
Nearly 500 entrepreneurs submitted business plans to compete for a grant as part of the ADM II competition, a collaboration of the United States Agency for International Development (USAID), the Western Union Company and the Western Union Foundation.
“The African Diaspora Marketplace will strengthen and help satisfy demand for locally produced products and services,” said USAID Administrator Rajiv Shah.
ADM has harnessed the knowledge and resources of the U.S.-based African diaspora and entrepreneurs since its launch in 2009.
The competition addresses economic opportunity and advances the ability of small- and medium-sized enterprises in North and sub-Saharan Africa to obtain capital.
In the 2012 competition, 44 finalists competed for the top awards with business plans addressing high-priority, high-impact sectors in Africa. Finalists presented plans in agribusiness, information and communications technology and renewable energy.
Winning proposals include:
• A Kenyan agribusiness implementing sustainable practices through production of high-efficiency organic fertilizer.
• An alternative power generator using agricultural waste in Liberia.
• An online medical information delivery system in Nigeria.
Each awardee can receive a total investment of up to $70,000, which includes up to $50,000 in matching cash grants and/or up to $20,000 in technical assistance.
Each winning project will be monitored for up to 24 months, USAID said. Grant payments will correspond to achievement of key milestones identified in each winner’s proposal.
Entrepreneurs also will have the opportunity to connect with winners of the first ADM competition to share best practices and learn from their experiences.
ADM II is jointly funded by USAID, the Western Union Company and the Western Union Foundation. Other contributing partners include Ecobank, African Capacity Building Foundation, George Washington University Center for International Business Education and Research, the Tony Elumelu Foundation, the U.S. Department of State and Irv Barr Management.
The marketplace competition showcased promising and innovative ideas for businesses that can create employment and strengthen trade in emerging markets in sub-Saharan Africa.
Leaders at the United Nations, USAID and other organizations have said establishing innovative, sustainable business initiatives and promoting entrepreneurship generate jobs and capital and create the potential to improve the fortunes of generations to come.
“At Western Union, we have the privilege of witnessing how diaspora communities are fostering positive change in their home countries every single day,” said Aida Diarra, a regional vice president at the Western Union Company. “The African Diaspora Marketplace is an incredibly powerful example of their efforts.”
Expanding on the success of the first African Diaspora Marketplace, Western Union and USAID invited small business investment funds and technical assistance mentors to participate in ADM II.
A full list of winners and additional information about the ADM is available on the USAID website.
Africa’s tallest skyscraper set to be taller than Empire State Building
June 30, 2012 | 0 Comments
BY Claude Harding*
South Africa could soon be home to one of the world’s tallest buildings, if the mayor of the City of Tshwane is to be believed. At 447 metres with 110 floors, the proposed building, set to be constructed in Centurion, will be Africa’s tallest structure and taller than New York’s Empire State Building.
The planned Centurion Symbio-City development will comprise two office buildings and one residential tower. The tallest tower will be 447 metres high, reaching 110 storeys. It will be flanked by two towers of 80 and 60 floors.
The City of Tshwane, the municipality under which Centurion falls, describes the project as a modern, technologically advanced, cutting edge development.
Centurion is situated in South Africa’s Gauteng Province, close to the country’s administrative capital Pretoria.
So how will the proposed Symbio-City’s tallest tower compare to the world’s tallest buildings? Not taking into account buildings that are currently under construction, such as the One World Trade Centre building in New York, the Symbio-City tower will be the 14th tallest freestanding structure in the world, only 5 metres shorter than the Petronas Twin Towers in Kuala Lumpur, Malaysia.
Tshwane is home to 132 embassies and four universities. According to Kgosientso Ramokgopa, executive mayor of the City of Tshwane, “the development is a reflection of the range of economic opportunities, cultural experiences, safety and a quality physical environment that Tshwane offers.”
It is unclear when the proposed development will be completed.
*Courtesy of http://www.howwemadeitinafrica.com
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
Nigerian President’s Call for Birth Control Sparks Debate
June 30, 2012 | 0 Comments
DAKAR, Senegal — Nigerian President Goodluck Jonathan has sparked intense debate by saying Nigerian families should have only the children they can afford. In remarks to the newly created National Population Commission Wednesday, the president said it may be time for “birth control legislation.”
Nigeria is Africa’s most populous country with about 162 million people. The United Nations says the population could reach 400 million by 2050. That’s a growth rate of 2.5 percent annually that economists say is unsustainably high for such a densely populated country plagued by poor infrastructure, poverty and unemployment.
The World Bank says a Nigerian woman has, on average, five or six children. It is not unusual for couples to have as many as 10.
President Goodluck Jonathan has called on Nigerians “to only have the number of children they can manage.” Managing population growth, the president said, is essential to economic planning and the government could adopt policies aimed at curbing rapid population growth and encouraging birth control use.
The president, himself a Christian, said the topic of population control is “sensitive” in Nigeria, where people, he said, are “extremely religious” and children are seen as “God’s gift to man.”
His comments have sparked religious debate.
Muslim leaders say Islam only allows family planning methods to space a woman’s pregnancies for health reasons, but not to control the number of children she has.
Sheikh Ibrahim Umar Ibrahim Kasuwar, a senior member of the Supreme Council of Sharia in Nigeria, says he was unhappy to hear of the president’s speech. He says nowhere in the Bible or the Quran does it say that people can be discouraged from having children. He says this is not the first time Nigerian authorities have talked about such measures but what they forget is that the people they serve are loyal first to God.
He says he has three wives and 16 children and plans to have and care for as many more as God gives him.
A local Christian leader in Kaduna state, Reverend Esra’a Kafaiza, said the Bible encourages procreation, but adds that parents have a responsibility as well.
“It is not right to give birth to more children that you can able to control – how are you going to educate them and guide them and lead them to the way of God,” asked Kafaiza. ”
Reverend Kafaiza said population growth is not the problem in Nigeria – it’s leaders are.
“The population of Nigeria cannot stop the progress of Nigeria,” said Kafaiza. “If our leaders can stand on their obligations and apply the wisdom of God and the fear of God, we can make it and succeed also in Nigeria.”
President Jonathan pointed to the example of China, which has a one-child policy and whose population growth has slowed sharply in recent years.
Politicians and community leaders said the government would be overstepping its bounds by attempting to regulate family size.
Sociologist at the University of Abuja Umar Kari says tradition and religious values make birth control a “hard sell” in Nigeria.
He says attempts to link a reduced birth rate with poverty reduction are met with disbelief.
“The ordinary people are not impressed,” said Kari. “In their own opinion, Nigeria’s major problem is not overpopulation or high rate of population increase. Rather it is the inability of the Nigerian state to properly harness the resources – mineral, natural and human resources – of the country for the benefit of the people.”
Nigeria is Africa’s largest oil producer. However, corruption and mismanagement mean that little of that wealth trickles down to the average person.
*Culled from VOA News
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.
Introducing The African Kingdoms &Empires Theme Park or “Heritage City”
June 19, 2012 | 0 Comments
By Shanda Washington*
Despite its immense potential, Africa is grossly misunderstood by many across the world. Talk about Africa and based on the image that comes to many minds is one of misery, of disease, of illiteracy, of wars, famine, poverty and other negative labels used by the western media to brand the continent. Yet this is a continent described by US Under Secretary of State for African Affairs Johnnie Carson as the last biggest emerging market in the world. It is home to some 54 countries or so I believe, it is a billion man strong markets; it has vast resources some of which are not found anywhere else in the world. Because of these resources, global powers are now making a mad rush for Africa. Beyond the vast scramble for resources that salivates predatory appetites, lies historic realities that the world is ignorant about or refuses to come to terms with. Africa is the continent where civilization started, it is the continent that is home to humanity, it is a continent that has some of the best cultures in the world, it a continent with some of the biggest empires that the world ever knew. It is partly in a bid to help immortalize the historical realities of Africa that the African Kingdoms Empires theme or “Heritage City was conceived.
Heritage city is designed to showcase Africa’s rich history, enhanced with modern technology to produce a total experience in learning, entertainment and relaxation for tourists and visitors. Heritage city represents the best initiative till date to present all of Africa’s diverse culture and history to tourists and visitors in one spot. By its existence, it is hoped that Heritage City will attract wide range of tourists from all over the world. For many African Americans who yearn to know more about their roots, the City offers a unique opportunity to get a healthy feel of Africa’s rich heritage presented in the best possible form with a dose of modernity.
The African Kingdoms and Empires Theme Park or “Heritage City”, is an idea conceived by a very good friend of mine Ekwo Omakwu, when Ekwo showed me the business plan way back in 2000, I knew I had found my life’s calling. Through lots of research, we realized that Africa did not have anything like what we were trying to do. I did not know a lot about Africa, just what I had heard. After all, they don’t teach us about Africa in school. Although so many African Americans are still not very knowledgeable about Africa a lot of it is not their fault. We are constantly being bombarded with negative images about Africa. I can remember telling my friends and family about Heritage City. And a lot of the responses were “who’s going to go to a theme park in Africa?’ “Isn’t everyone over there poor?”
When someone says that everyone in Africa is poor, I have to remind them that Porsche just opened up its first dealership on Victoria Island in Lagos. That is not to diminish the problems that the Continent does have. But, we know that Heritage city will bring thousands of jobs and boost tourism. In Monrovia, Liberia Kendeja a resort, built by African American multimillionaire and Black Entertainment television founder Robert Johnson, is a five star resort. Kendeja is the first new hotel to be built in Liberia in a decade. Retail giants like Wal-Mart are searching for inroads n the continent. I think those are positive signs for Africa and shows that Africa has potential and that people are starting to notice and understand that Africa is really the future. I think as an African Americans we have to be more proactive in our engagement with the continent. Just as the investment of Robert Johnson in Liberia is a salutary initiative so too is the school opened by Oprah Winfrey in South Africa, so too is the work done by Actor Isaiah Washington in Sierra Leone with his Goondobay Foundation. The Heritage City idea falls in line with these kind of initiatives which should forge greater bonds between mother Africa and its Diaspora.
We hope to put together groups of people to take to the park. It is so important for people to see for themselves, that what they show us about Africa is not the truth. But overall, I do feel that people have been very positive about the park. We have a Facebook page that has almost 50,000 likes.
We believe that Heritage City can help dispel the myths about Africa. Heritage city will promote a greater understanding of Africa and will highlight Africa’s contribution to human civilization. By focusing more on Africa’s pre-slavery and pre-colonial era, the achievements of African people that have been otherwise obscured will be showcased at the theme park.
Abuja- Nigeria’s capital was chosen as the location for Heritage City because it is fast becoming a magnet city for the West African sub-region and for the rest of Africa. It is a new city with new infrastructure and space for continuous expansion. There are also a number of amazing rock formations, waterfalls, hills and valleys in Abuja and surrounding areas. It must not be forgotten that Nigeria is the giant of Africa. It is the leader in the continent with developments be there social, economic or security wise which impact the rest of the continent positively or negatively. It was therefore appropriate that Nigeria be chosen to host this first of its kind project.
Heritage City Project is championed by Heritage City Parks Limited-a private development company based in Abuja, Nigeria. The project funding and planning was packaged
by the Washington; DC based US-Africa Technology Council, Inc. The project concept was developed since 2002 but administrative bottle-necks on the part of the Nigerian city government have since delayed the approval of a site for the project and its initial take-off in 2006.Nigeria is currently not known as a popular tourist destination. The promoters of Heritage City hope all that will change when Heritage City opens in 2013. The Heritage City Project stands to gain tremendously on an annual basis from a large influx of international tourists including African Americans, citizens of the Caribbean, and also indigenous Africans themselves who will be interested in learning more about their heritage in an atmosphere that is tranquil, relaxing and entertaining. The African Kingdoms and Empires Theme Park will promote Africa’s rich cultural heritage by focusing on the historical dimensions that shaped that heritage.
*Shanda Washington is the project assistant for Heritage city, and social media PR she can be reached at email@example.com ,cell phone 202-369-7170 .website www.heritagecitypark.com, Facebook page African heritage city.
Economic growth pulls Rwandans out of poverty
June 15, 2012 | 0 Comments
Business and service sector are drivers of booming growth that benefits many Rwandans.
By Steve Terrill *
KIGALI, Rwanda — Eighteen years ago this week (Friday April 6), Rwanda plunged into genocide, 100 days in which some 800,000 Tutsis and moderate Hutus were massacred and the country was battered by civil war.
In the past 17 years Rwanda has pulled its economy up from the ruins to become one of Africa’s most dynamic and fastest growing, registering at least 8 percent GDP growth for the past 5 years.
It has not been easy work and the country still has a long way to go.
A majority of Rwandans still live on less than 50 cents per day, with 77 percent on less than $1.25 daily, according to United Nations statistics.
The small country — at 10,000 square miles it is about the size of Maryland — and has the highest population density in sub-Saharan Africa. About 86 percent of the population subsists on traditional agriculture, according to the UN. Despite fertile volcanic soils and abundant rainfall, food production often does not meet demand, requiring imports.
Rwanda does not have oil deposits or other major natural resources. President Paul Kagame’s government has bet on economic growth based on tourism and services to create new employment.
Kagame’s gamble appears to be getting results. At least 1 million Rwandans have been lifted out of poverty in just five years, according to the Rwandan Household Living Conditions Survey, released by the government earlier this year.
Economic growth between 2006 and 2011 reduced the number of Rwanda’s 11 million people living in poverty from 57 to 45 percent, according to the report.
International development expert, Paul Collier, author of “The Bottom Billion,” called the Rwandan statistics “deeply impressive” and said that Rwanda had pulled off a rare “hat trick” of rapid growth, sharp poverty reduction and reduced inequality.
“This should be happening everywhere in Africa,” Collier said, at the release of the report. “Instead, it’s happening nowhere else.”
Health has improved as shown by key indicators. Infant mortality dropped from 86 per 1000 live births in 2005 to 50 per 1000 live births in 2011. The use of contraceptives went from 25 percent in 2008 to 45 percent in just three years.
Rwanda’s infrastructure grew rapidly, with connections to electricity jumping from 91,000 in 2006 to 215,000 in 2011, according to government statistics. Access to education improved sharply with primary school completion rates for 2011 reaching 79 percent for boys and 82 percent for girls, much higher than the overall targets of 59 percent and 58 percent respectively, while participation in secondary level education doubled from 2006 to 2011.
“We are happy with the valuable progress we have seen in these numbers,” said Kagame when announcing the data. “But we are also aware there is more work to be done, not less.”
Kagame said he hopes that continued economic growth will come not from aid, but from investment and capacity building. In 1995, 100 percent of the government budget came from foreign aid. In 2011, it had fallen to 40 percent. The government aims to get that to zero.
Kagame’s aim to make Rwanda the high tech hub for Central Africa was boosted by Carnegie Melon University’s decision to open a computer science campus in Kigali. Carnegie Mellon will offer information technology and electrical computer engineering masters programs beginning in August.
“A lot of people go outside of Africa to get an education, with more than 200,000 young Africans going to Europe, Asia and America every year to study,” Michel Bezy, Assistant Director of CMU-Rwanda told GlobalPost. ”This creates a brain-drain because we estimate that about 50 percent of those students never return home.”
Bezy said both Kagame and Carnegie Mellon University want Rwanda’s brightest students to study in their own country so they can stay here after graduating and help build and support the nation’s IT infrastructure.
Rwanda has invested in an advanced fiber-optic network in Africa which has helped to attract the giant payment processing company Visa. The company launched a partnership with the Rwandan government in December last year to help transform the country from a cash-based economy to a more efficient, cashless one.
“Make no mistake: This is absolutely a commercial activity from our perspective,” said Elizabeth Buse, Visa’s Group President for Asia Pacific, Central Europe, Middle East and Africa. “This new partnership will not benefit Rwandans alone. It will drive more volume and revenue across the Visa network.”
Buse added that Rwanda provides an “extraordinary development and economic framework. There is an openness to develop public private partnerships — which is very unusual among government — and there is a strong focus on developing ICT infrastructure.”
Rwanda’s business and service sectors account for two-thirds of GDP, having replaced agriculture. Tourism is a key part of the service sector. Marriott is building one of its first three hotels in sub-Saharan Africa, with a 5-star, 250-room hotel in Kigali. Marriott said it decided to enter Rwanda because of its promise as a service, transportation and logistics center for the Central Africa.
Even as Rwanda’s economy grows and outpaces its neighbors in virtually every development indicator, large wealth gaps still exist.
The country is still largely made up of agricultural workers living in grinding poverty. The coming years will be a test to see if Rwanda can include its poorest, rural citizens in Kigali’s economic boom. But analysts believe that if growth continues, even Rwanda’s poorest farmers will benefit from the country’s success.
“Rwanda is truly an undervalued asset that is positioned for strong business growth,” said Clay Parker, managing director of Bridge2Rwanda, an NGO focused on sustainable economic development. “Their corporate style leadership has a mindset of minimum bureaucracy and maximum protection. The people desire to learn and work hard. They want to be innovators who do not simply compete with the rest of Africa, but instead the entire world.”
*Culled from http://www.globalpost.com
Herakles Farms Announces Update on Its Cameroon Palm Oil Subsidiary SGSOC
June 13, 2012 | 0 Comments
Company to Proceed with Phased Development Approach to Ensure Sustainable, Environmental and Socially Sensitive Growth
– Herakles Farms, a New York-based agriculture company operating in Ghana and Cameroon, today announced new details for its Cameroon palm oil subsidiary, SG Sustainable Oils Cameroon (SGSOC), and its decision to pursue a phased development approach to allow its many stakeholders to better understand the social and environmental benefits and impacts and to be responsive to the concerns of all stakeholders that may arise.
To date, SGSOC has cultivated less than 30 hectares in the Nguti, Mundemba and Toko Sub-Divisions of South West Cameroon. Specifically, this development entails three nurseries near the villages of Talangaye, Lipenja I, (Batanga) and Fabe, with 70,000 mature trees currently ready for transfer to the field. SGSOC recently conducted pre-clearing studies on the initial 2,000 hectares of land under evaluation for field-planting development. These studies included a detailed examination of the flora, fauna, and habitat of the land adjacent to the Talangaye nursery in order to ensure the maintenance and protection of all environmental and social high conservation value areas.
SGSOC committed to development in Cameroon in September 2009, when the Company and the Government of Cameroon signed an agreement to develop approximately 70,000 hectares of oil palm in an area classified by the Government as secondary forest in the South West Region. The area had suffered economically in large part because of its isolation from services and market opportunities. Since the land in the region had been logged and farmed repeatedly in the past, the Government of Cameroon responded to the communities’ needs by designating the land for commercial, agricultural and economic development.
SGSOC conducted an Environmental and Social Impact Assessment (ESIA) for the area and submitted it to the Government of Cameroon in August 2011. The Government thereafter issued its approval through a Certificate of Environmental Conformity in September 2011. In an April 2012 ruling, the Mundemba High Court affirmed that SGSOC had complied with these environmental and land-related Government regulations and that the Company has been in order with such requirements for legal operation in Cameroon.
While SGSOC expects that approximately 60,000 hectares may ultimately be suitable for planting, before it proceeds with transferring its trees from the nursery to the field, it has committed to performing additional pre-planting studies designed to ensure that the Company has thoroughly mapped all high conservation value sites, important lands for village use, buffer zones and fulfilled other obligations to key stakeholders.
In parallel to this phased approach, SGSOC is also helping to support rural employment and development, upgrading infrastructure including roads and enhancing critical services such as healthcare and schooling. For instance, together with the local organization of medical doctors, WecCare Foundation, a program was recently completed in the villages of Talangaye and Ayong near Nguti, and Lipenja I, Batanga and Meangwe near Toko. Consultations, informational booklets, medication and a range of selected surgeries with appropriate follow-up were included in the program. In terms of education, the Company donated textbooks to 35 secondary schools in all nine subdivisions in the Ndian Division. SGSOC continues to develop its longer-term medical and educational programs for the local villages in the area.
“Herakles Farms is committed to listening to the concerns of all stakeholders and modifying our practices where necessary. We want to be a responsible leader in developing sustainable agriculture that prioritizes community development,” stated Bruce Wrobel, CEO of Herakles Farms. “We are focused on balancing our commitments to the Government regarding job creation and economic development with the specific and important interests of the local communities, as well as NGOs and other stakeholders. We are proceeding in systematic phases in order to be responsive to all concerned. Going forward, we want to foster greater openness, transparency and collaboration in our activities.”
About Herakles Farms Established in 2009, Herakles Farms is focused on identifying and implementing solutions to important food security issues in Africa. The management team has a track record of developing environmentally and socially sustainable projects that result in economic development in some of the least-developed African countries, and has received numerous awards for its work. Previously known as SG Sustainable Oils (SGSO), the Company has been an active member of the Roundtable on Sustainable Palm Oil (RSPO) since 2008.
Contact Information: Ms. Delilah Rothenberg Herakles Farms 277 Park Avenue, 40th Floor New York, NY 10167 (212) 351-0176 Rothenberg@heraklescapital.com
SOURCE Herakles Farms
Time For An African Valley? — Sub-Saharan Accelerators Start To Emerge
June 13, 2012 | 0 Comments
By Mike Butcher*
The news that i/o Ventures had launched the Savannah Fund in Africa is clearly welcome news for an emerging continent. It’s $10m fund size will be a shot in the arm for the eco-system there. But I was surprised to see that it was being described in some quarters as the “first ever” Sub-Saharan African incubator and accelerator. Because it patently is not.
“I think MEST would actually be the first model in this space,” said African tech watcher Ben White of vc4africa.biz when I asked him about this. MEST has a fund size of $20m, although it’s invested via a non-profit.
So to start getting into this, it may be that we are well over-due for a run-down of accelerators in Africa. Here’s what we’ve found so far.
There’s clearly been a proliferation of coworking spaces and tech incubators around Sub-Saharan Africa over the last 3-5 years. Accelerators linked with funds are a more recent phenomenon:
1. MEST: Meltwater Entrepreneurial School of Technology (MEST) provides training and mentoring in Accra, Ghana. Started in 2008, MEST is a not-for-profit NGO that is funded by the Meltwater Group through its non-profit Meltwater Foundation. Invests in 3-5 startups per annual programme. Fund size: $20m spread over 10 years.
2. HumanIPO (Nairobi, Kenya). Launched 2011. 88mph is their seed fund. Takes a minimum 10-15 investments per year. Has room for 25 startups in its space. Fund size: Uknown.
3. Umbono (Cape Town, South Africa). Launched 2011. This is Google’s accelerator & fund. Puts in $25k to $50k seed capital. Fund size: Unknown.
5. Mara Launchpad (Kampala, Uganda). Launched 2012. Backed by Mara Foundation. Fund size: Unknown.
6. Lastly there is the co-working space iHub (Nairobi, Kenya) launched 2010 and is now the base for the Savannah Fund as mentioned above. Fund Size: $5m, but is aiming to be $10m eventually.
The Savannah Fund is coming out of i/o co-founder Paul Bragiel and i/o entrepreneur-in-residence Mbwana Alliy along with Erik Hersman a cofounder the Ushahidi crowd sourcing platform and a cofounder of Nairobi’s iHub. Five early stage $25,000 for 15% equity and three to six months to prove themselves. Follow-on funding for the successful ones will be in the region of $100,000 to $200,000.
Savannah Fund has backing from Tim Draper, Dave McClure of 500 Startups, Yelp co-founder Russ Simmons, and Dali Kilani and Roger Dickey of Zynga, as well as local Kenyan entrepreneurs, including Karanja Macharia of Mobile Planet.
Savannah will also run an incubator like i/o in San Francisco for ten companies a year, but it appears the companies will be sourced in Nairobi with the ones showing promise being shipped over from East Africa to the US to scale up.
The consensus on the ground amongst seasoned AfricaTech watchers is that while Nigeria has the fastest growing economy it’s also pretty dangerous at the moment. Kenya also has its issues but is widely regarded as a strong hub for tech companies in Africa, and Tansania has potential, but Ghana is quickly gaining a reputation because of its relatively stable business and political environment and the English language is widespread. It’s also becoming a big airline hub because airlines prefer not to drop their staff into potentially dangerous countries.
Expect more Africa coverage from TechCrunch in due course…
*Culled from http://techcrunch.com
Economic growth stirs hope in Africa
June 13, 2012 | 0 Comments
Over the next five years, the continent will expand faster than any other
By Emily Dugan *
While ministers in Europe try to hold together crumbling economies, a success story has been quietly emerging to the south. Africa is experiencing its longest income boom for 30 years, with gross domestic product growth rates averaging about 5 per cent annually over the past decade. Even this year, as markets elsewhere collapse, the continent’s income is projected to increase by around 4.5 per cent.
Africa will have the world’s fastest-growing economy during the next five years of any continent, according to the International Monetary Fund. Its forecasts also show that seven of the world’s 10 fastest-growing economies will be African, with Ethiopia, Mozambique, Tanzania, Congo, Ghana, Zambia and Nigeria expected to expand by more than 6 per cent a year until 2015.
The world is starting to take notice: trade between Africa and the rest of the globe increased by 200 per cent between 2000 and 2011. As well as the usual exports of oil, natural gas and minerals, the sale of African-manufactured goods is also increasing. Over the past ten years, African manufactured output has doubled.
Zambia is one of the continent’s most promising economies, growing at 7.6 per cent in 2010 and 6.6 per cent in 2011. Thanks to the technology boom, its supply of copper, which now accounts for almost half its exports, is highly sought after. Though it is still among the poorest in the world – it is ranked 164 out of the 187 countries on the UN Human Development Index – there are signs that its economic success is starting to translate into better lives for its citizens. By 2009, the country had full primary school enrolment, up from 80 per cent in 1990, and the latest figures show a decline in the infant mortality rate to 86 per 1,000 live births in 2009 from 88 in 2008.
Marcelo Giugale, the director of the World Bank’s poverty reduction programme for Africa, has been watching how the continent’s economic successes impact on its poorest people and is cautiously optimistic. “Sustained growth is necessary but not sufficient on its own to have an impact on poverty”, he said. “You can have growth for a long time and it will help only a few people. We have been lucky that growth has been accompanied by poverty reduction. Not as much as you’d hope, but still. We don’t have continental numbers, but we do have individual countries that show a reduction in poverty, especially extreme poverty.
“In Kenya, Nigeria, Rwanda and Mozambique, infant mortality, health indicators and educational attainment have all improved.”
Mr Giugale believes the mineral-rich continent could see even greater leaps. “If Europe holds together, I think this growth in Africa will continue,” he said. “We are only at the tip of the iceberg in terms of the commodities that Africa has that we know about. I would estimate we still know only about 10 per cent of what’s there. There is so much still to discover.”
Technology has helped speed up growth. In Kenya, for example, mobile phone bank transfers have revolutionised rural access to cash. Just two years after the mobile banking system M-Pesa was introduced in 2007, 40 per cent of Kenya’s adult population had become customers.
There are also early signs of a growth in the continent’s middle class. An African Development Bank report has projected that by 2030 much of the continent will have a middle-class majority and that consumer spending will soar from $680bn in 2008 to $2.2trn.
Joel Kibazo, a consultant working with Oxford’s Centre for the Study of African Economies, says the signs of an emerging middle class are encouraging: “If you look at my country, Uganda: when I was growing up, there was one university, now there are about 30. All these people who are educated are coming out wanting a middle-class lifestyle. They don’t want to go back to villages and mud huts, they want to buy microwaves and laptops.”
But he fears the current European crisis could chip away at the successes. “In 2008, when the rest of the world fell off a cliff, Africa continued moving up”, he said, “but this time, I don’t think it’s going to escape the turmoil in Europe in the same way.”
Emerging economies, such as India and China, do not seem put off, however, and are snatching up opportunities in mineral-rich countries. In 2008, the Democratic Republic of Congo took $6bn of Chinese money for infrastructure – some 2,400 miles of road, 2,000 miles of railway, two universities, 32 hospitals and 145 health stations. In return, China got a slice of the country’s natural resources to feed its own industry – 10 million tons of copper and 400,000 tons of cobalt.
In contrast, Britain has not seized chances on the same scale. Razia Khan, a senior researcher for Standard Chartered Bank, said: “Africa is trading that much more with the emerging powers, so the UK’s share of trade with Africa is not as dominant.”
Over the next 40 years, Africa’s population is set to double, from one billion to two billion, a massive increase in the number of young people of working age. The median age on the continent is currently 20 – half that in Europe, where the economy is faltering.
Yet the continent’s recent swift expansion has largely passed by northern Africa. In Egypt, growth fell by 3.3 percentage points to below 2 per cent in 2011, and in Tunisia a fall of 4.2 percentage points produced contraction of around 1 per cent, according to analysts at the African Economic Outlook. In Libya, the civil war brought oil production to a standstill and GDP shrank by more than 40 per cent. The more mature economy of South Africa also bucked the trend for economic expansion, expanding its output by only 3.1 per cent in 2011.
Despite the economic gains, there are some who find the regimes unpalatable. Tom Cargill, the assistant director of the Africa programme at the foreign policy think tank Chatham House, said: “If you’re interested in states becoming more economically successful, then what is coming out of Africa is good news. But if you are interested in an Africa where human rights are respected and governments take on the attributes of Western democratic countries, including fair elections and freedom of speech, then it isn’t good.
“African states are finding their own ways to economic growth which don’t conform to those liberal human rights criteria. Part of that is because Europe is declining, so European prescriptions of how to behave, in terms of governance, is becoming less attractive to African states.”
Though some may be uncomfortable about how it got there, it seems Africa can no longer be dubbed “the hopeless continent”.
*Culled from http://www.independent.co.uk/news/world/africa/
BBC announces major new focus on Africa*
June 13, 2012 | 0 Comments
The BBC has today announced its first-ever dedicated daily TV news programme in English for African audiences. The new programme, BBC Focus On Africa, brings together the expertise of the BBC World Service’s African Service and BBC World News on television. It is the first in a range of new programming for Africa to be launched by the BBC this summer, including a major expansion of its TV offer.
BBC Focus on Africa will be aired by the BBC’s broadcast partners in Africa and will be shown globally on BBC World News. It forms just one part of an expansion of the BBC’s offer on TV, radio and online.
The BBC today named Komla Dumor and Sophie Ikenye as the main presenters of the daily 30-minute news programme.
BBC Focus On Africa will be launched on prime-time TV across the continent from 18 June 2012 at 17.30 GMT. The programme will draw on the pool of BBC African talent on the continent and in London to report on Africa’s rising economies, entrepreneurs, innovators, culture, entertainment and sport.
Focus on Africa will be covering the major news from the continent and asking: is there a way out of the Sudan crisis? What impact will Europe’s economic problems have on Africa’s booming economies? How does Africa deal with its growth in natural resources?
The programme will also challenge African leaders and politicians on tough issues. Focus On Africa will report on the latest developments in business, technology and science and speak to those driving change. It will also look at how Africa is becoming an information technology hotspot. The programme will report, for example, on Kenyan scientists who are at the forefront in discovering cheaper, locally produced medicines to combat malaria.
Focus On Africa reporters across Africa will be giving us a snapshot of the innovation, lifestyle and culture of the country they live in. The programme will feature Africa Beats, looking at the people behind Africa’s varied music scenes. Every step of the way viewers will have their say through social media.
Focus on Africa presenter Komla Dumor says: “After decades of turmoil and uncertainty, a new Africa is emerging. The old stereotypes are being challenged and a new, compelling narrative is being written. I am incredibly excited to be part of a new BBC programme that will provide solid coverage and analysis of Africa’s challenges and prospects.”
Solomon Mugera, the BBC’s Africa Editor, says: “Africa is now one of the fastest developing news markets in the world – this new investment will expand our services for African audiences.
“While radio remains popular in Africa, TV is growing – and our partnerships with leading African broadcasters play a key part in these future plans. Mobile phone ownership is racing towards a billion, internet connectivity is rising and social media is empowering audiences. It’s essential that the kind of independent journalism the BBC does that isn’t slanted to one political or commercial viewpoint remains central to the new media landscape.
“With correspondents in 48 African countries, production centres in Nairobi, Abuja, Johannesburg and Dakar and a weekly audience of 77 million, the BBC already has deep roots in the continent. Our journalists are from the African countries they report on – in English, Swahili, Hausa, Somali, Kinyarwanda/Kirundi and French – living and breathing the big stories and issues facing Africa.”
The BBC also announced that six special episodes from Africa of current affairs interview programme Rendezvous, hosted by Zeinab Badawi, will be broadcast on BBC World News from mid-June with guests including President Kikwete of Tanzania.
The BBC newsgathering resources in Africa are part of a global network of 70 bureaux. The BBC made its first broadcast to Africa more than 80 years ago. The combined audience on radio and television makes the BBC the largest international broadcaster in Africa.
*Courtesy of http://www.bbc.co.uk/mediacentre/worldnews/
Cuba injects doctor diplomacy into Africa
June 11, 2012 | 0 Comments
By Nick Miroff*
Oil-pumping African nations pay hefty sums to staff their hospitals with thousands of Cuban doctors, with most of the money going to the Cuban government.
HAVANA, Cuba — Africa is a growth market for the world’s best-known Cuban brand after Havana Club rum and Cohiba cigars.
That would be Cuba Rx, also known as Havana’s doctor diplomacy.
A generation ago, Fidel Castro sent Cuban soldiers to intervene in African civil conflicts and fight the Cold War against US proxies. Now, Cuba’s doctors are fanning out across the continent as the island expands its role in administering medical services to some of the world’s most ailing countries.
For Cuba the effort is good philanthropy, good diplomacy and, in some cases, good business. The Cuban missionaries are part of a widening global medical outreach that has boosted Havana’s ties around the world and earned billions in hard currency for the cash-strapped Castro government.
The largest contingent of Cuban doctors working abroad remains in Venezuela, Cuba’s closest ally, where they have helped boost support for Hugo Chavez’s government by staffing clinics in rural areas and rough neighborhoods where health services are scarce.
In turn, the Venezuelan government sends Cuba billions in cash as well as critical supplies of oil. But Chavez is facing re-election in October as well as an uncertain recovery from an aggressive and still-undisclosed form of abdominal cancer.
If a leadership change in Venezuela were to cool relations with Cuba, thousands of Cuban doctors could be reassigned elsewhere — many to Africa, where fast-growing economies and rising commodity prices have left some governments flush with cash yet lacking in health care professionals.
Some 5,500 Cubans are already working in 35 of Africa’s 54 countries, Cuban Foreign Ministry official Marcos Rodriguez told reporters this week at a press conference in Havana.
Of those, 3,000 are health professionals, and 2,000 are doctors, he said.
“We have blood ties with Africa,” the deputy minister said.
Some 1.3 million African slaves were brought to Cuba during the island’s colonial period, Rodriguez said, and 2,289 Cubans died fighting in Angola between 1975 and 1990, where some 300,000 Cuban served.
“Cuba believes that it has a historic debt to Africa that must be repaid,” he said.
Then again, Cuba’s debt repayment is not an entirely one-way affair.
While Cuba sends physicians to Africa’s poorest countries and grants scholarships for their students to study medicine on the island, it does a brisk business with more prosperous countries on the continent — especially those that are rich with oil and poor in health professionals.
Petroleum-pumping Africa nations such as Algeria and Angola are paying hefty sums to staff their hospitals with Cuban doctors, with most of the money going to the Cuban government.
For instance, the Angolan government pays Cuba about $5,000 a month for each doctor the island sends, according to a source with knowledge of the arrangement. The Cuban doctor receives a $500 share.
It’s a tiny cut, but the amount is still about 10 times what Cuban doctors can earn back home. The Castro government also rewards physicians who complete medical “missions” with other perks — like the ability to buy a used car from the state.
The specific details of each arrangement between Cuba and the countries that receive its doctors and other professionals are not public. But the programs seem to work along three basic channels: providing medical help free to poor countries that can’t pay, charging countries that can pay, and training medical professionals at universities back in Cuba.
This sliding-scale policy has won Cuba friends around the world, as students from more than 100 countries have been trained at the island’s medical programs. According to a report this week in the Toronto Star, nearly 20,000 foreign students are currently receiving medical training in Cuba — including 116 Americans on scholarship.
But not all foreign students are studying in Cuba for free. When officials in Ghana announced recently they had reached a deal with the Castro government to train 250 doctors over a six-year period, the arrangement was criticized by Ghanan officials who argued the money would be better spent boosting education doctors back home.
Many African doctors who train abroad opt to work in foreign countries where salaries are higher, and the Cuba’s training urges them to serve their communities back home.
After the 1959 Cuban Revolution, Africa was one of the first places Cuba’s health missionaries went when a small medical brigade arrived in Algeria following the country’s anti-colonial fight against France. Cuban medical personnel also accompanied Cuban soldiers sent to aid leftist allies in Angola, Namibia and elsewhere.
And the ideological battle between the US and Cuba is still playing out on African soil. A program created by the Bush administration in 2006 creates special visas for Cuban medical personnel who wish to defect from their missions abroad.
About 800 doctors have done so to date, drawing fierce criticism from the Castro government, which says the US visa program deprives poor countries of desperately needed medical care.
Culled from GlobalPost
With Kenya election, East Africa enters make or break season
June 11, 2012 | 0 Comments
By CHARLES ONYANGO-OBBO *
As Kenya heads into the first election under its new Constitution, the East African Community too will begin its most dramatic transition.
The transition season will end in 2017 in Rwanda, when President Paul Kagame is scheduled to step down. How the leaders and East African citizens play their hands over this period, could make or break the East African project.
For starters, more East African leaders will be leaving office and handing over to new leaders in this period, than at any other in the region’s history. Kenya’s president steps down next year in March when the country votes, after serving his constitutionally provided two terms in office.
Burundi and Tanzania, both countries with term limits, will go to the polls in 2015 and Presidents Pierre Nkurunzinza and Jakaya Kikwete will leave office.
Only Uganda, where term limits were scrapped, goes to elections in 2016 with uncertainties about whether President Yoweri Museveni — who has been in power since 1986 and is already the longest-serving East African president ever — will bow out or soldier on.
Over the past year, Museveni has had to continually quell his riotous ruling National Resistance Movement, where youthful MPs, sensing that the elder leader’s prestige has been tarnished by years of corrupt government and alleged nepotism, figure that he is no longer the Colossus he was some years back.
At the official age of 68, Museveni is looking wan and is frequently off colour, which has prompted what promises to be a messy internal succession scramble. So far, it is presumed that the abstemious and wily NRM secretary-general, Prime Minister Amama Mbabazi, is the man at the front of the succession queue.
Other claimants to Museveni’s throne have ganged up on him, and have thrown everything that is not nailed down at his head and character.
More than any other in the region, the succession in Uganda is set to be the most unpredictable.
In Rwanda, Kagame has given all indications that he is packing his bags and clearing out of State House. But Rwanda-watching and Kagame-bashing and Kagame-boosting are among the biggest industries in the world as far as Africa goes, so there are many voices who don’t think the former guerrilla leader will leave office.
In any event, there is one thing about Rwanda that is not doubt. The Rwanda Patriotic Front, easily Africa’s most disciplined ruling party and one of its richest, will continue to run the show for a long while. And Kagame, who will still be a relatively youthful 60-year-old in 2017, will continue to exert influence over how business is conducted in Rwanda.
The comings and goings in East African State Houses over the next five years are important, because over this same period, the EAC will be undergoing a radical remake. Last week, EAC Secretary General Dr Richard Sezibera said fragile South Sudan’s application to join the EAC is being studied.
South Sudan’s admission is likely to be quick. Uganda’s Deputy Prime Minister and Minister for East African Community Affairs Eriya Kategaya said earlier this year at the launch of the Society for International Development’s State of East Africa Report 2012 in Nairobi, that there was a strategic need to admit South Sudan into the EAC fold in order to “protect the new nation against aggression by [north] Sudan.”
War-scarred but slowly stabilising Somalia has also applied to join.
Somalia will take critical steps towards restoring functioning government for the first time in over 20 years between now and August, when it will have passed a new constitution, elected a new parliament, and its first democratically appointed president in generations.
The Amisom wand
The modest progress made in stabilising Somalia is thanks to the African Union’s peacekeeping force in Somalia, Amisom. Until this year, two EAC countries — Uganda and Burundi — were the only two countries providing troops for Amisom and it is they who broke the militant Al Shabaab’s back in Mogadishu, and lately took the key city of Afgoye, Somalia’s breadbasket, considerably improving food security, an important factor if the country is to return to normalcy.
Kenya entered the Somalia fray in October 2011, and after a cautious first few months, has been aggressive in recent weeks, taking the town of Afmadow, and setting its sights on the strategic Kismayu port town.
The Kenya Defence Forces, which were “re-hatted” as Amisom troops in February, said last week that they would have Kismayu in the bag by the key date of August.
With Kismayu, Mogadishu, and other important regions of Somalia controlled by Amisom and the Somalia government, the new government elected in August will have a reasonable degree of credibility. In all probability, Burundi, Kenya, Uganda and Djibouti Amisom forces — which will shortly be joined by Sierra Leone — will remain in Somalia for a few more years.
They are unlikely to leave their shining foreign policy prize out of the EAC, when they withdraw. Indeed, because of the mutual EAC defence pact, the regional armies will have a legal basis to remain in Somalia were the Amisom mandate to expire soon, if it were a member of the Community.
How the EAC will cope with, possibly, five new presidents having to deal with new members — South Sudan and Somalia — who are politically unstable and whose government structures will still be primitive, is anyone’s guess.
History is the best guide here. The EAC has survived transitions before — none of the EAC presidents in power today, with the exception of Museveni in Uganda, was in office when the EAC charter was first signed in 1999.
But some of East Africa’s coming challenges are unprecedented.
According to the State of East Africa Report 2012 (SoEAR2012), the region’s population has grown by 24 million since 2005 and was estimated to be 139 million in 2010.
“The most important population characteristic of East Africa are its children and youth”, said SoEAR2012, “who account for an overwhelming majority, 80 per cent, of the region’s population in 2010.”
Most of these are unemployed, with youth joblessness rates in countries like Uganda estimated to be over 80 per cent. Youth discontent and unrest is rising, and over the next five years, new — and possibly inexperienced — EAC leaders will be the ones to deal with the problem before it explodes into revolt.
Kenya’s Independent Electoral Boundaries Commission (IEBC) is aiming to register 18 million voters in total — about four million more than the number in 2007. Not all these voters will be youths, but if we consider that Kenya’s population is currently increasing by one million every year, and that between 1999 and 2006 the working-age population increased from 9.7 million to 13.1 million (approximately 500,000 young people joining the work force every year) then it is likely that most of Kenya’s new voters will be between 18 and 24 years old.
With their vote in 2013, will come expectations of a good deal from the new leaders. This same pattern will be replicated in most of East Africa.
With the recent discoveries of oil and gas in the region, governments will have the money to pay for new job and social programmes and buy off restless voters.
Uganda’s oil is expected to start flowing in 2017, Kenya’s at perhaps around the same time. Tanzania is also likely to find a lot more deposits of gas, as is Rwanda, which is also exploring for oil.
However, most of the secessionist demons in Africa also live in East Africa. The region has seen the most number of successful secessions in Africa —Ethiopia/Eritrea, the Sudans; and there is a high possibility Somaliland will break away — evidence that perhaps East Africans are quite a schizophrenic people, integrationist and parochial at the same time. The Tanzanian Union is also coming under pressure. A fortnight ago in Zanzibar, Uamsho, a group that is demanding a referendum on Zanzibar’s secession from Tanzania, was behind three days of disturbances in which churches were burnt.
In the 2010 election, Zanzibar took some steps to put an end to perennial election violence by instituting a new power-sharing deal so that it’s no longer “winner takes all”: Ali Mohamed Shein from the governing CCM (Chama Cha Mapinduzi) party was voted in as president in elections in November 2010.
He narrowly beat Seif Sharif Hamad of the opposition Civic United Front. Under a power-sharing deal, Mr Sharif serves as one of Shein’s vice-presidents. The power-sharing deal was enshrined in a constitutional amendment adopted in 2010 to end perennial election violence.
While Uamsho’s secessionist demands are a new wrinkle Tanzania doesn’t need, the fact that the country’s new constitution is expected to be inaugurated in April 2014, means it has a chance to offer Zanzibar an additional calming sweetener.
The worry in Tanzania will probably be that Kikwete’s successor will have a bigger political fight on his hand than his predecessor.
The ruling Chama Cha Mapinduzi’s fortunes have been dwindling in recent years, as the party is bogged down by corruption scandals and rising internal struggles. In the 2005 election, for example, CCM won 206 out of 232 seats, and Kikwete was elected with 80 per cent of the vote.
It bled in the 2010 election. CCM won 186 out of 239 seats, and this time Kikwete had to make do with 62 per cent of the vote — even then, there were allegations that the vote was stolen.
CCM should still scrape by, but the fact that it has become comfortable with running the show largely unchallenged since just after Independence, means it could become nasty if faced with the real possibility of losing power. That point, though, is not about to come tomorrow.
In November last year, a rights group reported that more than 300 people had been killed in the preceding five months, including opposition and former rebel FNL members.
The dangerous slide continued in Burundi, with Human Rights Watch reporting last month that there had been a significant increase in political violence: “Reciprocal killings by members of the ruling National Council for the Defence of Democracy-Forces for the Defence of Democracy (CNDD-FDD) and the former rebel group the National Liberation Forces (FNL) increased, particularly in Bujumbura and in Bujumbura Rural Province. Impunity for these crimes remains one of the most serious obstacles to peace. The single largest incident of killings took place in September in Gatumba, near the Congolese border.”
Of the five members of the EAC, Burundi is probably the one over which most sleep should be lost. But if Nkurunziza’s successor is a gentler ruler, it too might still have a prayer.
Long-term, East Africa must worry about a common problem of institutional credibility. It seems that the majority of East African president are able to capture their countries’ imaginations, but the institutions th e state and other leaders don’t.
A Gallup poll published on April 25, for example, showed that in Kenya 62 per cent of respondents approved of President Kibaki, but only 38 per cent approved of the country’s wider leadership.
In Tanzania, 66 per cent approved of President Kikwete, but only 59 per cent approved of the country’s wider leadership. In Uganda, 60 per cent of respondents approved of President Museveni, but only 49 per cent of the country’s wider leadership.
There were no polling numbers for Rwanda, but President Kagame typically turns in high ratings in most opinion polling. Little polling is done in Burundi, but the same pattern might well be repeated there.
These numbers might flatter the leaders, but for as long East Africa is a region ruled by men, not institutions, it is will also more likely continue to report a democratic deficit.
*Courtesy of The East African
Nigeria celebrates first home-made warship
June 8, 2012 | 0 Comments
By Will Ross *
After nearly five years in the making, the Nigerian navy ship or NNS Andoni was launched with a colourful event.
At 31m (100ft) long, this is no giant of the seas, but the fact that it was designed and built in Nigeria, by Nigerian engineers, is a great source of pride.
“We are all happy and elated,” said Commodore SI Alade, one of Nigeria’s senior naval officers.
“This is the first time this kind of thing is happening in Nigeria and even in the sub region.”
Moments after stepping on board NNS Andoni, sailor FL Badmus said: “I feel on top of the world.
“I’m proud to have been picked by the naval authorities to serve on this ship.
“We hope this is the beginning of very good things to come and we thank God for it.”
The warship was named after the Andoni people of south-eastern Nigeria – and several chiefs travelled to Lagos to witness the launch – including his Royal Highness NL Ayuwu Iraron Ede-Obolo II, wearing a top hat, a sequin-adorned velvet gown and a brightly coloured necklace.
The ceremony also featured multi-faith prayers, with an imam asking God to “protect and preserve this ship from the dangers of the day and the violence of the enemy”, and a Christian praying: “May she sail with success like the Ark of Noah.”
The event had an interesting twist of symbolism for the guest of honour, Nigeria’s leader, Goodluck Jonathan.
He is from a family of canoe makers – and that he is now the president launching a warship is a sign of how far he has risen.
“This is the beginning of the transformation… and I believe in another 10 to 15 years, we can be thinking about starting a project to take Nigerians into the air,” President Jonathan said.
The NNS Andoni could be key in the fight against militants operating near Nigeria’s oil fields as well as the growing threat of piracy in the Gulf of Guinea.
Piracy in Nigerian waters is on the increase and incidents are happening over a wider area, according to the International Maritime Bureau.
There were 10 piracy attacks off the 780km (485 miles) of Nigeria’s coastline during the first quarter this year – the same number reported for the whole of 2011.
“While the number of reported incidents in Nigeria is still less than Somalia… the level of violence against crew is dangerously high,” according to a recent IMB report.
The NNS Andoni is equipped with an advanced radar system and firepower.
“With a speed of up to 25 knots (46km/h), this can quickly go to intercept the pirates,” said Commanding Officer Adepegba standing on the bridge pointing out the ship’s three machine guns and the automatic grenade launcher.
The Nigerian navy reportedly wants to acquire 49 more vessels over the next 10 years. But how many will be home built?
Orders are already in – for three from a French shipbuilder, and six from Singapore.
President Jonathan recently approved the acquisition of two large patrol vessels from China Shipbuilding and Offshore International, a mainly state-owned company.
In an effort to boost local industry, one of the Chinese vessels is meant to be 70% built in Nigeria.
NNS Andoni was dwarfed when a 105m-long frigate steamed past during the ceremony – with all the officers cheering on deck.
NNS Thunder, a veteran of the Vietnam War, arrived at the beginning of the year, a gift from the US.
Eyebrows were raised when it was announced that the monthly fuel bill of the 45-year-old ship would be $1m (£650,000).
When this year’s navy’s $450m budget was discussed at the House of Assembly in January, one senator described the donated ships as hand-outs that could become liabilities rather than assets.
There were also calls for corruption to be plugged.
“Corruption has sucked the blood out of our system. So we have to depend on hand-outs,” one senator lamented.
NSS Andoni’s fuel bill will certainly be lower than NNS Thunder.
‘No indigenous touch’
After parading on the deck, the naval officers took photos of each other with mobile phones – clearly delighted with the new ship.
“It’s a great day. It’s taken over five years but it’s worth it,” said a smiling Kelechi, one of the engineers.
“We came up with the design, the expertise and about 60% of the materials were locally sourced. The engines, generators and navigation equipment came from outside.”
Nigeria is one of Africa’s biggest oil producers, but this has not so much helped as hampered the development of local industries because the country has relied so heavily on imported goods. As he launched NNS Andoni, President Jonathan lamented the decline of industries that had been strong not long after independence in 1960.
“We had Nigerian Airways, the Nigerian shipping line and a number of investments that were doing well. But because there was no indigenous touch, all these died,” the president said.
“We are told that some countries that were on par with us are now building aircraft, choppers and other things,” he said, adding that Nigeria had for a long time not embraced technology.
The president suggested sending the brightest students of engineering to the best universities in the world.
“Then let them come back and work in Nigeria because we cannot continue to be importing. We have a very large market and even what we consume alone is enough to support an industry.”
“We have this market, we must use it,” President Jonathan said – before laying the keel to mark the start of work on the second “Made in Nigeria” warship.
*Courtesy of BBC Africa
How some western entrepreneurs are abandoning Silicon Valley for Africa
June 3, 2012 | 0 Comments
By Dinfin Mulupi*
East Africa’s growing opportunities in the technology sector have proved too good to ignore for some entrepreneurs from western countries. While many people in Africa have for a long time viewed the US and Europe as the lands of opportunity, young entrepreneurs from western countries are abandoning Silicon Valley to participate in east Africa’s technology sector.
Jeremy Gordon (27) came to Kenya two years ago to work as a volunteer with a microfinance institution in Nairobi for four months.
“I just wanted to come and see how mobile money was being applied in microfinance. I had read a lot about M-Pesa. I was planning to go back to graduate school, but I decided to stay and explore opportunities here,” says Gordon.
Today Gordon is involved in a number of technology startups. He co-founded Niko Hapa Ventures, a loyalty programme that enables businesses to reward loyal customers, get feedback and generate buzz on social media.
Though he grew up in the San Francisco Bay Area – home of Silicon Valley – Gordon says he finds the ICT opportunities in Kenya more interesting than those in the US.
“It is significantly easier to raise money in Silicon Valley, but both the problems being addressed by ICT and the solutions people are working on [in Silicon Valley] aren’t as exciting to me,” says Gordon.
Michael Benedict moved to Uganda to work for an NGO, but when his contract expired he opted to stay and founded Carbon Keeper, a mobile phone and web based software for collecting customer information on rural energy projects.
“I worked on rural energy for four years in Washington D.C. Moving to east Africa was an opportunity to come out and actually be involved in a project on the ground and work on technology that people in D.C. are promoting. I am able to do it in a better way than I would at my desk in D.C.,” says Benedict.
“East Africa is at the cusp of a technology-driven inflection point. We saw an opportunity to help redefine commerce and be a part of something meaningful,” says Ben Lyon (26), a US expat who co-founded Kopo Kopo, a web based mobile payment gateway that helps businesses process mobile payments in real time.
Having witnessed the internet revolution in Denmark in the early 1990s, Michael Pedersen sees the technology revolution in east Africa as a second chance to grab opportunities missed earlier.
“East Africa is a place I have been following since 2006. I worked with a digital agency in Kenya and later moved back to Denmark. When the fibre optic cables landed I moved back because it presents new and exciting opportunities,” says Pedersen, developer of Uhasibu, a web and mobile cloud based accounting system developed for SMEs.
Sandra Zhao (23) cooked at a restaurant and ran a tech startup on the side in New York. She moved to Kenya and is today working with a technology focused social enterprise; One Degree Solar, a solar energy company that uses a mobile platform for communication with its customers.
“My friend who was here (in Kenya) kept talking about the iHub (a co-working space and business incubator in Nairobi) and all the cool things happening here. The more she talked about it the more I wanted to come. It is a unique place to be,’ says Zhao.
Bas Hoefman (35), a Dutch national, explains that he established Text to Change, an organisation that uses SMS to challenge people on their knowledge of personal health, in Uganda primarily because of the wide penetration of mobile technology in the region.
Hoefman explains that mobile phone technology is the most effective and affordable medium of communication and has and will continue having a huge impact on rural communities in east Africa.
“With the promising growth of cheap Android phones it will also be Africa’s laptop as most people will not need to own one to access communication. The mobile phone landscape in Africa has rapidly evolved over the past decade with 500 million mobile subscribers and 1 million added every week due to liberalisation and increased competition,” says Hoefman.
Being in east Africa comes at heavy price as these entrepreneurs have found out. Pedersen reckons that for every month he is in Kenya he losses Ksh. 1 million (US$12,000) that he would have made elsewhere.
“Before I came here I was making more than what I do now. When I think about opportunity cost it is not just about finances. Considering the chance to build interesting, potentially high-impact products and services here in Kenya, I would say the opportunity cost of being in the US is much higher for me,” says Gordon.
Toni Maraviglia (28), a teacher from the US, moved to Kenya to work for an education focused NGO in rural Nyanza, Kenya. Maraviglia worked with teachers to create MPrep, an assessment-based system that quizzes students on topics learned in class via SMS. Though she was later admitted to the Haas School of Business in Berkley, one of the top business schools in the world, she opted to stay in Kenya and build MPrep.
“I don’t feel I have given up that much to be here. I don’t see this as a loss. I am in love with this place. It is really hard being away from your family. I have to miss four weddings this year. However, besides that, there is a great opportunity to do something good here,” says Maraviglia.
A different market
Even as foreign entrepreneurs flock to the region, concerns have been raised about how effective they will be in a market that is very different from western countries.
“The most effective way to build products is to build them in markets you are familiar with. Foreign entrepreneurs working in east Africa cannot compare themselves with locals. I am aware that there are certain things that will take a while for me to understand. It is very easy to make false assumptions,” says Jeremy Gordon.
Sandra Zhao reckons that how people in the US interact with technology is very different from how people in east Africa do.
“Working with Kenyan staff and partnering with Kenyans is the way to do it. We have to understand how mobile technology works here. Even though smartphones have done so well in the region, most people still don’t have smartphones,” says Zhao.
What does the future hold?
Although most of these young expatriates are uncertain about whether they will be staying in east Africa permanently, they are optimistic about the region’s future.
“By having worked in east Africa for over five years I have learnt that it has enormous potential. The region has shown a vast economic growth and there is a rapid growing middle class. I believe, despite its challenges, east Africa has enormous business potential and not only in the ICT sector, but also in other industries,” says Bas Hoefman.
Ben Lyon adds: “There is a possibility I could stay here permanently. Kenya has an exciting future ahead of it and I feel obliged to contribute to that future. I am also interested to see how the IT space in South Sudan and Somalia develops in the next five to ten years.”
*Culled From How We Made It In Africa http://www.howwemadeitinafrica.com/
Africa: FDI Into Africa Accelerates As Investor Perceptions Begin to Shift By Nelly Nyagah*
May 12, 2012 | 0 Comments
By Nelly Nyagah*
Growing optimism and confidence among international and local investors has led to significant inward investment into the continent over the last decade, according to professional services firm, Ernst & Young’s second African Attractiveness Survey.
The number of new foreign direct investment (FDI) projects in Africa grew in 2011, with project numbers almost up to levels last seen in 2008. In the last decade, Africa has seen an increase in inward investment from 339 new projects in 2003 to 857 in 2011 (an increase of 153%). Investment has come from both developed and emerging markets, as well as intra-African investment.
India has led the way as the fourth largest FDI investor by number of projects since 2003 with annual compound growth of 46% since 2007. China and the UAE remain prominent too, but there is high growth in investment from an increasingly diverse range of other rapid growth markets, with South Korea, Saudi Arabia and Turkey among those at the forefront Says Mark Otty, area managing partner for Europe, Middle East, India and Africa at Ernst & Young: “With rapid-growth markets not only dominating investor attention and capital flows, but also playing an increasingly strategic role in defining the global economic agenda, the competition for global FDI is intensifying. African countries must position themselves appropriately in this shifting landscape to attract a greater proportion of the investment that will accelerate growth and development.”
The African Attractiveness Survey report combines an annual analysis of investment into Africa since 2003, with a survey of 505 global executives on their views about how and where investment will take place in the next decade.
Perception versus reality
The 2012 survey paints a positive picture, reflecting growing confidence in Africa’s prospects. 60% of survey respondents say that their perception of Africa as a place to do business has improved over the past three years. Looking forward, 73% of respondents anticipate that Africa’s attractiveness will improve over the next three years, while only 4% believe it will deteriorate.
Of those who believe that Africa’s growth prospects in the near term are significantly positive, half have a dedicated Africa strategy in place, and 92% have an active business presence on the continent.
However, the survey results also highlight that there is stark difference in perception between those who are already operating in Africa, and those who do not. This is manifested in the low percentage (at 5.5%) of global FDI projects that Africa attracted in 2011. While this is up from 4.5% in 2010 and is, in fact, the highest proportion of global FDI that Africa has ever received, reservations remain amongst those who have not yet invested into the continent.
“Despite high optimism, high growth and high returns, the perception gap still exists and the African continent as a whole still attracts fewer FDI projects than India and far fewer than China. There is still clearly work to be done by Africans – government and private sector alike – to better articulate and “sell” the growth story and investment opportunity for foreign investors,” says Ajen Sita, managing partner for Africa at Ernst & Young.
Intra-African investment leads the way
A key theme highlighted in the report is the growing confidence, self-belief and commitment by Africans to move Africa forward, reflected in the substantial growth of intra-African investment. Between 2003 and 2011, there has been 23% annual compound growth in intra-African investment into new FDI projects. This growth has been accelerating, with the growth rate up by 42% since 2007.
Over a period in which the annual number of FDI projects into Africa has more than doubled – from 339 in 2003 to 857 in 2011 – intra-African investment has grown exponentially with project numbers increasing from 27 in 2003 to 145 in 2011. As a result, in 2011, intra-African investment accounted for 17% of all new FDI projects on the continent.
The growth in intra-African investment is led by Kenya, Nigeria and South Africa. The three countries are ranked among the top 20 investors on the continent between 2003 and 2011. Since 2007, the growth rate in investment from Kenya, Nigeria and South Africa has been 78%, 73% and 65% respectively.
“There has been a radical shift in mindset and positioning over the last decade, with Africans themselves increasingly leading from the front by providing African solutions to Africa’s challenges. Clearly work still remains to be done, but pushing ahead with key initiatives such as regional integration and investment in infrastructure will ensure that Africa remains on a sustainable growth curve,” says Sita.
Moving beyond dependence on commodities
The 2011 African Attractiveness Survey highlighted the growing diversification of FDI as a key trend. This has continued, with even greater levels of investment into less capital-intensive sectors, which has resulted in increased flows into manufacturing, business services and sales, and marketing and support industries. There is a definite shift from the traditional extractive industries.
Africa remains high on the agenda of those looking to invest in foreign markets but despite the growth and progress, a perception gap remains. However, significant improvements in trade agreements, regional integration and an increased investment in infrastructure will push Africa into the top league of investment destinations.
Says Sita: “In the midst of a global economy that is being reshaped, with growth and capital flows shifting from north to south and west to east, Africans have a unique opportunity to break the structural constraints that have marginalised the continent for decades, if not centuries.”
*Courtesy of http://www.tradeinvestafrica.com
A Valuable Development Partner For Africa In the OIC
May 12, 2012 | 0 Comments
By Ajong Mbapndah L
“In a country with an unemployment rate of 30%–and growing—youth like Bate Takang Peter face incredible hardships to become gainfully employed. Bate’s wish and that of his father, however, was for him to build a family home in their village in rural Cameroon. Luckily, Bate’s aunt told him about Cameroon OIC’s vocational training school, and with her support, Bate went back to school and graduated with a diploma in Building Construction and Small Business Management. That was over 18 years ago. Today, Bate is a successful builder who has built many houses for his community, along with his father’s dream house. In his own words: “I did build the house my father talked about…the OIC philosophy, the skills and training from OIC have made me a happy man.”
The above quote is found on the page of Cameroon OIC one of the programmes of the Opportunities Industrializations Center International in Africa. For over forty years the OIC has been one of Africa’s most reliable development partners with a unique model that takes cognizance of local realities and trends to equip its graduates with marketable skills. Present in some 19 countries and counting, what also makes the OIC stand out is the autonomy enjoyed by the various country programmes which rely greatly on local management. Founded in 1967 by Leon Sullivan, the OIC was initially invited to Africa by Nigerian leaders. According to the President and CEO of OIC International Crispian Kirk, Founder Leon Sullivan answered the call of Nigerian leaders to set up vocational training programmes akin to the ones in the USA. With a grant from the USAID, OIC started operations in Nigeria in 1970. In Cameroon, 15,500 youth are assessed to have received vocational training .13, 000 (5,800 women and 7,200 males) are now successfully employed in both the private and public sector. Approximately 2000 graduates have created their own businesses
Our mission is to build self reliance through vocational skills and entrepreneurial development says Crispian Kirk. A highly regarded social entrepreneur, the affable CEO who talks about the continent with great insight and passion says the development approach taken by the OIC is unique. People everywhere want to have education, health, skills and jobs to provide for their families he says. The OIC focuses on two major areas, agriculture and technical and vocational training. With about 75% of Africans involved in one kind of agricultural activity or another, it is important to help them with the kind of skills that can optimize output. Many people thought that telecommunications will be a big drive in the world, but in Africa Mr Kirk believes infrastructure has the potential of been the game changer. Africa benefits when food can be produced in Kano Nigeria and it gets to Accra Ghana on the same day via rail or other means he enthused. It is in this light that people need training in infrastructural development, road development, engineering, electricity, plumbing, computer management et al. Emphasis on the OIC is on marketable skills that go with the available job market and contribute to overall development in specific countries.
The OIC has a bottom up approach to services it renders Kirk goes on. The OIC may be about the only NGO were local leadership plays a critical role in decision making. Even if there is a grant from the USAID; it is the local leadership that signs the checks and handles expenses. It is one of the reasons why the OIC in countries like Nigeria, Cameroon, Ghana, Liberia, Ethiopia, Tanzania etc continues to wax strong. On how OIC measures the success of its programmes, the dynamic CEO said prior to each project consultants draw a baseline monitoring and evaluation module to ensure it captures common indicators of progress. We do not measure success simply by the number of graduates but also by the number of people who graduate from OIC programmes and land a job he says. Africans tend to look outside for solutions where as there have them right there, Kirk pointed out. A frequent visitor to Africa, Kirk says the OIC gives premium to local talent and expertise instead of inundating programmes with foreign experts and consultants as most international NGOs do.
On what he has learned from his frequent visits to Africa that his fellow Americans may not know, Kirk says the image portrayed of Africa as a begging continent is severely flawed. “I see more people going to Africa to beg” than the reverse he chuckles. All the amount of international aid poured into the continent is only a fraction of the huge resources that come out of Africa. Africa is a place of immense wealth and a diverse people striving for a better life. Asked if he would recommend Africa as destination for American business investment, absolutely Kirk answers. The US government must do more to support American businesses working with Africa he challenges.
The Chinese government is doing a lot in providing support for Chinese companies doing business in Africa and the USA may miss the boat if it does not offer similar support to American businesses working towards partnership with Africa he opines.
Although the OIC is open to considering expansion into more countries if invited to set up shop, it is more interested in opening up more OIC facilities and training centers in countries where it already operates. Using the example of Cameroon for instance, Kirk said instead of having one Center in Buea, OIC will love to open up more centers around the country. OIC Ethiopia operates two centers, one in Addis Ababa for unemployed urban youth and the second one in the town of Jimma in the Gambella Region of Ethiopia for Sudanese Refugees in collaboration with the UNHCR and the Ethiopian Administration for Refugee and Returnee Affairs office.
On the ties that exist between governments and the OIC, Kirk affirms that there are very strong. The only way to guarantee sustainability is to work with governments and local communities he says. If aid from USAID dries up tomorrow something that has happened in the past, it is the local governments that will fund the programmes. OIC Ethiopia for instance is nationally recognized by the Ministry of Justice and operates under the umbrella of the Ministry of Labor and Social Affairs of Ethiopia. Its Board of Directors consists of community leaders, private sector representatives (including the Chamber of Commerce of Addis Ababa) and representatives from Ministries such as the Ministry of Labor and Social Affairs, Ministry of Education, and the Addis Ababa City Administration.
As the OIC continues with its salutary development partnership mission in Africa, its success is spurring a number of people around the world to emulate their example. For instance at a recent congressional hearing at the US Capitol before the House Subcommittee on Africa, Global Health and Human Rights Actor Isaiah Washington cited the OIC as an inspiration in his own work in Sierra Leone. “My efforts are part of a growing trend of members of the African Diaspora reconnecting with their homelands or the homelands of their ancestors. I have looked to the example of the late Reverend Leon Sullivan, who spent a great deal of his life connecting African-Americans and others to countries in Africa. Organizations he founded, such as Opportunities Industrialization Centers International and the International Foundation for Education and Self-Help, have helped members of the Diaspora and others to volunteer their skills to teach young people in Africa or take part in training programs for African entrepreneurs and farmers”
The development partnership between the OIC and Africa is built to last ,says Crispian Kirk who has an extensive career in international development. He provided pro bono
legal representation to survivors of apartheid before South Africa’s Truth and Reconciliation Commission. Crispian was formerly the director of the National Medical Association’s (NMA) Global Health Initiative, where he was responsible for launching Global Health projects in a number of Sub-Saharan African countries. He also founded and served as president of Bantu Consulting, LLC, where he provided strategic international business development and finance expertise to small and medium-sized enterprises. He served as a member of the Obama-Biden Africa Policy Team during the 2008 Presidential Election and has participated in the filming of a documentary in Sierra Leone that examines human rights abuses in the diamond industry.
*More on the OIC International and its country programmes in Africa can be found at http://www.oici.org/where-we-work/
Seven trends likely to shape African agriculture in the coming years
February 21, 2012 | 0 Comments
By Femi Adewunmi*
In a recent research report, titled African Agriculture: This other Eden, Renaissance Capital identified a number of factors that are likely to influence African agriculture in the years ahead. A summary below:
1. Increasing demand from China
China’s meat consumption has increased significantly over the past decades. In 2001, the average Chinese consumed around 43 kg of meat every year. Over the following ten years, annual per capita consumption rose to approximately 54 kg, a 22% increase. More meat consumption has led to a rising demand for soya beans – a popular source of feed for livestock.
China, however, cannot supply its own need for soya beans. In 2001, the country produced 15.4 million tonnes of soya beans. This year production is expected to be about 14 million tonnes. Although Chinese soya bean production has decreased, domestic consumption has skyrocketed from 28.3 million tonnes in 2001 to 71.6 million tonnes in 2011. This higher demand has been met through imports.
In addition to soya beans, China’s ability to be self-sufficient in the production of other crops is also likely to be reversed in a dramatic fashion over the next few years. Renaissance says that the same situation as what happened with soya beans could play itself out in other grains, such as maize, wheat and rice. The past two years has seen a minimal increase in the harvested area for wheat and rice, while yields for all three grains have also only seen a marginal improvement. Rising urbanisation is putting increasing pressure on farmland.
It is not only China that will import more grains. Similar dietary changes are underway in a number of other emerging economies. As demand rises, internal constraints in a number of geographies are becoming apparent. Renaissance says this is a good opportunity for Africa, which has significant farming potential, to increase its exports of agricultural commodities such as maize, palm oil and other crops.
2. Food security
The UN Food and Agriculture Organisation (FAO) believes that 70 million hectares of additional farmland is required to feed the world’s 9 billion people by 2050. The Americas could most likely fulfill this need alone with Canada, the US, Brazil and Argentina providing the bulk of additional supply.
However, the issue of food security is not only about basic needs and how to fulfill those needs – it is also about the risks attached to achieving it. In common with the oil & gas industry, there comes a point where an over-reliance on too few suppliers for a country’s energy needs makes it hunt out alternative sources of energy. A similar need to diversify supply will likely arise in agriculture, and this represents a major opportunity for Africa to provide the world with food security.
3. Resource nationalism
Although resource nationalism is often associated with the extractive industries, Renaissance expects the issue to also come to the fore in African agriculture. Resource nationalism is not always entirely driven by anti-foreign sentiment. High prices help, too. The electoral success of Evo Morales in Bolivia, Hugo Chávez in Venezuela and the recently elected Sata government in Zambia might never have materialised had it not been for the prevailing high prices of oil, gas and copper over the past decade.
High prices for agricultural goods, the need to secure alternative food supplies and the sensitivities of access to and ownership of land, all suggest resource nationalism in agriculture is likely to become a more prominent theme in the years ahead.
4. Will urbanisation lead to farm mechanisation?
It estimated that 60% (currently 40%) of the continent’s population will live in cities by 2050. As more and more workers flood into urban environments and readily available pool of cheap workers disappear from the countryside, farmers are forced into a straightforward labour-capital shift. In short, farms must mechanise if they are to maintain their competitive position.
Smallholder farmers, too, must make a decision: if they dedicate their supply of labour to generating urban-derived income, what do they do with their land? Another way to look at this conundrum takes the form of a question: is the rise of the superfarm inevitable?
The rise of the superfarm is a relatively modern phenomenon. There are possibly fewer than 100 industrial groups that own, lease or operate farms of over 100,000 ha.
Do economies of scale exist in agriculture? The purchasing power on inputs or selling power on output that comes with a 100,000 ha farm is likely to be no greater than a 1,000 ha farm. This is accentuated by two factors: first, managing 100,000 ha under a single corporate umbrella is more likely to result in managerial dis-economies of scale; and second: 100 farmers managing 1,000 ha plots each can easily form a co-operative, which will provide them with all the purchasing benefits of the superfarm and none of the dis-economies of scale. However, many superfarms exist because they act as channels for investment capital. In short, while managerial or operating economies of scale might not exist, financial economies do.
Ultimately, the debate over superfarms comes down to money. How does one create a conduit for capital for investment in agriculture? Can smallholders provide that conduit? If so, it would be reasonable to assume they had a future in this most strategic of industries. However, the volatility of food prices, the rapid urbanisation that characterises large parts of our planet, the relative undercapitalisation of the sector and the sheer variability of the agricultural labour force in its current form, all suggest that in creating those conduits for capital, superfarms are likely to play a hugely important role in attracting investment to the sector.
One of the overriding issues for humanity is that every civilisation with an urban heartland has been built upon the availability of food and water. In fact, it is the existence of those food and water resources, which has allowed urban societies to flourish. However, over time, every single one of those civilisations, societies and states has collapsed because its depleted and exhausted hinterlands could not supply its cities with their food and water needs.
The collapse of food-supply systems that support urban societies has been a permanent issue since urban centres were founded. Renaissance anticipates a great deal of new thinking on sustainability in agriculture, and expects Africa to lead much of that new thinking.
7. The future of aid
African food aid will likely be transformed, too. Renaissance says that many aid agencies operating on the continent are setting agendas that hamper commercial development. The idea that some aid agencies are seeking to transform themselves into commercial enterprises highlights the new thinking that abounds in Africa. Traditional methods of delivering aid are likely to become redundant in the decades ahead.
Culled from How We Made It In Africa