Vol.1 No. 3 June, 2016
AFRICA ...Harnessing Africa’s Potential
RIO OLYMPICS THE REFUGEE TEAM BIG MOTIVATION FROM POLITICS TO PRUDENCE GOVERNOR NYESOM WIKE SETS THE PACE
Liberia: Rebooting To Rebound
UK : £3.50 USA: $4.99 EURO: €5.00 NIGERIA: ₦1000.001 June 2016 CHERRYAFRICA
With an increased port operational efficiency, decreased port cost and decreased financial burden on government,
Nigerian Ports Authority is becoming
Nigerian Ports Authority
2 June 2016 CHERRYAFRICA MARI T
...To be the Leading Port in Africa... Website: www.nigerianports.org
Graphics Unit NPA 01/2016
the Hub of International Freighting and Trade in West and Central Africa.
Vol.1 No. 2 May, 2016
AFRICA ...Harnessing Africa’s Potential
WHO ON EARTH CAN HELP? VERDICT 2016: I WILL NOT GO WHAT MANNER OF SACK?
The Audacity of Guts
Kicking Out Tuberculosis
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PAGE 52 QUOTE “Many African countries are already on track with transforming their economies. The role of governments in Africa is to offer inclusive and sustainable development which is important in addressing climate change and economic growth.”
AUGUSTIN MATATA PONYO
From Politics To Prudence
PAGE 22 Let There Be Light In Africa
No to Communication Service Tax Bill
19 Ghana must win 37 Medicine By Drones
46 African Passport for Presidents 48
We Abhor Involvement in Corrupt Business Practices
50 Time To Really Clean-up 54 Rio Olympics: The Refugee Team Big Motivation 60 Africa’s Blue Economy: An opportunity not to be missed 62 The Evolution of Human Resource Management
Wasted Billions PAGE 14 June 2016 CHERRYAFRICA
Africa’s Economic Transformation
N MONDAY, April 4, 2016, Ethiopia’s Prime Minister, Mr. Haile Mariam Desalegn in his keynote speech at the opening of the Conference of Ministers at the headquarters of the Economic Commission for Africa in Addis Ababa reflected on harmonising and coordinating the diverse policies of the Sustainable Development Goals and Africa’s own Agenda 2063. Mr. Desalegn did not end his speech without encouraging African states to be “strategic, ambitious, rigorous and disciplined” if they are to achieve sustainable and inclusive development for their people, as the continent’s future rests squarely in its hands. The Prime Minister of the Democratic Republic of Congo, Mr. Augustin Matata Ponyo, on his part, views government as having a crucial role to play in bringing about sustainable development. He said: “Many African countries are already on track with transforming their economies. The role of governments in Africa is to oﬀer inclusive and sustainable development which is important in addressing climate change and economic growth.” Dr. Nkosazana Dlamini Zuma, the Chairperson of the African Union Commission, also implored African countries to improve young people’s skills in science and engineering, challenging the uninspiring scenario that has seen Africa’s innovation and scientific skills lag behind with an average of more than 90 per cent of graduates in social sciences. Her position that Africa has no choice but to look for solutions with the continent’s burgeoning youth population, achieve industrialisation and economic diversification, reduce import dependency and create regional centres of innovation sound brilliant and need to be adopted and implemented by African leaders beyond cosmetic statements and political grandstanding. In addition, suggestions on possible solutions by the Executive Secretary of the Economic Commission for Africa, Mr. Carlos Lopes that Africa's current growth has not generated suﬃcient jobs and has not been inclusive enough to significantly curb poverty need to be paid attention. This is more so as fluctuations in price have made such growth vulnerable, a development that underpins his further suggestion that the continent should look into structurally transforming, focusing on the potential oﬀered by industrialisation, and consider expanding commodities value chains, and attracting low-value manufacturing from Asia to Africa. As aptly remarked by Mr. Lopes, Africa’s leaders involved in politics, business, economic management, humanitarian and civil society aspects of governance now also need to understand that transformation will not happen spontaneously but rather as a result of deliberate and coherent policies that are entrenched into a seamless development strategy, enlightened by a transformational leadership. There are no two ways about it. Strong leadership is a prerequisite for fostering the continent’s development with healthy economies that grow and end poverty, according to the Vice-President of Namibia, Mr. Nickey Iyambo who encourages African countries to learn from Namibia’s approach by cultivating the African spirit of self-reliance through a wise use of resources. As Africans, we all, without exception, must take the torch in our own hands and work assiduously and assertively to develop our countries.
Carolyn Isaac Publisher
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...Harnessing Africa’s Potentials
© 2016 All rights reserved
Chairman Francis Nyoyoko Editorial Team Publisher Carolyn Isaac email@example.com Managing Editor Murphy Jones firstname.lastname@example.org Associate Editors Adama Bukari, Morgan Winsor, Iyowuna Obomanu, Patricia Abena-Kissi Contributing Editors Jamie Leigh-Matroos (Cape Town) Athan Tashobya (Kigali) Pascaline Ameyo (Accra) Abdoulie Nget (Banjul) Correspondents Williams Freeman (Accra) Bini Israel (Nigeria) Design and Production Kelechi Okoro – Emmanuels Country Manager Ann Ashiogwu Administration Job Peters, Becky Joseph Marketing Selasi Appiah (Ghana) Akunna Nworgu (Lagos) Frank Air (Accra) email@example.com Subscription Juliet Joseph firstname.lastname@example.org Editorial Advisory Board Tony Charles (Chairman) Dare Akpata, Salome Malema, Makwaia Wa Kuhenga, Kede Alhie, Umar Sanni, Peace King Kporvie Oﬃce 5, Owukori Crescent, Western Avenue, Alaka, Surulere Lagos Nigeria. Tel: +2349099277714 +2349096640887 email@example.com Ghana Bureau: +233267967272, +233244330942 firstname.lastname@example.org ISSN: 24657107
June 2016 CHERRYAFRICA
Liberia’s welfare under President Sirleaf
Iron Lady", Ellen Johnson Sirleaf for a 6 year presidential term with the hope that she would provide leadership, vision, and help restore hope to Liberians.
FTER SUFFERING 14 years of almost unceasing brutal civil conflict that resulted in destruction of lives and property, Liberians, in 2005 elected their nicknamed "Iron Lady", Ellen Johnson Sirleaf for a 6 year presidential term with the hope that she would provide leadership, vision, and help restore hope to them. The task was enormous; stabilising the fragile security situation in the country, uniting a nation polarised by ethnic divisions, reconciling and healing deep wounds after the war, reducing a whopping 85 per cent unemployment, restoring the economy, addressing the massive infrastructural deficit, dealing with rampant corruption and rebranding the nation from the status of a failed state to a decent and respectable nation. Indeed President Sirleaf is at the twilight of her second six year tenure. So how has Liberia fared under the iron lady? Peace And Security Liberia has been at relative peace for more than a decade now and counting.
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The UN mission in Liberia (UNMIL) has been instrumental in providing adequate security and protecting the country’s borders. UNMIL, which has a huge Nigerian contingent, has been immensely instrumental in training and rebuilding the Liberian security forces. That includes physical structures, funding, as well as recruiting and training of personnel. For example, UNMIL has made tremendous achievements in the maintenance of the rule of law through the construction of police stations and barracks, as well as immigration at border posts. Liberian oﬃcials and residents are particularly grateful to UNMIL for financing the construction of the facilities through its Quick Impact Project. The Johnson-Sirleaf administration main-
tains that the country’s security forces are in full readiness to take over security from UNMIL which exercise is slated for the end of June 2016. Many Liberians, though, are highly skeptical about Sirleaf’s claim considering the spate of ritualistic killings reported around the country in recent times, even with the presence of UNMIL The Economy Prior to Johnson-Sirleaf’s assumption of oﬃce, Liberia’s external debt stood at $4.9 billion dollars. By 2012, it was virtually nonexistent. This huge financial debt had not been serviced for
more than 20 years. In 2010 the Government of Liberia was able to cancel her $4.9 billion debt by reaching the completion point of the Heavily Indebted Poor Countries (HIPC) initiative, with financial reforms approved by the World Bank and IMF, leaving greater resources available for investment in public services and poverty reduction. Although Liberia’s foreign debt profile has been rising over the past few years, it remains one of the lowest among developing countries. Liberia's national budget in 2006 stood at $80million; by the end of Johnson-Sirleaf’s first term in office that figure had risen eightfold
to $649.7 million. And although forecasts were made by economists that the figure would hit the billion dollar mark by the end of 2017, Liberia’s economy deteriorated in 2014 and 2015, with GDP growth of 0.3 per cent, further down from 0.7 per cent in 2014, forcing the budget to be reduced to $555.9 in the 2016/2017 fiscal year. The country is struggling to recover from the twin shocks of the Ebola crisis and the sharp decline in commodity prices, which led to business closures, including of mines and consequent job losses and reduced fiscal revenues. Substantial downside risks remain, which challenge the government’s recovery eﬀorts and plans to diversify the economy to mitigate the impact of such future shocks. The continued terms-of-trade shocks and the reversal in private investment inflows due to the outbreak of the Ebola Virus Disease (EVD) have prolonged Liberia’s post-Ebola economic recovery. The mining sector, which was one of the key drivers of economic growth, declined by 17 per cent, followed by 1.1 per cent decline in the agriculture sector. The economy was, however, salvaged by a relatively resilient services sector, which grew by 5 per cent; attributable mainly to the recovery in construction, hotels and trading services. GDP growth is projected to recover to about 3.9 per cent in 2016. The recovery is expected to be driven by the coming on stream of a new gold mining concession, and improvements in services as rural and urban markets re-open. However, the slowing of China’s economic growth and its potential adverse impact on the global economy are likely to keep already low commodity prices depressed. This remains a major downside risk for Liberia, given its dependence on the exports of rubber, iron ore and oil palm for growth, employment and fiscal revenues. In 2006, the reserves of the
June 2016 CHERRYAFRICA
Central Bank were a mere US$5 million but today they stand at more than US$350 million.
Ellen Johnson Sirleaf
24th President of Liberia Incumbent
Assumed oﬃce 18 January 2006 Vice President Joseph Boakai Preceded by Gyude Bryant Personal details Born Ellen Johnson 29 October 1938 (age 77) Monrovia, Liberia Political party Unity Party Spouse(s) James Sirleaf (Divorced) Children 4 Alma mater Madison Business College University of Colorado, Boulder Harvard University Religion Methodism
Employment Liberians 14-years old and younger make up 47 per cent of the nation’s population. Those 15 to 35-years old make up 28 per cent of the population, meaning that 75 per cent of Liberians are 35 years old and younger. According to Liberia’s Labour Force Survey, 1.1 million Liberians (a quarter of the population) are counted as employed in Liberia. However, there are only 195,000 paid employment positions. The other 850,000, which consist primarily of the youth population, are considered vulnerably employed, meaning they are self-employed mostly in the informal economy on unsustainable jobs. They have little to no benefits, unstructured salary and pension, or work for a family member without pay. According to the Central Bank of Liberia, unemployment rate in the country increased to 3.80 per cent in 2014 from 3.70 per cent in 2013. Unemployment rate in Liberia averaged 8.24 per cent from 1980 until 2014, reaching an all time high of 15.90 per cent in 1983 and a record low of 3.70 per cent in 2010. Other sources claim that the rate of unemployment in Liberia at the moment stands at 60 per cent. If that is a figure to go by, then it means President Sirleaf has reduced the rate of unemployment only by 25 per cent, from 85 per cent in 2006.
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Electricity Supply In Liberia The Sirleaf administration has restored electricity supply to several parts of the capital, Monrovia, and surrounding communities. This has been made possible through the Emergency Power Programme (EPP) phase 1 and phase 2. The Saint Paul Hydro Dam, which was the largest prewar source of electricity in Liberia, damaged in 1990 in the heat of the war, is being repaired by the Chinese Government and scheduled to come on stream by December 2016. Several projects are underway to restore or expand electricity capacity throughout the country. Work has been completed on the Cross Border West African Power Pool (WAPP) Project. The project currently supplies power to 18 Liberian towns in Maryland, Grand Gedeh, and Nimba Counties. The WAPP project is supported by the World Bank with $200 million for the transmission lines across 4 West African countries. (Liberia, Sierra Leone, Guinea and Cote D'ivoire). Government is embarking on short and medium to long-term measures in meeting the energy demands of the Liberian economy. Before the civil wars of the 90's, Liberia’s energy consumption was 64 megawatts (MW). In 2016 the nation's energy demands are approximately 6 times more than pre-war levels; due among other things to increase in businesses coming to Liberia. On rural electrification, the Rural and Renewable Energy Agency (RREA) has plans to electrify the rural areas, starting with the pilot project at Yandohun, Lofa County,
using micro-hydro electric plants. Executive Director of RREA, Mr. Augustus Goanue, has announced that a rural energy fund is being set up under the theme "Lighting One Million Lives in Liberia," by having rural dwellers swap their kerosene lanterns for solar lanterns power and rechargeable by sunlight. Rehabilitating the Mount Coﬀee Hydropower Plant is part of a bigger plan in Liberia to regain power stability and financial benefits. The plan to develop the entire St. Paul River Basin is part of the West African Power Pool (WAPP) CLSG Redevelopment sub programme. The aim is to reach the prewar level of the power plant: 64 MW. St. Paul is capable of generating up to 1,000 megawatts of electricity to supply Liberia and neighbouring Serra Leone. Monrovia alone needs 100-200 megawatts of power, while the entire nation will need around
300-400 MW to be fully connected. Norway has pledged to help refurbish the country’s hydro-electric plant in Mount Coﬀee outside Monrovia which was destroyed during the civil war. One of government’s interim measures for solving the electricity issue was awarding US$112 million energy contract to Buchanan Renewable Energy(an independent power producer) to burn old rubber woods and transform them into electrical energy. Work began in 2009 on a new, environmentally-friendly power plant in Liberia that will use old rubber trees to generate electricity. It is part of a plan to make Liberia the world's first sustainable biomass-driven economy. Access To Water Supply An exciting development in water access is a new water plant under the Liberia
Work began in 2009 on a new, environmentallyfriendly power plant in Liberia that will use old rubber trees to generate electricity.
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COVER Water and Sewer Corporation (LWSC), which claims it will be able to supply “pipe borne water to nearly 1.5 million inhabitants” both in the capital of Monrovia and its suburbs. This is an impressive development to help improve infrastructure and clean water access in Liberia after the devastation of the civil war. As a result of this water plant, the amount of safe drinking water will increase from 5.5 million gallons daily to 10 million. LWSC, in tandem with the World Bank, will work to further increase the supply of pipe borne water into Monrovia, and the government will receive a significant boost to enhance safe drinking water in Liberia. The government of Liberia asserts that currently, about 750,000 residents of Monrovia are receiving 24-hour pipe-borne water while the government completed 92 per cent of the distribution network in the capital. Adequate water supply still remains erratic in Liberia, even though the country is naturally endowed with the highest fresh water per capita in the world. Healthcare Sirleaf's administration has ensured a substantial increment in the take home salaries of doctors and medical personnel nationwide. Liberia has witnessed the construction and rehabilitation of health centers around the country. Since she took oﬃce, health facilities in the country have been doubled with improved access to health care. Some of the visible achievements in the area of health include the Telewoyan Hospital in Voinjama, the Jackson Fiah Doe Referral Hospital in Tappita, and the Japanese-Liberia Friendship Maternity Ward boast some of the most advanced medical equipment, the rehabilitation of the J.J. Dossen referral hospital in Harper, while the JFK Medical Center is fast approaching pre-war status in terms of quality service and referral facilities. However, dearth of trained health care personnel remains an ulcer in the industry as was exposed during the Ebola crisis where less than 20
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trained doctors were available in the country to battle the scourge. The government has included mental health in its basic package of health services and developed a mental health policy and plan. When the Sirleaf Administration took state power, the health infrastructure of Liberia like other vital sectors had completely collapsed and only International Non-governmental Organizations were providing the simplest forms of health services, most especially in emergency health care. The health sector takes almost 14 per cent of the proposed 2016/2017 budget. Education The government has allotted a significant portion of the national budget to education, approximately 15 percent in the 2016/2017 fiscal year. Since the ascendancy of the government to present, over 250 schools have been constructed across the country with 1.3 million students in pre-primary and primary schools. There is expansion of secondary school system to accommodate such a large student population as they move through primary to secondary school and then to university, with a free and compulsory primary education policy. There is a noticeable exodus of teachers from private to public schools due to attractive salary packages from government. Presently, the least paid classroom teacher earns a monthly salary of L$18,000 (US$ 240.00) while a Master degree holder earns L$46,000(US$600.00) monthly, excluding other benefits. There has also been reform in the educational system to ensure its relevance to the needs of the nation as well as ensuring a healthy and safe working environment including adequate furnishing and instructional materials for all schools. The girl child education also remains a special priority for the president The government also over the past decade opened several vocational and technical colleges in several regions of the country while more universities have been opened in the country.
Construction, Rehabilitation of Roads/Bridges For road construction, President Sirleaf has reconditioned to topnotch shape virtually all the major roads in Liberia and is expanding her construction frontiers to roads that had never been tarred since Liberia’s independence 169 years ago. For example, the road that runs from Gbarnga City, Bong County in central Liberia to the Guinean border is being tarred to tiptop shape. The Ganta Saniquelle Road in Nimba County is also undergoing serious construction. The Pleebo Harper Highway in Maryland County, eastern Liberia has been transformed, as well as the Pleebo Fish Town Highway that links Maryland County to Rivergee. All these roads, as well as a host of others had never been tarred since Liberia’s independence. Liberia, in her 2016/2017 budget has allocated $15 million for road building and $3 million for road maintenance. These and a renewed foreign investor confidence that have attracted billions of dollars into the country over the past decade are expected to endear President Sirleaf to the hearts of Liberians. It would seem, though, that that is quite the contrary. A survey by this medium reveals that there is a general feeling of dissatisfaction about the Johnson-Sirleaf government’s inability to tackle corruption head-on. President Sirleaf has failed dismally in that regard, as has been acknowledged, even by government oﬃcials. Many interviewed by this medium, such as Mr. Augustus Freeman, James Togba and a host of others share the sentiment that any president with the resources and international goodwill that Sirleaf has had at her disposal would do better than the president. Indeed, whoever will take the reins of power from Sirleaf by January 2018 would have the tough job of fighting the cankerworm of corruption. Many Liberians interviewed by this medium described the task as being as diﬃcult as separating white from rice or green from grass.
No to Communication Service Tax Bill Many Nigerian telecoms services users may not be aware that there is a Bill in the making at the National Assembly called the Communication Service Tax (CST) that could make such services more expensive.
ow would you feel if you must pay much more to use data for browsing and related activities; to make phone calls with your numerous phone lines, send SMS and MMS, or even to watch your favourite movies, live football matches and other shows on your beloved pay-tv channels? These are some of the unpleasant experiences consumers of telecommunications services may all be confronted with, should the Communication Service Tax (CST) Bill see the light of day. The Communication Service Tax Bill is a private bill that seeks to impose a 9 per cent Service charge payable
monthly by the user of an electronic communication service as supplied by the service providers. The Bill which has passed the first reading at the lower chamber, the House of Representatives, will on its passage into law compel communication service subscribers to pay additional tax on voice calls, SMS, MMS, Data and Pay TV viewing. So far, the controversial Bill has drawn the ire of some subscribers, consumer rights advocates, and civil society groups, among others, who see the CST as another form of double taxation. On the business side, there are fears that the Bill if passed into law will aďŹ€ect the frequency of voice calls, SMS, MMS and data usage by subscribers thereby reducing expected
return on investment in the nationâ€™s bubbly telecommunications sector. The tax will be charged at 9 percent of the fees payable for every service and will be borne by the customer. These include users of Short Messaging Service (SMS), Multi Media Messaging Service (MMS), voice calls, data and Pay-tv services supplied by service providers, and the service providers are not exempted. Experts say the government is about to mortgage all the gains of the liberalisation of the telecom sector in a blind pursuit of taxation income, which will take more than it gives, with the proposed new tax being worked on. Before it goes on with its plans, however, they are quick to point out that the CST will increase the cost of communication services June 2016 CHERRYAFRICA
thereby making services unaffordable. They also argue that it amounts to double taxation because consumers already pay VAT on communication services. There is also the outcry that the tax is discriminatory because it targets only the communication sector to the exclusion of other sectors of the economy. Government, they maintain, needs to stimulate the economy to generate additional tax streams rather than overtax an already overburdened taxpaying populace and sector. Analysts further contend that though Government needs to expand the tax base, it should be targeted at including taxable people and sectors that are currently not included and those that are evading tax, since the tax would likely lead to a reduction in revenue to operators due to reduced use of aﬀected services such as SMS, MMS, Voice, data, for instance. Government’s attention has, in addition, been drawn to the threat the bill poses to the country’s broadband plan and the adoption of the electronic communication services such as data use.
According to findings, the bill, titled, “The Communication Service Tax (CST) Bill, 2015,” is a private member bill.
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Overall, stakeholders are concerned that the CST may discourage further investment in the industry due to reduced returns on investment, ROI, while the introduction of new taxes without harmonizing existing ones will further compound the issue of multiple taxation and could make the industry unattractive to investors. Given the scenario, industry groups including the Association of Licensed Telecommunications Operators of Nigeria (ALTON); Association of Telecommunications Companies of Nigeria (ATCON) and the National Association of Telecommunications Subscribers (NATCOMS) have jointly written a letter to the Minister of Finance, Mrs. Kemi Adeosun and Minister of Communications, Adebayo Shittu, about the danger the new tax system portends
for the industry if it becomes a law. As a mark of solidarity, the Global System for Mobile telecommunications Association (GSMA), the body which represents mobile operators worldwide, has also joined them in the agitation, according to a letter dated March 30, 2016, copies of which were made available to the media in Lagos. In the letter, the bodies reminded the lawmakers that the socio-economic impact of mobile penetration has been widely recognised. According to them, a research conducted by the World Bank, which predicted that a 10 per cent increase in mobile broadband penetration in low to middle income countries (to which Nigeria belongs) led to 1.38 per cent increase in GDP growth. They stressed that to connect the yet to be connected Nigerians to the mobile platform, aﬀordability remains a key challenge, since the unconnected are basically found among the lower income population groups. According to them further taxation on electronic communication services would hit lower income consumers the most, as they are already struggling due to the adverse economic situation. They add that increased price pressure would be working against their social and economic inclusion. They said: “Moreover, this will result in a double taxation for consumers who already pay Value Added Taxes on telecommunications services.” According to findings, the bill, titled, “The Communication Service Tax (CST) Bill, 2015,” is a private member bill. For CST purpose, “User” is defined as “a customer or subscriber of any electronic communication network or broadcasting service and includes a customer that is an operator or provider of electronic communications network or service.” In eﬀect, customers who purchase ECS solely for resale (middlemen) are also required to pay CST on their purchases. As contained in the bill, providers of ECS are required to collect CST upon supply of services and remit the tax to the Federal Inland Revenue Service (FIRS) no later than the last working day of the month following the month of transaction. However, this timeline may be extended in certain circumstances, according to the proposal of the bill.
CONTINENTAL ISSUE Failure to submit CST returns by the due date would attract a penalty of N50, 000 plus N10, 000 for each day of default, and interest at the rate of 150 per cent of the average prevailing commercial bank lending rate published by the Central Bank of Nigeria (CBN). Also, refusal of service providers to provide government access to the network nodes attracts a penalty of five per cent of the yearly gross revenue of the last audited financial statements. Though, the bill is still a proposal, failure to pay the interest due on default within one month would attract additional interest on the unpaid interest. According to the letter sent to the ministries of Finance and Communications respectively signed by Mortimer Hope, Director Africa, GSMA; Gbenga Adebayo (ALTON); Lanre Ajayi (ATCON) and Chief Adeolu Ogunbanjo (NATCOMS), the bodies stressed that if introduced, such tax will result in an increase in prices for consumers, have adverse impacts on the adoption of mobile services and industry investment, and be counter-productive to the longer term national digital strategy objectives set by the government. Commenting on the matter, the Chief Executive Oﬃcer of Airtel Nigeria, Segun Ogunsanya, said the planned tax bill would lead to increase in call charges resulting in less minutes of use on networks. Ogunsanya seeks sector’s engagement with the NASS to discuss the tax bill and the communications bill, 2016 in view of the potential adverse impact on the industry. Furthermore, the bodies reminded the lawmakers that the socio-economic impact of mobile penetration has been widely recognized. They recalled the impact of mobile services on the long-term development of the digital economy, which in 2014 contributed about $8.3 billion to the Nigerian economy, which is set to increase as penetration of voice and broadband services grows. In addition, they stressed that the potential of mobile broadband is apparent from the rapid development of the digital economy in Nigeria and is supported by a diverse and growing local ecosystem, with usage of apps growing by up to 30 per cent yearly for example. They reminded the government that the development of a competitive digital
NIGERIA economy, boosted by mobile penetration and investment in networks will, over time, strengthen the economy as a whole leading to faster economic growth together with higher fiscal income for the government from a broader tax base. According to them, by impacting usage of communications services and in turn industry revenues, this proposed tax will have adverse eﬀect on the industry investment needed to improve and expand mobile connectivity across the country. They stressed that mobile industry investment in Nigeria is already constrained by multiple level of taxes and fees set by local and regional authorities, in addition to fees to the national telecommunications regulator and high costs of right of ways. “In a context of declining average revenue per user, this can make it more diﬃcult for mobile operators to make a business case for investment. The proposal would also further increase the administrative cost burden on service providers to comply with numerous and complex tax regulations, already high compared to other countries. “In view of the above, we respectfully request your urgent intervention to prevent the adoption of a new tax on electronic communications services. We remain available to meet with you to progress dialogue and to ensure the digital economy delivers its full potential in Nigeria”, they stated.
Though, the bill is still a proposal, failure to pay the interest due on default within one month would attract additional interest on the unpaid interest.
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BAYO AMODU OR MANY YEARS, Nigeriaâ€™s oil sector has been imbued with complex controversies. As the second largest oil producer in Africa with 1.4 million barrels per day after Angola which has a steady production of 1.8 million barrels a day, the nation contends with a lot of issues in her oil sector. One of such issues is fuel subsidy regime, which the federal government abruptly put to an end recently by modulating the pump price of premium motor spirit also known as petrol from N86.50 per liter to N145. The development has attracted mixed reactions from Nigerians.
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Most of the criticisms on the fuel subsidy regime arose from the mind-boggling amount estimated at more than N6 billion per month spent by the country on questionable fuel subsidy payments to oil marketers. Many said such amount of money should have been spent on infrastructural development in the country given their spin-oďŹ€ impact. For instance, the Nigerian Extractive Industry Transparency Initiative (NEITI) in 2015 revealed in its audit report that the Federal Government spent about N4.5 trillion from 2006 to 2012, a period of seven years as subsidy on petroleum products imported into the country. According to the Executive Secretary of NEITI, Zainab Ahmed, the Audit Report of
2012, shows that a total of N1. 355 trillion was processed for payment as subsidy. Out of this amount, N690 billion was actually paid, putting a debt burden of N665 billion on the Federal Government. “From our reports, the amount of money that Nigeria has paid so far on subsidy in the last seven years stands at N4.5 trillion. The breakdown shows that N816. 554 billion was paid between 2006 to 2008, N3 trillion between 2009 and 2011 and N690 billion in 2012. We in NEITI believe that this amount is more than enough to repair our refineries or build new ones. NEITI therefore stands firmly with Nigerians who share the fair position that the oil subsidy should be removed,” she stated. In a similar development, Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu said an average of N1 trillion per year was paid as fuel subsidy in the past five years despite mounting debts and infrastructure deficit.
In nine years counting from 2006 to 2015, the nation spent about N10 trillion on fuel subsidy. Unfortunately, many Nigerians lament that the country cannot boldly say they have truly benefitted from the subsidised petroleum product. Kachikwu says the country spent the huge amount on fuel subsidy in the face of mounting local and foreign debts as well as infrastructural deficit. To stem the tide, Zainab this is the most propitious time for the Federal Government to remove oil subsidy, adding that the financial commitment to the canker has grossly hurt on the national purse. Dr. Kachikwu had announced the government’s decision to scrap the Petroleum Support Fund, otherwise known as fuel subsidy on May 11with questions on the lips of the supporters of the move by government on the economic value Nigerians would derive from continued payment of the hefty sum of money. The price hike from N86.50 to N145 represents a 67.63 per cent increase. Announcing the end of the subsidy regime, Kachikwu said: “Government arrived at the new price by a simple conversion of using foreign exchange at N285. That N285 is from nowhere; it is basically the secondary source that people buy foreign exchange from, versus the N320, which is the black market rate. If you convert it and throw it in, you will get about N141, N142 or N143. So there aren’t much of palliative elements left there for you to use. It is simply, go out, find your product, your cost is covered, there is an opportunity for your eﬃciency to make money, come and deliver.” Prior to the announcement of the new pump price of N145 per litre, the federal government had convened a meeting of various stakeholders in Aso Rock. The meeting presided over by vice president Prof. Yemi Osinbajo,was said to have been attended by the leadership of the Senate, House of Representatives, Governors Forum, and Labour Unions, including the Nigerian Labour Congress, NLC, Trade Union Congress, TUC, National Union of Petroleum and Natural Gas Workers NUPENG, and Petroleum and Natural Gas Senior Staﬀ Association of Nigeria, PENGASSAN. However, the duo of the NLC and TUC later refuted the claim that they participated in the meeting and threatened to mobilise their members for protests
Announcing the end of the subsidy regime, Kachikwu said: “Government arrived at the new price by a simple conversion of using foreign exchange at N285. That N285 is from nowhere; it is basically the secondary source that people buy foreign exchange from, versus the N320, which is the black market rate.
June 2016 CHERRYAFRICA
CONTINENTAL ISSUE against the move by government. Nevertheless, it was reported that the said meeting among other things reviewed the current fuel scarcity and supply diﬃculties in the country and the exorbitant prices being paid by Nigerians for the product which on the average was within the range of N150 to N250 per litre. As explained later by the Dr. Kachikwu, the meeting noted that the main reason why the problem had persisted in the past was the inability of importers of petroleum products to source foreign exchange at the oﬃcial rate due to the massive decline of foreign exchange earnings of the federal government. As a result, private marketers have been unable to meet their approximate 50 per cent portion of total national supply of petrol. The meeting, according to the Minister, concluded that in order to increase and stabilise the supply of the product, any Nigerian entity is now free to import the product, subject to existing quality specifications and other guidelines issued by regulatory agencies. There has been a barrage of criticisms against the hike in fuel price. Those who argue against fuel subsidy removal described it as being provocative and punitive. According to Femi Odulana, a public aﬀairs analyst, Nigerians rightly feel that being one of the world’s producers of crude oil, the cost of petrol should not be overbearing, especially as government does very little for the people. Nigerians fully expect that with the coming to power of the All Progressives Party, APC and their promise for change, life should be getting better. He said: ‘‘but it is not, making people wonder whether inflicting more pain on an already destitute people is the APC’s own idea of governance. Roads everywhere are bad, power unreliable
16 June 2016 CHERRYAFRICA
and potable water supply inadequate. In addition, the country has to contend with skyrocketing food prices, a near total lack of security, unmitigated unemployment, absence of social security, a comatose railway, crumbling education and poor health care delivery systems.’’ He also said deregulation can only lead to even higher prices and inflation of virtually every commodity. ‘‘If the government believes it is accountable to no one; if the president thinks he can succeed where his predecessors failed, then he obviously misread public opinion. Subsidy removal will stifle the economy,’’ he stated. Also, critics of the Buhari administration such as Ayodele Fayose, Ekiti State Governor, described the new policy as political 419 on Nigerians by the administration of President Buhari. The gover-
nor, who said the increment was another vindication of his predictions on what to expect in 2016, added that it was now clear that the scarcity of petrol being experienced in the past three months was deliberately orchestrated by the federal government to pave the way for the already conceived increment. He said: “When they were seeking votes from Nigerians, they promised to reduce petrol pump price from N87 to N45 per litre, they promised to create three million jobs per year, they said $1 will be equal to N1 and above all, they promised to pay unemployed youths N5, 000 stipends and provide one meal a day to pupils nationwide. “Instead of fulfilling their promises, they have increased petrol pump price to N145 per litre, increased electricity tariﬀs, re-
CONTINENTAL ISSUE trenched thousands of workers and imposed untold hardships on Nigerians. As they did in 2012, if labour leaders do not also stand up for the people at this time, posterity will not forgive them.” Also, Nnamdi Eze, a Lagos-based medical doctor, considers the policy as being insensitive and ill-timed, noting that without employment, energy supply and socio-economic safety nets, the masses of Nigerian people have been thrown into shark-infested waters and with neither life guards nor life jackets. There is also the question of whether the Nigerian National Petroleum Corporation will still be selling fuel refined locally at the price of N145 per litre when it did not use foreign exchange to import the products. The federal government must provide answers to these problematic issues for Nigerians who were initially shocked at the news of the price increase to fully accept it. Some analysts say the government has announced its intention to redirect the funds from the subsidy into infrastructure, support for domestic refining capacity and safety net programs tailored by states, which henceforth will receive 100 per cent of their allocation from the Federation Account. According to Charles Ilodibe, an expert in energy matters, the hike in fuel price is a step in the right direction. He however said the success of these programs rests on proper oversight and participation of all the relevant stakeholders, especially the media and civil society. ‘‘In a country where there is already a lack of trust between the people and government, communicating the huge costs of the subsidy and the benefits of its removal to the population is critical,’’ he said. He further stated that although the government claims to have saved about N16.5 billion from April this year to date, the standing view is that deregulation is just another ploy by the nation’s vampire elite to further divert the country’s resources. He said the real challenge the government faces is winning the trust of the people as some form of social protection need to be launched immediately to protect the most vulnerable. According to him, this could include measures to reduce the cost of public transportation in the short term. Experts have also said that the trillions of naira spent by successive administrations on fuel subsidy have only succeeded in sustaining a corrupt, largely abused regime that has ended up in private pockets, creating over-
Kachikwu night billionaires who continue to walk free displaying their opulence. According to Odulana, ‘‘Petrol subsidy over the years have caused supply disruptions and engendered ineﬃciencies in their management. Under the current low oil price environment, dwindling oil revenue and shortage of foreign exchange, deregulation would partly reduce the pressure on the naira and foreign reserves. With deregulation, importers of petrol can source for their dollar requirements from autonomous sources, which would ease pressure on the naira and foreign reserves ‘‘Diversion of products will be minimised, as there will be no incentives for marketers to divert petrol to markets where they are guaranteed higher prices. The removal of subsidy will attract critically needed private sector investment in the downstream oil sector and lead to the construction of new refineries ‘‘The end of subsidy will end crude oil swaps and other opaque trading arrangements that have cost Nigeria billions. Savings made by government will be used to develop critical infrastructure that would create jobs, and
‘‘In a country where there is already a lack of trust between the people and government, communicating the huge costs of the subsidy and the benefits of its removal to the population is critical,’’ he said.
June 2016 CHERRYAFRICA
CONTINENTAL ISSUE funds redeployed to subsidise productive sectors of the economy such as agriculture, textile manufacturing and SMEs (wise countries subsidise production, not consumption). With deregulation and the attendant competition, marketers and NNPC will be forced to adopt best practices in order to remain in business. A banker, who pleaded anonymity said: “I think the new policy is okay. Prices will adjust. Things will get better. There is no gain without pain.” Similarly, Ray Umunike, managing director of Salsium Energy, thinks that the price spike as a result of the fuel price increase is only momentarily. “It will go downwards except some sharks are capitalising on it and maximising profit. We didn’t have the strong political will when Jonathan did it in 2012. I think it’s a good policy,” he said. Meanwhile, Vice-President Yemi Osinbajo says fuel price hike was necessitated by scarcity of dollars occasioned by the depletion of the foreign reserves and it was corruption that made it impossible for Nigeria to build or maintain refineries over the years which has forced the nation to be import-dependent. He said: “If you have no foreign currency, you have to import fuel. All of our refined petrol today is imported. A lot of problems with our refineries are corruption related issues. If we repair our refineries today, we will still only be able to refine 40 per cent of our petroleum so we still need to import. But the truth is that in the absence of foreign exchange, when you have to import your refined petroleum, what are you left with? I think it is important that when we look at corruption and its deleterious consequences, we must relate it directly to what we are experiencing all the time.” Osinbajo said President Muhammadu Buhari fought against increasing pump price for several months but had to finally bow to pressure due to the economic reality. He said the foreign reserves currently stand at about $27billion and maintained that if the $15bn stolen in the dubious arms deal had been available
18 June 2016 CHERRYAFRICA
today, there would have been more dollars in the country and the value of the naira would have been protected. Subsidy Removal History Governments, over the years have continued to insist that the subsidy it pays on petroleum products are too much for it to bears and that almost all the funds go into private pockets at the end of the day. Therefore, government’s position is that it would be better if it removes the subsidy so that the acclaimed few people said to be benefitting from the importation of the commodity are prevented from feeding fat on Nigerians. The history of fuel price increase otherwise known as subsidy removal in the country dates back to 1978 when the government first increased the price to 15kobo per litre from 10kobo per litre. In 1990 the government further increased the price to 60kobo per litre and two years later, precisely, 1992 an additional 10kobo moved the price to 70kobo per litre and in 1993 it was jerk up to N3.25 and further to N11.00 per litre in 1994. From 1994 to 1998, the oﬃcial pump price hovered around N11 per litre. With the
coming of the civilian regime in 1999, the price moved from N11 per litre to N20 and up again to N22 in 2000. It increased again to N26 in 2001 and N40 in 2003. Prior to leaving oﬃce, former President Olusegun Obasanjo in 2007 jerked up the price of petrol to, first, N65 per litre and again over N100 per litre. Late President Umaru Musa Yar’Adua under pressure from NLC reverted to N65 per litre for petrol while Jonathan pegged it to N97 in 2012 and later reduced it to N87 shortly before leaving oﬃce. According to Ilodibe, ‘‘the major concern in the whole politics of subsidy is not its removal but the insincerity, hypocrisy and dishonesty of the leaders (both past and present). It is dubious for a leader to support what he had earlier condemned just because he is in power now. That is selfishness and opportunistic. If removal of fuel subsidy was allowed in 2012, Nigerians and the economy would have adjusted to it long ago. It wouldn’t have been as painful as it is today. While the debate continues, the question on the lips of many people is: Only time will tell how far the new policy regime will go.
Ghana Decides 2016
Ghana Must Win In any competition there is a loser and a winner. Expectedly, therefore, Ghana, and not necessarily the politicians, would be the ultimate winner after the November 7 elections, while her award will be peace and stability with democracy being her strategy of progress
Williams Freeman ll over the democratic world, election serves as a key criterion in affirming a country's democracy through the change or retention of government by the electorate. Democracy also provides a country with a framework within which elections should be conducted to aid in nation building. The impact of elections has been seen all over the world as some countries attain higher heights and others also get plunged into social and economic anarchy. November 7 of this year is when Ghana's democratic depth would be tested as the country endeavours to elect a President and Parliamentarians to take the responsibility of leading it into Canaan, the land of promise. One might notice the change in dates from December to November but not to worry because it is in eďŹ€orts to protect
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CONTINENTAL ISSUE the sacrosanctity of Christmas festivities. During election years as witnessed in the past, the rise of tension is inherent hence the possibility of the “power pest” taking advantage of the situation sucking into the vulnerability of the electorate to enrich themselves with power. Ahead of this year's poll, political parties have been putting in stringent measures to attain power making it one of the keenly contested elections in history. Preparations As this year's elections promise to be too close call, political parties are leaving no stone unturned in their preparations, as they endeavour to gain power. The last election was subjected to criticisms and rumours of rigging, which eventually led to the final verdict being contested in court for more than 8 months, bringing the nation to a standstill. On the back of that, political parties are seeking to win this year's election convincingly with no shadows of doubt cast over it hence their rigorous preparations. The incumbent party, the National Democratic Congress (NDC) hasn’t undertaken any major preparation after the party’s primaries where His Excellency John Dramani Mahama got the nod to represent the party yet again after he went unopposed as George Boateng his competitor was disqualified for not meeting standards of the party's registration process. Analysts have, however, gone to town with the allegation that it was a stunt pulled by the leaders of the party to make the President ease through the process with no diﬃculty. Ban on campaign hasn’t been lifted yet by the Electoral Commission as constitution demands but in order not to be left behind, the President has mapped up his own strategy of
GHANA appealing to electorate by organising his "Accounting To The People Tour" where he combs the breadth and length of the country in eﬀorts of accounting himself capable to the people as the best candidate to take the country into the brighter future. The ruling party’s close rivals and the country's main opposition party, the New Patriotic Party (NPP), is also on the heels of their antagonist as they map up strategies. to gain power this time. They lost out on the last election by a close margin and claim it was due to rigging by the incumbent. They kick-started their preparations after the Supreme Court verdict, when they held their congress to elect the flag bearer and parliamentarians to brighten their chances of gaining power. Nana Addo Dankwa Akuﬀo Addo got the nod for the third time beating stiﬀ competition from Alan Kyeremanteng popularly referred to as Alan Cash. Akuﬀo Addo has so far launched a strong campaign to help amass votes. He also chose Dr. Mahmoud Bawumia as his running mate to expedite the process. The NPP has put in measures to aid in bringing the party back to power with some being their "begging" for cash to help the running of their campaign as well as organizing
some rallies to put the party’s message across. The lesser known political parties are also not being left behind, as there seems to be some flicker of hope for them ahead of the polls. Dr. Paa Kwesi Nduom who fell out with the Conventions Peoples Party and therefore broke away to form his own party called the Peoples Political Party (PPP) is considered an eligible candidate but due to his less popularity and non involvement with any of the two main political parties his chance of becoming president remains very remote. Political parties like the CPP have also had their fair share of problems and surprises but in order to gain power, these issues have to be buried so they can present a united front. Ivor Kobina Greenstreet shocked Ghanaians when he got elected as the flag bearer of the party ahead of Samia Nkrumah, the daughter of the founder of the party and the first president of Ghana Dr. Kwame Nkrumah despite his debility. Other Political parties like the PNC, GCPP, and APC are all putting in eﬀorts to gain power though it looks herculean. With the political parties preparing meticulously, the fulcrum of this process, the Electoral Commission has also been preparing in
Briefs on Ghana Election
Coalition of Domestic Election Observers
20 June 2016 CHERRYAFRICA
CONTINENTAL ISSUE eﬀorts to eliminate all doubts of any unfair and undemocratic comments being associated with them. They recently opened the national register for registration to be conducted so the electorate could exercise their franchise. Although the electoral umpire has come under huge criticisms from the NPP mostly on the transparency of the register it however seems unperturbed as it continues to make preparations for the elections. Expectations The expectations of the electorate are very high going into this year's election. They have grown to appreciate the process over the years as the only way to eliminate corruption and bad governance. All over some principal streets of Accra, the level of enthusiasm and alacrity with which Ghanaians wait with bated breath to cast their votes remain amazing. They say whether rain or shine, fire or ice, they will cast their ballots because it is high time they took matters into their hands since they are the only people to make Ghana a better country. Possible Outcomes At the end of the last general elections, there were deep-rooted lessons to take away. People got to know that crowds may not necessarily win elections, but strategies may make all the diﬀerence. The rallies of the NPP were always thronged with people giving the impression that their candidacy was the best but since they lost power in 2008, they have not recovered. All parties have a chance of winning this year's elections considering the eﬀorts they are putting in. The incumbent NDC are hopeful they will be re-elected considering the achievements they have been able to rake in when they took over. His Excellency John Dramani Mahama and his party boast so many developmental projects and milestone achievements like eliminating schools under trees, increasing capitation grant, and more, but notwithstanding, they shouldn’t be complacent as their achievements have been undermined by pockets of alleged corruption and injustices.
GHANA Their failure to solve the erratic power supply popularly known as "dumsor" is also a time bomb waiting to explode in their faces. With other problems and grievances rampant in their regime, analysts say it is just a matter of time, except the government makes appropriate adjustments. A clear case was when John Mahama lost 4 per cent of his party's vote when he was re-elected as the flag bearer. On the back of this, the NPP is mapping up a counter attack strategy in order to oust them from power by using their failures as backlash and to make them seem incapable and unaccountable of managing the aﬀairs of the economy. The NPP, however, also faces some challenges due to the internal wranglings in their caucus with some key oﬃcials of the party suspended. The suspension of Party Chairman Paul Afoko, General Secretary Kwabena Agyepong and 1st Deputy Chairman Sammy Crabbe has thrown a bad light onto the party as well as disuniting its front which might make it diﬃcult for them to win. They have also had their fair share of allegations of corruption as acting Chairman Freddie Blay and some other oﬃcials were alleged to have squandered party funds. However, their theme for this year's election "Arise for change" is believed by some Ghanaians to be the best as per permutations, political parties that use "Change" as their theme always win with clear examples being Barack Obama in 2008 and the late Professor John Atta Mills in that same year. APC, PPP, PNC, CPP, GCPP and the rest all have their share of problems which may determine their performance in this year's election. A clear example is the People's National Congress (PNC) which had its former flag bearer Hassan Ayariga who has a metaphoric tendency for humour leaving the party to form his own party called the African People's Party (APC) after he was beaten in the race for the party’s flag bearer by Edward Mahama. Generally, when the ban on campaign is lifted, all parties will organise their own rallies and map up their own strategies to aid in soliciting for votes but the people will definitely be
the one to decide. The race as always will be limited to just two parties but I would want to play the devil's advocate to say that this time around, it wouldn’t be so and the lesser known parties will give the two main parties a run for their money. The NDC won the last election by a percentage of 50.7 per cent followed closely by NPP as usual with 47.74 per cent, leaving the other political parties to share the insignificant spoils. The two main political parties can boast one stronghold at each with the rest expected to be floating. This development will go a long way in crowning the winner. Final Deductions In any competition there is a loser and a winner. Expectedly, therefore, in this upcoming election, there will only be a winner known as Ghana and her award will be peace and stability with democracy being her strategy of progress. Ghana has so far become the beacon of hope with respect to democracy on the African continent and such an attribute shouldn’t be marred by an unfair election. The West African country is expected to show the world that Ghana and Africa is capable of managing her own aﬀairs.
On the back of this, the NPP is mapping up a counter attack strategy in order to oust them from power by using their failures as backlash and to make them seem incapable and unaccountable of managing the aﬀairs of the economy. June 2016 CHERRYAFRICA
From Politics To Prudence With Ghana setting the pace and Nigeria likely to follow after recently modulating petroleum products prices, more African oil producing nations are under necessity to embrace the sweeping wave of deregulation
Adama Bukari, Accra lobally, crude oil prices have seen recurring fluctuations with the West Texas Intermediate (WTI or NYMEX) crude oil prices recording the lowest ever rate of $15.24 per barrel in January, 1946 and the highest in June, 2008 with $151.72 per barrel. The setting of crude oil prices is characterised by power-play driven largely by the Organisation of the Petroleum Exporting Countries (OPEC) whose 13 members are Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. OPEC controls 40 per cent of the world’s oil production and 73 per cent of the world’s oil reserves thus making the organisation highly influential in oil price determination. OPEC’s strategic decision of setting production targets for its members
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since the early 1980’s has had enormous impact on oil prices as evidenced by the fact that anytime OPEC reduces production targets, crude oil prices surge. The reversal is also usually the case any time there is a glut. Over the years, OPEC had often been criticised as being an anti-competitive oil pricing cartel but the organisation describes its intent as that of seeking market stabilisation. Any move by OPEC to either increase or cut down oil supply directly aﬀects the prices globally as non-OPEC members are pushed to sell crude at the OPEC price levels. OPEC is therefore indispensable in global oil price politics. Crude oil prices exert economic implications for both producing and non-oil producing countries and this explains, announcement of new petroleum prices is akin to the reading of national budgets – for price changes in fuel products automatically aﬀect every other sector. In Ghana, prior to the deregulation of oil
prices on June 16, 2015, the setting of fuel prices occasioned an immediate review of prices of almost every commodity including transport fares and general service charges. This makes crude oil prices so sensitive an issue as it has the potency of determining the direction of the fiscal projections of governments. The Cost of Subsidy To safeguard economies from the shocks of oil prices, most governments have had to regulate their oil sector - thus subsidising in most cases to protect their economies from experiencing hyper cost of fuels at the pump stations. It needs stating that if done well within the context of proper targeting, energy subsidy can reduce the transmission of price hikes to consumers; provide incentives for the growth of industries and expand access to energy to the larger population for real socio-economic growth. However, studies have shown that cost of subsidy and the associated problems of ill-targeting and misallocation of revenue make the policy unattractive. According to the International Monetary Fund (IMF), the fiscal cost of fuel subsidies in Sub-Saharan Africa (direct subsidies and foregone taxes) for the year 2012 was estimated at 1.4 per cent of the region’s GDP. Studies have also shown that energy subsidies greatly benefit the high-income group. However, their removal hurts the poor. This is due to ill-targeting strat-
egies in the price regulation mechanism. It is therefore not economically prudent to continue subsidising fuel for the rich to benefit while losing revenue that could be channelled to the provision of essential services and infrastructure for the poor. Subsidy on petroleum prices has been identified as unsustainable as governments’ continued absorption of increases in oil prices below minimum thresholds is a drain on public purse and a further reduction of revenue that should accrue to the state in the form of petroleum taxes. This is particularly crucial when taxation on fuel constitutes perhaps the single most important revenue source for most developing countries in Africa, Asia and Latin America. Price Pendulum Imperatives The pendulum of oil prices keeps swinging at varying points. The lowest ever was $15.24 recorded in January, 1946. The year 2008 recorded the highest ever crude oil price of $151.72 per barrel. China’s increased consumption of oil in its impressive growth strides pushed oil prices from 30 USD in 2000 to a record high in 2008. As recent as January 2016, crude oil price had dropped so low to $28.50. Oil price has since January been recording marginal increase from $28.50 to its June 1, 2016 level of $50.63. Specialists in the oil industry have pointed out deregulating the sector is prudent as the savings made by subsidy removal will not only save
Subsidy on petroleum prices has been identified as unsustainable as governments’ continued absorption of increases in oil prices below minimum thresholds is a drain on public purse and a further reduction of revenue that should accrue to the state in the form of petroleum taxes.
June 2016 CHERRYAFRICA
Ghana's Minister of Petroleum, T.H. Emmanual Armah-Kofi Buah. the public purse from depletion, but also create room for the savings to be channelled into the provision of vital infrastructure such as roads, schools, hospitals and housing among others. A regulated oil market implies that prices of oil are not allowed to rise and fall in response to the interplay of market forces because of subsidy regimes. This hurts weaker economies as substantial budgetary requirement is needed to fund the subsidy. However, deregulation implies active participation of marketers in the industry thus spurring stiďŹ€er competition to bring about improved customer services. The stiďŹ€er competition triggered by deregulation is one that puts the customer at the forefront of business decisions while oil marketers strive to maximise returns on their investments. This is in contrast to a regulated market where there is no incentive for competition as governments provide automatic guarantee of profits for players in the industry. At the peak of deregulation, cartelisation and predatory pricing are virtually eliminated and
A regulated oil market implies that prices of oil are not allowed to rise and fall in response to the interplay of market forces because of subsidy regimes.
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the market space is open to fair competition culminating in greater choices for consumers. The imperative for deregulation in the oil sector is succinctly captured by Matar Al Neyadi, UAEâ€™s Undersecretary of the Ministry of Energy and Chairman of the Gasoline and Diesel Prices Committee who during the 5th Gulf Intelligence Energy Markets Forum held in Fujairah in 2015 indicated that subsidies impede market functions, create artificial prices, decrease sustainability and limit the growth of clean energy. The case for sustainability is of critical concern to industry players given the rising global population and the expanding economies of emerging markets in Asia, Africa and Latin America. These economies have increasing demand for oil-based energy. Allowing consumers to pay market prices will cut down consumption wastages. With countries such as Ghana having removed subsidy from petroleum products and Nigeria modulating prices and set to deregulate the oil sector, it is obvious that the wave of subsidy reforms is indeed a global phenomenon that is likely to stand the test of time. The benefits of deregulation have made it attractive to several countries including Peru, Argentina, Pakistan, Chile, Philippines, Thailand, Mexico, Canada, Venezuela, Japan and USA, among others who have removed the state-dominant role on oil pricing resulting in the creation of vibrant and thriving oil
CONTINENTAL ISSUE industries. The Politics of Deregulation Perhaps the biggest challenge that is likely to aﬀect the eﬀective implementation of subsidy reforms across the globe is the politics of deregulation. This is because oil deregulation has grave political consequences especially in developing countries where low incomes and widening inequality gaps make it diﬃcult for the average oil consumer to pay realistic prices thus sparking widespread agitations in times when the global crude prices surge with the obvious increases in petroleum prices at the local levels. Allowing oil prices to be set based on market realities implies that at the instance of increased crude oil prices, the expump price will equally inch up with the full cost passed on to the consuming public. It is not uncommon that hikes in fuel prices have often triggered discontent from the consuming public in form of strikes and general discontent. The sheer cost of a deregulated oil sector, especially when crude prices surge, is one that sends shivers down the spine of political actors. Governments across the globe that have implemented deregulation have risked being unpopular with the populace. The politics of deregulation was manifest during President Obasanjo’s regime when in 2003, Nigeria attempted deregulation. In June 20, 2003, Nigeria’s Petroleum Products Pricing Regulatory Agency (PPPRA) announced its new pump price and this was met by nation-wide strike led by the Nigeria Labour Congress and its aﬃliates causing a downward review of pump price. Ex-president Jonathan suﬀered same resistance at deregulation when on January 2, 2012, the government totally removed the subsidy on price of fuel from N65 to N140. Again, this triggered mass strikes causing another downward review. The Nigerian story reflects the extreme politicisation of deregulation in most parts of Africa. The challenges notwithstanding, the past decade has seen increased deregulation of oil prices with countries like the United Arab Emirates, Ghana and many others adopting the policy of deregulation. Ghana has since 2015 rolled out its oil deregulation policy thus removing subsidies on petroleum products. Under this policy, what is known as the Automatic Petroleum Product Pricing Formula (APPPF) is now in place thus fuel prices are set automatically to respond to world market prices and as usual, the politics of such policy has raged on with critics pointing
GHANA to the subsidy reforms as an IMF conditionality – factual though. At the onset of the reforms, agitations ensued when prices inched up. However, with the pricing pendulum swinging to lower and upper levels, consumers are gradually accepting the realities of deregulation. As an OPEC member, Nigeria, being the 12th largest producer of petroleum in the world and the 8th largest exporter is yet to subject itself to the litmus test of subsidy reforms. It is no secret that former President Goodluck Jonathan experienced diﬃculties in managing the country’s volatile oil sector where long queues were the regular feature at fuel stations across the country. For decades, Nigeria, though a major oil exporter has experienced fuel shortages and inadequate energy supply in general. In May 2016, Premium Times reported that Nigeria will soon see the full implementation of subsidy reforms in her oil sector and this is likely to result in drastic hikes of not less than 27 per cent rise in the current regulated prices. Certainly, President Muhammadu Buhari must brace himself for the stark opposition that is likely to follow upon the full-scale deregulation regime. Anchoring Deregulation Sustaining deregulation in the face of the obvious consequential political implications associated with oil-sector is one of prime importance to industry watchers. Key question that arises is whether or not African governments will continue to hold on to deregulation even if the world market prices surge to peak levels as witnessed in the period 2008. Further, will governments, in the name of political expediency revert to regulation when the prices surge? These questions are critical in assessing the future of deregulation in African countries where political actors often succumb to political pressures and roll out popular policies just to score cheap political points without recourse to the economic realities on the ground. It does appear that globally deregulation has come to stay and governments in Africa have come to terms with the huge budgetary deficits that subsidy imposes on their national purses. This is true in developing countries where oil subsides are often misplaced and ill-targeted with monies accrued from oil subsidies diverted for other sectors thus having no eﬀect in real economic terms. This explains why the Bretton Woods institutions had over the years pushed for deregulation. The most eﬀective anchor to a successful deregulation regime across Africa and other developing economies is political will.
It does appear that globally deregulation has come to stay and governments in Africa have come to terms with the huge budgetary deficits that subsidy imposes on their national purses.
June 2016 CHERRYAFRICA
Nyesom Wike Sets The Pace And Gets Rivers Running 26 June 2016 CHERRYAFRICA
ivers State is a top state in Nigeria with over $23billion state domestic product (SDP) bigger than some five African countries put together. It is the hub of the oil and gas industry in the country and the heartbeat of the Gulf of Guinea. The present governor, Nyesom Wike, a lawyer and former minister, plays it big; he played big in the Goodluck Jonathan administration, in the then ruling Peoples Democratic Party (PDP), the Jonathan re-election push, won big in the April 2015 governorship election in his state with 87.77 per cent (1.3 million votes), fought big in the tribunal wars that went to the apex court in the land which upturned all the previous verdicts, and when it is time to govern, he has played big emerging one of the topmost performers in the first year. Now in the opposition in national politics, he is one of the biggest figures whose singular moves make waves on the national political radar.
June 2016 CHERRYAFRICA
70 kilometres of roads in its urban renewable programme. Governor In Action Before he came to power as governor of the state with the second biggest economy, Wikeâ€™s supporters called him High Tension, probably because of his forceful personality and bulldozing tendency in the campaigns. Now in governance, he is called Action Governor. His address at the Liberation Stadium on May 29, 2015, at his inauguration, oozed power and action. He barked orders that flung open the doors of the judiciary that had been under lock and key for almost one year. He installed the female chief judge (Daisy Okocha) that had been approved by the Nigerian Judicial Council (NJC) but was not allowed to sit by the previous administration in the state. Wike barked again and the orders transported back the 75 lecturers of the Rivers State University of Science and Technology (RSUST). This has
He barked orders that flung open the doors of the judiciary that had been under lock and key for almost one year.
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been his style. He has bulldozed down several impediments that had held Rivers State back, thereby moving the oil rich state forward with force of motion. Stability For almost two years, the state was seized by vicious political crisis that had pitted the then incumbent governor, Chibuike Rotimi Amaechi, against the powers at the centre. This almost crippled the state; revenue was going down, salaries and pension were unpaid, contract workers were unpaid, the judiciary was shut down, the legislature was on stilts, the security apparatus was dismantled, construction works were stalled, among other issues. Only politicking was on the fast lane with attendant acrimony laced with violence and subsequent killings. Public servants barely showed up in the oďŹƒces as a result of the friction. In the words of Ihunwo Obi-Wali, a PDP leader, Gov Wike moved fast to order life back to the state. He cleared the arrears of salaries. This created instant impact. Civil servants rushed back to work. The
One of the fifty Conmmisioned Houses at Iriebe Satatlite town
police found new strength and stability returned to the state. Students of the state on scholarships in foreign universities who were about to be thrown out were rescued with over N1billion. Movement around the state capital, Port Harcourt, had become impossible due to potholes everywhere was restored with a scheme, ‘Operation Zero Pothole’. Road Construction In just one year, Wike has emerged as the only governor that has steadily awarded road contracts despite the hue and cry over dwindling revenue allocation from the centre. His state fell from N25billion allocation in 2011 to a mere
N5billion in May 2015, yet he has recorded over 120 km of roads constructed. He has been commissioning road projects to mark his one year in oﬃce accompanied by top national leaders of the PDP such as from the former senate president, David Mark, the former national chairman, Ali Modu Sherif, and others. Wike signalled his resolve to confront road infrastructure headlong when he came along with the giants, Julius Berger and China’s CCECC. Now, the state government says it has rebuilt 120km of roads so far in Port Harcourt, Obio/Akpor, Ikwerre, Eleme, Etche, Oyigbo and Akuku-Toru local council areas. The government mentioned some of
His state fell from N25billion allocation in 2011 to a mere N5billion in May 2015, yet he has recorded over 120 km of roads constructed. He has been commissioning road projects to mark his one year in oﬃce accompanied by top national leaders of the PDP such as from the former senate president, David Mark, the former national chairman, Ali Modu Sherif, and others. June 2016 CHERRYAFRICA
SPECIAL REPORT the roads as: Abonnema/Obonnema Link Road/Bridge (Commissioned) Eagle Island/Iloabuchi Road/Bridge (Commissioned)Abuluoma-Woji Link Road/Bridge (commissioned) Oyigbo Market Road (Commissioned) Nkpogu-NLNG Road/Bridge (commissioned); Reconstruction of 33 kilometres of Township Roads, Reconstruction of Igwuruta-Chokocho Road, Reconstruction of Eleme Junction to Onne Junction of the East-West Road, Reconstruction of the Rumualogu/Alakahiah Road, and Rehabilitation of the Road under Mile 1 Bridge. Others are: Reconstruction of the Rumuolumini-Iwofe Road, Rehabilitation of Obi Wali road, Reconstruction of Elioparanwo road, Reconstruction of Oro-Igwe road. One of the highpoints of the road infrastructural development by Wike in the last one year is the revival of the Rivers State Road Rehabilitation Agency with added technical manpower and equipment. Some of the roads rehabilitated by the Agency include: Bodo Road, Woji Road, Evo Crescent, Birabi by Presidential Hotels Andrew Uchendu Crescent and Abacha Link Road. Economy On wheels Before Wike came on board, the economy of the oil state seemed to have halted because the roads to the business nerve centres such as the seaports had collapsed. Workers spent more than six hours going to and coming from the Onne Oil and Gas Free Zone with the Federal Ocean Terminal and the Lighter Ocean Terminal which has almost 200 companies. Wike wept when he saw this situation. Thus, for the sake of the economy, he initiated work on major federal roads such as Eleme Junction to Onne Junction of the EastWest Road to boost movement to the Onne Seaport. This project was funded in conjunction with private stakeholders in the area. The governor also initiated the reconstruction
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Deputy Senate President, Senator Ike Ekweremadu (with Mic) , Rivers State G Wike at the Commissioning of the Rumueprikom-Rumuolumeni road by the De of the Federal Government owned NPA-Industry Road to the Port Harcourt port to improve the economy of the area. Next, he moved to the Trans-Amadi Industrial Area and began the road rehabilitation scheme that is about transforming the once thriving industrial zone. This brought instant applause and made the business community very happy, according to Ibifiri Bobmanuel, president of the Rivers Entrepreneurs and Investors Forum (REIF). Enhancing Security Governor Wike has adopted a comprehensive approach to address the security challenges he met on ground. To enhance security in the
course of the last one year, Wike donated 66 Security Vans fitted with communication gadgets to Security Agencies operating in the state. The governor also liaised with the 23 Local Government Areas to donate another 46 Vans fitted with communication gadgets to Security Agencies. He has enhanced Statutory Financial Support and relevant logistics for security agencies thereby strengthening the State Security Council for responsive performance. the governor also made stiďŹ€er laws against violent crimes. The security initiatives of the governor and his committed funding of security programmes have been appreciated and commended by security chiefs.
Governor, Nyesom Ezenwo Wike and Wife of Rivers State Governor, Justice Eberechi Suzzette Nyesomeputy Senate President
Provision Of Water Provision of potable water has been the greatest setback in Port Harcourt. Now, Wike has launched the stateâ€™s urban water sector reform, the Port Harcourt Water Supply Scheme and the Sanitation Project. This project will create women entrepreneurs, youth employment as well as provide safe drinking water for the inhabitants of the state. Under the new Urban Sector Water Reforms, the State Government will be supplying water to two million people in Port Harcourt and Obio/Akpor Local Government areas after laying 400 kilometres of water-pipes in strategic locations. There are other schemes
for some other local council areas in the state such as Akuku-Toru, Eleme and Okrika.
cial autonomy to the Judiciary in the state and released N700million to the judiciary for capital projects.
Justice To most Nigerians and the international community, Governor Wike's most outstanding achievement in the last one year is his restoration of the rule of law and the rebuilding of the Judiciary. He has so far appointed three top female judicial heads: Daisy Okocha as chief judge (who just retired), replaced by another female chief judge, Adama Iyayi-Lamikanra, while Christy Gabriel-Nwankwo was made President Customary Court of Appeal. The governor also enhanced finan-
Tribunal victory In the course of his first year in office, Governor Nyesom Ezenwo Wike faced a lengthy battle to defend the mandate he holds in trust for the people of Rivers State. He won at the Supreme Court and won back most of the parliamentary seats his party lost in court. Basic social amenities In the course of the governor's first year in oďŹƒce, housing has also received the required attention. 50 Units Iriebe Housing Estate for MidJune 2016 CHERRYAFRICA
Profile of Rufus Nkereowaji Godwins Head of Civil Service, Rivers State Rufus Nkereowaji Godwins is a lawyer and civil servant in Rivers State, Nigeria. He is the current Head of Service under the administration of Governor Ezenwo Wike. Prior to his appointment, he had served as Permanent Secretary of Rivers State Ministry of Environment and as Solicitor-General & Permanent Secretary of the Rivers State Ministry of Justice.
dle Income Earners has been completed and commissioned. The Wike administration has also commenced the construction of the Phase 2 of Mile One Market under a public private partnership arrangement. Sports development Sports development is one area that Gov Wike used to place Rivers State on the global map. Rivers State hosted a series of international football matches that attracted global citizens to the state. Skills acquisition and Empowerment In one swoop, 35,000 artisans, barbers, traders, fishermen, farmers, hairdressers and other small scale business owners benefited from the N2billion Rivers State/CBN Micro, Small, and Medium Scale Enterprises Development Fund. This has helped to improve the economy of the State. The Rivers State Micro Finance Agency, RIMA, has built the capacity of the beneficiaries and disbursed the funds directly to them in a very transparent manner. Education/Rehabilitation
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Education has received unprecedented attention including completion of Law Faculty Building in the UST, starting the medical school in UST, starting the completion of the abandoned structures at the Faculty of Management Sciences and Faculty of Environment buildings of RSUST, reinstated 75 sacked lecturers and paid N700million to them. Agricultural revival Governor Wike has revived the abandoned agricultural sector . In liaison with the CBN, Gov Wike has delved into the promotion of commercial agriculture by providing cheap finances for the cultivation of oil palm produce and cassava. The administration in February 2016 launched the school farm project to attract the youths to farming. More than 2000 youth farmers have been registered for empowerment into agricultural sector in the state while plans have been concluded for the administration to extend credit to farmers and fishing folks. The administration also reintroduced Input Distribution to boost Food Production in the state. The Wike administration is currently re-
habilitating the fish farms in Ubima, Buguma and Andoni, while it contained the spread of avian influenza in Ikwerre, Obio/Akpor and Port Harcourt Local Government Areas in November, 2015. Transport, health A Database of Buses/Taxis in the state capital is in the process of being developed while new Motor-Parks have been established in Port Harcourt to promote the security of lives and property. To further boost the morale of doctors, Gov. Wike has flagged oďŹ€ the construction of the doctors' quarters at the Braithwaite Memorial Hospital gutted by fire. Civil Service Gov. Wike cleared the four-month salary arrears he inherited from the past administration and also settled the eight months pension arrears owed by the past administration. The state civil service has been reformed with Ministries, Departments and Agencies promptly receiving monthly overheads. Urban Development
SPECIAL REPORT Wike has embarked on aggressive physical planning by designing a low density residential layout near golf estate at Trans-Amadi Industrial Layout wherein 150 plots of land have been mapped. This new residential layout billed for development will further beautify the city. To stop illegal structures in the urban centres of the state, Wike merged the oﬃces for the approval of building plans into a one-stop-shop location at the State Secretariat. This has also increased revenue for the state. To ensure the people support the urban renewal programme of the administration, a public enlightenment campaign, "Operation Garden City Restoration 2016" was launched for Port Harcourt and neighbouring communities, with eﬀorts geared at making the state capital neat and
RIVERS STATE appealing. Future Going forward, Governor Wike has started the process of fulfilling some key pledges he made on road construction. The governor in fulfillment of his pledge to the General Overseer of the Redeemed Christian Church of God, RCCG, Pastor Enoch Adeboye on the completion of the Obiri-Ikwerre road to the airport has flagged oﬀ the reconstruction of the road. The governor has flagged oﬀ the dualization of the Saakpenwa-Bori road in line with his campaign promise to the people of Ogoni. In line with his commitment to the welfare of children in the state, Governor Wike flagged oﬀ the construction of an ultra-modern recreation centre near the Bori Camp axis on Aba Road, Port
Harcourt. The governor has also commenced the revival of all dysfunctional street lights across Obio/Akpor and Port Harcourt Local Government Areas, to improve security and beauty at night. The flag-oﬀ of the much-neglected Sakpenwa- Bori Road in the heart of Ogoniland has brought instant joy to a marginalised ethnic group and has shown indication that the one year of Wike was no fluke. The masses now believe that the speed of work would continue in the coming years. According to the Commissioner of Information and Communications, Austen Tam-George, Governor Wike has lifted the state from despondency to hope with hard work. He has fulfilled the promise he made to the people and has continued to blaze a trail.
NYESOM WIKE'S BIODATA Ezenwo Nyesom Wike is a Nigerian lawyer, politician from Rumuepirikom in Obio Akpor, Rivers State, Nigeria, and former Minister of Education. He also won the Rivers State governorship ticket of the PDP (Peoples Democratic Party) in 2014. Nyesom Wike was born on 24 August 1967. From 1999 to 2007, Wike was the Executive Chairman of Obio-Akpor Local Government in Rivers State, an oﬃce he used to redefine and exhibit his special brand of governance. From 2003 to 2006, Wike was the National President of All Local Government of Nigeria (ALGON), the umbrella forum through which all the 774 Local Government Council Chairmen in Nigeria interface and interact on issues aﬀecting the Politics and policies of Nigeria. From 2007 to 2011, he was appointed the Chief of Staﬀ of Governor Amaechi. And in 2011, President
Goodluck Jonathan appointed him as the Minister of Education State of Federal Republic of Nigeria. In May 2013, Wike donated his salary for six months (about 11.7 million naira) to a non-profit organization, Tompolo Foundation. On 8 December 2014, Nyesom Wike won the Rivers state governorship ticket of the Peoples Democratic Party. An outstanding administrator, lawyer, leader and politician, Barrister Nyesom Ezenwo Wike was born to the family of Reverend and Mrs. Nlemanya Wike of Rumuepirikom community, Rivers State. Chief (Barrister) Nyesom Ezenwo Wike holds degrees in Political and Administrative Studies as well as Law. After a brief stint with private legal practice, Chief E.N. Wike was elected twice as the Executive Chairman of Obio/Akpor Local Government Area. He served his two terms
in oﬃce from 1999 to 2002 and 2004 to 2007. While in oﬃce, Chief E.N. Wike also served as Deputy President, Association of Local Governments of Nigeria, ALGON, in 2004 and was later elected the President of ALGON. He also represented Africa as a member of the Executive Committee of the Commonwealth Local Governments Forum.
June 2016 CHERRYAFRICA
INTERVIEW WITH EMMA OKAH
Emma Okah, a lawyer, is a man versed in public administration and governance. He was a tall figure in constructive opposition all through the Chibuike Rotimi Amaechi era and joined forces with Gov Wike to return the party to power in May 2015. Now, as Commissioner for Housing, he opens up to CherryAfrica in an exclusive interview on the inner workings of the new administration especially in the Housing Sector. Emma Okah
Wike's secret of success: The Governor Is Practically On The Streets Chasing Contractors â€“ Emma Okah 34 June 2016 CHERRYAFRICA
s an insider, how would you give an overview of Gov Nyesom Ezebunwo Wike’s one year in oﬃce as Chief Executive of Rivers State,
The administration of Nyesom Ezebunwo Wike (CON) has just celebrated one year in oﬃce which lasted for one full week. It was a weeklong festivity filled with laudable activities. It was action-packed, filled with fulfilled expectations and hope with the period. Activities kicked oﬀ with commissioning of projects and we were finding it diﬃcult to squeeze in all ready projects within the programme. There was a Report Card of everything the Government did including what Ministries, Departments and Agencies (MDAs) did across board. Anyone who lays hands on that Report Card would be satisfied that the Government has done very well within this period. What we have taken away from the experience of this one year is that any leader can appease his people if he has integrity, honesty and if he stays focussed. The one year has proved integrity and honesty. We have seen in the past when contracts were overpriced and more than half of that cost goes into private coﬀers not to the projects. That has been one of the greatest problems of this country, including Rivers State, until we came on board. Now, the Wike administration said from the onset, look, there will not be any variation. For every job to be done, don’t tell us about inflation. Go ahead and fulfill your own side of the bargain and we will fulfill our own side of the bargain. We showed we have zero-tolerance for corruption. So, no engineer from a ministry will demand for any bribe and if demand is made, do not respond, ignore and carry on with good job. These things looked impossible to attain. So, now, we drive the projects without corruption. We noticed many abandoned projects that would have served our people in Port Harcourt and Obio/Akpor. These two local council areas seem to be merged into one to be called Port Harcourt. Any other community has
RIVERS STATE good representation in these two LGAs. So, if you touch a road in this location, you touch every segment of Rivers State. The roads are very many from small to big ones. Contractors and everyone else was put on the toes. Money was released when due. The Governor is practically on the road chasing contractors. That is a lesson that Gov. Wike has given to governors around Nigeria; that you must be on your toes for contractors to perform. We recommend this to every chief executive of a state because it was diﬃcult for any contractor to do something funny without being caught. This is because the Governor, Commissioner and permanent secretaries were always coming. It was diﬃcult to do anything funny and get away with it. The next factor is that we patronised contractors that have signature (reputation to protect) such as Julius Berger, CCECC, for instance. They did most of the projects. It was a bit easier and lighter to check fraud and laxity. I think that was a very good decision. We eliminated political contractors by using the big multinational construction companies. Traﬃc problems are practically eliminated on most of the roads. Look at Borokiri roads or township roads; one would have wondered if there was any government in the past eight years. Those things have been eliminated and the people are now happy to live and work in Port Harcourt without loss of man-hours and constant repair of vehicles. We did this not because we received the highest allocations or borrowed the highest, but this is just the product of integrity and honesty, being circumspect and being able to negotiate well for public good, and not for the interest of your pocket. We were able to do good deals with contractors and eliminated waste. We have drastically reduced recurrent expenditure (including overhead). Before we came, overhead had ceased to exist, but we revived it but cut it down by 40 percent. This was done to free funds for capital projects. Everybody has adjusted to this. A greater number of our people are getting value from Government. If road is done, members
of all political parties can drive on them, same for schools. We chose that there should be no politics in project execution; let us do someone good for the sake of our people and for the future generation. The Sakpenwa – Bori Road (Ogoni) is being done. This was a road that troubled the people. Every past administration had promised to do that road; but it’s Gov Wike that has started it. We have done a lot in the cities so its time to move down the sub-urban roads.
Traﬃc problems are practically eliminated on most of the roads. Look at Borokiri roads or township roads; one would have wondered if there was any government in the past eight years. Those things have been eliminated and the people are now happy to live and work in Port Harcourt without loss of man-hours and constant repair of vehicles.
June 2016 CHERRYAFRICA
SPECIAL REPORT We have started biometric screening to actually know those we are paying. We have so far saved N1Bn but more is expected. A lot of schools are undergoing renovation, going by the degree of decay they witnessed. We are taking them in phases, by senatorial areas. Our internally generated revenue (IGR) is gradually moving up, a sign that there is stability and peace in the state. It shows also that most people are adjusting to the fact that the state must look inwards for funds. So far so good, and we are proud of what we have done in the past one year. What can you say was done in the Housing sub-sector? The housing sector is where the governor focused so much from inception. Recall that in the first 100 days, we did 50 two-bedroom houses for middle income earners at Iriebe Housing Estate. That was a signal from the Ministry of Housing of what to expect. It is to fulfill the promise the governor made on housing and partnership with private sector (PPP). That zeal has not ceased. The entire Iriebe Satellite Town is now undergoing remodeling and the contractor has promised it will not be the same anymore in that town. It was conceived under Dr Peter Odili and many areas were built up. Unfortunately, after that administration, one would have expected the subsequent administration to show leadership but that did not happen. Hoodlums and criminals moved in and looted important things such as heaters, fans and electrical appliances. Not only that, they took possession and constituted themselves into a threat to public property. We are a government and we must retake possession. What other areas are you paying attention to? We are a service ministry and a lot of government houses have come
36 June 2016 CHERRYAFRICA
RIVERS STATE under jeopardy. The attitude of every Nigerian who occupies public property is the same: nonchalance. They say ‘it’s not mine, it can go down. In fact, the more it goes down, the better for me because I will apply for money from the Goverent to repay it’. This is just the summary of the attitude of Nigerian public servant, even that property which is put at his possession for his enjoyment. From the top to the bottom, that is the same. You can imagine what happened to the Rivers State Government House. Who would have admitted that a governor lived there. So, this administration says, no, we will do it right. It takes time and money. Hopefully, by the 2nd and 3rd anniversary, a lot would have been done in that sector, redeeming public houses. We have done the Mile 1 Market which was abandoned since 2013. We have revived it with MCC and by next week (first week of July, 2016) they would be moving to site. We had some adjustment in the drawing because we acquired additional land. For us in this ministry, the less we stay in the oﬃce the better because we are there with you in the field to ensure we meet timelines. We also have a lot of proposals on PPP because it is the new area, the new focus. Government can no longer fund all the housing projects required. The right way to go is involve the private sector and make them stakeholders so we limit ourselves to provision of land as our equity contribution. The partner now puts his money down. At the end of the day, the houses are shared based on equity contribution. It is not a process that has become popular here but in Lagos it’s the in-thing. The era of jumbo allocation from Federal Allocation is over and everyone is looking inward. Port Harcourt is a hub and it has all it takes to compete well. Anything the government is doing to ease land registration and certificate of ownerships?
wThe Government has challenged those who have challenges obtaining land documents to step forward and get it in six weeks. The issue is that there lots of irregularities with land buyers. Some of them have wrong survey plans and when they are asked to file it, they discover all they have been carrying around are fake papers. You also see those who buy Government Restricted Lands, instead of coming to this Ministry to screen the land, they prefer to go to the other side and obtain all manner of papers and begin to develop or encroach on Govt land. This is an issue. See Eneka; they rush to develop the place which is Government Reserved Area 8, hoping that Government will show sympathy. We have been warning them that a day will come when bulldozers will move in and bring down these houses and that will define the relationship between the state government and land developers in this state. We think we have done well.
We also have a lot of proposals on PPP because it is the new area, the new focus. Government can no longer fund all the housing projects required. The right way to go is involve the private sector and make them stakeholders so we limit ourselves to provision of land as our equity contribution.
Medicine By Drones Rwandan authorities are showing strong indications that the country’s health care would soon have a fresh breath of life
Athan Tashobya t sounds odd, but the government of Rwanda has moved to set up a regulatory framework for Unmanned Aerial Vehicles (UAVs), better known as “drones” following two investors’ interest to establish the world’s first drone airport (drone port) in the country beginning this June. On the sidelines of the World Economic Forum on Africa, held in Kigali last May, Zipline Inc, a California-based robotics firm announced details of a partnership with Government to make on-demand deliveries of life-saving medical products using drones. This followed a deal signed in February, between the government and the firm to build infrastructure for unmanned aerial system (UAS) to ensure eﬃcient logistical transportation of medical supplies in the country.
Zipline Inc is the second international firm to express interest in rolling out the technology in the country. In November last year, Norman Foster, a renowned British architect, expressed interest by his firm, Foster + Partners alongside business partners, to build the world’s such port in the country to facilitate in transportation of urgent medical supplies and electronic parts to remote parts of the region using the drones. Come July, doctors and nurses in hilly areas of Rwanda will be able to order blood and emergency medicine via a text message. Drones, part of a new type designed to save lives, will fly to a clinic using GPS coordinates but instead of landing, it will drop a small package by parachute. According to Keller, the company together with the government of Rwanda will create a network of delivery drones that will ferry medical supplies across the coun-
According to the memorandum of understanding (MoU) signed in February, Zipline was to begin setting up its first drone port, where the drones will land and take oﬀ in Muhanga District around May, with the tests set to begin in August.
June 2016 CHERRYAFRICA
try, with a capacity to make 50 to 150 deliveries per day, using a fleet of 15 drones, each with twin electric motors and an almost eight-foot wingspan. Zipline, will see the introduction of drone technology in the supply of essential medical products such as blood supply to even the remotest parts of the country hard to access by roads. According to the memorandum of understanding (MoU) signed in February, Zipline was to begin setting up its first drone port, where the drones will land and take oﬀ in Muhanga District around May, with the tests set to begin in August. Keller Rinaudo the chief executive of Zipline, told CherryAfrica that by using the drones, Rwanda would significantly reduce the cost incurred in the delivery of medical supplies as well as improve accessibility to even the remotest parts of the country hard top access by roads. He said the government’s commitment to use technology for social good had facilitated his firm’s entry into the country. The project’s success, he said, would make Rwanda the first country in the world to commercially use drones to deliver medical supplies to various parts of the country. Regulations In The Pipeline To facilitate the planned development, the Rwanda Civil Aviation Authority (RCAA) is in the process of drafting regulations that will soon be submitted to Cabinet for approval and made operational by 2016. The authority found it important to have the framework in place to guide further developments in the technology, which is fast becoming popular as well as other progress such as port
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construction. The overall aim was to ensure that the uptake of the technology was done in a secure, safe and eﬃcient manner. According to RCAA, the regulation drafting process involves consultations with stakeholders in the aviation industry and is guided by the international civil aviation guidelines. Rwanda’s Minister for Youth and ICT, Jean Philbert Nsengimana, says the introduction of the technology was in line with Smart Rwanda Master Plan adopted by Cabinet last year. The master plan, he said, was developed to accommodate emerging industries and sectors in ICT such as drone technology. “This is to ensure that Rwanda was a leader in technology in the region and the continent,” Said Nsengimana.
Dr Jean Baptiste Mazarati, the deputy director-general of the Rwanda Biomedical Centre, said the development would make it possible to ease the cost incurred in delivering medical supplies as well as improve eﬃciency in delivering the supplies. He said the technology which was a first not only in Rwanda but on the continent would be initially used to deliver blood supplies with other supplies to be included in the future. Mazarati said: “The use of the technology will impact our way of doing business and management of resources to improve delivery of services.” CherryAfrica understands that, investors noted that beginning this year they intend to begin construction of three drone ports which will take about four years before completion. According to the World Health Or-
ganisation (WHO), millions of mothers and children die every year due to conditions that could be prevented or treated with access to simple, and aﬀordable medical interventions. However, in the developing world, access to these interventions is hampered by what is known as the lastmile problem: the inability to deliver needed medicine from a city to rural or remote locations due to lack of adequate transportation, communication and supply chain infrastructure. The distribution of blood products is particularly challenging given the strict temperature requirements and short shelf life. Africa has the highest rate of maternal deaths in the world, mainly due to post partum hemorrhaging, which makes access to lifesaving blood transfusions critically important for women across the
continent. In Rwanda, rural hospitals have struggled with supplies in the past due to their isolated locations. Most lifesaving supplies are currently delivered via motorcycles. According to Dr Agnes Binagwaho, the Minister for Health, the initiative is truly a life-saving technology. She said: “We have established that if we manage to use this technology, it will be a life-saving initiative. There are a lot of advantages, but I’m also hopeful that as pioneers we learn by doing. Although, I can’t predict how many lives will be saved, even saving one life is crucial.” In public-private partnership with Zipline for the last-mile delivery of all blood products throughout the country, a team of Rwandan and American engineers will set up and operate
Zipline’s first Hub in Muhanga District. It is from this Hub, Zipline will deliver life-saving blood to 21 facilities located in the Northern, Western, and Southern Provinces of Rwanda. Zipline plans to expand services to Eastern Province in early 2017, putting almost every one of Rwanda’s 11 million citizens within range of lifesaving medical product deliveries. The partnership is believed to enhance ongoing eﬀorts by the Ministry of Health to deliver a high standard of health care. Uptake of the technology was done in a secure, safe and eﬃcient manner. According to RCAA, the regulation drafting process involves consultations with stakeholders in the aviation industry and is also guided by the international civil aviation guidelines.
June 2016 CHERRYAFRICA
Let There Be Light In Africa Africa’s electrification needs catch global attention with participants at the annual World Economic Forum on the continent brainstorming to ensure there is light
A picture of Nyabarongo Hydro power plant, i ensure 100 percnt electrification by 2020.
HEN THE WORLD’S elite convened in Rwanda’s capital, Kigali, for the 26th annual World Economic Forum WEF) on Africa, the issue about the proportion of African population without access to electricity repeatedly featured in every theme running through many of the sessions for three days. The theme of the 2016 meeting, which ran from May 11 to 13, was "Connecting Africa’s Resources through Digital Transformation". It saw a number of African leaders, global economic, political and social experts converge in the “Land of a Thousand Hills’ to fashion ways through which Africa can usher in the Fourth Industrial revolution— and may be take the lead for the global digital revolution. However, it is as hard to imagine that with the much sought after “Africa’s digital dream”, the continent is still playing catchup, to realise all the benefits of previous
40 June 2016 CHERRYAFRICA
industrial revolutions. It sounds like an improbable dream to imagine how the continent will lead the fourth industrial revolution when, today, only 40 per cent of Africans have a reliable energy supply, and just 20 per cent of people on the continent have internet access— as per the World Economic reports. Africa’s population is swelling, in fact UNICEF estimates that in the next 35 years, about 1.8 billion babies will be born in Africa—essentially doubling the population and pushing the number of those under the age of 18 to 1 billion. Energy demand is expected to grow fourfold and therefore countries will need to add 292 gigawatts of new capacity to meet this demand over the next 25 years. Experts, at the recently concluded WEF on Africa, suggest that leveraging investments into renewable, digital and energy-eﬃcient technologies will spur the continent’s ambition to a fully electrified continent. Jubril Adewale Tinubu, the Group Chief Executive of Oando Plc, gas and oil energy
in Rwanda, lanuhced in 2015. the East African country is bid to provider and other energy services noted: “It is not acceptable this day and age, that the continent that has more than 600 million people has no access to energy. For every three people, two do not have access to power. It is a scandal.” He added that for Africans to realise what he referred to as “Total electrification” then there is need to push for the energy mix, which includes, coal, gas, hydro, solar, wind, diesel, nuclear “Make smart energy a priority,” Tinubu is quoted as saying. Erastus J. O. Mwencha, the Deputy Chairperson of the African Union Commission said governments need to create policies and environment that will enable the move for renewable energy, and encourage private partnership into the energy sector—which will consequently lead to the electrification of the continent and further economic transformation. “Governments should develop strategies to mobilise the resources and bring private sector players on board to drive the con-
tinent’s needed energy. There are many initiatives in place, on the continent, even under the NEPAD program we are developing policies but also encouraging public private partnership,” Mwencha noted. He further suggested that if Africa is serious about electrification, then the continent has to be strengthening regional integration and sharing of energy resources to increase energy penetration. A study by the New Partnership for Africa's Development (NEPAD) indicates that Africa needs about $1 trillion to close the energy gap through scaling investments into large power infrastructure, as well as investing in other energy projects. Jasandra Nyker, the Chief Executive Oﬃcer, of BioTherm Energy (Pty) Ltd, a renewable energy investment and independent project development platform focused on sub-Saharan Africa said that Africa’s absolute electrification is possible and investing in smart energy will be key in unlocking the possibility. “The future of smart energy is very bright
“Governments should develop strategies to mobilise the resources and bring private sector players on board to drive the continent’s needed energy. There are many initiatives in place, on the continent, even under the NEPAD program we are developing policies but also encouraging public private partnership,”
June 2016 CHERRYAFRICA
in Africa,” said Nyker, adding “given that the growth rates and the fact that large population are migrating to cities of Africa in the next 20 years, there is a lot of opportunity for both on and oﬀ grid technology as well as power facilities to come online.” Nyker reiterated that the diﬀerence towards smart energy penetration can only be realized if the governments are willing to deploy renewable energy policies. Nyker’s comments were echoed by Tinubu, who noted: Africa “has no choice but to deploy both conventional and renewable energy sources to electrify the continent if it is to achieve economic transformation. “And we need to have policies in place that seek to drive renewable energy to compensate for the shortages we have.” Will Africa get to a point where it will rely only on renewable energy solutions, completely getting rid of fossils? Tinubu said, “I don’t think we will completely get rid of fossils, but the continent has more than 100 years of oil and 600 years of gas supply to power the continent and 400 years of coal. We need to take the benefit of global evolution.” Rwanda’s Push For Renewable Energy At the recently concluded African Development bank summit in Lusaka, Zambia, Rwanda’s President Paul Kagame noted that, “Energy mix will be dictated by our needs and resources”. And truth of the matter is that the need for electricity in Rwanda is vivid. Local population always complains of intermittent power supply and unscheduled load shedding, which they say hampers their business, through raising the cost of operations. The challenge emanates from insuﬃcient power supply in the country that heavily relies on hydro-power generation by the government. Few manufacturers produce
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Photo Courtesy The New Times
Chaim Motzen, co-founder and managing director of Gigawatt Global (C) shows Infrastructure minister James Musoni (R) and Trevor Green, the managing director of Remote Partners, around the new solar photovoltaic power plant in Rwamagana District recently own energy to serve their power needs, a situation experts say should end, encouraging firms particularly the big manufacturing plants to turn to renewable energy and stop reliance on national power grid. It is from this background that the government rallies citizens to embrace renewable energy for industrial and homestead use. Rwanda relies on hydro-power, which accounts for 97.37MW of electricity generated, while thermal energy contributes 51.7MW, and methane gas, 3.6MW. Solar energy use in Rwanda, as an alternative source of power, is still low at about 8.5MW, according to oﬃcial figures. In fact, not long ago, Kagame inaugurated a 26MW KivuWatt methane power plant in Lake Kivu- the only gas/water extraction energy plant operating in the world pushing the country’s installed capacity of about 190MW
of power—which the government targets to increase to at least 563MW by 2018 to make it possible to extend electricity to the majority of Rwandans. The government plans to increase oﬀ-grid power generation to 22MW over the same period, up from 8.75MW presently, with solar energy generation as one of the main proposed renewable energy sources. Therefore, by embracing renewable energy for industrial use, manufacturers will ensure a sustainable source of power that will enhance eﬃciency and reduce operational costs, according to experts. And, for Africa to champion the Fourth industrial revolution, governments, private sector and financial institutions—talk of African development Bank, among others—have to come on board and put cards on the table to address energy issues first.
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43 4 3
Africa’s Take away From WEF In Kigali. Athan Tashobya
uring the recently concluded World Economic Forum (WEF) on Africa held in Rwanda’s Capital Kigali from May 11 through 13, the world’s elite economic game changers and critical stakeholders in social and political spheres deliberated on the conceivable transformation footprint for Africa. There were many lessons on table for each of Africa’s economy, to inhale and stimulate their push for a better economic change—consequently making the entire continent a powerhouse of the much-projected Fourth Industrial Revolution. During various sessions—as panelists forged ways for Africa to champion the fourth industrial revolution—it was eminently evident that Africa needs to have three things put right: understanding her barriers; fostering transparency and accountability, plus promoting civic participation and rights. Elsie S. Kanza, the Head of Africa and Member of the Executive Committee at the World Economic Forum remarked that a few years ago Africa was looked at as the “New India” but later to change. She said: “If one has been across Africa for the last five years, significant changes for the better are apparent, obstacles are present, setbacks emerge and steady match to a better African continues,” adding that her dream is to send an African rural girl to mars in a spaceship designed, built and launched
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First Lady Jeannette Kagame (3rd Left), Ivan Kagame (4th Left) and Ange Kagame (Right) among other participants at WEF on Africa in Kigali.
in Africa. Realising Kanza’s Dream Seeing Africa conquer her obstacles is not Kanza’s dream to own, but for everyone who has Africa at heart; knowing that Africa is the most “blessed” continent—with the world’s riches at hands—yet the most cursed with highest poverty levels, compared to the other four sister continents. “I believe this can be done, because it is not a new dream. With Africa’s fourth industrial revolutions Africa can create tomorrow’s industries today, faster and better,” said Kanza, adding that all to be done is, “to equip young Africans with relevant skills and competence, and internet” for the continent to lead the way into the Fourth Industrial revolution—which involves exponential
technologies, and game-changing innovations. Indeed, this can be done, if Africa commits to it; since 70 per cent of the continent are younger than the aging 30 per cent—giving the continent a clear-cut manpower over any other continent. As underlined in the fourth industrial revolution, the idea that exponential technologies and innovations that change the world– might allow Africa to lead the way in the Fourth Industrial Revolution, despite having two in three people on the continent lacking access to electricity. According to WEF, it’s precisely these types of deficiencies that could allow Africa to use existing technologies such as 3D printing, artificial intelligence and the internet of things to become the
Kagame (middle) with Buﬀet (R) and Tony Blair during one of the sessions at WEF on Africa in Kigali Last Month.
next great “leapfrogging” success story. By leapfrogging directly to cutting-edge technologies, Africa can bypass the industrial phase in which developed countries invested in now cumbersome technological infrastructure – and bypass the cost of revamping it as well. This is of particular importance when it comes to addressing Africa’s deficiencies in basic needs, wrote Gary Coleman. Experts say, exponential technologies can accelerate access to water, food, energy, healthcare and education. Rwanda as Africa’s ‘success laboratory’ Rwanda is known to have experienced the most devastating catastrophe of the 21st century—with over one millions people killed in just a hundred days, during the 1994 genocide against the Tutsi. And then, in the rebuilding process, came the government of national unity led by the incumbent president Paul Kagame, whose “gospel” to natives has been defined by two key words “Hope and self-reliance”. Despite the country’s turbulent past, Rwanda has opted decisively to be in control of its own destiny. During one of the sessions at WEF on Africa, hosted by former UK prime minister Tony Blair, with rare panelists,
Rwandan president Paul Kagame, and philanthropist Howard Buﬀet, Kagame is quoted as saying: “We are very stubborn…We want aid but we need to participate in where the money goes.” Well, it seems this has paid oﬀ; investors and development partners seem to agree with the fact that Rwandans are now stable and have since defined their own future and have hope to achieve it. “People have to have hope…No investor wants to invest where you don’t have stability and predictability,” pointed out Buﬀet, as part of the discussion of emerging economies and their future growth. Blair also said that Africa’s hope can no longer be about, “easy political narratives, camera-ready opportunities in which the wealthy give to the poor are not the way to develop a resilient and self-reliant culture.” That translates into Rwanda taking a long view, focusing their energy on what will make them competitive and improve their overall productive capacity. One area they have firmly committed to is a stable political and business environment. With Rwanda’s stubbornness, according to Kagame, this has made the country rank highly and prove to be a consistent top performer on a number of various objective measures of growth
by local and international bodies, not only in Africa, but globally in, business climate, health, education, crime, anti-corruption, women empowerment, trust in public institutions, and perceptions of personal well-being and freedom. According to the Heritage Institute’s 2016 Economic Freedom index— which ranks countries according to open markets and rule of law—Rwanda is the fourth strongest country in Africa and 71st in the world (for context, France ranks lower at 75 and China at 144). The East African country currently holds the record of highest percentage of women representation (64 per cent) in Parliament, better than any other country across the world. The Corruption Perception Index (CPI) 2015, released by Transparency International (TI), in January 2016, indicates that Rwanda is the fourth least corrupt country in Africa and 44th globally. In sub-Saharan Africa, Botswana claimed the top spot followed by Cape Verde, Seychelles, Rwanda, then Mauritius and Namibia, respectively. The country ranks above several larger sub-Saharan African nations in the latest network readiness index from the World Economic Forum. And thanks to government initiatives, and investing in information, communications, and technology (ICT), current mobile penetration was estimated at 77 per cent in 2015. This type of investment—and success—is a testimony to the power of hope. As Kagame noted, when Rwanda was emerging from its civil war in the early 90s, the underlying theme of their recovery was the hope that they could and would forge a new future: “We were starting more or less from nothing. We had to involve everybody’s participation, with everybody saying, ‘We need to create something for ourselves.” Kagame said. With Africa’s economies largely depending on the so-called “foreign partnerships” for budget supports, Africa’s leaders may need to build “hope and self-reliance” among their people, if they want the continent to leapfrog and lead the way for the Fourth industrial revolution. But most importantly, African governments need to address issues of understanding her barriers; foster transparency and accountability, and Promote civic participation and rights. June 2016 CHERRYAFRICA
African Passport for Presidents African Presidents attending the next AU meeting in Rwanda from July 10 to 18 are expected to carry African passport to fast-track the adoption of the scheme designed to facilitate movement of people and interregional trade.
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The Newly established "Kigali Convention Center", located in the heart of Kigali city, Will be inaugurated later this month (JUNE) and its first business will be to host AU summit in JULY. The $300m worth Convention has an auditorium with sitting capacity of 2,600, a five star hotel with 292 rooms , seven sub-divisible conference rooms and 10 smaller meeting rooms.
frican heads of states are to carry an African passport for the next African Union Summit to be hosted in Kigali, Rwanda, in July, CherryAfrica has learnt. The move is aimed at showing solidarity and promoting free movement of Africans within their region and other parts of the continent, according to Dr Nkosazana Dlamini-Zuma, Chairperson of the African Union Commission. She says the heads of states will receive the African passport since the AU wants to popularise it, “as it is very symbolic and significant for the continent, as well as practical, because if one is carrying an African passport he/she should not be expected to apply for a visa,” Rwanda will host the 27th African Union Summit, scheduled to take place from July 10-18, 2016, in the capital Kigali. She added: “A few of us at the AU are already using that passport within Africa and it is very useful, but we want the heads of states to carry it when they are visiting African countries to make it oﬃcial and known to others as well.” Africa’s attempt to address this situation has seen free movement show up in continental development strategy documents since the 1980 Lagos Plan of Action and the 1991 Treaty Establishing the African Economic Community (AEC), commonly known as the Abuja Treaty. Abuja committed African states to “adopt, individually, at bilateral or regional levels, the necessary measures in order to achieve progressively the free movement of persons, and to ensure the enjoyment of the right of residence and the right of establishment by their nationals within the community” The chairperson also said that all African countries must give a
30-day visa on arrival for all African passport holders, and Ghana, Rwanda and a few other countries have already responded to that decision. In fact, Rwanda gives visas to Africans on arrival, and recent reports from the national emigration and immigration directorate notifies that the country is in the process of scrapping oﬀ all visa requirements for Africans traveling to the east African country. Dlamini-Zuma said: “We also urge other countries to follow suit. Countries have said that they are going back to look at the practicality of doing their immigration regulation, but there is a decision and it is up to all of us to hold our countries to that decision so that indeed Africans can move freely amongst other African countries.” She further stated that a lot of countries had that arrangement within their regions like in the Economic Community of West African States (ECOWAS), the Southern African Development Community (SADC) and even the East African Community (EAC), but also contended that it was time to move beyond that to inter-regional so that people, not only in their region, but also beyond their region, could move freely. Sharing his testimony, Ephraim Rwamwenge, an entrepreneur who travels to other African countries, told CherryAfrica that if this came about it would make ease of business a lot either. “We have to submit a lot of paperwork, including a bank statement, and even then we have to wait for at least two weeks to get a visa in some embassies. That creates a gap between our travels and customers do not always understand,” he said. Rwamwenge, who is curator of the Global Shapers community-Kigali hub, said that the shapers are due to petition the AU summit for a visa-free African.
June 2016 CHERRYAFRICA
We Abhor Corruption in Business Practices Van Dongen
In this interview by Dinfin Mulupi with JJ van Dongen, CEO of Philips for Africa, he shares his thoughts on the continent’s slowing economic growth, and explains how the company is adapting its products to local needs. He also speaks about emerging trends in the continent’s healthcare industry.
ecent reports suggest sub-Saharan Africa will record slower economic growth in 2016 compared to previous years. How does this aﬀect your business? First of all, there are a billion people in Africa you cannot overlook. Second, in Africa you have to have a long-term strategy. Philips
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has been here for more than 100 years. The focus you need to have is how to deal with diﬀerent parts of Africa that may be having faster growth – and parts that are having slower growth. As a company we tailor our investment based on what we see happening in diﬀerent parts of the continent. Overall we are continuing investing and growing market share.
We are focusing on the seven countries that deliver the bulk of the GDP of Africa (South Africa, Nigeria, Kenya, Egypt, Algeria, Morocco and Ghana). We are also focusing on 10 tier-two countries that are up and coming, such as Ethiopia, Côte d’Ivoire and Mozambique. In these countries we see opportunities to expand and grow faster.
INTERVIEW However, we serve the whole continent, and those other countries are also very important to us. So we are growing well – in fact way ahead of the market – and are cautiously investing in countries, adapting our portfolio to fit African needs and developing new business models. Doing business with government is sometimes viewed negatively due to concerns over bureaucracy and corruption. How do you handle this now that government ministries are a key client for Philips? In our company we have general business principles. I’m quite ruthless with my staﬀ and organisation – we don’t accept any involvement in corrupt business practices. So yes there is corruption in Africa, we are not blind to that, but we are very strict in terms of how we conduct our business. From my own experience in countries across the continent, if you take a hard line and work with people who have a similar mindset, you find customers who are interested in operating in the correct business way. Bureaucracy is not an issue just in Africa, but across the world. What we try to do is make it easier for a ministry of health, for instance, to address the needs. For example, in large-scale projects we look at how to get funders to support our clients in their healthcare revitalisation programmes. As a global company, how do you stay relevant to local needs in a continent that is so diverse? We opened an innovation hub in Kenya in 2014 and its primary focus is taking our global portfolio and adapting it for African needs and looking at new business models. Take the example of shaving – generally the African male skin is diﬀerent from European male skin. So we have adapted the blades in our shavers that are oﬀered in Africa for the African male skin types and that means you avoid things like bumps that occur in African males. In terms of new business models, as a company we see an opportunity to address mortality reduction in Africa and so we have developed very strong business models working with
ministries of health and financiers to start scaling primary healthcare development. Describe the trends you are seeing in Africa’s healthcare industry. We see people wanting to control their lives. We see ministries of health also wanting to have very eﬀective solutions, so they are focused on reducing the cost of acquisition and maintenance of equipment. We also see ministries of health don’t want to buy one or two pieces of equipment, instead undertaking large-scale projects to revitalise their healthcare systems. For example, in Kenya we are supplying 11 intensive care units to be deployed across the country. This is one of the projects where we are providing total turnkey solutions, including service, through a funding mechanism spread over a period of time. Although there is rapid urbanisation, hundreds of millions of people in Africa still live in rural areas, and that means we need to continue to focus strongly on primary healthcare in rural areas where the highest mortality rates exist. We also see the private health sector growing significantly, and as a company we have a very strong presence in the private sector in many countries in Africa. You see physicians running their own hospitals and radiologists setting up their own radiology departments. This is having an impact on the demand for our equipment, such as radiology and cardiology diagnostic equipment, where demand is increasing significantly. Is the continent generally making progress in the area of healthcare? I think the healthcare systems are generally improving. However, today in Africa we have a double disease burden – communicable diseases, such as HIV, as well as a rise in non-communicable diseases such as strokes and cardiac issues caused by things like obesity. It is a major concern because ministries of health have to address primary diseases but also these expensive diseases, such as cancer, which require higher level of equipment and
diﬀerent training of their physicians. Some countries are trying to avoid the root causes of these non-communicable diseases. We see in South Africa, for instance, a strong focus on reducing smoking and alcohol consumption, and recently attacks on excessive sugar consumption. Don’t you think emerging consumers that are consuming more fast food and processed snacks undermine such eﬀorts? It is true we have consumers who are becoming wealthier and wanting to explore all these diﬀerent types of experiences. However, they are also becoming aware that these things have an impact on their health. They are cautious. At Philips we focus on how to improve people’s lives, and that also involves how people eat. For example, we have an airfryer that allows you to cook without oil. We see an uptake by the middle class, particularly in our segment of healthy products. Generally, we see people wanting to improve their lives and have a better lifestyle. Culled from How We Made it in Africa.
In our company we have general business principles. I’m quite ruthless with my staﬀ and organisation – we don’t accept any involvement in corrupt business practices.
June 2016 CHERRYAFRICA
Time To Really Clean-up New regulations for mine rehabilitation emerge to address gaps in South Africa’s mining legislation
rom early next year South Africa’s mining companies will have to set aside millions of rand for new mine rehabilitation provisions. The discovery in recent years that old gold mines were seeping acidic water highlighted gaps in the country’s mining legislation. Water pollution and other negative eﬀects emerged only long after the original mines that caused them had shut down. As a result, the responsibility for repairing the damage has fallen on the state, which has been trying to persuade the remaining mines to pay for it, while devising new legislation to ensure that mines clean up after themselves in future. Sarah Magnus, environmental social governance leader at Ven-
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myn Deloitte, says the previous regulations governing mine closure set out detailed requirements, such as sealing shafts and re-vegetating mining areas. But they did not detail how damage arising many years after closure, such as water pollution, should be managed. The regulations (under the Mineral & Petroleum Resources Development Act, or MPRDA) required only that mining companies set aside funds for immediate and final closure requirements. This entailed understanding the cost if the mine closed unexpectedly and the cost if the mine closed permanently. They had to calculate these costs — such as demolishing mining infrastructure, filling pits and rehabilitating the land — every year. Funds for closure and rehabilitation could be set aside in a current account, through a financial guarantee from a bank, or by setting up
a trust fund. Every year mines have had to report on their rehabilitation plan and show they have set aside enough money for it. With eﬀect from November 20 last year, the financial provision regulations moved from the MPRDA to the National Environmental Management Act (NEMA), though enforcement remains with the department of mineral resources. Under NEMA, significant changes were made. Chamber of Mines head of environment Stephinah Mudau says there was industry consultation on the new regulations but the fundamental issues the industry raised were not taken into consideration. Another change in relation to trust funds was introduced after the consultation process. The NEMA rehabilitation requirements are principles-based, not
prescriptive as the MPRDA ones were, Magnus says. Apart from immediate and final rehabilitation provisions in cash, guarantees or trusts, mining companies now have to make a separate provision specifically in a trust fund for latent and residual eﬀects of mining for at least 10 years after the mine closes. Under the new regulations, mining companies have to undertake three basic risk assessments for closure planning every year: one for immediate closure, one for final closure and one for residual and latent eﬀects, which have to be carried out by an independent specialist and signed oﬀ by an external financial auditor. These services will be expensive, but the purpose is to ensure that companies do not over-or under-provision. Magnus says Venmyn Deloitte is urging its clients not to leave these calculations and provisions to the last minute. The firm has spent months drawing up an agreed-upon procedure to ensure an objective
process is followed. Mudau says the chamber has five main areas of concern. The first is that there is double-funding, since mining companies already carry out ongoing rehabilitation as part of operational expenses but are now required to set aside cash, guarantees or trust funds for ongoing and daily environmental management as well. The second concern is that some mining companies have already made a single rehabilitation provision in a trust fund and will have to restructure it by setting aside money in a new trust specifically for latent and residual eﬀects. Accessing the money in the existing trust fund has income-tax implications. The third concern, Mudau says, is uncertainty around the transitional arrangements and whether the implementation date is the end of this year or February 19 next year, which is exactly 15 months after promulgation. Fourthly, the requirement for a separate financial audit of the provisions recommended by the
independent environmental assistant practitioner adds unnecessary costs. Finally, the regulations include clauses on care and maintenance which are already provided for in the MPRDA. Magnus does not believe the new regulations are onerous. Other mining countries, like Canada and Australia, also require their mining companies to make financial provisions for latent and residual eﬀects, she says. But it would be preferable if the regulations allowed companies to build up their latent and residual trust fund over time, rather than having it all in place by February. Mudau further says the environmental aﬀairs department has undertaken to have further discussions with national treasury, the South African Revenue Service and the mineral resources department on the trust fund issues and their tax implications. The department has also promised to issue a clarification note, though that will not have any legal standing.
June 2016 CHERRYAFRICA
Kicking Out Tuberculosis Researchers at Stellenbosch University, South Africa collaborate with a multinational team of scientists to design first rapid test for tuberculosis
Jamie Leigh Matroos
he burden of tuberculosis (TB) is felt worldwide. According to the World Health Organization (WHO), 9.6 million people fell ill with TB and 1.5 million died from the disease in 2014. Over 95 per cent of TB deaths occur in low- and middle-income countries, meaning Africa and rest of the developing world is at risk. It is for this reason that researchers at Stellenbosch University, South Africa are collaborating with a multinational team of scientists to develop a rapid point-of-care diagnosis test for TB. The device is being developed by the ScreenTB consortium, a team of TB experts from eight African and European partnering institutions. "This low-cost screening test has the potential to significantly speed up TB diagnosis in resource-limited setting," says co-inventor, Prof Gerhard Walzl of Stellenbosch University's Faculty of Medicine and Health Sciences. There are currently three main tests in use. The most sensitive test, a culture test, uses a sputum sample that is sent to a laboratory. A positive result shows up
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after 10 days while a negative result takes up to 42 days to confirm. Developing regions lack the infrastructure to make this test a viable option. Patients lack the funds to get their results by visiting a healthcare facility multiple times. The second is the sputum microscopy test. Widely used in Africa, it requires the sputum slides of the patient to be individually checked. While it is inexpensive, itâ€™s labour intensive, meaning only a certain number of tests can be conducted in a day. The test is also not as sensitive to people living with HIV as their sputum often has low levels of the bacteria, which can lead to a false negative test result. Lastly, there is also a molecular test that detects bacterial DNA in the sputum sample. While it has the shortest waiting period of two hours, it is not widely available to people in rural areas as instruments are placed in a centralised manner, such as a laboratory. The ScreenTB consortium believe their device could reduce the diagnostic process to minutes. The test is conducted on blood obtained from a finger-prick and can make a TB diagnosis in less than an hour. The diagnostic test is a hand-held,
battery-operated instrument that will measure chemicals in the blood of people with possible TB. "Health care workers with minimal training will be able to use the test at grass-roots level and get immediate access to screening test results," says Walzl. Currently in its developmental phase, the device will be tested in five African countries over the next three years. The technology will make life-saving diagnostics available in regions where high costs and sophisticated equipment have put adequate medical care out of reach. "People in remote areas with high TB incidence still do not benefit from the newer developments and face long diagnostic delays and often multiple return visits to clinics before they are diagnosed," says Walzl. The new test will be able to provide near-immediate results that will enable a person with TB to be diagnosed and started on treatment during a single visit to a health care facility. The test would also be accessible to the poor. According to an article in The Conversation, it would initially cost US$2.50 per test, with an expected drop in price as it becomes commercialised. Currently the culture test costs $45 per test while the DNA sample test
SOUTH AFRICA costs $12 per test. The fight against the disease has been stunted by the arrival of drug-resistant tuberculosis. Known as persistent bacteria, this strain of TB is able to survive treatment. While early diagnosis can significantly decrease the consequence of TB, researchers have also taken steps to better understand the way the disease develops. Through a collaborative eﬀort, researchers at Stellenbosch University and Imperial College London were able to develop a way to identify, isolate and target persistent bacteria. The technique is called fluorescence dilution and was recently revealed in Microbiology, the scientific journal. It has been described as using “micro-tweezers” to physically pick out the slow-growing bacteria from the rest. This allows researchers to find the hard-to-identify persistent bacteria. Through their exploration of the new method, the researchers found that the body’s own defence mechanisms could help persistent bacteria survive. They found the bacteria increased while hiding in white blood cells. They hope the discovery will lead to a deeper understanding of the body’s response to TB and what leads to drug resistance. South Africa has the highest TB rates in the world. Each year between 450,000 and 500,000 people develop TB. The researchers believe screening tests and a better understanding of the disease could have a positive impact on the deadly disease.
"People in remote areas with high TB incidence still do not benefit from the newer developments and face long diagnostic delays and often multiple return visits to clinics before they are diagnosed,"
June 2016 CHERRYAFRICA
The Refugee Team Big Motivation The International Olympic Committee has formed new team amid an unprecedented influx of refugees and migrants fleeing zones ravaged by war, violence, persecution and poverty in Africa, the Middle East, South Asia and other regions.
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Morgan Winsor he International Olympic Committee has unveiled a new team of refugee athletes who will compete for the first time at the Olympic Games in Rio de Janeiro this summer, and a majority of them are Africans. Out of the 10 athletes chosen for the Refugee Olympic Team — the first of its kind — five are from South Sudan, two from the Democratic Republic of Congo and one is from Ethiopia. The two other refugee athletes are from Syria, the committee said in a release revealing the makeup of the team on June 3. The International Olympic Committee, the governing body of the
Olympic movement, selected the 10 athletes from a total of 43 refugees who were initially named as candidates for the new team based on nomination criteria including sporting level, oﬃcial refugee status verified by the United Nations and personal situation and background. The committee, which said it will continue to support the refugee athletes even after the upcoming games in Brazil, will provide them with uniforms and will also assign coaches and team oﬃcials to them. The newly formed team comes amid an unprecedented influx of refugees and migrants fleeing war, violence, persecution and poverty in Africa, the Middle East, South Asia and other regions. More than 10,000 people have lost their lives trying to cross the Mediterranean Sea to Europe since 2014, the U.N. refugee agency (UNHCR) said this month. According to the latest numbers, 3,500 people died attempting the perilous journey in 2014. Further indications are that 3,771 died last year and 2,814 have lost their lives so far this year. UNHCR spokesman Adrian Edwards called the rising death toll an “extremely worrying dynamic.” He said: "You've now had since
the start of 2014 — when this phenomenon of rising numbers across the Mediterranean happened — 10,000 deaths. That threshold has been crossed just in the last few days," Edwards told reporters on June 7: “This is clearly an appalling number of deaths that have occurred in the Mediterranean, on Europe’s borders just in the past couple of years.” The International Olympic Committee first announced its plan for the Refugee Olympic Team at the U.N. in October last year. “These refugees have no home, no team, no flag, and no national anthem. We will oﬀer them a home in the Olympic Village together with all the athletes of the word. The Olympic anthem will be played in their honor and the Olympic flag will lead them into the Olympic Stadium. This will be a symbol of hope for all the refugees in our world, and will make the world better aware of the magnitude of this crisis,” International Olympic Committee president Thomas Bach said in statement to the press, while announcing the team members: “It is also a community that refugees are our fellow human beings and are an enrichment to society. These refugee athletes will show
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the world that despite the unimaginable tragedies that they have faced, anyone can contribute to society through their talent, skills and strength of the human spirit.” CherryAfrica highlights the complete list of athletes who were named to the Refugee Olympic Team by the International Olympic Committee’s executive board this month: Rami Anis Anis, an international swimmer, grew up in Aleppo, Syria, and was 20 yearsold when civil war broke out. In order to avoid getting drafted into the army, Anis and his family fled to Turkey in 2011, where his brother lived. They moved to Belgium in October last year, where they also had family members. He started training at the Royal Ghent Swimming Club a few months later, according to the U.N. refugee agency. Anis, now 25, will compete in the 100-meter butterfly event at the Rio Games in August. “Swimming is my life,” he said in a recent interview with UNHCR. “The swim-
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ming pool is my home.” Yiech Pur Biel Biel, a South Sudanese runner, lived in Nasir, a small town in the oil rich Upper Nile state in the crosshairs of the ongoing civil war. He fled the fighting with his relatives and arrived at a refugee camp in Kakuma in neighboring Kenya in 2005, though his parents remained in Nasir. Last year, Biel took part in athletic trials in Kakuma organized by the Tegla Loroupe Peace Foundation, which runs a refugee athletic training center. He showed promising results and was chosen to join the foundation’s training team, according to UNHCR. Biel, 21, will compete in the men’s 800-meter race in Rio. In a recent interview with the U.N. refugee agency, Biel described the challenges he faces training in a refugee camp, where there is no gym or equipment — not even shoes. Yet, he stays motivated. “I focused on my country, South Sudan, because we young people are the people who can change it,” Biel told UNHCR. “And secondly, I focused on my parents. I need
Anjelina Nadai Lohalith hopes Rio 2016 success will reunite her with parents
James Nyang Chiengjiek to change the life they are living.” James Nyang Chiengjiek Chiengjiek grew up in Bentiu in South Sudan’s northern Unity state. He fled his home to avoid being recruited by rebels and arrived at a refugee camp in Kakuma, Kenya, in 2002. There, he went to school and started running competitively. He joined the Tegla Loroupe Peace Foundation in 2013, where he has been training ever since, according to the U.N. refugee agency. Chiengjiek, 28, will compete in the men’s 400-meter race in Rio. “By running well, I am doing something good to help others – especially refugees,” Chiengjiek told UNHCR in a recent interview. “Maybe among them are athletes with talent, but who did not yet get any opportunities. We are refugees like that, and some of us have been given this
Rose Nathike Lokonyen opportunity to go to Rio. We have to look back and see where our brothers and sisters are, so if one of them also has talent, we can bring them to train with us and also make their lives better.” Yonas Kinde After fleeing his home country of Ethiopia, Kinde has been under international protection in Luxembourg since October 2013. The long-distance runner has competed in a number of marathons and reached the qualifying standards for Rio during the Frankfurt Marathon last year with impressive time of 2 hours and 17 minutes, according to UNHCR. Kinde, 36, will compete in the men’s marathon race in Rio. He said he’s been training even harder since learning about the Olympic refugee team. “I normally train every day, but when I heard this news [about the
Paulo Amotun Lokoro refugee team] I trained two times per day, every day, targeting for these Olympic Games,” Kinde told UNHCR. “It’s a big motivation.” Anjelina Nadai Lohalith Lohalith was forced to flee her war-ravaged home in South Sudan when she was just 6 years-old. She hasn’t seen or spoken to her parents since. She arrived in Kakuma, Kenya, with her aunt in 2002, where she went to school and participated in running competitions. She was selected to join the Tegla Loroupe Peace Foundation’s refugee training center in 2015, according to the U.N. refugee agency. Lohalith, now 21, will compete in the women’s 1,500-meter event in Rio and hopes to earn some prize money to help her parents. The first thing she plans to do with the money, she told UNHCR, is “build her father a better house.” Rose Nathike Lokonyen Rose and her family fled war in South Sudan when she was just 10 years-old. They arrived at the refugee camp in Kakuma, Kenya, in 2002, where she went to school and started running competitively. She’s been training with the Tegla Loroupe Peace Foundation since last year. Lokonyen, 23, will compete in the women’s 800-meter race in Rio. In an interview with the U.N. refugee agency, she said she hopes her story will inspire others. “I will be representing my people there at Rio, and maybe if I succeed I can come back and conduct a race that can promote peace, and bring people together,” Lokonyen told UNHCR.
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James Nyang Chiengjiek Paulo Amotun Lokoro In his home country of South Sudan, Paulo was a young herder taking care of his family’s cattle. But the ongoing conflict forced him to leave his home behind and flee into neighboring Kenya in 2006. There, he went to school and played sports in the Kakuma refugee camp. He joined the Tegla Loroupe Peace Foundation training center last year and will compete in the men’s 1,500-meter event in Rio this summer. “I want to be world champion,” Lokoro, 24, said in a recent interview with the U.N. refugee agency. Yolande Bukasa Mabika Mabika grew up in Bukavu in eastern Democratic Republic of Congo, one of the areas worst aﬀected by the 1998-2003 civil war. The conflict Mabika from her parents when she was a young girl. She discovered a passion for judo while living in a center for displaced children. Mabika went on to represent her country in international competitions. But years of poor training conditions and abuse forced her and her friend Popole Misenga to seek asylum in
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Yusra Mardini Brazil during the World Judo Championships in Rio in 2013, according to the U.N. refugee agency. Mabika, 28, will compete in the women’s middleweight event at the Rio Games. “Judo never gave me money, but it gave me a strong heart,” she told UNHCR in a recent interview. “I got separated from my family and used to cry a lot. I started with judo to have a better life.” Yusra Mardini Mardini grew up in Damascus, Syria, where she swam competitively and represented her country in major tournaments. But as the civil war intensified, the teenager swam for her life in the Aegean Sea to escape conflict last year and even helped push a sinking boat filled with refugees toward Greece. She now lives and trains in Berlin, Germany, according to the U.N. refugee agency. Mardini, 18, will compete in the women’s 200-meter freestyle event. “I want to represent all the refugees because I want to show everyone that, after the pain, after the storm,
Yolande Bukasa Mabika
Yiech Pur Biel comes calm days,” Mardini told UNHCR in a recent interview. “I want to inspire them to do something good in their lives.” Popole Misenga Like his friend Mabika, Misenga was also separated from his parents as a young child by war in the Democratic Republic of Congo. He was taken to a center for displaced children, where he too took up judo. Misenga represented his country in international tournaments, but years of poor training conditions and abuse forced him and Mabika to seek asylum in Brazil in 2013, according to the U.N. refugee agency. Misenga, 24, will compete in the men’s middleweight event in Rio. In a recent interview UNHCR, he said he hopes to be an inspiration for other refugees. “I want to be part of the Refugee Olympic Athletes team to keep dreaming, to give hope to all refugees and take sadness out of them,” Misenga told the U.N. refugee agency. “I want to show that refugees can do important things.”
June Ju une 20 2016 016 CHE CHERRYAFRICA ERRYAFRICA
Africa’s Blue Economy: An opportunity not to be missed
frica's "Blue world" is made of vast lakes and rivers and an extensive ocean resource base. Thirty-eight of the fifty-four African States are coastal States. More than 90 percent of Africa’s imports and exports are conducted by sea and some of the most strategic gateways for international trade are in Africa, underscoring the geopolitical importance of the region. Maritime zones under Africa’s jurisdiction total about 13 million square kilometres including territorial seas and approximately 6.5 million square kilometres of the continental shelf. Mauritius with its 1850 square kilometres is one of the smallest countries in Africa and in the world. However, with its territorial waters, it becomes a country with 1.9 million square kilometres, the size of South Africa. Therefore, we have another Africa under the sea. Quite rightly, the African Union call the Blue Economy the "New Frontier of African Renaissance". Africa’s aquatic and marine spaces are an increasingly common topic of political discourse; its natural resources have remained largely underexploited but are now being recognized for their potential contribution to inclusive and sustainable development. This "Blue world" is more than just an economic space— it is part of Africa’s rich geographical, social, and cultural canvas. Through a better understanding of the enormous opportunities emerging from investing and reinvesting in Africa’s aquatic and marine spaces, the balance can be tipped away from illegal harvesting, degradation, and depletion to a sustainable Blue development paradigm, serving Africa today and tomorrow. If fully exploited and well managed, Africa’s Blue Economy can constitute a major source of wealth and catapult the continent’s fortunes. Africa’s economies continue to grow at remarkable rates, including through the exploitation of the rich endowment of land-based natural resources and com-
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modity exports. Converting this growth into quality growth, through the generation of inclusive wealth, within environmental limits and respecting the highest social considerations, requires bold new thinking. It also involves the creation of jobs for a population on the rise. The Blue Economy oﬀers that opportunity. For example, the International Energy Agency estimates that ocean renewable energy has a power potential suﬃcient to provide up to 400% of global current energy demand. Other estimates indicate that in 2010 the total annual economic value of maritime related activities reached 1.5 trillion euro. It is forecasted that by 2020, this figure will reach 2.5 trillion euro per year. Surely, Africa needs holistic and coherent strategies to harness this potential. All water bodies, including lakes, rivers, and underground water, in addition to seas and the coast are unique resources, yet neglected and often forgotten. The largest sectors of the current African aquatic and ocean-based economy are fisheries, aquaculture, tourism, transport, ports, coastal mining, and energy. Additionally, the Blue Economy approach emphasizes interconnectedness with other sectors, is responsive to emerging and frontier sectors, and supports important social considerations, such as gender mainstreaming, food and water security, poverty alleviation, wealth retention, and jobs creation. The Blue Economy can play a major role in Africa’s structural transformation. The approach advocated in ECA’s new Policy Handbook* is premised in the sustainable use, management and conservation of aquatic and marine ecosystems and associated resources. It builds on principles of equity, low carbon footprint, resource eﬃciency, social inclusion and broad-based development, with the jobs agenda at the centre of it all. It is anchored on strong regional cooperation and integration, considers structural transformation as an imperative for Africa's development and advocates for a complete departure from enclave development models. Instead, through better
linkages to other sectors of the economy, it situates the aquatic and marine economies as part of integrated ecosystem services based on the harvesting of living and non-living resources, benefitting both costal, island states and landlocked countries. Biotic resources allow Africa to expand its fishing, aquaculture, mariculture sectors and foster the emergency of vibrant pharmaceutical, chemical and cosmetics industries. The extraction of mineral resources and the generation of new energy resources provide the feedstock to resource-based industrialisation and places Africa at the centre of global trade in value-added products, no longer a supplier of unprocessed raw materials. Central to this agenda, is the need to modernise Africa's maritime transport and logistics services, its port and railway infrastructure, improve its reliability and eﬃciency with the view to seamless link the continent's economies to national, regional and global value chains as well facilitate tourism and recreation activities, just to name a few. Africa has salutary examples of maritime, riparian and river-based cooperation and dispute settlement. This includes examples of maritime and transnational aquatic boundary delimitation and demarcation. A collaborative approach for the development of the Blue Economy will create the foundation for the formulation of shared visions for transformation. The Blue Economy development approach is an integral part of African Agenda 2063. Building on the experience with implementing Green Economy principles for a transition to low-carbon development, we are seeing an increasing number of African member States formulating Blue Economy strategies to diversify their economic base and catalyze socioeconomic transformation. *Based on the foreword of Africa’s blue Economy; a policy handbook . An abridged version of this post has been published by the OECD Development Centre: Dr. Carlos Lopes is the Executive Secretary of the Economic Commission for Africa (ECA), headquartered in Addis Ababa, Ethiopia.
Visit California For Entertainment AGOZINO AGOZINO who recently returned from an editorial trip in California, United States of America, writes on why the city is a home of entertainment.
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www.cherryafrica.net TOURISM TOURISM
ollywood California, unarguably, the entertainment capital of the United States of America and the world, with the appellation, City of Angels, is an unending spectacle. It is seductively serene as it is intimidating by the height and large volume of entertainment activities it holds every day. When viewed from a landing aircraft, the city makes an interesting view, but, more engaging are the splendid skyscrapers dotting the landscape. Ensconced within the high-rise buildings are the homes of entertainment gurus and stars. In the city with 3.884 million residents, Cable News Network, (CNN) and Hollywood, two of the country’s biggest private multi-billion dollar firms, always attract the world’s powerful political and entertainment personalities. Asked to appraise the number of people that visit Hollywood, Peter Nike, a
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California-based actor enthused: “I can’t say exactly the number, but all I can say is that you have an uncountable number of personalities from all over the world that come here daily. They come because everyone likes to see Hollywood". A tour of the major entertainment and cultural facilities of the city further established its position as the entertainment capital of the world, because the multi-racial city records tens of thousands of visits to its entertainment and cultural treasure sports and influential art institutions every day. Hollywood For a tourist visiting California for the first time, a trip to the Hollywood will create the impression of a mini city, designed and constructed on a vast land, just for entertainment purposes. It arguably stands out as the most eye-catching project in the
United States of America. Known as the entertainment capital of the world, Hollywood is home to the most worldclass nightclubs and hotels, it also oﬀers various attractions and shops. It has been dubbed the most exciting and mythical city in the world, where millions of visitors flock every year to meet the movie stars, become one or simply gaze at the stars. Grammy Museum The Grammy Museum is another wonder to behold, because it is believed to be one of the most popular entertainment museums in the world. It is a great place for families, especially, if they are interested in music. Nwaka Onwusa, a Nigerian and associate curator of the museum, says she’s most proud of “the diversity of content that is displayed in the museum, which is a reflection of revolutionary music and musicians". Another hidden gem in the museum is the
200-seat, state-of-the-art Clive Davis Theater, which hosts live concerts by top artistes, and talks with famous producers and others in the music business. It is a place to get insights and see major performers like Taylor Swift, The Cult, and Annie Lennox in an intimate performance space. City of Santa Barbara Santa Barbara is a beautiful coastal city that is located about 90 miles (150 km) north of Los Angeles in Southern California. Sometimes referred to as the American Riviera, Santa Barbara is famous for its mild temperatures and for the Californian mission-style architecture that is very common in this city. A long-standing local ordinance ensures all commercial construction follow the mission theme, which results in a plethora of red-tiled roofs and adobe supermarkets. In addition, Santa Barbara boasts beautiful beaches and is a popular getaway spot for Los Angeles resJune 2016 CHERRYAFRICA
idents. Santa Barbara’s most popular attractions are its Stearns Wharf and the Mission Santa Barbara, a Spanish outpost founded by the Franciscan Order in 1786. Oakland Museum of California The Oakland Museum of California or OMCA, formerly the Oakland Museum, is an interdisciplinary museum dedicated to the art, history and natural science of California. It is located in Oakland, California. The museum contains more than 1.8 million objects dedicated to telling the extraordinary story of California. It was created in the mid-1960s out of the merger of three separate museums dating from the early 20th century, and was opened in 1969. The museum building, designed by Kevin Roche John Dinkeloo, an architect, is an important example of mid-century modernism and the integration of indoor and outdoor spaces. The concrete building includes three tiers, one each focusing on the art, history, and natural science collections, along with temporary exhibition galleries, an auditorium, a restaurant, and other ancillary spaces. Outdoor architectural features
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are terraced roof gardens, patios, outdoor sculpture, a large lawn area, and a koi pond. The museum owns more than 70,000 examples of California art and design, created from the mid-1800s to the present. Painters represented in the art collection include Addie L. Ballou, Albert Bierstadt, George Henry Burgess, Richard Diebenkorn, Maynard Dixon, Childe Hassam, Thomas Hill, Amédée Joullin, William Keith, David Park, Mel Ramos, Granville Redmond, Jules Tavernier, Wayne Thiebaud, and the "Society of Six" (William H. Clapp, Selden Connor Gile, August Gay, Bernard Von Eichman, Maurice Logan, and Louis Siegriest). The museum holds the personal archives of Dorothea Lange and images by many other noted photographers. Oscar-worthy California Hotels Hollywood celebrates most of its best players during awards seasons and those honoured vary from actors and directors to make-up artists and sound-eﬀect engineers. However, one category of performers tends to get shut out, though they have been known to steal the show over the years: the cast of California hotels,
most of them not too far from Tinseltown, which has provided gorgeous, colorful or just quirky settings for dozens of great films. Some of these hotels have embraced their roles in the movie history and others are just waiting for their next close-up. Disneyland Walt Disney Creative Entertainment is the theatrical and technical live entertainment production division of Walt Disney Imagineering, the design and development arm of The Walt Disney Company. Disney produces large scale shows, parades, and fireworks displays for Walt Disney parks and resorts, one of the four major units of the media conglomerate, and also creates entertainment for the two nonDisney-owned theme parks, Tokyo Disneyland, and Tokyo DisneySea. Theatrical development of Disney creative entertainment is led by Michael Jung; parades, fireworks displays, and nighttime spectaculars development is led by Steve Davison, and the production and technical division is led by Ted Carlsson, long time technical director for multiple projects in all Disney theme parks.
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WITH TRICIA ABENA KISSI
The Evolution of Human Resource Management
HE EVOLUTION of human resource management (HRM) as a distinct profession can be traced to the days of the industrial revolution when factories established personnel departments to respond to the growing need to look into wages and welfare of workers. The workers in the early factories faced long hours of work, and worked under extremely unhygienic conditions. This soon led to several industrial unrests. The government quickly intervened to provide basic rights and protection for workers, and the need to comply with such statutory regulations forced factory owners to come up with formal means of looking into workers’ wages and welfare, and deal with other issues concerning labour. This led to the emergence of Personnel Management (PM) as a distinct profession. The PM concept remained for the greater part of the 20th Century, and was mainly administrative in nature. It was limited in scope and viewed labour as a tool which could be manipulated for the benefit of the organisation and replaced at will. It mainly concerned itself with employee record keeping, adherence to policies, recruitment, training and wage administration, and staﬀ welfare. In those days, the personnel function was treated as a routine activity meant to hire new employees and to maintain personnel records. It was never considered a part of the strategic management of businesses. The latter decades of the twentieth century however, saw the winds of change starting to aﬀect PM profession, seeing it evolve into HRM. The focus was now on the best way to motivate employees. This new approach considered workers as
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valuable resources to organisations, a great improvement from the earlier approach where workers were treated as tools good only for the ‘master’s’ use. While PM was a strictly staﬀ function, HRM began to become an increasingly line management function, directly interlinked to the core business operations. At its most basic level, HRM comprises all the duties and activities performed by HR professionals in organisations towards the achievement of organisational strategic objectives. However, HRM further evolved into Strategic HR Management (SHRM) towards the end of the 20th century. And from a primitive role a century ago as PM, HRM rose to become the most critical function of organisations. The workforce, hitherto considered as “costs” now became “assets” and a valuable source of an organisation’s competitive edge. The focus of HRM which is used interchangeably with the HR function now lies in trying to align individual goals and objectives with corporate goals and objectives. It now acts as a strategic business partner rather than enforcer of rules and regulations regarding compliance to labour regulations and laws. SHRM diﬀers from the traditional HRM in two major ways. Firstly, SHRM focuses on organisational performance rather than individual performance. Secondly, it emphasises the role of HRM systems as solutions to business problems rather than focusing solely on addressing HRM objectives and challenges. But “strategic” means more than a system’s focus or even financial performance. Strategy is about building sustainable competitive advantage that in turn creates above-average financial performance for the organisation over the long haul. Thus, HRM is expected to perform a more
strategic role in the organisation. Similarly, changes in the nature of managerial work over the years, coupled with new models of organisational flexibility, technological advancement and the changing world of work, mean that the contemporary HR function is remarkably diﬀerent from what it was two or three decades ago. As Caldwell (2003:984) argues, and rightly so, ‘the emergence of HRM as a panacea for integrating business strategy and people management has exposed personnel practitioners to a new set of role demands, professional challenges and management expectations; even as there has become greater involvement of line managers”. The HR function has changed substantially from our original understanding of what an HR function should look like, with increased segmentation, devolution and outsourcing of departments. The HR function is transforming its focus from the management of human resources to the development and maintenance of organisational effectiveness. Several studies have attempted to capture this new set of demands, and the changing HR function. The contemporary HR function has been summed up to include: administration, negotiation, legal expertise, advocacy, functional expert, human capital developer, organisational development and strategic business partnership. The foregoing discourse brings to the fore how the HR function has evolved from the days of PM to what it is now―SHRM. For this reason, HRM cannot continue to live in the past. It must rather focus on how to harness the potential of the workforce to contribute significantly to achieving organisational goals on a sustainable and competitive basis.
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