Hope springs eternal as Ghana turns 60 Kenyatta’s tough reelection bid Are Nigerian banks in distress? Making innovation count Opinions: Li Yong, Ben Payton, Jeff Raikes, Abdul-Jalilu Ateku 2017 / VOL.9 / NO.1
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HOW SOUTHERN AFRICA CAN DEAL WITH DESPOTS WHAT GHANA EXPECTS FROM ITS NEW LEADER INVESTING IN AFRICA’S TECH START-UPS
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60 YEARS ON
hana this month celebrates a milestone 60 years of independence. The country has come a long way from the backwaters of development to becoming an integral part of the global future, certainly in Africa where it has become a symbol of peace, stability and thriving democracy, commodities that continue to elude many of its continental peers. It has come full-circle, from unstable governments, the stain military dictatorships and coups that plagued its early days all the way into the 1990s. But it has held up and can now claim to be Africa’s shining light. Since its return to multi-party democracy in 1992, Ghana has successfully held six democratic elections. The fact that in each time, power has transferred peacefully has advanced the indisputable view that Ghana is one of the most mature democratic countries in West Africa. That’s on the credit side, on the debit side, corruption, lack of basic infrastructure and a perpetual dependence on aid from the West continues to blight its record. You can read our assessment of the country elsewhere on these pages. As the first country south of the Sahara to gain independence, many freedom fighters trooped to Ghana for inspiration. Ghana does not struggle with human rights issues but matters of developing its own people. About half its population lives on less than $1 a day and 79 percent on less than $2 a day. Corruption remains at the core of its administrations. It’s the story of Africa. Its founding father, Dr. Kwame Nkrumah envisaged a prosperous country, with industry and jobs aplenty. The country certainly has the resources and the human capital. It even came up with a long-range plan to achieve middleincome status by 2020, a laudable vision that looks like a weird dream in the moment. But that is where you come in, Mr New President Nana Addo.
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2016 / VOL. 9 / NO. 1
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YOLANDA CUBA TALKS DATA, INNOVATION & CONSOLIDATION
42 HOW WEST AFRICA BUILT THE MUSCLE TO ROUT DICTATORS AND KEEP THE PEACE Following the resolution of the political impasse in The Gambia, a great deal of attention has focused on the role played by the conomic Community of West African States (Ecowas).
52 KENYATTA’S TOUGH TASK IN REELECTION BID Kenyan President Uhuru Kenyatta’s bid for a second term in East Africa’s biggest economy is running into trouble in one of his ruling coalition’s previous strongholds: the Rift Valley
MALAWI AWAITS EARLY INVESTORS
Officials at a recent forum in London explained how Kenya is one of Africa's economic stars.
HOPE SPRINGS ETERNAL AS GHANA TURNS 60
6 Business Times Africa | 2017
56 HOW WE PLAN TO REVITALISE NIGERIA
06 60 Years on 09 Briefs OPINION 14 Africa’s Decade of Industrialization 16 How to Help the African Dust Bowl 18 Windows of opportunity for Africa 20 Making innovation count 22 The Heart of Africa’s New Medical School 23 ENTREPRENEUR WATCH FEATURES 26 Sustainable Investing and Social Entrepreneurship 28 African mining hopes are distant from uncertain reality 32 What Ghana expects from its new leader 40 Africa’s dinosaur dictators: Heading for extinction in 2017? 45 What southern Africa can learn from West Africa about dealing with despots 48 Angolan SWF chairman looks to facilitate move away from oil 50 Behind the conflict in central Kenya that’s costing lives and hitting tourism 59 Economic plan could make or break Nigeria 61 Are Nigerian banks in distress? 64 Africa To Diaspora: Send More Money Home 66 Deregulating the petroleum sector 68 Investment in Africa’s tech startups on the rise
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Ivory Coast cocoa defaults sap confidence
ocoa exporters and traders say a lack of transparency surrounding a wave of export contract defaults in Ivory Coast has shaken their confidence in the top grower's marketing board. The Coffee and Cocoa Council (CCC) last week acknowledged that some exporters, having wrongly speculated that world cocoa prices would extend yearslong gains, would default on loss-making contracts. The admission, delivered by CCC Director Massandje Toure-Litse on Ivorian state television was an abrupt U-turn by the marketing board, which for months had repeatedly denied reports that defaults were on the horizon. "When the first rumours surfaced in September, she said it was nothing. But four months later, she recognises the problem," said the director of an international exporter in Abidjan. "The CCC talks to no one and always says everything is fine when we can see for
ourselves that's not the case." The CCC, which did not immediately respond to a Reuters request for comment, began sending letters to exporters in default last week. "If it's just 100,000 tonnes of defaults, that can be sorted out quickly. But if it's more than 300,000 tonnes, it will be hard to manage," said one international trader. The CCC has still given no indication of the total volumes in default, however, leading many to complain of a lack of transparency. "We don't know the level of their losses. We don't know anything. Everything is being done in complete opacity and that is what is worrying us," said another international exporter. Exporters and traders estimate that the CCC has used spot auctions to sell up to 200,000 tonnes of cocoa for export between January and March to counter the impact of anticipated forward sales defaults. Exporters are still required to
purchase physical cocoa for their spot contracts at the government-mandated price. However, the CCC must cover any losses they incur selling those beans at current world price levels. Toure-Litse attempted to reassure exporters, saying the CCC had the resources to support the sales, but she gave no further details. The CCC's reserve fund is believed to contain around 120 billion CFA francs ($195 million), but some exporters are already backing off the spot auctions due to concerns that it will struggle to pay the promised support. Instead, many are waiting for the start of the mid-crop harvest on April 1, when the CCC is widely expected to lower the price for farmers. "There are so many available beans in Ivory Coast right now that there is no risk in postponing purchases and paying less from April," said a European trader.
2017 Business Times Africa 9
BRIEFS: WEST AFRICA
Illegal miners largely cleared out of Ghana mine
Millicom agrees to sell Senegal unit for $129 mln Luxembourg-based Millicom International Cellular said it has signed an agreement to sell its Tigo Senegal subsidiary to the local Wari group for $129 million. Millicom provides mobile services to more than 57 million customers and its business focuses on Latin America and Africa, while Wari provides digital financial services in Africa with 500,000 sending outlets worldwide and 45,000 paying points. Tigo is the second biggest mobile phone operator in Senegal after Wari. 10 Business Times Africa 2017
The deal will enable Wari to offer more convenient and affordable services, Wari's chief executive, Kabirou Mbodje, said in a statement. The transaction is subject to regulatory approval by authorities in Senegal. Digital financial services are expanding rapidly in Africa in parallel with the growth in smartphone use and Wari's move should enable it to enter the telephony market for the first time. â€“ Rtrs
Illegal miners have "largely been cleared" from AngloGold Ashanti's Obuasi mine in Ghana and the company can now explore a number of options for the asset including its possible sale or redevelopment, according to its chief executive. The invasion of the loss-making, mothballed operation by thousands of illegal miners made the asset a toxic one that underscored the social and political risks of mining in west Africa. "The military have done it without any injury or loss of life," Srinivasan Venkatakrishnan, who goes by the name Venkat, told Reuters on the sidelines of an African mining conference. Venkat said he had a constructive meeting in January with Ghana's new President Nana Akufo-Addo and the company was in early talks with the government about the future of the loss-making mine, where operations were closed over two years ago. Venkat said the company was now looking at three options: selling the mine or redeveloping it as a mechanised operation, with or without partners. There have been other signs of renewal in the mining sector in Ghana. South Africa's Gold Fields said in October that it would invest $1.4 billion to extend the life of its Damang mine in Ghana. â€“ Rtrs
BRIEFS: SOUTHERN AFRICA
US$275 mln compensation for SA silicosis sufferers South Africa's gold industry, which faces a class action suit from miners who contracted the fatal lung disease silicosis, said on Wednesday the government had 3.7 billion rand ($275 million) in a fund available for compensation to sufferers. "There is a compensation fund that has about 3.7 billion rand in it," said Graham Briggs, a former mining executive who chairs an industry working group on occupational lung diseases. He said that amount should be enough to compensate all the silicosis sufferers who used to work in mines. But Briggs told journalists at a mining conference that no compensation had been paid out yet from the fund for reasons which remain
unclear. Briggs said the fund was with the department of health and was the product of contributions paid over the years by mining companies, which put in around 8 rand for each shift a miner worked. Officials at the department of health were not immediately available for comment. Silicosis is an incurable disease caused by inhaling silica dust from gold-bearing rocks. It causes shortness of breath, a persistent cough and chest pains, and also makes people highly susceptible to tuberculosis. Many of those affected are migrant labourers from neighbouring countries such as Lesotho. A court last May ruled that class
action suits for up to half a million miners who contracted the disease could go ahead. Companies have since said they would appeal that decision, setting the stage for protracted legal wrangling. Briggs, a former chief executive of Harmony Gold, said the industry was "getting closer to a solution" and hoped an out-of-court settlement could be reached with the claimants this year. The working group on occupational lung diseases was formed by Africa's top gold producer AngloGold Ashanti, Gold Fields, Harmony, Sibanye Gold and African Rainbow Minerals, as well as Anglo American which used to mine gold. â€“ Rtrs
2017 Business Times Africa 11
BRIEFS: NORTH AFRICA
North Africa top wheat buyers grow more of their own to well global glut As if the global wheat surplus couldn’t get much worse, some of the biggest buyers may not need as much. That could swell stockpiles already expected to be the biggest ever. Countries in North Africa like Egypt and Algeria -- all dependent on foreign wheat to help keep their populations fed -- probably will harvest 25 percent more on their own farms this year if the weather is as favorable as expected, the International Grains Council estimates. That means imports from the region could drop from a record high to a threeyear low, according to Chicago-based researcher AgResource Co. While global demand for wheat has never been bigger, output has risen even faster, and prices have plunged for four straight years. After droughts in North Africa hurt domestic crops last year, rain and mild temperatures will aid grain development this season, according to a report last month from the EU’s Monitoring Agricultural Resources unit. And the region’s weaker currencies against the dollar may further erode imports. “If you want to be bullish on wheat, it can’t be based on demand or trade,” said Dan Basse, president of AgResource. “World wheat trade is stagnant, and if we have crops that are bigger in North Africa, it makes the expansion of trade by producing countries more difficult.” Prices will need to drop further to spur demand, he said. Subsidized Bread Egypt, which provides subsidized bread for its citizens, is the world’s top importer of wheat to supplement domes12 Business Times Africa 2017
tic production, and Algeria is the third-largest buyer. While food insecurity is significantly worse in drought-ravaged southern Africa, the five countries in North Africa still include millions who are undernourished, according to the United Nations. The UN Food and Agriculture Organization estimates yield prospects in North Africa are “good to excellent,” based on weather forecasts. The U.S. Department of Agriculture, in a Feb. 21 report, said wet weather has left favorable conditions in Morocco as well as in Algeria and Tunisia. AgResource estimates the improved yields from better weather will boost output in the 2017-18 season to 19.6 million metric tons, up 39 percent from last year’s drought-damaged harvests. That would cut imports in the period to 27.6 million tons from an all-time high of 28.1 million a year earlier, the researcher said. Big Improvement In Morocco, where a drought last year cut the harvest by 71 percent and sent imports surging 64 percent, farmer Abdessamad Raiss says conditions are the best he’s seen in more than a decade. “We’ve had plenty of rainfall this year,” said Raiss, who farms 30 hectares (74 acres) of soft wheat in Khmisset, about 50 miles northeast of the capital, Rabat. “Last year, I missed so many loan installments on my truck, but I’ve already made plans with my banker to pay back the loan in full by June.” Wheat crops in Morocco, Algeria and Tunisia rely mostly on rain, though Egypt’s farms are mostly irrigated. “We had two years of rela-
tively high imports in North Africa, and the situation should be different in the coming season,” said Amy Reynolds, a senior economist at the International Grains Council in London. “All these countries suffer from tight foreign reserves, so anything that cuts back on expenditure on imports is a big boon for them.” Even in good harvest years, North Africa is still dependent on foreign grain. On average, more than 40 percent of the total cereal demand in Egypt and Morocco comes from imports, according to the FAO. In Tunisia and Algeria, it’s more than 60 percent, while Libya’s reliance on foreign supply is even greater. The five nations in North Africa will import a record 28.6 million tons in the year that ends May 30, up for a fourth straight year and 30 percent higher since 2013, according to the USDA. Over that same period, domestic production is down 26 percent and consumption has increased 9.2 percent to a record 44.7 million tons, the data show. “Imports will still be significant, and the impact on economic pressure within the countries depends not only
on the input requirement, but also on the prices on the world markets,” Monika Tothova, an FAO economist, said. Most importers have benefited as rising global output overwhelmed demand in recent years. Stockpiles will reach a record 236 million tons this season, according to a Grains Council report on Feb. 23. Wheat futures in Chicago have tumbled by more than half from a high of $9.47 1/4 a bushel in 2012 to a low in August of $3.86 3/4. Prices are up about 11 percent this year and were at $4.51 by 1:15 p.m. London time on Friday. That’s still below the average of $6.29 over the past decade. While improving domestic supplies reduces the need for imports, purchases from some countries in North Africa also may be limited as their currencies weaken against the dollar, which reduced their buying power for grain purchases in the U.S. currency. “From a trade perspective, it could mean less reduction of stocks from other countries, making it difficult to paint a bullish picture on wheat,” said Benjamin Bodart, a director at adviser CRM AgriCommodities in Newmarket, England.
BRIEFS: EAST AFRICA
Kenya’s $5bn nuclear power plant plan Kenya has unveiled plans to build a $5bn nuclear plant to boost its current poor and expensive power supply and attract investment. The Kenyan government is carrying out a feasibility study for the construction of the country’s first nuclear power plant, which will cost $5bn and will be started no later than 2021. Set for completion by 2027, the project has been developed largely to address the east African country’s expensive and unreliable power supply, which is often cited as a deterrent to investment. The facility will generate 1000 megawatts (MW) of electricity, a significant addition to the total 2299MW the country currently produces, most of which comes from hydroelectric dams and geothermal wells, according to the Energy Regulatory Commission. Kenya aims to increase production to 6766MW by 2020. The government will begin looking for bidders on the project when it chooses a site, and will look at both private-public partnerships and government-to-government deals for funding and support, the National Electricity Board reported. – fDi report
Tanzania’s US$46 billion power demand Tanzania says it needs $46.2 billion in investment over the next 20 years to revamp ageing energy infrastructure and meet soaring demand for electricity. Investors have long complained that a lack of reliable power is an obstacle to doing business in east Africa's second biggest economy. A power system master plan released by the country's energy ministry said 70 per cent of capital spending would be financed by debt and the rest
by the government's own resources. "The financing requirement to implement the Power System Master Plan (PSMP 2016 - 2040) is about $46.2 billion for capital cost," the updated plan said. "The cost includes investment on generation, transmission and sub-stations. Generation accounts for almost 80 percent of the total investment cost." Tanzania aims to boost power generation capacity to 10,000 megawatts
over the next decade from around 1,500MW now by using some of its vast natural gas and coal reserves to end chronic energy shortages and boost industrial growth. Tanzania said in January it was seeking a loan of $200 million from the World Bank for its debt-ridden state power supplier Tanzania Electric Supply Company (TANESCO) after the country's president refused to allow the utility to raise prices to cover costs.
2017 Business Times Africa 13
OPINION Africa’s Decade of Industrialization By Li Yong Africa’s economies must move beyond producing raw materials to build dynamic and competitive manufacturing sectors with higher value added.
LI YONG Li Yong is Director General of the United Nations Industrial Development Organization (UNIDO)
VIENNA – In today’s interdependent global economy, Africa remains a weak link. If the world is to achieve the Sustainable Development Goals, thereby completing the United Nations 2030 Agenda for Sustainable Development, it must help Africa accelerate its development by promoting rapid and responsible industrialization. Africa is by no means destined to lag behind the rest of the world economy. On the contrary, it could easily become a global economic powerhouse – and within the next decade. But, to fulfill its economic potential, Africa must industrialize. The Year Ahead 2017 Cover Image The importance of this has been stressed repeatedly at recent international forums, including last August’s Sixth Tokyo International Conference on African Development (TICAD VI), and the G20 summit in Hangzhou, China, the following month. For the first time, the G20 placed industrialization in Africa – and all of the Least Developed Countries (LDCs) – on its agenda. The African Union’s Agenda 2063 also supports this drive. 14 Business Times Africa | 2017
The recent UN General Assembly resolution declaring 2016-2025 the Third Industrial Development Decade for Africa is yet another push in this direction. The organization that I represent, the UN Industrial Development Organization (UNIDO), has been tasked with operationalizing and leading the implementation of the concomitant program, including
mobilizing the needed resources. All of these declarations and commitments are an important first step. But they will mean little unless they are translated into concrete and effective action that advances African industrialization, creates jobs, and fosters inclusive and sustainable economic growth and development. The question is how.
OPINION: AFRICA'S DECADE OF INDUSTRIALIZATION Nissan Patrol Nigeria assembly
The short answer is money and action. We must challenge the international community and development partners to back their words with real financial commitments. And we must build partnerships to operationalize programs that will enable Africa to become the world’s next main engine of economic growth. Such programs must recognize and tackle the acute challenges the continent faces. The economic growth experienced in recent decades has not been structurally driven, sustainable, or fully inclusive. Indeed, growth rates vary widely across the continent, and not all Africans are benefiting. Though the middle class in Africa has expanded markedly in recent years, generating a consumer boom and boosting domestic investment, many people still struggle to make a living. Unemployment rates are high, especially for young people and women – a reality that drives many Africans to head north. To keep them home, Africa’s economies must move beyond producing raw materials to build dynamic and competitive manufacturing sectors with higher value added. Here, Africa must draw on the opportunities presented by participation in global and regional value chains. New and
innovative industrial-development strategies, as well as carefully tailored measures to attract foreign direct investment, must be introduced. Of course, to develop such strategies and participate effectively in industrial value chains, Africans need knowledge. Investment in education and skills training is imperative to facilitate successful and lasting industrialization. By understanding and drawing on proven innovations from around the world, Africa could leapfrog more developed countries technologically, building the capacity to produce more sophisticated, higher-value goods. Knowledge of other countries’ experiences will also help Africa to avoid the pitfalls of unbridled industrialization – particularly environmental damage. Africa must ensure that its industrial-development strategy includes effective environmental safeguards. Africa is well placed to industrialize. Beyond its massive natural-resource endowments, the continent has a favorable demographic profile (its rapidly growing population means that it will soon have the world’s largest workforce) and high urbanization rates. It also benefits from a highly educated diaspora.
But industrialization is never automatic. Governments must step up to address market failures, while planning, implementing, and enforcing industrial policies that address the shortcomings of previous ineffective versions. They must then institutionalize these new policies in national and regional development strategies. To succeed, governments will need adequate capacity, competence, and legitimacy to mobilize and interact with all stakeholders, thereby creating an attractive investment climate. The necessary reforms will open the way for public-private partnerships, which can provide investment for infrastructure development and maintenance. They will also facilitate cooperation with international organizations and development finance institutions, which can provide additional funds, while helping countries to upgrade their productive capacity. A recent report, prepared for the Hangzhou G20 Summit, features a number of recommendations for Africa. It suggests support for agriculture and agribusiness development and linking them with other sectors, as well as measures to boost resilience to price shocks. Furthermore, the report emphasizes the need to deepen, broaden, and update the local knowledge base, invest in energy- and material-resource efficiency, and promote green technologies and industries. Other recommendations relate to trade and regional integration, leveraging domestic and external finance, and promoting what it calls the “New Industrial Revolution.” My numerous meetings with African leaders and visits to dozens of countries across the continent have convinced me that Africa is committed to industrialization. In fact, the process is already underway in many countries, including Ethiopia, Ghana, Rwanda, and Senegal. By offering our commitment and support, we can enable these countries to realize inclusive and sustainable development for the benefit of everyone.
2017 | Business Times Africa 15
How to Help the African Dust Bowl By Jeff Raikes
Two-thirds of African farmland soil is missing key nutrients, and many farmers lack the technical knowledge and resources to restore their land’s fertility, leaving them unable to take full advantage of new technologies. Picture a small farm under a blazing hot sky. An intense drought is afflicting the surrounding region, prospects for the next harvest are bleak, and the financial system lacks the capacity to provide the loans farmers need to get by. This scenario describes today’s southern Africa, which is in the grips of an epic drought. As it happens, it also describes eastern Nebraska in the “Dust Bowl” years of the early 1930s – a period through which my own family lived. My father, Ralph Raikes, was the first in his family to graduate from college. After working for Standard Oil in California, he stopped by his parents’ farm on his way to Cambridge, Massachusetts, where he planned to pursue graduate studies at MIT. He never made it. He had to stay in Nebraska and help my grandfather save the family farm from the banks, which had already repossessed one-third of the land. The Year Ahead 2017 Cover Image The most important change my father made was in his mindset: he came to think of the farm not as a subsistence operation, but as a family business. He turned to the University 16 Business Times Africa | 2017
of Nebraska, where he had received his undergraduate degree, and acquired hybrid corn and other improved seeds that the university was developing. Then he tracked inputs and weather conditions, which was rarely done at that time. My father realized that he couldn’t do it alone, and that he would need better access to financing. So he helped guide – first as a customer, and later as an adviser and director
JEFF RAIKES Jeff Raikes is Co-founder of the Raikes Foundation, former CEO of the Bill & Melinda Gates Foundation, and, previously, President of Microsoft Business Division. He is a board member of the Alliance for a Green Revolution in Africa (AGRA).
– Farm Credit, a national banking cooperative network, in its efforts to help local farmers weather the Dust Bowl years. He also helped found the Nebraska Farm Business Association, which aggregated the data that he and his peers collected, so that they could determine best practices. And he worked together with my mother, Alice, who ran the family poultry business. Farm Credit and the University
OPINION: HOW TO HELP THE AFRICAN DUST BOWL
of Nebraska’s labs and greenhouses emerged out of United States government programs that had been created to improve the agriculture sector’s performance. That sector was under water in 1933; with one-quarter of the population living on farms at the time, more investment was needed. That year, Congress passed the first “farm bill,” the Agricultural Adjustment Act, which boosted investment in the rural economy and helped lift farm income by 50% within two years. Federal farm programs treated farming as a business enterprise, enabling businessmen like my father to prosper. Eighty years later, African farmers need to make the same switch, by treating their subsistence operations as family-owned enterprises. And, like my father during the Dust Bowl years, they have novel means at their disposal: a wide range of new seeds and other technologies have been developed for African family farms – those with 4-5 acres or less – to use in the field. In October, a group of scientists received the World Food Prize for producing and disseminating a sweet potato variety that adds vitamin A to Sub-Saharan Africans’ diets, and other new seed varieties are helping
farmers survive the harvest-crushing drought. But, as a recent report from the Alliance for a Green Revolution in Africa (AGRA) makes clear, government investment must follow the science. Agriculture comprises almost twothirds of Sub-Saharan Africa’s workforce, and in 2003 the African Union called for countries to increase their investment in the sector to an ambitious 10% of all government spending. Only 13 countries answered that call, but their investments – in research and development, services that help farmers take advantage of new research findings, credit and financing initiatives, commodity exchanges, and other marketing efforts – have already paid dividends. Those 13 countries have experienced marked improvements in agricultural production, per capita GDP, and nutrition. Government investment paves the way for private-sector investment, and it could be a game-changer for African farmers, who have operated at subsistence levels for far too long. Only about 6% of rural households in Sub-Saharan Africa receive loans from financial institutions. Moreover, almost two-thirds of African farm-
land soil is missing key nutrients, and many farmers lack the technical knowledge and resources to restore their land’s fertility, leaving them unable to take full advantage of new technologies. African farmers growing new crop varieties are increasing their yields by only 28%, compared to 88% for farmers in Asia. My parents made certain that all five of their children graduated from college. Like them, farmers everywhere want to ensure that their children lead healthy, prosperous lives; and they all recognize the importance of education. The farmers I have met around the world often just want to sell enough extra produce to pay their health bills and put their children through school. They take advantage of opportunities when they arise, and they position their children to reap larger profits in the future. One hopes that an American story of economic progress, like that of my family, will soon be an African story, too. With so many new innovations becoming available, Africa’s family farmers need their governments to invest in their future. If they do, that future will look much better than today’s dusty and desperate reality.
2017 | Business Times Africa 17
Windows of opportunity for Africa By Ibrahim Assane Mayaki
As the world strives to limit global warming, we need to prepare for significant changes to communities and economies. When Morocco hosted the first climate change summit since a global emission reduction deal was struck in Paris a year ago, the country was determined to make the COP22 summit one that reflected the priorities of the African region. During the November summit in Marrakesh, some of the world’s most vulnerable countries led on delivering the goals of the Paris Agreement. Morocco acted as an advocate for other African countries, who walked in with clear demands. These countries called upon world leaders to put agriculture at the core of the climate debate, including agreeing on concrete plans to support Africa’s smallholder farmers. Despite having the lowest emission rate world at barely 3 percent of the global total, Africa is particularly vulnerable to climate change. High exposure to desertification in the Sahel region and to flooding in coastal cities in west Africa are just two examples. With warming of 1.5 to 2°C, drought and aridity will make an estimated 40 to 80 percent of agricultural land unfit for growing maize, millet and sorghum by 2030-2040. But Africa is also vulnerable because of its low adaptive capacity, 18 Business Times Africa | 2017
IBRAHIM ASSANE MAYAKI A former Prime Minister of Niger, from 1997 to 2000, is the Chief Executive Officer of the New Partnership for Africa’s Development (NEPAD).
OPINION: WINDOWS OF OPPORTUNITY FOR AFRICA
compounded by poverty and lack of infrastructure. At COP22 discussion of erratic weather patterns, floods and droughts - which have plagued developing countries at an increasingly alarming rate, as demonstrated by the severe droughts throughout southern Africa in 2016 - fed into debates on topics including agriculture, economies, traditional farming ecosystems and deforestation. Mobilising finance remains an absolute priority. African nations need sufficient predictable financial flows to adapt to climate change, and support to develop their infrastructure on many fronts. This includes data collection, climate diplomacy and research. Aid money can only go so far. While donations from the US, UK and Germany were forthcoming, the trends of those contributions have yet to match the commitment developed countries made in Paris to provide $100bn yearly of climate adaptation funds to least developed countries, starting in 2020. These funds are supposed to flow to vulnerable island nations and the poorest nations in Africa to protect agriculture, shore up coastal defenses and spur renewable energy. Despite these challenges, the overwhelming consensus on the need to
carry forward the Paris Agreement goals on carbon reduction was clear. Last year in Paris, almost 200 countries agreed to limit global warming to “well below 2°C” while aiming for a safer guardrail of 1.5°C. Each country submitted a climate plan (a Nationally Determined Contribution or NDC) to stay below this target. However analysts say there is still a substantial gap between these plans and the long-term temperature goals of the Paris Agreement. There are also concerns that a new US administration under Donald Trump, a climate sceptic, will not honor environmental commitments made by the Obama administration. This could in turn affect the resolve of other major polluters such as China, which was a positive force during COP22 and has shown itself more open to tackling climate issues in recent years. Nevertheless all countries at the summit sent out strong political signals about raising ambitions while getting on with the job of cutting emissions. However, clearly one year since the Paris Agreement is not long enough for governments to bring forward tougher carbon cuts. The more realistic focus at COP22 was on reinforcing existing plans. Countries agreed that 2018 will be the
next major meeting under the Paris Agreement, and also that they will get the rulebook for it ready that year too. At NEPAD, as implementing arm of the African Union and its member countries, our work builds on Marrakesh outcomes to reinforce programs on climate finance, capacity building and development. We will focus particularly on the region’s youth, land restoration and agriculture productivity. The key is to find creative ways of reducing emissions while not jeopardising economic growth, poverty eradication or food security. The 4 per 1000 Initiative, for example, demonstrates that maintaining soils through smart agriculture can play a crucial role in food security in high climate risk areas. The fight against global warming has so far largely focused on the protection of forests and reforestation. In addition to forests, we must encourage more plant cover in all its forms to store more carbon in the soil. A 0.4 percent annual growth rate in soil carbon can significantly contribute to limiting carbon dioxide in the atmosphere. and achieve the longterm objective of limiting the average global temperature increase to the 1.5°C to 2°C threshold. Just as resilient cities require a holistic approach, so does climate resilience. As the world strives to limit global warming, we need to prepare for significant changes to communities and economies. We need, in parallel, a continuous high-level dialogue and implementation of tangible actions. Globally the trajectory is to shift to low-carbon, resource-efficient, socially just and green industrialisation. Africa, as a latecomer to industrialisation, can determine its own path. The region can leverage lessons from past industrial transformations while tapping into new technologies in order to develop a model for low-carbon development that can inspire the rest of the world. 2017 | Business Times Africa 19
Making innovation count By Chantel Troskie
More than three quarters of brands will deliver Customer Experience through VR and chatbots in the next four years, Oracle research finds The relationships that brands have with their customers is set to undergo a technological revolution, causing the number of human-to-human interactions to fall significantly, according to new research released by Oracle today. Last year, October, Oracle teamed up with Coleman Parkes Research to explore how brands are innovating in their marketing, sales, and service functions to deliver a better endto-end customer experience - Can Virtual Experiences Replace Reality? This report explores how the boom in digital and mobile technology has reshaped customer behaviour and their relationships with brands, and provides guidance on how they can keep up with fast-changing expectations. It emerged that 77 percent of South African brands are expected to be using VR for CX by 2020, with 34 percent having already implemented the technology in some form. A total of 800 CMOs, CSOs, Senior Marketers and Senior Sales Executives were surveyed across France, the Netherlands, South Africa and the UK. Respondents were also evenly split between three industries: manufacturing and high-tech engineering, online retail, and telecommunications. In addition, 79 percent will be using chatbots for customer interactions by 2020, with 48 percent turning to auto20 Business Times Africa | 2017
CHANTEL TROSKIE Customer Experience Account Manager at Oracle South Africa
OPINION: MAKING INNOVATION COUNT
mation technologies in sales, marketing and customer service. VR is currently being used for customer experience by a car manufacturer where it recently-showcased the virtual driving experience of its latest car. Customers purchase a lowcost cardboard VR headset that holds their smartphone and then enables them to drive in an actual car. Local estate agents also showcase dream houses to their customers via a lowcost cardboard VR headset. Other big players to bring virtual reality to their customer experience include banks, some of which have launched cash-less banks that provide customers with a virtual environment to experience online services, video-conferencing with financial experts for more complex services and interactive mechanisms. Most brands put this fundamental change in relationship down to the rise of social, digital and mobile platforms.
The research found that 40 percent of senior sales and marketing executives agree that customers do more independent research before contacting them to make a sales enquiry, and 35 percent noted their customers preferred to make purchases or resolve a service issue without speaking directly with a member of the sales or customer service team. VR and Chatbots set to surge In response, brands are looking to implement innovative technologies that allow their customers to continue interacting with brands on their own terms. In terms of upcoming technology investments, the research found: • 77 percent of brands expect to be using VR for CX by 2020; 34 percent have already implemented the technology to some degree • 79 percent of brands will be using chatbots for customer interactions by 2020; 36 percent have already implemented them
• 48 percent of brands have implemented automation technologies in sales, marketing and customer service, with another 38 percent planning to do so by 2020. Data continues to pose a challenge Despite the race to innovate, the reality is that many brands are still struggling to unify, organise and process the growing volumes of customer data they have coming into their business, making it difficult to truly understand and deliver a personalised experience for customers. • 48 percent of brands don’t currently include social or CRM data in their customer analytics • 41 percent agree smarter analysis of customer data will have the biggest impact on the experience they deliver to their customers • 56 percent already collect a great deal of data from multiple sources, but are unable to extract customer insights from it
2017 | Business Times Africa 21
The Heart of Africa’s New Medical School By Michael Fairbanks
MICHAEL FAIRBANKS A fellow at the Weatherhead Center for International Affairs at Harvard University, is Chairman of the Board of Silver Creek Medicines.
The Year Ahead 2017 Cover Image
UGHE friends and colleagues for a tree planting ceremony
wanda has achieved some of the most dramatic gains in health and poverty-reduction in the world. This small, landlocked African country (the size of Massachusetts, but with twice the population) has developed a primary healthcare system with near-universal access to clinical care and insurance. Rwanda has reduced both economic and health-care inequality, and demonstrates how “health equity” helps to build strong societies.
22 Business Times Africa | 2017
The secret to Rwanda’s success is that its leaders are building “modern institutions on traditional values.” They built a system of community justice, called Gacaca, which integrated their need for nationwide reconciliation with an ancient tradition of clemency. They breathed life back into a civic tradition of Umuganda, where one day a month, citizens, including the president, gather together to weed their fields, clean their streets, and build homes for the poorest among them.
In 2015, the government of Rwanda and the Boston-based Partners In Health (PIH), with the help of the Bill & Melinda Gates Foundation and the Cummings Foundation, established the private, not-for-profit University of Global Health Equity (UGHE). The university is founded on the principle that every member of a community deserves the same care and opportunity, and focuses on the delivery of quality health care to those who need it most. Agnes Binagwaho, a co-founder of UGHE who is a former minister of health and an adjunct professor at Harvard Medical School, once said to me, “Why would I want to raise my children in a nation where all children don’t get the same medical care as they do?” Rwanda’s government has already pledged $43 million to UGHE in land and infrastructure support. Its leaders have launched a two-year, part-time Master of Science in Global Health Delivery to teach how to create national health care in developing countries. Lecturers from Rwanda’s Ministry of Health, Harvard Medical School, Yale University, and Tufts University taught Rwandan students everything from epidemiology to
THE HEART OF AFRICA'S NEW MEDICAL SCHOOL
Academic Campus Plan
“Why would I want to raise my children in a nation where all children don’t get the same medical care as they do?” budget management. Last summer, UGHE began construction on a 250-acre campus in Butaro. This year, 250 professionals from as far away as Mexico and Australia will compete for 25 spots on that campus. Undergraduate and graduate degrees in nursing and oral health, and non-clinical programs in research and health management, are next. In 2018, UGHE’s campus will also be home to a school of medicine. It will provide space for generations of health professionals to learn how to heal patients, comprehend the sociology of disease, and build the health systems that make a strong society. UGHE’s founders believe that, by the time the university celebrates its ten-year anniversary, 480 students will have graduated; another 870 will be earning their degrees; and over 2,500 professionals will have attended executive education courses. They expect that over 1,000 of the students passing through the UGHE’s doors in that first decade will arrive from the rest of Africa, Asia, Europe, and the Americas. Rwandans will invite these international students to visit their communities to observe their traditions and learn how to care for their people. The young men and women will attend Rwandans’ weddings and funerals, learn to prepare and enjoy their foods, and acquire some of their language, the portal through which to view their sturdy values. Rwandans will teach
their international guests that in Africa, family is an all-encompassing concept, and that, in Rwanda, an entire generation treats the next as its own children. The international network of UGHE alumni, unified by their commitment to realize health equity for their own communities, will become a global force for change. UGHE will also strengthen Rwandan society. Though regarded by many as one of the safest and least corrupt societies in the world, Rwanda faces a great shortage of doctors and nurses. There are 684 physicians in Rwanda, a total that is far below the 1,182 physicians proposed by the Ministry of Health, and only 27% of the World Health Organization’s recommended minimum of 2,576 physicians. UGHE has already generated jobs, by hiring local laborers, and has increased access to the region, by creating new roads. It could boost Rwanda’s GDP by 0.5% per year, and every dollar invested in UGHE could gen-
erate $2 worth of return in economic development, according to McKinsey & Company. Some social scientists assert that poverty is not just a matter of poor nutrition, lack of medical care, and inadequate shelter; it also means exclusion from global networks of trade, science and commerce. This isolation is pernicious, because it destroys people’s hope and aspirations for a better life. UGHE will be Rwanda’s newest institution, a public-private collaboration based on traditional values: community, trust, hard work, and optimism about the future. It will integrate each citizen of Rwanda into global networks of learning. The Rwandans will accomplish this, as they do many things, because they believe that the only investment that can bring infinite returns is in their children, and because graduates of the University of Global Health Equity will be their sons and daughters, too.
2017 | Business Times Africa 23
AGBLEATOR DIVINE GRADUATE OF KWAME NKRUMAH UNIVERSITY OF SCIENCE & TECHNOLOGY, GHANA
Agbleator Divine…the graduate pencil and charcoal artist Divine is the owner of AD Arts and a graduate of the prestigious Kwame Nkrumah University of Science and Technology (KNUST). From his childhood he aspired to be an engineer but changed his mind along the line to pursue a career in what he calls a “God-given gift”. 24 Business Times Africa | 2017
is love for arts began when he entered the senior high school where he studied Visual Arts programme. “Even though I entertained the idea of being an engineer, I found that my passion for arts kept increasing when I was studying Visual Arts in the senior high school. So finally, I gave up on my dream career and focused on the arts.” After completing his degree, Divine decid-
AMBITION AND REWARD-THE STORY OF BABA YABDOW
ed not to go through the hassles and frustrations of looking for a job, but to set up his own arts studio at home. “What I did was that, I reduced the amount I charged for my work so I could raise the money quickly enough to set up. Through that, and with the help of my parents and uncle who was my guardian, I was able to raise some little money to set up my studio. Challenges One challenges that Divine faced was discouragement from his peers. “It was difficult to find people encouraging me to pursue what I wanted to do. My associates felt this wasn’t a job that could really earn me a living. They felt there was no market here for the art industry so I would be wasting my as my full time job.” But one thing that spurred him on
was the fact that his parents and his uncle did not oppose his idea. They told him to do whatever he is interested in. Another challenge for him is the non-availability of the tools and equipment for his work in the country. “Sometimes I roam in shops to get some vital tools I need for the job and interestingly some of them are even unheard of. So I have to always purchase them from outside the country and that is more expensive because of the exchange rate.” The marketing conundrum The creative arts industry is more of a niche market in Ghana. Everybody loves to see nice art but most people find it too expensive. So the industry is patronized mostly by the middle class and the rich. Because of that, Divine
courts these customers with quality works. He makes sure every single art he produces advertises itself. His works have attracted some popular figures of the society. Ama K. Abebresen and Harold Amenyah are among the patrons of his products. He also uses the social media as a cheaper source of advertising. “I think education has helped me cultivate the needed discipline and the direction I need to be able to focus on what I am doing. It has also taught me how to be organized and plan towards my goals and how I can achieve them successfully.” Like every artist who have been inspired by the works of renaissance men such as Leonardo Da Vinci, Michelangelo, Divine wants his works to be appreciated and loved by every eye that sees it. So he plans to eventually take it international when he has the capacity. Divine rues the lack of attention and support given to the creative arts industry which has resulted in many youths pursue other programmes outside their interest. “From what I see, much attention is not given to the creative arts industry. We have to fight our own way through before we can make it to the top. So I would urge government and even the private sector to find a way of supporting this industry so that the youth will feel encouraged to go into this area.” Divine believes every person has a God-given talent that can create a job for the person, rather than relying on the government to create jobs. “I will advise my fellow youth to look within themselves and they would find a special talent. They should capitalize on that talent and use it to create jobs for themselves and others.” As part of his efforts to inspire others, Divine has taken it upon himself to mentor young artists. Note: One art work takes at most one week for him to complete. But he is able to do it within three days if it is an express contract.
2017 | Business Times Africa 25
Sustainable Investing and Social Entrepreneurship - Key To Africa’s Transformation
ustainable investment practices are transforming private capital investments, demonstrating that returns and a positive impact can - and should - go hand in hand. Benchmarking environmental, social and governance (ESG) best practices can influence investment performance and improve alignment of values. Exits through IPOs and secondary buyers also require demonstrating adherence to ESG standards. Social Impact Investment Readiness strategies address both financial and systemic factors that can mitigate the risks that impact an investment’s long-term potential, create resilient value and increase capital efficiencies. Particularly pertinent to the continent’s Entrepreneurship, which is not only ripe with opportunity but prone to unpredictability – i.e., rapidly changing demographics and evolving policy
26 Business Times Africa | 2017
environments - but also one of the most popular continents with a very young majority, it is imperative we develop and build our society as well as economy. Sustainable investing has reached a level of maturity where it is clear that, especially in the emerging markets, the debate is no longer about why investing sustainably is critical for business. Instead, the focus is on how to successfully integrate these strategies into investments in order to maximise value and impact – not only for the holding period but for the lifespan of the business. In a 2015 United Nations Principles of Responsible Investment survey, nearly 75% of LP respondents said they were making ESG factors part of manager selection and nearly 85% of GP respondents said that taking ESG into account had helped pinpoint risks and opportunities for value creation -
therefore if Entrepreneurs are to attract the RIGHT capital the require they out to consider this as a core part of their development. Interesting Key Facts • Younger investors and Entrepreneurs – millennials under the age of 35 – are leading the way in the demand for impact investing investments. More than any other age group, they are interested in investing in companies that share similar values and are more likely to believe they can achieve competitive returns (59 percent). • Millennials also place greater importance on the Social issues they consider important than on financial returns (47 percent) • At Franklin Templeton, they make a clear distinction that ESG is different from ethical investing or valuesbased investing. And, they do not
SUSTAINABLE INVESTING AND SOCIAL ENTREPRENEURSHIP - KEY TO AFRICA'S TRANSFORMATION
think it should require a trade-off in terms of performance. Instead, they believe ESG is about risk-based investing which evaluates, in equal measure, all potential risks and drivers of long-term return, and assesses whether those risks are priced in. • By one estimate, $21.4 trillion of global assets under management (AUM) in 2014 were reported as invested in a “sustainable” way—a significant increase from $13.3 trillion in AUM reported in 2012.
NEW SUSTAINABILITY-RELATED BUSINESS OPPORTUNITIES IN KEY SECTORS IN 2050
Macro economic trends are driving significant market growth for sustainanble investing; opportunities could amount to $10 trillion or 4.5% of world GDP, IN 2050
Key Strategies Entrepreneurs Need To Consider To Be Socially Investment Ready Quantifying Impact : Focus on the beneficiaries and the larger stakeholder base but ultimately it needs to be drilled right down to a “per dollar invested / made / spent - leading to a specific social impact” Strategic Impact : Ought to relate to the business and doesn't have to be something separate from the underlying business activities. This demonstrates to investors that social impact is a core part of the entrepreneurs focus and strategy rather than an add-on only to look good or to attract investment only. Qualifying Impact : A Half-yearly or annual Impact report describing the social impact to reassure investors and stakeholders of their commitments and also to track the growth of impact over time.
Risk-Weighted ESG Factors
$ 3.5T .7 Health & Education
$ 1.88T $10 Trillion
Agriculture & Food
The Urgent Need For Sustainable Investments In Africa • The returns on higher education are growing globally and they are highest in Africa. The World Bank has invested more than US$1 billion in African higher education since 2000. • In Sub-Saharan Africa, 20% of the World Bank’s overall education portfolio is devoted to higher education, amounting to US$600 million. • Investments in higher education
$ 3.T Energy
would pay off. Returns to investments in higher education in Africa were 21%, which was the highest in the world, according to Claudia Costin, a senior director at the World Bank. • The global health sector, especially in developing markets, is facing critical workforce shortages. To address this challenge, GE Healthcare announced in 2015 a $100 million commitment to healthcare education over the next three years in its 84-country Eastern and African Growth Markets (EAGM) region.
Fundamental Analysis SUSTAINABLE INVESTMENT PROCESS
SEAN DRAKE An entrepreneur and founder at The Wealth Project Holdings PLC
2017 | Business Times Africa 27
African mining hopes are distant from uncertain reality It should be a match made in heaven. Developing Africa's vast mineral resources to meet the needs of the resource-hungry economies of China and the rest of Asia.
By Clyde Russell
ut if there is one message to take away from this yearâ€™s Mining Indaba conference in Cape Town, it's that there remains a large gap between hopes and reality, and that in much of sub-Saharan Africa mining investment remains challenging, if not in the too-hard basket. In many cases, it appears that the various stakeholders in mining simply talk past each other, with mining companies pleading for regulatory certainty, preferably on favourable terms, and government leaders pushing their agenda that the industry must benefit all. The main problem is that many African countries have what are effectively incompatible goals when it comes to developing their natural resources. They want mining companies to invest billions of dollars to provide jobs and tax revenues, but they also insist that the same companies meet high hurdles relating to empowering various groups in the host country. South Africa, the continent's mining powerhouse, is a case in point.
28 Business Times Africa | 2017
The country's mining charter calls for companies to have a minimum of 26-percent ownership by investors from the black majority. In itself this is perhaps a sensible and justifiable position for the government, given how black South
Africans were largely excluded from participating in the economy under the white-minority government's policy of apartheid, which ended in 1994 with the negotiated transition to democracy. However, in practice it means that any company consid-
AFRICAN MINING HOPES ARE DISTANT FROM UNCERTAIN REALITY
The main problem is that many African countries have what are effectively incompatible goals when it comes to developing their natural resources.
ering investing in South Africa will effectively be forced to contribute 100 percent of the capital for only 74 percent of the profits. Obviously this adds to the cost of doing business, and may just be enough to deter mining investment,
especially when companies have the option of taking their money to other jurisdictions with less onerous terms. The mining charter has prompted legal challenges in South Africa, and much criticism from the mining sector, with some company representatives at the conference this week privately expressing fears that the 26-percent black empowerment rule is likely only the beginning, and that the percentage that must be held by black investors may rise to something closer to 50 percent in coming years. Wider Uncertainty It's not just South Africa that presents problems for mining companies, with other countries also shifting goal posts as they try to extract more benefits from their commodities. The Democratic Republic of the Congo (DRC), the world's largest producer of cobalt and a major producer of copper and diamonds, changed its mining code in 2012, doubling royalties and seeking larger free carry equity stakes, as well as local beneficiation quotas. But opposition to these reforms meant the DRC government quietly abandoned them, but the fallout was that the country tarnished its reputation as a mining investment destination. Ghana, a model for mining investment after its 2006 mining law attracted investors into its gold industry, decided in 2012 to raise a windfall tax on gold, but then didn't follow through. Other countries that have or are planning to change their mining laws include Zambia, Zimbabwe and Tanzania, reinforcing the continent's image as a difficult place to do business. The Fraser Institute survey of investor appeal tells the story, with the 2015 rankings placing South Africa 66th out of 109 jurisdictions, Zambia 68th and Zimbabwe 98th. It's not all bad news, with Botswana, a major diamond producer, ranking 39th and Ghana in 31st spot. But the point is that African countries have to compete with Austral-
ia and Canada, which boast the top two jurisdictions of Western Australia state and Saskatchewan province. While those are developed countries, other developing nations such as Chile, in 11th spot, and Brazil, in 56th place, offer stiff competition for mining dollars. So what can African countries do to improve matters while still meeting the goals of getting mining to contribute more to the development of local economies and people? The first step is to agree a regulatory framework and then stick to it, resisting the urge to tinker when commodity prices start to rally. But it's also important for governments and miners to recognise that what they have been doing simply isn't going to work. An example of innovative thinking could be that a government decides to raise the royalty rate on mining ore, perhaps to a level slightly higher than comparable jurisdictions, and then places the extra revenue in a sovereign wealth fund. Such a fund could have a mandate to buy stakes in new projects, or to lend money to suitable local investors so that they might participate in mining ventures. A well-managed and structured wealth fund would also go some way to cutting down on susceptibility to corruption, a problem that plagues the current systems of forcing companies to give equity stakes to local investors. The risk for African nations is that if they don't sort out their regulatory frameworks, they will continue to miss out. Without improvement, it's likely the only projects that will be developed will be either the absolute best, as they will be justifiable because of their superior economics, or the ones where dodgy deals can be secured through corruption or by mining without care for the environment. â€“ Rtrs
2017 | Business Times Africa 29
Hope springs eternal as Ghana turns 60
n many countries the world over, 60 years in the life of a human being is the time to retire from work and embark on a life of rest and, possibly nurturing grand children. But sixty years in the life of a country tells a totally different story. For some it could be a time of prosperity, growth and abundance of riches for its citizens and an efficient, well functioning social infrastructural system; but for others, 60 years could be a state of corruption, lack of basic infrastructure and a perpetual dependence on aid from the West. This is the state of Ghana at 60. At inde-
30 Business Times Africa | 2017
THE STATE OF GHANA@60 IS NOT THE STATE THE NATION’S FOREMOST FOUNDER, DR. KWAME NKRUMAH ENVISAGED.
pendence, Ghana was a shining light of the continent. As the first country south of the Sahara to gain independence, many freedom fighters trooped to Ghana to get inspired and go back home and gain independence for the countries. But today in Ghana, we are still battling sporadic ‘dumsor’, taps do not flow properly and if one should travel on a road for 10 or 20 kilometres without swerving a pothole or two then you are not driving in Ghana. The state of Ghana@60 is not the state the nation’s foremost founder, Dr. Kwame Nkrumah envisaged. Dr. Nkrumah’s hope for
THE US FEDERAL RESERVE AND AFRICA: TRENDS TO WATCH
his beloved Ghana is to see industries dotted around the country creating jobs and improving the living standards of citizens. His hope was to see Ghana grow and eat its food, and export the rest to the sub region. His plan was for Ghana to process its raw materials including gold, cocoa, cashew, before exporting the processed products for high foreign income. His hope is to see a well-tarred road network, coupled with state of the art transport system include railway development and marine systems. But this is not the current state of the nation. The Ghana of today is a sorry state of a nation that was so bright, young, ambitious and far ahead of its contemporaries including South Korea, Singapore and other African nations. Whiles Ghana’s contemporaries can be found in the top 10, or at least top 20, largest economies in the world, we are nowhere to be found. Whiles our contemporaries are so technologically advanced that they export, not just goods and services, but knowledge, we are in a deficit in terms of everything. Today, Ghana imports food including frozen chicken and rice to the tune of GH¢1billion. Apart from importing food, basic goods like toothpick is imported meanwhile we export the timber from our forests that are constantly depleting. Tourism, the fourth largest foreign exchange earner is in disarray. The infrastructure leading to these beautiful tourist sites are in the worst shape possible. Many road leading up to waterfalls, mountains and other tourist attractions are nothing to write home about. All that politicians do is pay constant lip service. Ghana is mired in billions of debt. From a surplus at independence to unsustainable debt pile up through debt forgiveness as a result of a visit to the group of Highly Indebted Poor Countries (HIPC), Ghana has now piled up billions of unsustainable debt once again. The nation’s current debt is gone beyond GHc120billion, which represents more than 70percent of Gross
Domestic Product. The balance of trade between our trading partners is always in a deficit with Ghana importing more from our trading partners than we exporting to them. The nation’s education and healthcare systems cannot support its own citizens. The situation is so bad that some Ghanaians have to travel out of the country to access quality healthcare and education. But there is hope for Ghana and there is hope that it can always get better and better for this nation and its beloved citizens. Never has Ghana seen a smooth and safe transfer of power from one political party to another on multiple occasions. That political capital alone has led to the attraction of billions of dollars from outside the shores of the continent which has led to the creation of jobs. Now businesses that seek to expand and investors looking to operate do not have to worry about political instability despite the multiple and numerous ethnicities. We have lived at peace with each other for decades and we will continue to live at peace with each other. There is hope and there will always be hope. The new government rode on the provision of hope to power and that hope and optimism is still felt on the streets and there is a strong feeling that we are about to turn a corner for good. With promises of creating jobs, not just in urban centres, but rural areas, Ghanaians are hopeful that things will get better. Culturally, Ghana is a hopeful nation and despite turning 60 and having nothing to good to write about turning 60, we shall and will always remain hopeful that the politicians we are increasingly despising will be able to take us out of this economic quagmire and place us at where we truly belong: the top. President Nana Akufo Addo has to make crucial decisions to help put the economy back to recovery. That recovery period must have no or minimum room for errors. The public’s expectation is high and the government is expected to provide impossible im-
mediate solutions to Ghana’s unfathomable economic challenges. The economic oratory of President John Mahama’s government was that, the economy has grown but the poor never benefited enough. Economic opportunity became uneven for many resulting from the policy failure of the austere measures, or from mundane, the mismanagement of the economy. The luxury of bad economic governance is longer an option to the public. On the macro level, looking for solutions to our grim lagging economic indicators is much expected. Also the figures of our Gross Domestic Product (GDP) which the new government always challenged whilst in opposition can foretell the partial picture of the depth and enormity of our plummeted economy. Therefore, quick - fix recovery could prove to be an unexpectedly difficult challenge. 2017 | Business Times Africa 31
What Ghana expects from its new leader ByJelili Jerry Afolabi
JELILI JERRY AFOLABI A banker and strategist
change of government in any country comes with high expectations from the citizenry, the public and private sectors, and the international community. For the business world and economy watchers like me, the expectations are mainly the policy interventions that will translate the political capital into concrete policy programs that will set the economy on a pace of growth. There is a lot that needs to be done to revitalize our almost moribund economy and make it grow more than it did the previous year. The new president and his team, who have just taken office, on 7th January, will determine the quality of life of Ghanaians for the next four years. The President and his Cabinet The success and progress of any government does not just depend on the President but most especially the team of experienced experts, corrupt free and dedicated individuals to be chosen to form the government. The kind of persons the President chooses to form his government will determine the ex32 Business Times Africa | 2017
WHAT GHANA EXPECTS FROM ITS NEW LEADER
THE GHANAIAN PEOPLE ARE OF HIGH HOPES AND EXPECTATIONS FOR THE FULFILMENT OF THE MAIN CAMPAIGN PROMISE MADE BY THE PRESIDENT. tent to which his vision and policy direction will impact on the economy and the citizenry. Although there would be pressure on the President to satisfy individuals who supported his election into office and party folks, the paramount goal must be focused on individuals who have the requisite experience, exposure and believe in his vision and ideological path for the country It is recommended that the President constitutes a team of both the old experience experts and young experience folks for them to share ideas. The first on the scale of high expectations of most Ghanaians are the appointment of the ministers, especially the minister of Finance. The management of the fiscal and monetary policies of the country will in a large measure determine the growth of business and attraction of foreign direct investments. The people expect a finance team that can set the foundation for businesses to flourish with policy interventions that will strengthen the local currency against the currencies of our trading partners. The other ministers must also be experienced, well educated, dedicated, and confident with the passion to serve the country. Previous governments have been criticized for appointing in experienced and corrupt individuals to serve and many believe it is one of the key reasons why our country has not realized its touted economic growth. Job Creation The Ghanaian people are of high hopes and expectations for the fulfilment of the main campaign promise made by the President. A promise to
create jobs and implement policies to sustain and grow businesses. The concept of job creation is same as wealth creation and can be realized when the government implements a new tax regime that makes business grow and expand to create more jobs. This can be done through tax breaks and incentives to those companies and institutions that employ and have potential of employing. The economy of Ghana is driven largely by the revenue from agriculture and agricultural processing because the vast majority of the population is into this sector of the economy It is highly expected that the new government as it takes office will implement policies and strategies that will increase the production and exportation of our produce. On the other hand, the new Government can win the hearts of the population if it revives the manufacturing sector and focuses on manufacturing led growth. The small and medium, micro enterprises sector must be empowered and promoted vigorously to increase export of local produce and manufactured items. If this is done, it will not only create jobs but the country will benefit from foreign exchange inflows that will strengthen the Cedi. Government should put in measures to reduce the importation of foreign produce and products that are keenly competing with the local ones. This may be achieved when high taxes are placed on these imported goods competing with our local one .ie to discourage their importation. Empower small businesses and startups Policies and policy implementation that will make businesses and institutions grow is what the new government needs to do. One of the key most important things to do for this realization of agenda is for the Central Bank to review downward its monetary policy rate. Currently the MPC is 25.5% which is still high making the cost of borrowing high and this translates into the high cost of doing business in the country. Interest rates are very high and unstable, making projections and forecasting very impossible for businesses. The new government needs to implement policy strategy to make loans and facilities accessible and affordable for 2017 | Business Times Africa 33
WHAT GHANA EXPECTS FROM ITS NEW LEADER
businesses and startups to encourage the youth to start their own businesses to reduce unemployment. Energy and Power The Ghanaian economy was drastically affected by the power crises (DUMSOR) which saw both the private and public sector lose greatly, revenue and growth. Most businesses collapsed, others were stagnated whereas most folded up and relocated to neighboring countries. Currently, the people of Ghana do not know the state of the power crises since the last government shrouded everything in secrecy. The new government must provide information to the people of Ghana on the current state of the power & energy sector and what strategies and plans they are putting in place to prevent the power crises (DUMSOR) from occurring again. Inflation & Exchange rate The new Government must within the first 100 days implement a policy strategy to address the Inflation and 34 Business Times Africa | 2017
Exchange rate challenges that face the country. There is the need to quickly fix the supply bottlenecks to get the economy working. I suggest a well-designed short and medium term anti-inflationary strategy and exchange rate regime to address the supply bottlenecks. With a strong monetary policy document implementation in place, these challenges can be resolved. Recommendations to the new government The success of this new government is solely dependent on the individuals the Commander in Chief appoints to the various Ministries, Departments and Agencies (MDAs). The President must ensure that those he appoints are experienced, disciplined, dedicated, incorruptible and have the passion to serve mother Ghana. The new government should not rush or fast truck any decisions in full filling any of its campaign promises within the first 100 days but rather allow the economic policy team to analyze and assess the state of the economy before any decisions are made since there are dire
consequences for any hasty financial decisions made on the economy. The Government must communicate its strategy and policy plan on how it intends to solve and address the power crises (DUMSOR) within its first 50 days in office. This is very crucial and important to both the private and public sectors of the economy. A Government with the main objective of job creation and economic development must ensure that a policy document is presented to parliament within the first 100 days on all state owned enterprises, its management, corporate governance standards and appointments. Government must ensure that very qualified and experienced individuals are appointed to the boards and top executive positions of all SOEs. With the high expectations in the business environment, citizenry and the international community, performance and results cannot be compromised. The new President has confidence and has promised to deliver on campaign pledges. The new government should operate an all-inclusive government and consult more any time the need arises so to achieve its objectives. I wish the new president well and pray for wisdom and knowledge for him to govern and bring growth to the good people of our nation. As a nation we all have individual responsibilities to ensure that our country grows and moves forward for financial and economic stability and in freedom.
The new government must within the first 100 days implement a policy strategy to address the inflation and exchange rate challenges that face the country.
COVER STORY ADVERTORIAL
DATA, INNOVATION AND CONSOLIDATION
- KEY TO AFRICA TELCOS GROWTH …says Vodafone CEO
he chief executive of Vodafone Ghana, Yolanda Cuba, has identified three key things that will remain very integral to the growth of telecommunications in Africa. Africa’s unique story with respect to the power of telecommunications continues to represent a special case study the world over. The continent has, more than anything else, embraced the power of technology to transform lives and has been a fast adopter of the rapidly changing landscape of digitalisation. Telecommunications has now become central to the way of life for many African countries. Various populations have come to regard it as a core life-enabler – for homes, businesses, emergencies, innovation, education, health, agriculture and the like. In Ghana for example, the mobile pen-
36 Business Times Africa | 2017
etration rate is in excess of 130%; although in reality it could be lower if you take into account the dual-SIM phenomena. Opportunities continue to abound in the sector; both in the urban space and also the peri-urban areas. With strong connectivity and good network quality, the industry’s potential for growth remains on course. Speaking to the B&FT in an interview, Yolanda said: “There’s no doubt that the future of this industry will be determined by high speed data, mobile money and innovation. I say this because as telecommunications operators continue to make greater social and economic impact, their levels of innovativeness and creativity will separate the men from the boys”. Yolanda also believes that mobile financial services and inclusion will continually define the industry as we look ahead. ” What is obvious to me in my short time
SOUTH AFRICA'S ANC CAN ONLY BE SALVAGED BY LEADERSHIP OF EPIC ETHICAL PROPORTIONS
2017 | Business Times Africa 37
DATA, INNOVATION AND CONSOLIDATION - KEY TO AFRICA TELCOS GROWTH
"We are committed to ensuring that Ghana gets digitized. We want to make sure that we touch the lives of every customer across Ghana – whether they are on our network or not. " in Ghana, for example, as it is with most developing countries, is that about 70% of the population is financially excluded. This provides a huge opportunity for telecommunication companies to deploy mobile money to facilitate financial inclusion and support economic growth and development,” she says. Vodafone’s C.E.O. is of the view that the need for data speed is increasingly becoming commonplace across some countries on the continent. There is an upsurge in consumer demand for dynamic telecom services with speed at all times. The mobile 4G/5G spectrum – representing a new frontier in the industry – together with other offerings will continue to play major roles in delivering consumer experience and efficient data services. However, most people do not realise that all mobile networks run off a fixed network. Simply put, there is no 2G/3G/4G GSM or mobile services without a fixed network. And in Ghana, Vodafone is the de-facto fixed network and has remained so for years. We are transforming our network into a Supernet for the explosion in data as we transit to a gigabyte society.”
Digitalisation Vodafone under Yolanda has already signalled a new focus on aggressive digitalisation, to ensure no one in the country is left digitally behind. It is an agenda Vodafone believes will provide opportunities and tools to make their customers work smarter and more efficiently, whilst encouraging inclusion.
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“We are committed to ensuring that Ghana gets digitized. We want to make sure that we touch the lives of every customer across Ghana – whether they are on our network or not. Our transformative purpose is to be at the forefront of this digitalisation revolution in Ghana – driving inclusion in all forms. We are transitioning to a total communications provider for the home, business and on-thego; providing a unified suite to connect families and businesses at one go. We are not only doing this for our customers; we are also focusing on our employees” says Yolanda. “Currently, one of the unique and innovative things Vodafone has introduced is in the area of graduate recruitment. Graduate applicants can now use their phones to record themselves answering interview questions at their convenience anytime and anywhere, which is then sent to Vodafone for assessment and eventual selection. The concept rhymes with the idea that not everybody can leave their jobs and come for an interview at a particular location. “Therefore, by introducing this simple innovation, we are not only widening our scope of talent search to include others who might otherwise find it difficult to participate, but also increasing our efficiency and effectiveness,” Yolanda explains.
Industry Consolidation There appears to be a constant saturation of the telecom industry across various countries in Africa. A case in point is Ghana, where for a population of 26million people, the industry
has 6 network operators and a host of Broadband Wireless players. Whilst this is unsustainable, it also provides varied opportunities for consolidation in the telecommunications sector, according to Yolanda. “I understand a number of consolidations are being discussed in various boardrooms. It is a cycle that happens intermittently and the telecoms sector is certainly no different. We all remember sometime between 2004 and 2007 when the banking industry in Africa also underwent a host of M&As led by Nigeria. In Ghana, Vodafone is absolutely in support of M&A activity in the sector. It is needed to generate more profitability and revenue for shareholders. What it does is that it opens up the market, creates avenues for customer empowerment and takes creativity and innovation to a higher level.” Whilst the telecoms sector will continually witness a lot of interesting times in the years ahead in Africa, Yolanda has a word of caution for established companies: “For instance in our industry today, we sell data to our customers and they consume content. This simple mismatch in models will be an issue over time if not addressed. Resilient companies must possess creativity, speed, simplicity and great anticipation in order to succeed. It is a new world out there and therefore, for established companies enjoying market share today and a bigger portion of the financial purse, a focus on customer needs should be key because the smaller and agile companies are ready to deploy different ways to win.”
Africa’s dinosaur dictators: Heading for extinction in 2017? By Ben Payton
uch an outcome is far from inevitable this year. But the prolonged economic crisis caused by low oil prices is testing the patience of beleaguered populations – and many of Africa’s geriatric autocrats are looking vulnerable. We could soon see a chain of events that has parallels with the Arab Spring, when the governments of Tunisia, Egypt and Libya fell in quick succession.
YET AFTER NEARLY THREE YEARS OF DEPRESSED PRICES, DEPENDENCE ON OIL IS AN OBVIOUS LIABILITY
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Democratic traditions have never taken hold in central Africa; every country in the region is classed as high or extreme risk in Verisk Maplecroft’s Democratic Governance Index 2017-Q1. It is probably no coincidence that this is also a region rich in oil. The black gold has allowed entrenched rulers such as Teodoro Obiang in Equatorial Guinea and the Bongo dynasty in Gabon to fund patronage networks and pay for security to shore up their positions. On average, 45 percent of the population in oil-producing African countries were born under their current leader, compared with just 26 percent in the rest of the continent. Yet after nearly three years of depressed prices, dependence on oil is an obvious liability. In Angola, the cost of fuel rocketed by almost 40 percent after the government cut subsidies last year. DR Congo – hard hit by the collapse of both oil and mining revenues – has slashed healthcare spending by a quarter. There is now a growing possibility that outbursts of frustration over corruption, the lack of jobs and the loss of subsidies will escalate into attempts to topple the dinosaur regimes. Indeed, Verisk Maplecroft’s data shows how the region is beset by problems such as corrup-
OIL AND GAS INVESTORS WILL FACE AN ALARMING ARRAY OF CONTRACTUAL AND SECURITY THREATS IF CENTRAL AFRICA’S LEADERS ARE SWEPT ASIDE. tion, which erode citizens’ trust in their government. Yet without democratic mechanisms to manage discontent, there is an increased risk of a violent reaction. Instability is already on the rise in several countries – Angola’s score in our Civil Unrest Index declined by almost 15 percent between the 2016-Q3 and the 2017-Q1 iterations of the index, while Gabon’s fell by close to 10 percent. If one of the regimes is toppled, the shockwaves will be felt across central Africa. Activists are bound to take inspiration if a long-entrenched leader is overthrown, especially if this occurs in a nearby country with similar political realities. These conditions point to a dangerous year ahead for the dinosaurs. Alternative scenario So far, at least, the region’s governments have continued to enjoy the loyalty of their security apparatus – and it is far from certain that this will change in 2017. Post-election violence in both Congo and Gabon was crushed with ruthless efficiency last year, and DR Congo’s Joseph Kabila was able to thwart protesters demanding he step
AFRICA'S DINOSAUR DICTATORS: HEADING FOR EXTINCTION IN 2017?
down at the end of his mandate in December. As long as governments continue to pay their police and army on time, they will have a major advantage against unarmed and often spontaneous protests. Meanwhile, some of the dinosaurs will be willing to relieve the pressure by retiring quietly, while ensuring that their successors safeguard the position of their families. This is the strategy adopted in Angola by José Eduardo dos Santos, the only leader that around 85 percent of Angola’s population has ever known. Dos Santos has installed his children in key positions so that they can protect the family’s wealth and influence after he leaves office following elections set for August this year. A managed transition is not without risks, but is likely to buy some time for the ruling MPLA party.
BUT THE PROLONGED ECONOMIC CRISIS CAUSED BY LOW OIL PRICES IS TESTING THE PATIENCE OF BELEAGUERED POPULATIONS
The implications The removal of the dinosaurs might offer some potential benefits for investors. In a very optimistic scenario, a new generation of leaders would successfully diversify their economies, ensure a level playing field for foreign businesses and guarantee transparency. But the aftermath of a political meteorite is sure to be tumultuous – and oil and gas investors will face an alarming array of contractual
and security threats if central Africa’s leaders are swept aside. Newly-installed governments would be under pressure from their populations to crack down on corruption and find quick-fixes for their countries’ social and economic distress. There is widespread suspicion in the region that many existing oil and gas licences were negotiated corruptly, and that they seriously short-change the state. Attempting to rewrite the terms of existing contracts would be an extreme solution, especially because governments would have less bargaining power during a period of low prices and would face being dragged into lengthy arbitral processes. Nevertheless, new administrations could squeeze more revenue from oil companies by imposing ‘stealth’ taxes and tightening fiscal terms for new entrants. On top of this, there is no guarantee of a smooth transition following the removal of a dinosaur leader. The opening of a power vacuum is likely to trigger conflict in some cases, as it did in Libya after 2011. Even extensive violence would not necessarily lead to production shutting down, since most of the region’s oil and gas deposits are offshore. But investors already struggle with high operating costs in the Gulf of Guinea, and increased security requirements would stymie new investment. Ben Payton is head of Africa at Verisk Maplecroft. This article is an extract from Verisk Maplecroft’s Political Risk Outlook 2017. For more information visit:https://maplecroft.com/portfolio/new-analysis/2017/01/19/political-risk-outlook-2017 2017 | Business Times Africa 41
How West Africa built the muscle to rout dictators and keep the peace By Abdul-Jalilu Ateku
ollowing the resolution of the political impasse in The Gambia, a great deal of attention has focused on the role played by the Economic Community of West African States (Ecowas). The regional body brought a swift end to the potentially explosive crisis sparked by the refusal of former President Yahya Jammeh to hand over to the newly elected Adama Barrow.
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Jammehâ€™s flight to exile was preceded by weeks of diplomacy to persuade him to hand over power peacefully. When this failed regional troops and military assets were mobilised to install Barrow forcibly. The rest is history. Barrow is now officially in the presidential seat. This resounding success, unrivalled by any African regional organisation, has taken decades to craft. It is remark-
HOW WEST AFRICA BUILT THE MUSCLE TO ROUT DICTATORS AND KEEP THE PEACE
The ECOWAS treaty of 1975 envisaged the group as an economic community with the aim of promoting Cooperation and development in all fields of economic activity.
able to think that at its inception in 1975, joint military action was not even on the cards. The fractious 1960s By the close of the early 1960s most countries in the West African sub-region had gained political freedom from colonial powers. They adopted a variety of political systems
including multiparty democracy, one-party civilian administrations and military autocracies. The region developed quite a reputation for military coups. There were more in the region than anywhere else on the continent. Initial attempts to form Ecowas floundered in the early 1960s. This was due largely to the differences between Ghana’s first president, Kwame Nkrumah, and Nigeria’s first prime minister, Abubakar Tafawa Balewa, on the kind of integration necessary for the states in the region. The fall of these two personalities from power in 1966 did not end the political rivalries in the region. Attempts at integration were further delayed by the civil war in Nigeria between 1967 and 1970. Its aftermath further affected any chances at integration due to the struggle over the supremacy of the West African region between Nigeria and Côte d'Ivoire along Anglo-Francophone lines. Eventually two influential military leaders – Generals Yakubu Gowon of Nigeria and Gnassingbe Eyadema of Togo – formed the nucleus of Ecowas in the 1970s. They succeeded in bringing on board the other military leaders of Dahomey (now Benin), Ghana and Niger among others. This explains the dominant role of the military in the life of the organisation. Ecowas was eventually formed on May 28 1975, in Nigeria as a regional economic grouping of 15 states. Membership went up to 16 when Cape Verde joined in 1976. But it declined again to 15 when Mauritania withdrew in December 2000. The Ecowas Treaty of 1975 envisaged the group as an economic community with the aim of promoting cooperation and development in all fields of economic activity. The grouping saw its role as raising the living standards of people in the region, increasing and maintaining economic stability, fostering closer relations among its members and contributing to the progress and development of the continent. It is significant that no reference was made to defence or security in any of the treaty’s 65 articles. How did the economic bloc blossom into a dominant sub-regional peace and security organisation in Africa? The need for a security organisation When Ecowas was formed in 1975 only Nigeria had experienced a civil war. But there was an increase in the number of violent conflicts after the late 1980s. Several factors contributed to the intractability and complexity of violent conflicts in Liberia, Sierra Leone, Guinea, Mali, Niger and Côte d'Ivoire. These included the effects of the Cold War, economic malaise, human rights abuses and political rivalries and interests of states in the region. The conflicts had deleterious implications for peace and security of the region. The effect of the civil wars was that some states became places for recruiting disenchanted unemployed youth into various armed banditry groups. They pillaged the region for natural resources and committed heinous war related 2017 | Business Times Africa 43
HOW WEST AFRICA BUILT THE MUSCLE TO ROUT DICTATORS AND KEEP THE PEACE
crimes. Ecowas was formed at a time when power vacillated between civilian and military rulers in the region. The period was characterised by governments accusing one another of supporting dissidents. There were also accusations of domestic problems being instigated externally. Against this backdrop, the treaty was revised in 1993. The “Revised Treaty” allowed the promulgation of protocols to regulate the peace and security architecture of member states. The peace and security architecture of Ecowas The first protocol promulgated was a nonaggression pact signed on April 28 1978 in Lagos, Nigeria. The region’s leaders present noted that the community cannot attain its objective save in an atmosphere of peace and harmonious understanding among Community members. This marked the beginning of future steps by member states to address security matters in the region. But the protocol proved inadequate against either external attacks or intrastate conflicts which were becoming more frequent. This led to the mutual assistance in defence protocol being passed. This was signed in May 1981 despite fervent opposition from Mali, Guinea-Bissau and Cape Verde. It did not create a standing army but provisions were made for joint action in the event of any security threat to a member state through a voluntary contribution of troops. These were referred to as the Allied Armed Forces of the Community. But the reliance on troop contributions from member states was a major challenge. This was because by the time troops were assembled the violence would have escalated. These and many other bottlenecks, in particular, the harrowing experiences of the Economic Community of West African States Monitoring Group (Ecomog) in Liberia and Sierra Leone, led to the next big step. Which 44 Business Times Africa | 2017
is why in 1999 a mechanism for conflict prevention, management, resolution, peacekeeping and security was agreed. Current peace and security framework The 1999 protocol put in place comprehensive structures and processes that have to be followed in the event of conflict breaking out. The mechanism makes provision for diplomatic and military interventions. It empowers regional leaders to decide on the deployment of political and military missions. Ecowas has a standby force in member countries which can be deployed rapidly to prevent conflicts from escalating. The rapid deployment of troops from Nigeria and The Gambia’s neighbour Senegal in the recent deadlock is a case in point. Other protocols relating to the prevention, management and resolution of conflict make up a significant part of the regional peace and security architecture. These include a supplementary protocol on democracy and good governance adopted in 2001. There are a number of other security related structures. These include an early warning system and a mediation and security council which advises the authority of heads of state and government. In addition, there are offices of the special representatives, a council of elders and special mediators. But the challenge of preventing conflicts from escalating remained. To meet this challenge, a conflict prevention framework was agreed in 2008. This enabled the regional powers to harness human and financial resources from other important players such as private and civil society organisations. A major challenge that now remains is the financial burden associated with political and military missions. But with its long history of meeting its challenges full square, there is every chance Ecowas will make a success of that, too.
ECOWAS HAS A STANDBY FORCE IN MEMBER COUNTRIES WHICH CAN BE DEPLOYED RAPIDLY TO PREVENT CONFLICTS FROM ESCALATING. Abdul-Jalilu Ateku is a PhD Candidate in International Relations, University of Nottingham
What southern Africa can learn from West Africa about dealing with despots Has the Economic Community of West African States (Ecowas) just taught the Southern African Development Community (SADC) a lesson?
By Chris Saunders
as the Economic Community of West African States (Ecowas) just taught the Southern African Development Community (SADC) a lesson? The West African states effectively took a dictator to task after he refused to comply with the democratic will of the people to vacate office. By using diplomacy in combination with the threat of military force they managed to convince the former Gambian president Yahya Jammeh to surrender power and leave the country. This was after he was defeated in an election. Why has the southern African regional body been, in comparison, so ineffectual? Will it learn from Ecowas and become more interventionist? Many countries in southern Africa have not had free and fair elections; Zimbabwe is the most obvious example. Where there have been cases of unconstitutional seizures of power, or leaders have stayed in office despite a lack of electoral support, there has been at best some form of SADC mediation, but not the threat of military intervention. Such contrasting relative tolerance, if not outright passivity, can be explained by a number of factors. They relate in part to the sub-regional configuration, with former liberation movements governing the most in2017 | Business Times Africa 45
WHAT SOUTHERN AFRICA CAN LEARN FROM WEST AFRICA ABOUT DEALING WITH DESPOTS
SADC’S CREDIBILITY IS AT STAKE . AT A TIME WHEN THE AU IS INCREASINGLY PROMOTING LEGITIMATE GOVERNANCE, THE QUESTION ARISES: HOW MUCH LONGER CAN SADC JUSTIFY ITS INACTION?
fluential member states. In addition, there appears to be a lack of common political will. This can be seen from the fact that there is no operational regional military force. SADC’s credibility is at stake. At a time when the AU is increasingly promoting legitimate governance, the question arises: how much longer can SADC justify its inaction? The case for a regional military force The Anglophone member states 46 Business Times Africa | 2017
of Ecowas formed a military force, called the Ecowas Ceasefire Monitoring Group (ECOMOG), already in 1990. It has intervened in a number of civil wars and cases of instability in West Africa. SADC, on the other hand, has for years been attempting to organise a stand-by force which would fall under the stand-by force of the African Union (AU). But the SADC force isn’t operational and has not got beyond some basic training exercises. Units
of the South African National Defence Force have been deployed for peace-making missions on behalf of the AU and the United Nations (UN) in a number of African countries. A disastrous military engagement in the Central African Republic cost the lives of 13 South African soldiers in March 2013. South African troops remain in the Democratic Republic of the Congo (DRC), a SADC member state. Soldiers have been killed there, too. It cannot be said that southern Af-
WHAT SOUTHERN AFRICA CAN LEARN FROM WEST AFRICA ABOUT DEALING WITH DESPOTS
ing Madagascar and Zimbabwe. The only case that somewhat resembled events around The Gambia was South Africa’s intervention in Lesotho in September 1998. Nominally under SADC, that intervention’s goal was to ensure the incumbent ruler was not ousted by opposition forces. Three SADC member states did intervene militarily in the DRC in August 1998. Troops from Angola, Namibia and Zimbabwe were deployed, nominally under the umbrella of SADC. The goal was to aid the then president, Laurent Desiré Kabila, against rebels who had invaded the eastern Congo. Kabila would not have been able to consolidate himself in power without the military support of the three SADC states. Both interventions were controversial within SADC, since they were not based on a common decision by the member states. These were at that time marred by the rivalry between Zimbabwe’s Robert Mugabe and South Africa’s Nelson Mandela. This may help explain why there have not been any similar military interventions since. Different approaches
rica has not experienced the kind of civil wars that West Africa has had in recent decades, and that there has therefore not been the need for such a force in the region. The war in the DRC has been far larger than those in Liberia and Sierra Leone where the East African regional force intervened. And there have been a number of other cases of instability where a SADC force might well have played a role in bringing about legitimate governance, includ-
Zimbabwe stands out as a case for intervention. Back in March 2002 Mugabe’s re-election as president was rigged and did not reflect the democratic will of the people. Then in March 2008 he lost presidential elections to his rival Morgan Tsvangirai. By all accounts Tsvangirai won the election, but Mugabe rigged the vote. A second round of voting was deemed necessary. But the ruling party’s militia unleashed brutal state terror against the opposition and Tsvangirai pulled out of a second round to stop further loss of lives. Instead of taking action against Mugabe, SADC engaged in mediation. This led to a coalition government being formed. Why did Ecowas act firmly against Jammeh while SADC didn’t against Mugabe? There are a number of reasons. Zimbabwe is a much more important country in southern Africa than The Gambia is in West Africa. Despite all his human rights abuses
and repressive rule, Mugabe remains a widely-respected liberation hero and popular among large parts of the population in the sub-region and on the continent. He has been able to project himself as having not only liberated his country from colonialism but also as remaining steadfast against colonial influences. Above all, he managed to sell his fast track land reforms as a necessary and just act of appropriating land from white farmers and giving it to blacks. Another key factor is that the most influential SADC countries are led by liberation-era leaders who continue to regard Mugabe as one of their own. Taking action against Mugabe would therefore always be controversial, and the consequences difficult to predict. In addition, Zimbabwe’s army has remained loyal to Mugabe and is a force to be reckoned with. The SADC leadership therefore played safe and did nothing effective. SADC and Kabila Unfortunately, there seems little chance of SADC following ECOWAS’s example and using the kind of intervention that led to Jammeh’s removal from office. SADC faces just such a test in the DRC. President Joseph Kabila has finally agreed to leave office. This should happen latest a year after he should have stepped down when his two terms came to an end. He made his decision after public protests against his continued term in office turned violent in December. Many people were killed during two days of riots. If Kabila reneges on the agreement he has made, will SADC act to ensure he in fact leaves office? How long will it take before SADC has the means and the will to remove rulers who have either been defeated in an election or who refuse to accept that their terms of office have come to an end? Will what has happened in West Africa in the case of The Gambia help persuade SADC to move towards more effective interventions to remove dictators and other illegitimate rulers? It seems unlikely.
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Angolan SWF chairman looks to facilitate move away from oil Josè Filomeno dos Santos, chairman of Angola’s sovereign wealth fund, outlines how it is reducing the country’s dependence on oil in favour of infrastructure, agriculture and timber.
ngola’s oil-dependent economy is on the slow march towards diversification. But reaching its destination will require, among other things, a mix of further investment, regulatory change and meaningful commitment to reform on the part of the government. While some progress has been made, including the introduction of a new private investment law and ongoing changes to the tax regime, the country still lacks the investment needed to propel non-oil sectors of the economy forward in the coming years. A hard-currency liquidity crisis and an expected leadership transition in 2017 are not helping.
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Nevertheless, new champions for Angola’s non-oil economy are emerging. At the forefront is the country’s sovereign wealth fund, Fundo Soberano de Angola (FSDEA), a $5bn entity officially established in 2012. With a mission to promote the social and economic development of Angola, the fund has marked itself out as a key driver of the country’s non-oil potential. Cutting dependence on oil “One of the reasons why the FSDEA is crucial to Angola's development is the fact that it focuses on the non-oil sectors of the economy. The strategic objective is to reduce the country's dependence on the oil industry,” says its chairman, Josè Filomeno dos Santos. About 60% of the FSDEA portfolio is geared towards
ANGOLAN SWF CHAIRMAN LOOKS TO FACILITATE MOVE AWAY FROM OIL
private equity investments in Angola and sub-Saharan Africa, with the remaining sum invested in fixedincome securities. FSDEA’s private equity activity is at an early stage but Mr dos Santos is looking to the longer term potential of sectors such as infrastructure, agriculture and timber to generate returns while promoting economic diversification. “The Angolan sovereign wealth fund’s private equity investment has a triple impact on its performance. It generates more capital gains than traditional securities holdings. It catalyses socio-economic gains, such as additional employment and new business opportunities. And it generates sources of sustainable net income over the long term,” says Mr dos Santos. Agriculture investment In the first half of 2016, FSDEA’s $250m agriculture private equity investment fund secured concessions of about 72,000 hectares of farmland split among seven large-scale farms. The objective is to produce crops for the domestic market, as well as for export, though the fund is still appraising how the land can best be utilised. “The management of FSDEA's various agricultural investments is obviously assessing what the Angolan market requires domestically, as well as what can be exported abroad, to ensure the financial feasibility of this strategic allocation,” says Mr dos Santos. But transforming these concessions into wellfunctioning and commercially viable agricultural assets is unlikely to be straightforward. For one, Angola scores poorly on many international business indices, in categories from corruption and innovation to the ease of doing business. A dearth of skilled labour and poor physical infrastructure add to the challenges of launching a commercial project. Addressing these problems will be critical if Angola is to emerge as a toptier investment destination.
in the exploitation, processing and trade of timber and its derivatives. As a result, we have increased the commercial transparency of the operation while simultaneously generating higher revenues for all parties involved,” says Mr dos Santos. The fund is the first organisation in Angola to adopt International Financial Reporting Standards. By increasing the transparency of its operations, the fund hopes to promote a greater awareness of its work, as well as the potential of Angola, to a wider range of investors. As Mr dos Santos acknowledges, for those who have not visited the country, Angola is an underappreciated market. “The challenge is to raise the profile of Angola as a location that is attractive to an increasing number of professional investors,” he says. While the work of the FSDEA will be important, the government must also stick to its course of economic and political reform. This will require hard choices and, at times, painful change, in order to root out corruption and encourage investment and innovation. If it can get this right, Angola has every opportunity of prospering in an era of subdued oil prices. – The Banker
ABOUT 60% OF THE FSDEA PORTFOLIO IS GEARED TOWARDS PRIVATE EQUITY INVESTMENTS IN ANGOLA AND SUB-SAHARAN AFRICA, WITH THE REMAINING SUM INVESTED IN FIXEDINCOME SECURITIES.
For its part, the FSDEA is looking to improve the transparency of the business environment. The recent acquisition of a timber concession is a case in point. “The FSDEA has recently acquired a large eucalyptus concession in the central region of Angola. This investment has already improved the prospects for the private companies and local authorities that intervene 2017 | Business Times Africa 49
Behind the conflict in central Kenya thatâ€™s costing lives and hitting tourism By Jennifer Bond
rmed pastoralist groups have, over the past few months, forcefully moved their livestock herds onto ranches or conservancies in Laikipia, central Kenya. Property has been destroyed, wildlife killed and tourists have been caught up in the clashes. There is a simplistic assumption that this is due to an ongoing drought or that the cattle raids are part of traditional pastoral conflict. Itâ€™s true that the pastoralist march on private land is in part for grazing and water. But in fact their actions are also a form of resistance to an unequal distribution of resources. Laikipia is an area characterised by valuable resources and diverse communities. This has created a complex political story with its roots in resource and land grabbing, political wrangling and human-wildlife conflict. 50 Business Times Africa | 2017
Land distribution Land-based grievances are what could have triggered these recent invasions. 2017 is an election year in Kenya and these are often used in political campaigns. They have already been witnessed in Isiolo - an area that neighbours Laikipia - where, conservancies are also being invaded by pastoralists, spurred on by local politicians. This political dynamic can also be seen in Laikipia. These grievances are an easy rallying cry as many pastoralists in the area lost access to their ancestral pasture lands in the early 20th century when British imperialists forcibly removed the Maasai pastoralist community from the Rift Valley and Laikipia. They were moved the area now known as the Maasai Mara, near the border of Tanzania. What ensued created a mosaic of land tenure arrange-
BEHIND THE CONFLICT IN CENTRAL KENYA THAT'S COSTING LIVES AND HITTING TOURISM
ments. The Maasai’s relocation enabled European settlement and agricultural production in the favourable ecological conditions of the Rift Valley – an area which came to be known as part of the “White Highlands”. Africans were restricted to certain areas, largely based on ethnicity. When independence came, it signalled the move towards individual land rights and redistribution schemes. But these schemes were criticised for putting land into the hands of a few political elites. In Laikipia, the majority of Kenyans were settled on smallholdings in the west, or remained landless. Group ranches, where a group of people collectively own freehold title to land, were set up predominantly in the north while some private ranches from the colonial period kept their land. Human-wildlife conflict Over time conservation areas – or conservancies were set up. These were either former ranches that moved into wildlife management or were set up by a community. Laikipia has an abundance of wildlife and these areas act as a form of public private partnership with the Kenya Wildlife Service. They are mandated to manage Kenya’s wildlife and offer tourism opportunities which can attract premium prices. But the conservancies have created conflict with some surrounding communities. There is deep inequality within Laikipia between those who reap the benefits of wildlife and those who bear the costs. Due to the land arrangements, many smallholders in Laikipia are situated outside the conservancies or within wildlife migratory corridors. As a result, they suffer both livestock or crop destruction. For privately-run conservancies there are concerns that this is a legitimate way to concentrate large tracts of land and valuable wildlife-related economic activities in the hands of a few individuals. Also troubling is the use of National Police Reservists by private conservancies. These scouts are private employees. But they are armed by the government through the national
police reservists initiative for the purpose of maintaining “wildlife security”. The scouts are empowered to use violence to stop poaching, but also act in security matters beyond the conservancy of their employment, such as tracking raided cattle. This has the potential to escalate conflict between private and public interests. Political dimensions Today the conflicts are also overlaid with corruption – particularly the misappropriation of funds that could have been used for rural development. Instead they serve political interests with some benefiting financially from the raids. The raids have become a political tool for those looking for votes in exchange for water and pasture. And so, fuelled by the proliferation of arms within pastoral communities, some politicians reportedly use their positions to incite their constituents to take up arms and lay blame for the lack of resources elsewhere. Cattle raids are therefore often perpetrated by criminal gangs with links to corrupt government or political actors. Previous disarmament programs have sought to address the arms problem but have been criticised for the excessive use of force by police or military. They have also been criticised
for leaving disarmed communities vulnerable to attack by those communities that haven’t been disarmed. A solution? This is not a new issue. There have been many incidents of invasions throughout the past few decades. However, the continual framing of these invasions as responses to drought fail to address the underlying dimensions of resource distribution. Short-term programs to address famine and drought do not guard against future invasions. They will continue to occur in the absence of genuine conversations about issues of governance, the sharing of benefits and resource management in Kenya. Rainfall and ecological conditions simply act to exacerbate the tensions. Until governance issues such as corruption, policy, security, management of resources and development within rural areas are addressed, the conflict will continue.
Jennifer Bond is a lecturer in Human Geography, Charles Sturt University
2017 | Business Times Africa 51
Kenyatta’s tough task in reelection bid
enyan President Uhuru Kenyatta’s bid for a second term in East Africa’s biggest economy is running into trouble in one of his ruling coalition’s previous strongholds: the Rift Valley. Kenyatta, 55, is counting on a commitment by Vice President William Ruto, 50, to deliver the key voting block in the August election and in return has said he will ensure the backing of Kenya’s
52 Business Times Africa | 2017
ruling party for Ruto’s presidential bid in 2022. That deal has become doubtful after a party led by the son of former President Daniel Arap Moi announced plans to enter a candidate in the 2017 race. “For Uhuru to win, he needs two key voting blocks -- one such block is facing a lot of antagonism, this is the Rift Valley,” said Ndung’u Wainaina, a political analyst based in Nairobi, the capital.
KENYATTA'S TOUGH TASK IN REELECTION BID
“In 2017, it’s not looking like he will get this block the way he got it in 2013.” Elections in Kenya are fractious times for investors because of violence that’s erupted in three of the past five votes. Anxiety about instability around this year’s ballot contributed to a drop in Kenya’s main stock index to a fouryear low last month, while the shilling has weakened 1.2 percent against the dollar so far this year. The government has warned the election may result in slower growth in the $69.2 billion economy this year, while the International Monetary Fund says there may be “heightened political instability.” Volatile Region
THE GOVERNMENT HAS WARNED THE ELECTION MAY RESULT IN SLOWER GROWTH IN THE $69.2 BILLION ECONOMY THIS YEAR
Violent protest could spell the end of Ethiopia’s impressive upward economic trend.
The Rift Valley, part of a 6,000-kilometer (3,728-mile) transcontinental trench that cuts through western Kenya, has always been a volatile region during elections. In a disputed December 2007 vote, it was the flashpoint for two months of ethnic violence that left 1,100 people dead and forced 350,000 more to flee their homes, slashing the country’s growth rate by almost fourfifths. Post-election fighting also erupted in the area in 1992 and 1997. The last ballot in 2013 was free of unrest because Kenyatta formed an alliance with Ruto, uniting two of the country’s biggest ethnic groups -- Kenyatta’s Kikuyu community and Ruto’s Kalenjin group -- which fought a decade ago. While Ruto was able to deliver “a lion’s share” of the Rift Valley vote in the 2013 election, his contribution this year will be reduced by a material margin, said Dismas Mokua, an independent political analyst based in Nairobi. “This time his support will reduce significantly, by as much as a third, because he has not been able to build a consensus among the leaders of his community in the Rift Valley and he has created unnecessary political enemies,” Mokua said. “There will be four counties of the 14 in the Rift Valley that will cause a challenge for the deputy president.” Concern within the Kenyatta camp about withering support in the Rift Val-
ley led Uhuru’s mother, Ngina Kenyatta, to meet Moi last month to discuss possible collaboration between their sons, the Nairobi-based Star newspaper reported Jan. 23. Daniel Arap Moi succeeded Jomo Kenyatta, Uhuru’s father and Kenya’s first president after independence in 1963, and backed Uhuru as the nation’s leader in elections in 2002. A week after the meeting, Gideon Moi’s party, the Kenya African National Union, announced it’ll compete on its own in the elections, signaling that an alliance with Kenyatta isn’t imminent. Kalenjin Infighting Ruto is being assailed on two fronts by sub-groups of his Kalenjin ethnic community. Isaac Ruto, the unrelated governor of Bomet county, has clashed with the vice president frequently since the 2013 elections, claiming the support of the Kipsigis, the largest of at least nine Kalenjin subgroups, in the southern Rift Valley. In the central Baringo county, Moi, 53 and a member of the Tugen sub-group, has also campaigned against William Ruto, who belongs to the second-biggest Nandi sub-group. “I foresee Moi’s son and Isaac Ruto finding some fusion in the south Rift and working together against the deputy president,” said Barrack Muluka, an independent political analyst based in Nairobi. “The question is whether they will ultimately vote against Uhuru in the election.” A political alliance that’s been suggested between former Premier Raila Odinga, former Vice-President Kalonzo Musyoka, ex-Finance Minister Musalia Mudavadi and Senator Moses Wetang’ula may wrestle “a portion of the Kalenjin vote away” from the deputy president if it secures the backing of Isaac Ruto and Moi, according to Emma Gordon, an analyst with Bath, England-based Verisk Maplecroft. Ruto and Moi have been linked to the new opposition coalition, known as National Super Alliance, though they haven’t publicly said whether they will join it. – Bloomberg 2017 | Business Times Africa 53
Malawi awaits early investors Officials at a recent forum in London explained how Kenya is one of Africa's economic stars, and is attracting investment through its open and stable economy. However, security issues and a creaking infrastructure are still a cause for concern.
aving suffered both natural disasters and political corruption in recent years, Malawi is fighting back. It has improved its ease of doing business – boasting Commonwealth links and an English-speaking workforce – and offers investors willing to take the plunge plenty of potential. Sebastian Shehadi reports. Already one of the world’s poorest countries, weather-related disasters – in the form of both droughts and floods – have seriously damaged the economy of Malawi and its all-important agriculture sector in recent years. GDP growth fell from 5.7% in 2014 to 2.8% in 2015, according to the World Bank. The organisation’s data also
54 Business Times Africa | 2017
shows FDI plummeting from $715m in 2014 to $142m in 2015. Investment monitor fDi Markets reports only one greenfield investment for 2015 and none thus far in 2016. Opportunities abound Despite all this, Malawi has major investment opportunities “in energy, infrastructure, manufacturing, agriculture, tourism and services”, says Kena Mphonda, the Malawi high commissioner to the UK. It is already home to more than 50 foreign companies, he adds. Furthermore, Malawi is among Africa’s most peaceful countries and the government “is very open to FDI”, ac-
MALAWI AWAITS EARLY INVESTORS
Malawi has also improved its standing in the World Bank’s Ease of Doing Business index, jumping from 163rd in 2014 to 133rd in 2016. However, numerous government corruption scandals, such as 2013’s so-called 'Cashgate', have cost Malawi millions in foreign donations. Cholo Mvula, an economic commentator on Malawi, says confidence “has not been [won] back” because the current president, Peter Mutharika, and his predecessor, Joyce Banda, are implicated in Cashgate. Additionally, climate disasters have exacerbated Malawi’s perennial electricity and water shortages. Blackouts are common, and back-up generators are essential for any business operating in the country. Since all of the country's petroleum has to be imported, the government knows that renewable energy, especially hydro and solar, is the solution and a primary area for FDI. Indeed, at Malawi’s 2016 Investment Forum, water and electricity supply projects – from new dams to waste-to-energy facilities – dominated the agenda and there were seven memoranda of understanding related to this area, according to Mr Mphonda. Most promising sectors
MALAWI HAS LARGE URANIUM AND COAL DEPOSITS, “AND THAT LAKE MALAWI HAD [UNEXPLORED] POTENTIAL FOR MINERALS
cording to Oliver Everett, CEO of the Commonwealth Enterprise and Investment Council. He cites the “flexibility and commerciality of the government. It will tailor incentives to each investor and, unlike most countries, its ministers quickly enter into direct talks.” Being part of the Commonwealth is another advantage. “[The Commonwealth's] financial and legal system is based on the UK’s and there’s a 19% cost advantage in doing business between Commonwealth countries,” says Mr Everett. He adds that investors also benefit from Malawi’s “inexpensive, competent and English-speaking” workforce.
Malawi’s biggest opportunity for FDI is, some contend, in agriculture and tourism. “It’s very fertile land. [Business must] diversify crops, create added value, and better comply with international production norms," says Mr Everett, while Mr Mvula believes that with the proper machinery and irrigation, agribusiness would both counter droughts and reward investors. Tourism is also important to the country, growing at 4.2% and accounting for roughly 7% of employment and GDP over the past four years, according to the World Travel & Tourism Council. However, considering Malawi’s beauty and peaceful environment, there is plenty of scope to expand. Although high-end ecotourism is being developed, Mr Mvula laments that it lacks Kenya’s “proper planning and safari parks”. Ageing airport infrastructure and poor marketing are other problems. Indeed, figures on the Malawi Investment and Trade Centre website have not been updated since 2013, which is a disincentive for potential investors in all sectors. Regarding natural resources, Mr Mvula says that Malawi has large uranium and coal deposits, “and that Lake Malawi had [unexplored] potential for minerals”. He adds that great opportunities exist for investment in ICT, since mobile and internet use is growing and there are currently very few operators. Mr Everett believes minimal competition – and not only in ICT – should be an incentive to invest in Malawi. “If you’re willing to wait 10 years and [invest from a strong currency, such as sterling], then your rate of return could be phenomenal,” he says.
2017 | Business Times Africa 55
How we plan to revitalise Nigeria
Nigeriaâ€™s strategy for regenerating its flagging economy centres on partnering with the private sector to drive sectors such as manufacturing, textiles and agriculture.
By Dr Okechukwu Enelamah
here is a saying that every challenging situation presents tremendous opportunities for far-reaching solutions. As Nigeria passes through a difficult economic phase, we have chosen to tackle the issues head on, taking into cognizance the lessons that must be learned from the past. There is no doubt that in a developing economy such as ours, private capital is crucial. This is why in the Ministry of Industry, Trade and Investmentâ€™s diversification and growth plan (otherwise known
56 Business Times Africa | 2017
THE CHALLENGE IN EVERY ECONOMY IS THAT OF INFINITE DEMANDS AND FINITE RESOURCES
as the MITI Plan), our strategic focus is partnering with private and development capital to mobilise resources for growth. Private partnership The challenge in every economy is that of infinite demands and finite resources. Given the limited resources of government, the MITI Plan, and indeed the overall approach of the Nigerian government to diversification and growth, is based on partnering with the private sector.
HOW WE PLAN TO REVITALISE NIGERIA
INTRA-AFRICAN TRADE REPRESENTS ONLY 12% OF THE COUNTRYâ€™S TOTAL TRADING ACTIVITY. NIGERIA NEEDS TO IMPROVE ITS TRADE WITHIN AFRICA.
prime minister of Georgia, Nika Gilauri, is on board to offer support. The global perception, and indeed the reality, is that our country is a tough environment in which to do business. We must change this negative perception! Positive perceptions will restore confidence, and attract investors/capital, technology and best practices. Some of the much-needed interventions include: establishment of a single window and simplifying the process for registering businesses, obtaining land titles, expedited clearance of goods from ports, obtaining visas and payment of taxes, among others. Based on this enabling environment and ease of doing business initiative, our goal is that Nigeria should work hard to move up at least 50 places in the World Bank Doing Business rankings in the next couple of years. Manufacturing growth
There are three core enablers in our policy framework for partnering with the private sector: creating a business-friendly environment; ensuring coherence between monetary, fiscal and structural reform policies so that the overall economic policies of government are well coordinated and targeted at the common purpose; and provision of hard and soft infrastructure for growth. It is one thing to have ideas, however. It is another to
implement them. We have therefore proceeded with the necessary steps to ensure that our vision is realised. On the business environment, our president, Muhammadu Buhari, has approved the establishment of the Presidential Enabling Business Environment Council. The Enabling Business Environment Secretariat has been set up, experts and technical consultants to support the team have been constituted and the former
Second, the Nigerian Industrial Revolution Plan (NIRP) broadens the scope and accelerates the growth of the manufacturing industry. In order to accelerate diversification and channel resources to sectors where we have a comparative advantage, the NIRP prioritises agro-allied businesses, cotton, textiles and garments, light manufacturing, petrochemicals and automobile assembly and production, which are based on the National Automotive Industry Development Plan. Start-up work on the policy has commenced. Implementation of the action plan on textiles and garments is ongoing while a roadmap has been developed for the production of tomatoes. Special economic zones (SEZs) and industrial parks are critical to the successful implementation of NIRP. Pre-development studies on six pilot SEZs in Nigeria, to world-class standards, commenced in December 2016. The ministry, through the Nigeria Export Processing Zones Authority, is working with a world-class team of experts from China. Afreximbank and China Exim Bank have committed 2017 | Business Times Africa 57
HOW WE PLAN TO REVITALISE NIGERIA
$1bn to the project. Thinking small Third, micro, small and medium-sized enterprises (MSMEs) are being prioritised for job creation. MSMEs will contribute enormously to the acceleration of domestic economic activity, innovation and wealth creation. We have to intensify implementation of much-needed support for these entities in various ways. One form of support would be access to financing. But SMEs also require support through connecting them to regional and global value chains for the export of their products. We have identified 23 cluster areas, termed industrial development centres, which will support MSMEs with capacity development. We also launched the business innovation and growth platform, with World Bank funding to provide support and capacity training for MSMEs. This will come in the form of grants, matching funds and technical support. Trade boost Fourth, trade and investment are engines for growth. The Economic Community of West Africa States (Ecowas) market and the ongoing negotiations to create the Continen58 Business Times Africa | 2017
tal Free Trade Agreement for Africa will expand the markets into which Nigerian manufacturers and providers of service can export. Nigeria is a big market of 170 million people. But we must now strategically seize the opportunities for growth in the 300 million Ecowas market and the continent-wide market of 1.2 billion people, of which more than half are under 18 years of age. Intra-African trade represents only 12% of the countryâ€™s total trading activity. Nigeria needs to improve its trade within Africa. As part of the MITI Plan, we are initiating strategic 21st century free-trade agreements to steer those economies and investors that seek market access to the Nigerian economy to undertake longterm strategic investments with the location of industries, assembly and manufacturing plants in Nigeria, as part of the connection to regional and global value supply chains. The MITI Plan for diversification and growth focuses heavily on linking trade and investment. A smart response Finally, to accelerate growth and modernise the Nigerian economy, the MITI Plan is developing a digital-led growth strategy for the Nigeri-
an economy, the Smart Nigeria Digital Economy Project. The objective of this project is to solve efficiency problems and create leap-frog opportunities in the economy, improve competitiveness and foster technology development and innovation more generally. The Smart Nigeria Digital Economy Project is our response to an area of intense economic and technological activity by young Nigerians, where there is a growing pool of talent. It is a sector of the economy where the private sector already has ownership. The role of government would therefore be to ensure a sound soft regulatory environment and hardware infrastructure to foster the rapid growth of this area. The potential gains of the digital economy will be manifest in sectors such as financial services (for example, in digital accounts, payments, mobile money), in health and educational services and other sectors of the economy. To imagine the gains that can come from the digital economy, a recent study by McKinsey Global Institute estimates that widespread use of digital financial services alone can add $88bn and create more than 3 million new jobs over the next 10 years in Nigeria. But these gains will not happen by themselves. It is imperative to say that there are critical drivers for growth, namely energy, agriculture, and manufacturing. Our plan for diversification and growth depends and rests on these critical drivers. An adequate and stable power supply is essential for industrialisation. Agricultural productivity must be scaled up to ensure food security and provide the inputs for agro-processing that is plugged into agricultural value chains. Manufacturing is central to job creation, technology transfer, new ideas and innovation. Given that the economy is a system where everything is connected, what the MITI Plan seeks to do is to establish synergy and connectivity across different sectors on a foundation of an attractive business environment.
Economic plan could make or break Nigeria Buhari’s economic blueprint for the next four years, due to be released this month, will aim to lift West Africa’s biggest economy from its worst slump
ith discontent mounting and Nigeria seeking to raise international debt, lenders and investors are waiting for President Muhammadu Buhari to announce a plan that could determine whether he keeps his promises to boost the economy and create millions of jobs. Buhari’s economic blueprint for the next four years, due to be released this month, will aim to lift West Africa’s biggest economy from its worst slump in more than two decades and boost the annual
RECOVERY AND GROWTH PLAN FOR 2017 TO 2020 COMES AFTER BUHARI FORCED THE CENTRAL BANK TO MAINTAIN CURRENCY PEG FOR MORE THAN A YEAR
economic growth rate to at least 7 percent by 2020, Budget and Planning Minister Udo Udoma told reporters and investors in the capital, Abuja. The recovery and growth plan for 2017 to 2020 comes after Buhari forced the central bank to maintain a currency peg for more than a year, curbing foreign investment, while the importers of certain raw materials and equipment are still banned from accessing dollars, denting manufacturing output. Buhari approved the 2016 budget almost five months after the start 2017 | Business Times Africa 59
ECONOMIC PLAN COULD MAKE OR BREAK NIGERIA
of the year, causing delays in spending and adding to the woes of an economy hurt by declining oil prices and output. “This is the last opportunity,” Ayodele Akinwunmi, head of research at Lagos-based FSDH Merchant Bank Ltd., said on Tuesday. “If it has taken them two years to develop a plan, I don’t want to believe it won’t work, otherwise it will be total failure for this government.” Ensuring macroeconomic stability, foreign-exchange availability and food and energy security are immediate priorities for the government, Udoma said this week. Part of the plan will be to boost oil production and revamp refineries, raise power generation, build food-processing zones, and invest in mines, and the government could sell assets and increase foreign borrowing to fund this, he said in an interview in October. Fundraising Challenge “The devil is in the details,” Pabina Yinkere, the Lagos-based head of research at Vetiva Capital Management Ltd., said by phone. “It’s those detailed strategies that will determine sources, and amount of money the government can raise to fund the plan. From the onset, fundraising will be a challenge.” The African Development Bank in November released $600 million of the $1 billion it agreed to lend Nigeria, and said the rest will be disbursed after the lender knows the nation’s economic plan. The government is seeking a $1 billion loan from the World Bank, and officials are meeting with investors in the U.K. and U.S. in preparation for the sale of a $1 billion Eurobond. China has pledged several financing packages totaling $40 billion for Nigeria’s infrastructure over an unspecified period. “The Eurobond is an easy one, and will be oversubscribed because of its small size and huge demand,” Yinkere said. “But lenders like the World Bank might have conditions on things like the foreign-exchange regime, and subsidies, while China will have several trade-offs in exchange for its money.” While the Central Bank of Nigeria removed a 197-199 per dollar peg in June, causing the naira to lose about 40 percent its value against the U.S. currency, it continues to intervene to keep the naira at around 315 per dollar and it blocks importers of 41 items it deems non-essential from the official foreign-currency market. The shortage of dollars has forced some importers to buy foreign currency on the black market at about 30 percent more than the official rate, pushing inflation to an 11-year high. The naira strengthened 0.3 percent at 314.83 against the dollar by 2:10 p.m. in Lagos, on Wednes60 Business Times Africa | 2017
day, according data compiled by Bloomberg, while it traded at 497 on street markets. The AfDB wants to see reforms in the energy industry to include cost-reflective power tariffs to encourage investment, said the lender’s president, Akinwumi Adesina. Investec Bank Ltd.’s head of Africa strategy and sales, Andrew Schultz, said Nigeria should follow Egypt’s lead and allow its currency float freely so portfolio flows can return, even as these decisions may raise inflationary pressures, rendering them non-populist and difficult for Buhari to make almost halfway into his term. Jobs Promised Buhari, whose current term ends in 2019, pledged to increase economic growth to 10 percent and create 1 million jobs annually when he asked Nigerians for their votes two years ago. While Buhari remains in the U.K. for medical tests, a civic-group coalition called for protests this week in Abuja and Lagos, the commercial capital, against worsening economic conditions. Gross domestic product probably contracted 1.5 percent in 2016, according to the International Monetary Fund, and the unemployment rate has climbed every quarter since the end of 2014, to 14 percent in the three months through September. “The plans look very good on paper, and because of the election cycle nearing, they will want the plan to deliver very quickly, and have very visible results,” Schultz said by phone from Johannesburg on Feb. 6. “But the progress, and meaningful results, will be seen in two years. The effectiveness of the plan will depend on how Nigeria deals with foreign-currency issues.” – Bloomberg
BUHARI, WHOSE CURRENT TERM ENDS IN 2019, PLEDGED TO INCREASE ECONOMIC GROWTH TO 10 PERCENT AND CREATE 1 MILLION JOBS ANNUALLY WHEN HE ASKED NIGERIANS FOR THEIR VOTES TWO YEARS AGO.
Are Nigerian banks in distress? While the Central Bank of Nigeria has been widely criticised for its recent handling of the naira, it has also been responsible for large-scale reforms to bank oversight. These may well save the industry from another crisis.
igeria’s economy has spent much of 2016 in recession for the first time in over two decades. Unsurprisingly there has been speculation about the strength of its banking system. Non-performing loans have already hit 12 percent of Nigerian banking assets. How could these institutions possibly survive? Better regulation, as it happens. Abysmally low oil prices and the effects of an artificially propped-up naira have shrunk the economy. Until April, Nigeria was the region’s top oil producer only to be overtaken by Angola. Manufacturers, a key borrower in the
“THE NIGERIAN BANKING SYSTEM IS ACTUALLY VERY WELL REGULATED COMPARED TO THE PAST.”
economy, are hurting. Recent indicators point to a prolonged contraction in manufacturing output despite a slight uptick in recent months, and 90 percent of firms are operating below capacity. Despite these pressures, in an assessment of the five largest banks – which account for nearly 50 percent of banking assets in Nigeria – ratings agency Moody’s found some positives. “The Nigerian banking system is actually very well regulated compared to the past,” says Akin Majekodunmi, a vice president at Moody’s Investor Service. “There are differences in the banks’ abilities to withstand economic 2017 | Business Times Africa 61
ARE NIGERIAN BANKS IN DISTRESS?
challenges, but all five banks remained technically solvent even in our stress test scenario.” This is thanks in part to Nigerian capitalisation requirements, implemented after the 2008-2009 global financial crisis. A 2014 Ernst & Young study of major banking markets in sub-Saharan Africa found that Nigerian banks had the strongest capital adequacy ratios in the region. While the Central Bank of Nigeria has been widely criticised for its recent handling of the naira, it has also been responsible for large-scale reforms to bank oversight. These may well save the industry from another crisis. The Moody’s study did not analyse 62 Business Times Africa | 2017
second-tier and smaller banks. Mr Majekodunmi notes that these institutions may not necessarily be as operationally resilient or diversified as the largest banks. Still, Moody’s expects nonperforming loans to peak at 12 percent of Nigerian bank assets. In the second quarter, NPLs reached 11.7 percent. Different business sectors have struggled to varying degrees, but almost all have been touched by Nigeria’s economic woes. Oil and gas loans initially suffered the most, though the situation has stabilised due to loan restructuring efforts. Manufacturers have also contributed to non-performing
loans, given their lack of access to foreign exchange and a deteriorating situation for the consumers who buy their products. Indeed, a recent NOI Polls survey found that 78 percent of manufacturers have been affected by lack of foreign currency access. And the government’s decision to implement the Treasury Single Account this year did not make things any easier for banks. The TSA aims to create greater transparency and consolidate government finances by setting aside all relevant funds in a single account overseen by the Central Bank. However this pulled an estimated 2-4tn naira out of the banking system at a time that pressures for foreign currency and trade finance were at their zenith. However, despite the remaining headwinds, there is light at the end of the tunnel. Non-performing loans are not expected to increase significantly as banks and businesses find their footing. And according to analysts, the impacts of the TSA implementation are mostly in the past now while giving long-term transparency a boost. An accounting regulation change may also help: this year, banks have been allowed to write-off their fully provided for non-performing loans (NPLs) immediately, rather than waiting the mandatory year. Of course, this does not change the fact or the cost of NPLs. But this change allows banks to use their capital reserves to clear up their balance sheets. Despite strains, it seems a banking crisis has been averted – for now. While some banks, particularly smaller ones, are more likely to come under financial strain, on balance the Central Bank of Nigeria’s conservative capitalisation requirements have shown their worth in this challenging economy. While many bank managers are almost certainly feeling the strain of a stormy economy regardless, their institutions are still looking seaworthy. - ThisIsAfrica
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Africa to Diaspora: send more money home Tunji Adeyemi traveled from Lagos to Britain seeking to persuade Nigerians living there to deposit their pounds in his bank’s vaults. Based on the crowds of people sitting at tables filling out forms in a Glasgow arts center, he’s finding a receptive audience. The Scottish city was just one stop in Sterling Bank Plc’s push to get Nigerians abroad to open 5,000 new accounts back home this year, said Adeyemi, head of the bank’s yearold diaspora-services program. The visit late last year, which also took Adeyemi to Manchester and Belfast, winning more than 500 new accounts, is intended to boost foreign-currency revenue amid a shortage that has crippled everyone from manufacturers to airlines. “We are ready to go all out,” said Adeyemi, who’s planning another multi-city trip, probably to Chicago and Atlanta, by April. “It’s not about having a physical branch in the U.K. It’s about your hunger and aggressiveness.” The government of Africa’s top crude producer is also trying to boost foreign currency inflows via the estimated 15 to 18 million Nigerians who live overseas. The Debt Management Office is raising a $300 million diaspora bond, First Bank of Nigeria, a bookrunner for the issue, said last week. And the finance ministry is meeting investors in London and the U.S. this week to promote the sale of a 15-year Eurobond, the longest maturity yet. The purpose is to fund this year’s record 7.3-trillion-naira ($23 billion)
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budget. A decline in oil income and the exit of foreign investors have created dollar shortages, contributing to the nation’s worst downturn in more than two decades. Unofficial Count The Nigerian diaspora officially sends about $20 billion home annually, the world’s fifth-largest receiver, according to World Bank data. Based on a Sterling Bank study, remittanc-
es through informal channels may equal that amount. “Perhaps one of the reasons we have not collapsed is because of the diaspora’s support,” said Abike Dabiri-Erewa, who advises President Muhammadu Buhari on diaspora affairs. While investment and equities slump, remittances were relatively stable as of last year, data shows. Dabiri-Erewa’s team has drafted a policy that would commit the gov-
AFRICA TO DIASPORA: SEND MORE MONEY HOME
ernment to help reduce remittance fees and enable diaspora investment. And by advocating for a law that grants Nigerians abroad the right to vote, the former lawmaker hopes emigrants will have one more reason to give back. Remittances are a lifeline in a nation where two-thirds of the population lived on less than a dollar a day in 2010, according to the most recent poverty survey by Nigeria’s statistics agency. Nigeria received 60 percent of the remittances sent to sub-Saharan Africa in 2015, says the World Bank, estimating that remittances to the region grew 3.4 percent in 2016. Nigerian depositors abroad can transfer funds directly to relatives at home and to invest at home, both for a fee. The drawbacks are that their investments are in the naira, a struggling currency that can’t easily be redeemed for the money they use abroad. Azimo, a London-based money transfer company, reckons that 80 percent of the wires it sends to Nigeria are for family support, which could include food, school fees and health care. “Remittances are an injection of
money into people’s hands,” said company co-founder Michael Kent. “They spend it where they think they’ll have the most impact.” In the case of Joseph Oke, the money goes to raise cassava. A 32-year-old banking and finance graduate, he left the commercial capital of Lagos and started last year to farm the tuberous shrub on his family land, hiring two laborers in the southwestern town of Iseyin. Because he’s not profitable yet, his enterprise and his family of three are sustained by the remittances sent back by his brother, a doctor in Chicago. “I send proposals on WhatsApp and if he approves it, he sends the money,” Oke said. “You cannot be begging money from friends so I thank God I have him over there.” Diaspora accounts can be held in foreign currencies such as pounds, euros or dollars. Once opened, customers can use Internet banking to make transfers, convert to naira and make foreign-currency and naira investments back home. Losing Homes Nigerian banks are especially eager to help diaspora customers navigate
the country’s cutthroat real estate market. A depositor abroad could use the bank’s services to find reliable developers, finance and purchase a house in Nigeria, for instance. These types of accounts also afford some protection in the awkward situation where relatives entrusted with making transactions for loved ones overseas don’t act in good faith. Samuel Adewusi, a Silver Spring, Maryland, lawyer, jumped on a plane to Lagos when neighbors told him his house had been marked for demolition. A family member who’d been collecting his money and overseeing the construction project had cut some corners. “He didn’t tell me he hadn’t gotten the building plan approved,” Adewusi said. Tracking down the building contractor who helped save his four-bedroom beach home was “like a detective movie,” but he considers himself lucky. Stories abound of people sending their savings home so family can help them build houses, only for them to find nothing on the ground when they visit, said Adewusi, who’s also chairman of board of the U.S. branch of Nigerians in the Diaspora Organization.
2017 | Business Times Africa 65
Deregulating the petroleum sector â€ŚAssessing the impact in downstream industries Part 1 By Michael Bozumbil
t has been a little over a year now since the policy of deregulating the prices of petroleum products was implemented in July, 2015. This was the last of the various major steps that were needed to be taken in deregulating the sector, which started about 20 years ago. Since September, 1996, when Ghanaâ€™s petroleum downstream deregulation process began, it has passed through several governments and
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this indicates its importance and delicate nature. This write-up will seek to evaluate the implementation of the policy over the years, looking at the extent to which the policy objectives have been achieved and the impact the policy has made in the growth and development of the petroleum downstream sector, especially in the area of promoting local participation, as
"One of the major policy objectives has been to reduce the burden of petroleum subsidies on government budget."
DEREGULATING THE PETROLEUM SECTOR
well as identify certain areas of concern and also offering some suggestions on the way forward. What Have Been The Policy Objectives? A number of objectives were set for the implementation of this policy. One of the major policy objectives has been to reduce the burden of petroleum subsidies on government budget by ensuring that there is full cost recovery by Petroleum Service Providers (PSPs). This was necessary because government after government realized that the tax revenue that could have been used to develop social and economic infrastructure was rather being used to subsidise the cost of petroleum products. Meanwhile, it was very difficult to direct these subsidies to those who really needed them. At the same time too, the amounts involved were so huge that government was not always able to fully and timeously meet its subsidy reimbursement obligations to the petroleum service providers. This therefore, led to intermitted shortage of petroleum products in the country because these petroleum service providers were heavily indebted to the banks. With the debts not being paid, the banks also at a certain point could not continue financing these companies, which invariably meant that the companies could not supply the market with sufficient products, bringing about intermittent shortage of petroleum products in the past. With the banks facing liquidity challenges as a result of the petroleum service providers’ inability to pay their debt due to government’s failure to reimburse them for the subsidy, they were thus unable to lend to businesses in other sectors of the economy leading to a much greater and wider negative impact on general economic growth and job creation. Therefore, by ensuring that all service providers fully recover the cost of supplying petroleum products to the market, the expected benefits were
not only limited to having uninterrupted supply of petroleum products but also guaranteeing a healthy banking sector which can support not only the petroleum sector itself but also other sectors for economic growth and job creation. Additionally, government resources would be redirected towards supporting to expand economic and social infrastructure such as roads, hospitals, schools and also providing targeted pro-poor social intervention measures such as adequately funding the National Health Insurance Scheme, providing public transport system, improving upon quality and accessibility to education by every Ghanaian child of school-going age, among others. Another key policy objective was to promote private sector investment in the provision of petroleum infrastructure. This was intended to reduce the burden on government to develop the needed infrastructure to meet Ghana’s rising demand for petroleum products. But to do this meant we needed to address the concerns of operators who complained at the time that Ghana’s margins for operators were relatively low, compared with those of our neighbours in the sub-region. It was thus seen as a disincentive for private sector players to raise private capital to invest in the sector since repaying such huge investments was going to be a challenge. In this regard, as part of the steps to ensure that this objective was achieved, measures were put in place to raise the operators’ margins to reasonable levels to make the sector more attractive to private capital. Further, one of the key objectives of the policy was to promote competition in the sector by encouraging new entrants, especially Ghanaian private sector players. This competition was intended to lead to efficiency in the system such that the efficient operators will pass the gains of their efficiency to consumers, in the form of product quality, service quality, low
prices, among others. Thus, fixed expump prices were to be removed so Oil Marketing Companies (OMCs) could set their own prices and compete among themselves. In doing this, the policy also sought to create transparency and objectivity in the setting of petroleum prices, to break the myth surrounding the pricing of petroleum prices, which hitherto, was communicated to the public during budget presentation by the Minister of Finance. Thus, the import-parity pricing formula was developed taking into account all the key factors that affect the pricing of petroleum products and price buildup templates developed. With this, the industry operators would have clear parametres to operate within. Also, a dedicated petroleum downstream industry regulator was to be established to ensure players operated within the rules and regulations of the industry so the interest of consumers was protected. Whilst working to deregulate the sector, the government realized that since most of the petroleum products depots were within the coastal areas, there was the need to continue to put some mechanism in place to deal with the cost of moving products from the coastal areas to other far places in the country without prices varying markedly in such places from those in the coastal areas. Thus, any differences in prices should not be due to transport cost but as a result of how efficient an OMC is in operating within its margin and passing its efficiency to the consumer in the form of lower prices or vice versa. Finally, another area of concern for government was to ensure that some products, termed “Social Products”, such as kerosene and premix fuel, whose consumption was relatively low and also which are meant for some low income segments of our economy, would continue to enjoy some subsidy, since to a very large extent, the subsidy will reach the target people. 2017 | Business Times Africa 67
Investment in Africa’s tech start-ups on the rise
rom mobile money to cargo drones and rugged portable wifi hotspots, Africa’s innovators are generating new technology to tackle consumer needs and development challenges. New data charting investment activity flowing into Africa’s tech start-ups shows that international investors are taking notice. According to Disrupt Africa, a portal for start-ups and accelerators across the region, tech start-ups on the continent raised more than $129m in 2016. Overall, 146 start-ups raised investment, a 16.8 per cent rise in the number of funding rounds compared to 2015. Financial inclusion remains a challenge across Africa, where only a third of adults have access to any kind of basic financial services, according to the IMF. It makes sense, then, that financial technology – or “fintech” – innovations attracted the most start-up funding in 2016. According to the research, fintech startups raised a combined total of more than $31m, or 24 per cent of all the fundraising recorded in the course of the year. According to Tom Jackson, Disrupt Africa’s co-founder, fintech appeals to investors because it checks two boxes. “Investing in fintech start-ups offers investors serious potential returns, given the size of the untapped markets these companies can reach,” he explains. “There is also a strong impact angle in that new forms of financial service provision have the ability to empower and connect unserved Africans.” The potential impact of new health and agriculture technology is talked about a lot, but that has not always been reflected in the amount of funding backing innovators in these areas.
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However, in 2016 both sectors saw strong growth. E-health start-ups represented 7.5 percent of companies to raise funding over the year, ranking as the sector third in terms of the number of funding rounds counted. Meanwhile the agri-tech space saw incredible growth of 8,660 percent in the amount of funding received, as compared to 2015. These start-ups are tackling a range of issues with equally diverse approaches. “Solutions range from e-health companies providing diagnostic solutions using smartphone apps, to agri-tech firms connecting farmers with lucrative new markets using the web and SMS,” Mr Jackson says. In terms of location, South Africa – famed for the “Silicon Cape” tech scene centred in Cape Town – was the most popular investment destination in 2016, with 64 of its startups taking home more than $46m. This reflects the booming support network for start-ups across the countries’ urban tech scene, with numerous organisations offering everything from funded acceleration, to niche mentorship, to access to cutting-edge facilities. A number of global entities – such as Barclays, GE, and Thomson Reuters – also launched start-up-oriented activities in South Africa during 2016. Nigeria and Kenya – or the “Silicon Savannah” – rounded out the top three. Combined, these countries accounted for 80.3 per cent of funds secured. Egypt, meanwhile experienced more than 100 per cent growth in fundraising, coming in fourth. Clearly investors are tapping into Africa’s tech prospects, and looking more broadly at the opportunities on offer. – ThisisAfrica
New data charting investment activity flowing into Africa’s tech start-ups shows that international investors are taking notice.