Invest in Africa 2011 DEVELOPING STRATEGIC PARTNERSHIPS
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DEVELOPING STRATEGIC PARTNERSHIPS
An official publication of the African Union
HYDROMINE, INC. Hydromine takes this occasion to express its deep sense of appreciation to the Government and People of Cameroon for their unfailing cooperation and support in the several projects which Hydromine and its various groups of partners are undertaking in Cameroon. In these ventures, Hydromine has become aware that Cameroon is blessed with a multitude of resources, the most important of which is the â€œcan doâ€? attitude of its People. Working together with the same degree of interaction, cooperation and mutual respect, we are confident that these projects will come to fruition and will be of lasting benefit to Cameroon.
A Force for Positive Change Sustainable Industrial and Social Development Programs in Africa, Europe, the Middle East and North and South America
Hydromine is a natural resources project development company principally involved, on a global basis, in a variety of natural resource, transportation infrastructure, power generation and sustainable energy technology development projects. Our particular expertise is to identify, develop, finance and implement highly viable projects in a timely and cost effective manner. Visit us at www.hydromine.net
Peter L. Briger Chairman & CEO
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2011 DEVELOPING STRATEGIC PARTNER SHIPS Obi Iheme Colette Doyle Barry Davies Clare Cronin
Editor Editor-in-chief Chief sub-editor Sub-editor Art editors Designer
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Jean-Philippe Stanway, James White Kylie Alder
DeveLOPinG stRAteGiC PARtneRsHiPs
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Martin Cousens Laurie Pilate Simon Bester, Sandeep Philips, Cataldo Tarantini, Melanie Vaughan, Brian Whelan
Managing director Chief executive Chairman
Andrew Howard Alan Spence Paul Duffen
An official publication of the African Union
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ÂŠ 2011. The entire contents of this publication are protected by copyright. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means: electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher. The views and opinions expressed by independent authors and contributors in this publication are provided in the writersâ€™ personal capacities and are their sole responsibility. Their publication does not imply that they represent the views or opinions of the African Union or Newsdesk Communications Ltd and must neither be regarded as constituting advice on any matter whatsoever, nor be interpreted as such. The reproduction of advertisements in this publication does not in any way imply endorsement by the African Union or Newsdesk Communications Ltd of products or services referred to therein.
Invest in africa 2011
Volta River Authority Volta River Authority Powering the economy of Ghana and setting the standard for public sector excellence Powering the economy of Ghana and setting the standard for public sector excellence For 50 years, the Volta River Authority (VRA) has been the sole provider of electrical energy for industrial, commercial and domestic use in Ghana. For 50 years, the Volta River Authority (VRA) has been the sole provider of Starting with a generation capacity of 588MW from the Akosombo electrical energy for industrial, commercial and domestic use in Ghana. Hydroelectric Dam, today, the VRA supplies 2,000MW power from a hydro-thermal mix. Starting with a generation capacity of 588MW from the Akosombo Hydroelectric Dam, today, theVRA VRAis supplies 2,000MW power from a To maintain this leadership, expanding its thermal generation hydro-thermal mix. capacity to take advantage of Ghana gas and also introducing and wind its portfolio toexpanding ensure reliability, sustainability Tosolar maintain this into leadership, VRA is its thermal generation and competitiveness in the West African energy market. capacity to take advantage of Ghana gas and also introducing solar and wind into its portfolio to ensure reliability, sustainability For more information and investment, contact: and competitiveness in the West African energy market. The Chief Executive Volta River Authority and investment, contact: For more information Electro-Volta House The Chief Executive 28th February Road Volta River Authority P.O. Box MB77 Electro-Volta House Accra-Ghana 28th February Road Tel: +233 30 266 4941-9 P.O. Box MB77 Fax: +233 30 266 2610 Accra-Ghana Email: firstname.lastname@example.org Tel: +233 30 266 4941-9 Fax: +233 30 266 2610 Email: email@example.com
HE Dr Jean Ping
HE Erastus Mwencha
Chairperson of the African Union Commission
Deputy chairperson of the African Union Commission
Permanent representative of the African Union Mission to the United States
Working towards regional integration
Overcoming the obstacles to FDI
Ten years of NEPAD: concerns and expectations
President and CEO, the Corporate Council on Africa
An introduction to the organization, highlighting how it came into being, its wide range of functions and its 54 member states
How the combination of sustainable growth and structural reforms is turning Africa into an increasingly attractive investment target
What is the African Union?
The next business frontier
HE Amina S Ali
The long-held dream of creating an integrated economic community is looking achievable as organizations show the collective will required
Ways in which the continent is getting to grips with the challenges that continue to put a brake on foreign direct investment, and which hamper African attempts to truly enter the global market
A review of the evolution and performance to date of the New Partnership for Africaâ€™s Development (NEPAD), the aims of which include eradicating poverty and promoting sustainable growth Invest in africa 2011
Corporate Social Responsibility
Oil & Gas
Growing on solid ground Back in 1993, when the world had its eyes set on the European single market, Escom anticipated the future: it believed and invested in Africa. Today, 18 years after its foundation, the company continues to grow on solid ground, with thousands of employees, several partnerships worldwide and a strong presence in various countries: Angola, Gabon, Mozambique, South Africa, Republic of the Congo, Democratic Republic of the Congo, Portugal and the Netherlands. Currently operating in six business areas â€“ Mining, Real Estate, Infrastructure (Public Works, Cements and Ports) Energy, Oil & Gas and Procurement â€“ allied to a strong commitment to social responsibility, ESCOM is increasingly becoming a reference company in Africa. Always looking to the future, Escom has reached a position of leadership, and is currently the largest non-petroleum company based in Angola. And it is with its eyes set on the future that it continues to build its presence in the African continent, so that, in the next 18 years, Escom may continue to be 18 years ahead of its competitors.
China in the driving seat
Joint action to unlock energy potential
Forging firmer links with Europe
Maximizing the return from minerals
Engagement with India progresses to new phase
Water: progress in the pipeline
A road map for agriculture
An ambitious strategy to improve infrastructure
The country’s non-interference policy has been valuable but Africa needs to ensure that all its citizens benefit from the relationship
Years of dialog, coupled with formal policies, have built a level of cooperation that has never been better and which is producing solid results
The subcontinent continues to stress political, as well as economic, factors as its ‘South-South’ strategy challenges the uneven architectures of power
Turnaround in links with Latin America
A growing relationship with Turkey
How becoming an emerging power with newfound wealth has changed Latin America’s approach to international relations, including African engagement
Long-standing connections with the Eastern Mediterranean country have become even closer, providing a mutually beneficial relationship
Partnerships will tap Africa’s abundance of natural resources; with a message from Dr Elham M A Ibrahim, Commissioner for Infrastructure and Energy
An integrated approach helps the continent benefit directly from its mineral riches; with a message from Elisabeth Tankeu, Commissioner for Minerals
Putting in place the appropriate infrastructure to benefit water provision and the environment; with a message from HE Mrs Rhoda Peace Tumusiime, Commissioner for Rural Economy and Agriculture
African governments have agreed a development program that will help their nations tackle the challenges in the agricultural sector
How a bold and wide-ranging new plan will help in closing the continent’s infrastructure gap Invest in africa 2011
Transport: still a long way to go
Exploiting the power of ICT
The AU has been proactive on all transport types, but rail finds itself lagging behind
Efforts are under way to harness Africa’s information and communications technology potential; with a message from Jean-Pierre Ezin, Commissioner for Human Resources, Science and Technology
Industrialization, envisaged as the engine to drive African development, faltered along the way – but valuable lessons have been learnt in the process
Healthcare: in need of a tonic
Leaps in learning
The market is expanding as Africa progresses toward its health goals; with a message from Advocate Bience Gawanas, Commissioner for Social Affairs
A robust action plan and study projects with partners overseas are helping the AU’s education program to achieve spectacular results
Cooperation between the AU and the continent’s travel body is bolstering a sector with much to offer
Clear road ahead for smart investors
Addressing investor concerns
Filling the financial services gap The AU is facilitating the growth of the finance sector so the continent can play its rightful role in the global economy and in international negotiations
The attractions of tourism
Doing business in Africa
Making the most of manufacturing
Opportunities abound across Africa, which has already made progress as a place to do business and is now embarking on a second round of reforms
Investors tend to fear corruption, instability and insecurity on the continent, but these factors do not affect investment as much as they might think
National investment organisations
Index of advertisers
A guide to market intelligence and political risk consulting companies that offer Africa expertise
Official investment and development agencies of African Union Member States
Invest in africa 2011
HE Dr Jean Ping Chairperson of the African Union Commission
Brothers and sisters of the continent, friends and partners of Africa,
y fellow Africans and friends of Africa, I am extremely pleased to present to you Invest in Africa, a showcase of investment information on our great continent’s successes thus far. This publication highlights Africa’s accomplishments, reminding us of how far we have come, and is an invitation to our friends who have yet to discover Africa’s treasures. This inaugural edition of Invest in Africa, published by Newsdesk Media, will provide you with insight into the myriad investment opportunities available across the African Union’s 54 Member States, as well as practical information on how to find and take advantage of them for the mutual benefit of African economies and international investors. We have much to be proud of as we have entered an era of democracy. Many of our nations have held elections, ushering in economic growth under democratic dispensations. This new age of increased transparency and accountability has also enabled the strengthening of key institutions, such as judiciaries and civil society, as well as economic transformation, with privatization and deregulation of key industries opening the playing field to both indigenous and international private investment, as well as opportunities in numerous sectors – from agriculture to the arts, health to leisure, infrastructure to natural resources, and finance to telecommunications. The African Union Commission’s Strategic Plan 2009-12 is being implemented across four strategic pillars – peace and security; development, integration and cooperation; promotion of shared values; institution and capacity-building. Above all, these ideas are designed to foster the improvement in the welfare of Africa’s people, which of course involves strong economic and investment-related components. This Plan provides a framework to further exploit traditionally profitable industries – such as oil and gas, minerals, and timber – but also for developing previously neglected sectors, including information and communications technologies, financial services, manufacturing, renewable energy, and tourism, hospitality and leisure. Additionally, the African Union also aims to create partnerships to develop sectors that provide social services – such as health, education, and water and environmental services – which will also provide investors with lucrative returns. Africa has traditionally been viewed by mainstream individual investors and institutions as an unattractive investment destination. However, in the face of the
Invest in africa 2011
wave of free-market economic transformation that is privatizing, deregulating, and, in many other ways, opening up the economies of Africa, the continent is now attracting far more interest. Furthermore, rapid population growth is creating a stable middle class of consumers, ready and willing to spend money on high-quality goods and services. Between 2005 and 2008, real GDP growth in Africa averaged about 6.4 percent per annum, a figure that had not previously been witnessed for decades, and in the face of a worldwide economic downturn, this growth rate remained positive in the year 2009. Africa’s economies quickly regained their previous swift pace, evidenced by an average continent-wide growth rate of approximately 4.8 percent in 2010. Although North Africa’s political turmoil and the associated interferences with economic activities have been forecast to slow Africa’s growth rate in 2011, predictions are that expansion will accelerate even further in the year 2012. There are two main factors that are responsible for Africa’s growth. These are domestic demand from within the populations of African countries and external demand from outside Africa, both of which are expected to continue growing in the coming years. Populations are growing, as is spending on goods and services by a middle class that being created throughout the continent. The other main catalyst to economic growth comes from the spike in non-African demand for natural resources, especially from rising Asian economic powers such as China and India. Africa has benefited greatly from its economic partnerships with its traditional allies in North America and within the European Union, and is also creating new alliances with partners in Asia – such as China, India and South Korea – as well as with many nations in South America, including Brazil and Venezuela. Regional integration within Africa’s main trade blocs – mainly the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), the Southern African Development Community (SADC) and the Economic Community of West African States (ECOWAS) – is also boosting growth and market opportunities by providing frameworks and initiatives that create and facilitate, at a regional level, the necessary economic, political and social conditions in which their respective member states can thrive. Africa’s future is bright, despite the challenges that are still to be overcome, but with the right investment in our people and in our infrastructure, and by continuing to build upon the gains that have been made during the recent years of economic transformation and democratic evolution, Africa can achieve all of its goals. It is my vision that, more and more, we represent ourselves as the entrepreneurial, dynamic, diligent, vibrant, hospitable people of our great nations. Invest in africa 2011
Africaâ€™s biggest sugar producer A leading, low-cost sugar producer cant manufacturer of high-value downstream products with extensive agricultural and manufacturing operations on the African continent, strong domestic markets and exports to 85 countries across the globe
ILLOVO, an African sugar producer Illovo is Africa’s biggest sugar producer and has extensive agricultural and manufacturing operations d in Malawi, Zambia, South Africa, Tanzania, Swaziland and Mozambique. The group’s focus is on Africa and its continued deployment of resources across the continent uniquely positions it to participate in the considerable growth opportunities that Africa offers. Illovo annually produces around two million tons ned sugar from 6.5 million tons of sugar cane supplied by its own agricultural operations and independent outgrowers who deliver cane to Illovo’s factories. High-value, niche-market products are manufactured downstream of the sugar pacity, production process. Installed electricity generating capacity, % of the group’s fuelled by renewable resources, provides around 89% 00 permanent and energy requirements. The group employs around 12 000 ring, marketing and 17 000 seasonal employees in agriculture, manufacturing, administration. Illovo is listed on the JSE Limited and is a subsidiary of e issued share capital. Associated British Foods plc which holds 51.5% of the sumer and industrial The group is a major supplier of sugar to African consumer cant n. Illovo has sig uropean Union (EU) and increasing access to preferential markets in the European perations outside and the United States of America (USA), whilst the operations stoms Union market in South Africa also have access to the South African Customs nity Sugar Protocol on Trade. terms of the Southern African Development Community egional markets within Pre-packed and bagged sugar is supplied into other regional ndustry, exports sugar into Africa. The group, through the South African sugar industry, e produced in South Africa the world free market. Syrup and speciality sugars are and Zambia mainly for domestic consumption, while speciality sugars made in k t iin th d iin th Malawi and Zambia are produced for preferential markets the EU and the case of Malawi, also in the USA. The majority of downstream production is sold internationally into high-value, niche markets. Furfural and its derivatives are produced at the Sezela mill complex on the south coast of KwaZulu-Natal whilst high quality ethyl alcohol, from which various grades of alcohol are made, is produced at the Merebank plant in Durban and at the Glendale distillery on the north coast. Lactulose is also manufactured at Merebank. cient in its own power requirements from bagasse and biomass, and where feasible, to export power into the national grids of existing and new countries of operation. In addition to the production of potable and denatured alcohol from molasses in South Africa, opportunities to expand Illovo’s involvement in this area of operation are being explored across the group. cant development needs. The challenges are most evident in the countries of operation outside South Africa, four of which are ed by the United Nations as Least Developed Countries. Being welcomed in the locations in which it operates requires extending the group’s support for its own employees beyond normal boundaries and into nearby communities. In addition to providing accommodation, health care, educational assistance and basic services to employees, the group also provides medical care to communities where no other facilities exist, assists in education delivery, provides municipal and civic services and access to water and sanitation, and participates in community outreach programmes. Social investment spend in 2010/11 amounted to R143 million. Considerable training and other support is provided to local indigenous growers in order to promote sustainable agriculture and economic development activities. Total cane supplies from these growers, including community-based co-operative schemes, amount to two million tons annually, generating revenue of approximately R618 million in these communities in 2010/11.
Thank You. Thank You. Thank You. Thank You. Thank You. Thank You. Thank You. Thank You. Thank You.
For the 9th year in a row.
Voted Best Airline in Africa for the 9th consecutive year as well as the 2011 winner for Best in Service Excellence in the Skytrax awards. To the 18 million who took part in the Skytrax survey and to all our staff who continue to make South African Airways what it is, we thank you. South African Airways. Bringing the World to Africa and taking Africa to the World.
HE Erastus Mwencha Deputy chairperson of the African Union Commission
y fellow Africans and friends of Africa, this maiden edition of Invest in Africa comes at a most opportune moment. The past few years have seen tremendous global economic turmoil on a scale not seen for almost a century. Yet this has not spread to all corners of the globe. The consensus among experts is that Africa – traditionally, and even today, viewed as a morass of instability and dysfunction – did not suffer economically to nearly the same extent as many other countries and, indeed, enjoyed a positive growth rate in 2009 and 2010. The demand for African goods, expected to remain strong in the short to medium term, has surged in recent years – from rising external partners, such as China, India and other countries that require our natural resources, and the fast-growing middle classes across our member states, whose rapidly increasing consumption is fuelling a wave of investment in manufactured products and services. These accomplishments are the outcome of many years’ hard work by our commissioners. Because of their tenacity and expertise, the African Union has been able to implement numerous initiatives and programs aimed at improving the welfare of African citizens. The vision and foresight of the founders of the African Union have led us to where we are today, and our Chairperson, His Excellency Dr Jean Ping, is driving our organization and the continent forward with courage and commitment. Although this investment guide is focused on the economic opportunities that abound in Africa, it must be noted that long-term, stable economic growth cannot exist without political stability and security of life and property. To this end, the African Union has been and remains heavily involved in efforts to engender and maintain peace and security throughout the continent, largely through diplomacy. Despite the challenges that must still be surmounted, investing in African people, infrastructure and services will continue to deliver the traditionally high rates of return that will not only bolster the portfolios of international investors in these times of economic hardship, but also serve as entirely new economic frontiers. We have welcomed investments from non-traditional partners – such as China, India, Turkey, Brazil, Venezuela and other countries of Latin America – and look forward to the opportunity to welcome others. In addition, we continue to seek new ways to partner with our longstanding economic partners in North America and the European Union. The horizon for Africa is extremely bright and the rewards bountiful for those who take the worthwhile opportunity of investing in our continent. Invest in africa 2011
General Electric: Invested in Africa For over 100 years, General Electric (GE) has been an instrumental driver of technological innovation in Africa. From the beginning, we have firmly believed that Africa’s growth will come from a model that recognizes the insights and visions for Africa by Africans, merged with GE’s global best practices. This deeply rooted understanding has contributed to the continent’s economic rise and ability to positively impact on its various socio-economic challenges. GE is helping address Africa’s socio-economic and infrastructural challenges that are compounded by a lack of adequate power supply, clean water, affordable and accessible quality healthcare and an integrated transport infrastructure for regional trade. These challenges can be tackled by partnering with African governments to create country-specific solutions that are futuristic and sustainable. GE’s growth and social responsibility strategy is underpinned by its two key business strategic drivers referred to as ecomagination and healthymagination. These strategies are aimed at addressing environmental issues in how we conduct and deliver on our business offerings as well as pioneering a healthy life for all.
The bold commitment to imagine and build innovative solutions that solve tomorrow’s environmental challenges today whilst still making a profit. GE has over 80 products that have been certified energy-efficient, including smart grid solutions, wind turbines, and multifuel gas turbines.
GE’s commitment to providing affordable, accessible quality healthcare products. Central to successfully delivering on both strategies are partnering with the country in which we operate and continuously identifying expansion opportunities.
Building Partnerships with Government and Enterprise
GE shares its technological capabilities and financial strength with the local know-how
GE launched the Developing Health Globally program in Africa with its first site in Asesewa, Ghana.
of African companies and governments. From joint ventures to training centres, GE is bringing people together in Africa for Africa. For example: in Nigeria GE signed a landmark agreement with the federal government to promote collaboration between the company and Nigerian public and private sector organizations that are driving critical infrastructure projects across the country.
To support Africa’s economic expansion, it is important to empower the youth by establishing research and education partners with national institutions. By committing to the long-term localization of our innovations, GE ensures that the best minds are creating the right solutions for Africa and sharing in GE’s culture of creativity and development. In fact, Nigeria is home to two GE Oil & Gas training facilities.
Beyond business, GE is committed to addressing Africa’s social needs including employment, training and youth development. The GE citizenship framework – “make money, make it ethically and make a difference” – enables the company to contribute and create value for society in ways aligned with its business strategy. As GE grows its presence in Africa, so do its efforts to be socially responsible. GE recognizes that success in tomorrow’s markets means working with Africa’s stakeholders to understand, predict and shape our future environment and ways of living. This requires bold initiatives that can help drive Africa’s socio-economic development. GE is committed to tackling important problems together in the spirit of partnership and respect. For more information, visit us at www.ge.com
R e n e w a b l e e n e R g y. w at e R d e s a l i n at i o n . F u e l c o n s e R vat i o n . it’s not Just a vision oF the FutuRe. i t ’ s e c o m a g i n at i o n Right
n o w.
HE Amina S Ali Permanent representative of the African Union Mission to the United States
y fellow Africans and friends of Africa, I am deeply honored for this opportunity to extend to you my greetings and invite you to explore the pages of this maiden edition of Invest in Africa, which illustrates the numerous investment opportunities available throughout the Member States of the African Union. It is a particular point of pride to me to be able to launch the first edition of this publication before my esteemed colleagues at the 2011 Eighth Biennial US-Africa Business Summit. Under the banner of the African Union, African countries have taken various initiatives in their quest for an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena. The strong leadership and foresight of His Excellency Dr Jean Ping, the Chairperson of the African Union Commission, has ensured that the African Union Member States have jointly and severally achieved numerous important developmental milestones, both economic and political. Increasingly, we are witnessing the emergence of Africa as one of the worldâ€™s fastest-growing markets. As more and more countries in Africa embark on economic liberalization drives, the markets throughout the continent have suddenly become alive with hectic business activity. There are huge opportunities waiting to be seized. Innumerable prospects exist for further waves of foreign and domestic direct investment in the various sectors of our economy, such as information and communications technology, agriculture, the media, hospitality, health and education. Africa has benefited from economic partnerships with international investors, in terms of technological development and markets for resources. The aim of the African Union Commissionâ€™s Strategic Plan 2009-12 is to spur the development of numerous industries, creating both employment and income for Africaâ€™s burgeoning middle classes. It covers a variety of areas, including conflict, peace and security; intensifying the sharing of knowledge and information about
Invest in africa 2011
economic development; regional integration; humanitarian response and action; gender equality; and promoting strategic partnerships. Invest in Africa introduces the African Union and its initiatives, as well as highlighting the numerous investment opportunities that are available in various sectors. Readers will learn of the results of the African Union’s collaborations with its traditional economic partners, as well as new partnerships that are being forged with China, India, Turkey, and Latin America. This publication also highlights ways in which the challenges of conducting business in Africa can be overcome, as well as addressing the questions that investors new to Africa may have. There is also plenty of information about which organisations to contact in order to access further research into Africa’s countries and economic sectors. In spite of all the stories of doom and gloom about Africa, in spite of all the stereotyping of Africa and its peoples, as well as the very negative perceptions or conclusions about our future destiny, in this publication I bring you a message of hope from the continent. Hope in our ability to build a future more peaceful and definitely more prosperous, where we can bequeath to generations of Africans to come a legacy of freedom and wealth for the greatest numbers. This is also an occasion to reaffirm our collective determination to strengthen our commitment towards a united, peaceful and prosperous Africa. We pledge our cooperation to continue to work with fellow friends of Africa effectively and wholeheartedly to make the continent the kind of place of which we and our forebears have always dreamed. To conclude, allow me to express my satisfaction so far at the active and fruitful partnership between the African Union and the fellow friends of Africa, and my hope that we shall continue to benefit from and count on the support of the friends and partners of Africa in the future. Please join us as we continue to open our markets and move forward to the bright economic future awaiting Africa. Invest in africa 2011
Stephen Hayes President and CEO, the Corporate Council on Africa
ongratulations to the African Union on its new publication. ln these times of economic uncertainty, the bridges of understanding need to be built and, where they are already in existence, strengthened. Communication in its many forms is essential now more than ever, and that is certainly the case between Africa and the United States, as we all strive to stabilize and build our economies. This publication is yet another important way in which those bridges can be built. The fact is that the importance of the African Union is not readily understood in the United States, and, if truth be told, most Americans have not heard of the African Union. Yet, as each day passes, its role in Africa and with the rest of the world becomes more critical. Many of the recent wars in Africa could not have been resolved without the African Union and, just as importantly, many conflicts that could have occurred did not because of the growing influence of the African Union. It is important to peacekeeping in Africa. However, as African economies grow and the role of regions comes to the forefront, the African Union will be playing an important role in economic development as well, and as never before. Many of the continentâ€™s most important economic decisions will be increasingly affected by the African Union. It is for this reason that we need to better understand the African Union, its relationship to all of its member countries and, certainly, its relationship to the United States of America. For this reason, we welcome this new publication and are honored to be a part of its first issue. ď Ž
Invest in africa 2011
What is the African Union? Ililta Yemane introduces the African Union and its 54 member states
he African Union (AU), formerly known as the Organization of African Unity (OAU), was launched in 2002. Whereas the OAU was concerned with, among other things, the sovereignty of individual states, the AU is more, but not exclusively, interested in protecting the security of the African continent. For example, since its formation it has been heavily involved in peacekeeping missions – in recent years, sending troops to Somalia and the Darfur region of the Sudan. The latter was a joint intervention with the United Nations (UN). To further its peacekeeping mission, the AU aims to unite African countries and to improve economic development. Important elements of this peacekeeping effort are the establishment of the African Standby Force (ASF) and the development of the Continental Early Warning System (CEWS). In the past, the organization had to work not only on reforming its structure, but also to tackle the internal issues of its Member States. Most African countries are plagued by poverty and domestic problems, such as non-existent or decaying infrastructure, high maternal and infant mortality rates, weak governmental bodies, corruption, civil unrest and wars. Further, corruption and conflict have crippled many commodity- and mineral-rich countries, and the AU has is eager to tackle this issue. The various parts of the organization take on different responsibilities, with the AU Commission playing a central role in its day-to-day management. One of its main tasks Invest in africa 2011
is to represent the AU and defend its interests, as well as to prepare strategic plans and studies, to select the Executive Council, and to coordinate and harmonize the Union’s policies and programs with the Regional Economic Communities (RECs). The AU has started various programs to achieve the objectives mentioned above. In the past few years, the creation of a well-functioning African Economic Community (AEC), through regional integration in which RECs have been utilized, has taken centre stage. In order to accelerate the efforts made to unite the continent thus far, the AU adopted the New Partnership for Africa’s Development (NEPAD) in 2001. The integration of countries is a longterm plan that has taken several stages to form and will require further stages to accomplish. The AU is central to all development taking place on the continent through its continental (NEPAD/AU) and RECs. To fully utilize its many resources, the AU needs to realize its many aims, such as the creation of a free trade area spanning the whole continent, a customs union, a common market, and a common currency. The progress that the AU has made thus far has been noteworthy, but nonetheless a lot still needs to be done. To finalize its vision of a fully autonomous and sovereign continent, the AU needs to achieve these goals for its countries, and to prove to its sceptics that economic development and prosperity can be achieved for each of its Member States through integration. With the AU staying on the path it has laid out for itself in recent years, the future continues to look bright, prosperous and attractive to investors.
• People’s Democratic Republic of Algeria • Republic of Angola • Republic of Benin • Republic of Botswana • Burkina Faso • Republic of Burundi • Republic of Cameroon • Republic of Cape Verde • Central African Republic • Republic of Chad • Union of the Comoros • Republic of the Congo • Republic of Côte d’Ivoire • Democratic Republic of the Congo • Republic of Djibouti • Arab Republic of Egypt • Republic of Equatorial Guinea • State of Eritrea • Federal Democratic Republic of Ethiopia • Gabonese Republic • Republic of the Gambia • Republic of Ghana • Republic of Guinea • Republic of Guinea-Bissau • Republic of Kenya • Kingdom of Lesotho • Republic of Liberia • Libya
• Republic of Madagascar • Republic of Malawi • Republic of Mali • Republic of Mauritania • Republic of Mauritius • Republic of Mozambique • Republic of Namibia • Republic of Niger • Federal Republic of Nigeria • Republic of Rwanda • Saharawi Arab Democratic Republic • Democratic Republic of São Tomé and Principe • Republic of Senegal • Republic of Seychelles • Republic of Sierra Leone • Somali Republic • Republic of South Africa • Republic of the Sudan • Republic of South Sudan • Kingdom of Swaziland • United Republic of Tanzania • Togolese Republic • Tunisian Republic • Republic of Uganda • Republic of Zambia • Republic of Zimbabwe
The next business frontier Africa is becoming a more attractive investment target. Both economic and population growth look sustainable, while structural reforms have facilitated the process of doing business on the continent, writes Pratibha Thaker
frica, previously viewed as a marginal location by mainstream investors and companies, is now attracting far more interest on the back of rapid economic and population growth. Real GDP growth in Africa averaged 6.4 percent a year in 2005-08, the best for a generation, and stayed positive in 2009 despite the global recession. The rebound has also been swift, with growth accelerating to 4.8 percent in 2010. Despite a projected slip to 3.5 percent in 2011 – largely due to political turmoil and economic disruption in North Africa – growth is expected to quicken to just under six percent in 2012, producing real per capita income growth of 4.1 percent (see table 1). Africa’s growth momentum is being driven by two broad factors – internal and external demand. Both will be sustained into the medium term. Strong internal demand stems from robust population growth combined with urbanization, increasing consumption and the emergence of a middle class. Four in 10 Africans now live in cities – where three in 10 people are middle class – pushing up demand for modern goods and services, and leading to rapid growth in the ICT, banking and retail sectors. The second main growth driver is the surge in external demand for African commodities, especially from fast-growing emerging markets in Asia, led by China and India. Several other key factors have been underpinning Africa’s growth spurt. Monetary and fiscal policies have become more effective, with the assistance of the International Monetary Fund (IMF), while debt levels have fallen sharply following generous write-offs for several countries in 2006-07. Structural reforms, including privatization and deregulation, have also advanced. African countries have featured regularly in recent years in the World Bank’s list of the top 10 business environment reformers, including Rwanda, Botswana, Burkina Faso, Egypt, Ghana,
Kenya, Liberia, Senegal and Zambia. Other reformers are Mali, Mozambique and Nigeria, although many are moving from a low base and progress is not always sustained (see table 2). Regional integration within Africa’s main trade blocs – the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), the Southern African Development Community (SADC) and the Economic Community of West African States (ECOWAS) – is also boosting growth and market opportunities, although harmonization will be a slow process and barriers will persist. The trade blocs are far more important as drivers of economic integration, as envisaged in the Abuja Plan of Action, which stipulated the role of the Regional Economic Communities (RECs) as a building block toward African integration. An additional factor underpinning economic growth is the gradual spread of democracy and better governance in many African countries. The recent examples of Nigeria, Ghana, Niger, and Tanzania, for instance, concluded an election that reflected the maturing of democracy and governance – although political uncertainly will continue to be Africa’s main weak spot.
Increasing investment Africa’s growth is attracting, and being spurred by, a rapid increase in foreign direct investment (FDI). Statistics on FDI are unreliable, although data from the United Nations Conference on Trade and Development (UNCTAD) shows that inflows into Africa peaked at $72 billion in 2008, before dipping to $59 billion in 2009, owing to the global recession, although Africa’s share of the global total rose from 4.1 percent to 5.3 percent in 2009 as FDI retreated less than in other regions. Some recipients continue to dominate inflows, especially the large oil producers Nigeria and Angola, which accounted for almost one-third of the total in 2009. Hydrocarbons and minerals still hold the most appeal for investors. However, non-mineral FDI is growing in several markets, led by Egypt and also South Africa, which is viewed as a key gateway to sub-Saharan Africa. Notable recent deals include the $10.7 billion purchase by India’s Bharti of Zain’s African telecoms assets in June 2010; the $3 billion takeover of South Africa’s Dimension Data by Japan’s NTT in October 2010; Invest in africa 2011
Table 1 Growth in Africa (% change, year on year) Real GDP
Real GDP per capita 6.7
Source: Economist Intelligence Unit. Figures for 2011 and 2012 are projected
Table 2 ‘Ease of doing business’ rankings within Africa and the world (in brackets)
12 15 11
19 16 23
2 South Africa (34)
5 6 7 8 9
Rwanda (58) Ghana (67) Namibia (69) Zambia (76) Egypt (94)
10 Seychelles (95) 11 Kenya (98) 12 Ethiopia (104) 13 Morocco (114) 14 Swaziland (118)
15 Uganda (122) 16 Mozambique (126) 17 Tanzania (128) 18 Cape Verde (132) 19 Malawi (133)
20 Algeria (136) 21 Nigeria (137) 22 Lesotho (138) 23 Madagascar (140) 24 Sierra Leone (143)
Source: World Bank, Doing Business (2011). ‘Africa’ covers 51 countries and ‘world’ 183 countries
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and the acquisition of a controlling stake in South African retailer Massmart by Walmart for $2.4 billion, which gained final approval from the competition authorities in June 2011. Earlier, in 2008, China’s Industrial and Commercial Bank bought 20 percent of South Africa’s Standard Bank for $5.5 billion in a landmark deal that highlighted China’s thrust for resources, markets and influence in Africa. The sectors providing the best opportunities are ICT, banking and retail, as penetration rates for modern goods and services remain comparatively low. Significant prospects also exist in tourism, healthcare and manufacturing. FDI in infrastructure is rising, driven by resources-for-investment deals signed by Chinese firms, and there are some openings for public-private partnerships, although the regulatory environment generally remains inadequate. Recent FDI deals illustrate that traditional sources of capital, such as the United States and western Europe, remain important, but they have been joined, and overtaken in some cases, by China and India. In China’s case, the state has been the main driver, while in India private firms such as Tata have taken the lead. In the past decade, Chinese investment in Africa has expanded dramatically, helping to drive a boom in Sino-African trade. Although this relationship has gone through periods of strain, reflecting concerns over China’s acquisitions of stakes in Africa’s strategic resources, the ready availability of Chinese loans, credit lines and technical assistance, coupled with the country’s lack of interference in Africa’s internal affairs, has encouraged African governments to seek closer ties with China. However, there is growing unease in several African countries over future Chinese investment, amid concerns that the continent is becoming too dependent on Chinese financing and that the relationship is too one-sided. The flood of cheap Chinese imports has proved to be a double-edged sword. On one hand, it has provided cheap goods for Africans, but on the other it has decimated Africa’s few domestic manufacturing industries, such as clothing and apparel. Another concern is the lack of skills transfer to African workers. To date, the bulk of Chinese-financed projects have been implemented by Chinese teams that make little use of domestic workforces, even for manual labor. After a period of intense investment and booming bilateral trade, China’s
relationship with Africa is about to enter a new phase that will test the foundations laid down in the past decade. China will face increased competition from other foreign powers, although its growing reputation for rapidly available financing, non-interference and hardy workers will continue to give it an advantage over its rivals. Ultimately, Chinese policy in Africa is, like that of all nations, selfserving and based on economic and strategic considerations. Traditional investors are extending their operations, as signalled by rising US interest in Africa’s non-oil sectors by firms such as IBM, General Motors, Dow and Walmart. Companies from other countries, including South Korea and Brazil, are also joining the bandwagon, while South Africa is a major outward investor in the rest of Africa.
Several fibre-optic cables have recently been laid off the coast, which will allow new internet services to be offered via mobile phones, creating huge potential for growth, even once subscription rates begin to stabilize Among the African lions roaring the loudest are Nigeria, Ghana, Zambia, Kenya, Mozambique and Ethiopia (see table 3). Nigeria, with its massive population, oil riches and free-market orientation – and a more transparent election in 2011 – has considerable promise, although weak infrastructure, inefficient administration and extensive corruption mean that caution is warranted. Also in West Africa, Ghana is poised for a boom, as newfound oil wealth combines with an already healthy economic base in one of Africa’s strongest democracies. In the east, where economic integration within the EAC is advancing briskly, Kenya is a regional hub, although prospects will diminish if the next election, in 2012, leads to instability. Ethiopia is one of the fastest-growing economies, although the state-led development model, so far, bars foreign firms from the telecoms and banking sectors. In southern Africa, Mozambique Invest in africa 2011
Table 3 African economic growth (2011) – top 28 economies by size (US$ billions) South Africa Nigeria Egypt Algeria Angola Morocco Sudan Libya Tunisia Ghana Kenya Cameroon Tanzania Ethiopia Côte d’Ivoire Zambia Congo Uganda DRC Equtl Guinea Botswana Gabon Namibia Senegal Mali Mauritius Mozambique Madagascar
396 | 3.9 315 | 5.9 232 | 1.2 176 | 4.1 99 | 7.9 98 | 3.0 66 | 4.1 58 | -26.1 47 | 0.8 35 | 9.1 34 | 4.5 26 | 3.0 25 | 6.3 24 | 7.5 Nominal GDP | Real GDP growth 24 | -1.2 20 | 7.0 20 | 7.8 19 | 6.3 18 | 4.0 18 | 4.3 16 | 5.8 16 | 5.0 14 | 4.2 13 | 4.3 11 | 5.6 11 | 4.4 10 | 7.3 9 | 2.0 0
Source: Economist Intelligence Unit forecasts
Table 4 Global competitiveness rankings, Africa Country
Source: World Economic Forum, Global Competitiveness Report (2010/11). ‘Africa’ covers 34 countries and ‘world’ 139 countries
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and Zambia offer good prospects, as do the better-established markets of South Africa and Namibia. Opportunities in North Africa will be constrained by the political turmoil sweeping the region, but provided the situation stabilizes and the democratic gains become entrenched, markets such as Egypt and Tunisia will offer considerable potential. Apart from Egypt, which is linked to the rest of Africa via COMESA, other North African economies are less well connected to the continent and more closely aligned with Europe. However, despite rapid overall growth and development in Africa, opportunities are limited in some countries at present (see table 4). There is still room for improvement in areas such as electoral procedure and governance. The African Union Commission advocates free and fair elections and maintenance of the rule of law, as well as good governance by Member States and governments to avoid political instability and conflicts, which end up limiting prospects for international investment. Although the continent still has some trouble spots, less risk-averse investors can still find opportunities. Weak infrastructure, especially power and transport, is a widespread problem – even in South Africa, which has the region’s best-developed networks. Major investment is being undertaken, but the scale of the problem requires a short-term solution. Improving Africa’s infrastructure is a daunting task. The spectacular growth in mobile telephony over the past decade highlights the potential for well-structured investments in Africa’s infrastructure. A decade ago, mobile penetration rates were lower than one percent in almost every country in the region. In 2010, around 40 percent of Africans had mobile phones. Between 2002 and 2007, mobile subscriptions in Africa grew by 49 percent annually, and there is still much scope for expansion. Furthermore, several fibre-optic cables have recently been laid off the coast of Africa, which will allow new internet services to be offered via mobile phones, creating huge potential for growth, even once subscription rates begin to stabilize. Urban infrastructure is set to become a key priority. Today, 40 percent of Africans live in urban areas – a proportion close to that of China. By 2030, Africa is forecast to have over 80 cities with more than one million inhabitants, and by 2050 an estimated 63 percent of Africa’s population will be urban. Other pervasive challenges include skills shortages and crime. But despite these obstacles, there is little doubt that Africa is now open for business. Pratibha Thaker has directed the Economist Intelligence Unit’s sub-Saharan Africa team since 2000
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Working towards regional integration Setting up an integrated economic community has long been a dream for Africa. Now it looks likely to become a reality, with organizations showing the collective will required and drawing up a road map, writes Ililta Yemane
he main aim of the African Union (AU) is to establish the African Economic Community (AEC), which is to be created by the Regional Economic Communities (RECs) over six stages and over a period not exceeding 40 years from the time of implementation, as agreed in Abuja, Nigeria, under the Abuja Treaty of 1991. The AU, formally known as Organization of African Unity (OAU), heads of state and governments met in Abuja, Nigeria, and signed a Treaty bringing the Lagos Plan of Action and the Final Act of Lagos into concrete form. The New Partnership for African Development (NEPAD), a merger of the Millennium Partnership for the African Recovery Programme (MAP) and the OMEGA Plan, was established in 2001, forming an integral part of the whole process. Invest in africa 2011
The desire to bring about economic integration in Africa goes back to the early 19th century. Numerous programs to promote integration have been worked on, driven by a collective desire to create a common market and increase bargaining power for all African countries. In more recent years, combating trans-boundary issues such as climate change, water and HIV/AIDS has also become part of the agenda. Last, but not least, there is also a collective aim to build a robust framework for coordination and to prevent conflict across the continent. The RECs that were created to work toward these objectives initially are: • ECOWAS – Economic Community of West African States in the West African region • ECCAS – Economic Community of Central African States in the Central region • COMESA – Common Market for East and Southern Africa in the East and Southern region • SADC – Southern African Development Community in the Southern Region • CEN-SAD – Community of Sahel-Saharan States • IGAD – Intergovernmental Authority on Development • EAC – East African Community • AMU – Arab Maghreb Union The stages are to be mainly activities of the RECs (existing and future), with the objective of establishing the AEC. The six stages may vary in duration, and the cumulative transitional period is not to exceed 40 years from the date the Abuja Treaty came into force (see diagram, facing page). Most RECs have been prioritizing macroeconomic policy harmonization by including provisions in their treaties and protocols as a means of achieving their integration and developmental objectives. The general belief has been that rapid economic growth and development cannot be achieved without overcoming the constraints of small populations and economies. The current statistics indicate that 38 of the 54 countries in the African Union have 15 million people or fewer, and one-third have populations of three million or fewer. What makes the process additionally challenging is that of the 46 least-developed countries in the world, 31 are in Africa. However, overall, the RECs have made significant progress in the continental integration process by developing Minimum Integration Programmes (MIPs), as well as by working towards establishing three pan-African financial Invest in africa 2011
institutions – the African Central Bank, the African Monetary Fund and the African Investment Bank. RECs have also developed a template designed to guide negotiations for Economic Partnership Agreements (EPAs). Further, in October 2008, the heads of the Southern African Development Community, the Common Market for Eastern and Southern Africa and the East African Community announced at the EAC-SADC-COMESA Summit a proposal for the African Free Trade Zone (AFTZ), also known as the African Free Trade Area. The AFTZ would be comprised of 26 countries with a combined GDP of around US$624bn, with the aim of easing access to markets within the area. Overall economic progress, it was hoped, would facilitate the process of political and social cohesion and unity. The speed of the process would be increased by the New Partnership for Africa’s Development (NEPAD), established by the AU in 2001, and which aimed to deal with the political and socio-economic transformation of Africa. Later, in 2010, the NEPAD Planning and Coordinating Agency (NEPAD Agency) was created to integrate with the AU, the main objective being to create plans at the continental (NEPAD/AU), regional (REC) and country levels. The aim of this move is to, finally, bring about regional integration, with the free movement of people and intra-African trade. Additionally, a lot of effort has gone into improving programs for the energy, transport and communications sectors, following the new partnership between NEPAD, AU and RECs, as well as between their technical-sector organizations. The AU’s peace mission and poverty alleviation will pave the way for a higher and better life expectancy in the African continent. Economic development achieved through integration can enable Africa to become more sustainable and self-reliant. With the emergence of NEPAD, key factors such as foreign direct investment (FDI) have been addressed – potentially useful if Africa is to practice self-reliance, which, in effect, is strongly linked to trade, investment and technological development. It is hoped that FDI will come mainly from private investments. In fact, in May 2011 Reuters reported that FDI levels could even increase to $150 billion by 2015, as emerging-market investors search for higher returns and perceptions of risk improve. This projection means that the economic, political and social efforts and improvements made by the African community have been recognized. The risks, as recognized by potential investors, may still be high. But, evaluating at the prospects and weighing up the potential, the gains appear to be too lucrative to miss.
Six stages to building an African Economic Community
Over five years: a) Consolidate and strengthen the structure of the ACM, providing free movement for people and factors of production. b) Create a single domestic market, with pan-African economic and monetary union, an African Central Bank and an African currency. c) Establish a pan-African Parliament.
Beninâ€™s President Thomas Yayi Boni (left) welcomes Nigerâ€™s President Mahamadou Issoufou to a July 2011 conference on integration and other matters in Cotonou
Over four years: establish an African Common Market (ACM).
Over two years: coordinate and harmonize tariff and non-tariff barriers among various RECs, with a view to establishing a Continental Customs Union.
Over 10 years: at the level of each REC, establish free trade and a Customs Union.
Over eight years: a) Establish tariff and non-tariff barriers, customs duties and internal taxes at May 1994 level. Determine the timetable for the gradual liberalization of regional and intra-community trade and harmonization of customs duties, as well as third states. This is all to be established at the REC level. b) Strengthen integration of trade, agriculture, transport, communications, industry, energy, money and finance. c) Coordinate and harmonise the activities of RECs.
Over five years: improve existing RECs and establish new ones in regions that lack them.
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Anambra State of Nigeria: achieving the Millennium Development Goals Mr Obi’s sure-footedness in the business world has also been enhanced by his membership of a number of reputable professional associations: Fellow, Nigerian Institute of Bankers; Member, Nigerian Economic Summit Group; Commonwealth Business Council; British Institute of Directors etc. Happily married and the father of two teenage children, 49-year-old Governor Obi undoubtedly possesses the academic, professional and social stability for the onerous task of governing Anambra State.
1.2 Our vision, our strategy Mr Peter Obi, Governor of Anambra State
1. BACKGROUND: THE STATE, ITS VISION AND DEVELOPMENT STRATEGY 1.1 The State and its Chief Executive
Located in the south-east geopolitical zone of Nigeria and home to the Anambra Igbo, who are undoubtedly the most entrepreneurial group of people in sub-Saharan Africa, Anambra State today is under the democratic governance of Mr Peter Obi, who was elected Governor in 2006 and re-elected in 2010 for a second fouryear tenure, thus becoming the only Governor of the State ever to serve two terms. With solid academic preparation at a variety of Ivy League institutions, complemented by vast business/financial experience garnered from positions as chairman and director of a number of quoted companies, Mr Peter Obi came well prepared for the job. Before becoming Governor, his quest for knowledge had taken him to the University of Nigeria; Lagos Business School Nigeria; Harvard Business School, USA; London School of Economics, UK; Columbia Business School, USA; Kellogg Graduate School of Management, USA; Institute for Management Development, Switzerland etc. Much of his business and financial experience came from his positions as former chairman of Fidelity Bank plc, Future View Securities Ltd and Paymaster Nigeria Ltd, as well as former director of Guardian Express Bank Plc and Chams Nigeria Ltd.
The Vision of Anambra State under Peter Obi’s administration is to achieve the Millennium Development Goals (MDGs). From all indications, Anambra State is among the very few sub-national governments in Africa to have adopted the MDGs as their vision in their commitment to the development of their societies. The strategy for achieving this vision is a unique approach, christened Anambra Integrated Development Strategy (ANIDS), with which all targets of the MDGs are being pursued simultaneously. The beauty of ANIDS lies in its simultaneous development of all sectors. ANIDS is, basically, a strategy that allows the State Government to plan carefully, budget properly, implement the plan, monitor the implementation, ensure delivery of the plan and encourage participation and feedback from the communities and stakeholders for whom the various ANIDS projects are being executed. At the heart of the participatory governance in Anambra State today is the involvement of the people in all stages of the project cycle – from planning and budgeting to implementation. With ANIDS, the State has moved its planning and budgeting from being supply-driven to being demand-driven. This is necessary in order to maximise the benefits from very scarce resources because Anambra, not being an oil-producing state, is a relatively poor state. Because it is anchored on careful planning and budgeting, ANIDS enables the government to identify budgetary gaps, some of which the state needs to fill with the support of its development partners. Thus,
in view of the meagre resources of Anambra State, collaboration with development partners (national and international) is of utmost importance. Unlike the situation in the past, before the Peter Obi administration, when Anambra was a pariah state and a no-go area for international development partners, a number of them are operating in Anambra State today, notably the UNDP, the EU and UNICEF.
2. HOLISTIC DEVELOPMENT: STRIVING HARD, ACHIEVING RESULTS ANIDS is the driving force behind the rapid development that has been taking place in Anambra State over recent years, with landmark achievements in every sector of the economy. Appreciating Anambra’s efforts, the Senior Special Assistant to the President on Millennium Development Goals, Hajiya Amina Az-Zubair, said, “Anambra State has made remarkable success in the implementation of the MDGs Programme.” The following examples will illustrate the efforts and some achievements in a few sectors:
2.1 Fighting poverty and hunger
As a pro-poor, grassroots-oriented government, one of the first steps taken by the Peter Obi administration in its fight against poverty was to do a Poverty Mapping of the State to establish its poverty profile. Having thus identified the poorest Local Government Areas (LGAs), the government is making concerted efforts to eradicate extreme poverty in the State, particularly in these poor LGAs. Consequently, Anambra State government has consistently churned out pro-poor policies and programmes as the basis for poverty eradication in the State. In this regard, the FADAMA III Programme has been a major avenue for providing capital and equipment support to hundreds of rural dwellers engaged in agro-related activities; capital support has also been given to thousands of the less-privileged – particularly women, widows, the physically challenged, as well as caregivers of orphans and vulnerable children – to enable them to either expand their trade or start petty trading or small-scale farming.
Governor Peter Obi at the distribution of empowerment tools to the physically challenged
Revolving loans have been made available to hundreds of women’s cooperative groups to establish small-scale, agro-based businesses such as poultry farms, fish ponds and pig farms. Sundry equipment (including palm oil processing machines, palm kernelcracking machines, food-processing machines, soap-making machines and electricitygenerating sets to power them) have been distributed to cooperative groups to establish cottage industries. A variety of skill-acquisition training sessions have been organised for the unemployed (especially the indigent, physically challenged, women and youths) who have been subsequently empowered with microenterprises equipment such as computers, generators, hairdryers, sewing machines, shoe-making machines, welding machines, vulcanizing machines, motorcycles, woodwork/ carpentry tools, barber’s shop tools, ovens, cookers, etc to make them self-reliant through self-employment. Poverty reduction is also being pursued through massive expansion of rural roads, especially in remote food-producing areas, thus opening up such strategic areas of the state with good access roads. This enables the government to send much-needed agricultural inputs to such remote rural areas; it also enables rural farmers to evacuate food items and other agricultual produce to urban markets for better profits and to feed the people. Today, Anambra State is reputed to
have the best network of roads in Nigeria, especially in rural areas. The creation of jobs, especially for young people, is another major weapon in the fight against poverty. The government’s aggressive efforts to create an enabling environment for local and foreign investors are yielding fruits and will create thousands of jobs. The establishment of a neem-based organic fertilizer plant to produce fertilizer will boost the huge capacity of the agricultural sector to generate employment. The ongoing construction of a giant facility in Onitsha by South African Breweries (SABmiller) is expected to create hundreds of jobs. The construction of the First and Second Business Parks in Onitsha is boosting commercial activities (the First has been completed and put to use while work on the Second has reached 90 per cent completion). The government is collaborating with Innoson Vehicle Manufacturing Company in Nnewi (the first indigenous vehicle manufacturing outfit in the country) and also revitalising/resuscitating abandoned and comatose industries, including Omor Rice Mill etc. Commending poverty reduction efforts by Anambra State, Dr Magnus Kpakol, Coordinator of the National Poverty Eradication Programme (NAPEP) said: “Governor Obi was the first governor to visit my office to discuss how to fight poverty in his state and remains determined and dogged by initiating effective economic empowerment programmes.”
ANIDS achievements in the education sector are truly heart-warming. Before Governor Peter Obi’s administration, not one single public secondary school in the state had a properly equipped, functional science laboratory. The scenario was no better in the area of computer literacy: in this age of information technology, computers were virtually unheard of in public schools. Today, the situation has changed dramatically in terms of ICT, science laboratories, electricity, water supply etc. About 150 schools have benefited from the laboratory rehabilitation and equipment programme of the government; more than 120 schools have been supplied with computer sets – each school receives 10 desktops with full accessories; Microsoft Academies have been established in 120 schools, with 50 laptops each; school buses have been provided for more than 100 secondary schools – the first time ever in the history of the state; technical colleges have been renovated and fully equipped; electricitygenerating sets and water boreholes have been provided for schools etc. Unprecedented progress has also been made in the provision of infrastructure in primary and secondary schools. When Peter Obi assumed office as Governor, there was no single public primary school classroom block that was not leaking; none without cracked walls, so much so that many of them constituted death traps to schoolchildren and teachers alike. The situation was the same for secondary schools, where trees were found to have grown
Micro-enterprises equipment being distributed to unemployed youths
including lecture rooms, computer rooms, libraries, IT equipment, audio-visual/teaching aids, furniture, office blocks and equipment, students’ hostels etc A remarkable innovation in the provision of healthcare in Anambra State is government’s support to voluntary agency/mission hospitals and training institutions (previous governments had ignored such health facilities, as all attention was focused on governmentowned health facilities). Today, the Peter Obi administration has provided facilities to secure accreditation for mission hospitals, giving regular financial support (Grants-inaid) to such hospitals and mission Schools of Nursing and Midwifery across the state, providing them with logistics support by donating buses and ambulances, supplying them with drugs, and extending a lifesaving hand of friendship and cooperation. An example of the new look of primary school classrooms across the state
in some classrooms! Today, the government’s achievements in all education sub-sectors have been truly astonishing: construction of new classroom blocks and renovation of existing ones in numerous primary and secondary schools across the 21 Local Government Areas of the state (new prototype five-room classroom blocks are simultaneously being provided for all the 177 communities in the state, at three blocks per community); construction and renovation of numerous buildings, including students’ hostel complexes. The result has been the creation of a conducive environment for learning at all levels of education.
medical equipment, furniture, potable water, electricity-generating sets etc have equally been provided for these health facilities. Commendable efforts have also been made to build the capacity of existing and incoming health providers: capacity training for hundreds of doctors, nurses and other health workers; securing accreditation for the state’s Schools of Nursing, Midwifery and Health Technology through provision of a multiplicity of infrastructure and facilities
Achievements in the health sector have been equally impressive, as our health indicators have continued to improve. Under the Peter Obi administration, there has been remarkable improvement in the provision of infrastructure for primary health centres, general hospitals and tertiary health facilities, as exemplified by the astounding transformation going on at the Teaching Hospital of the State University. With special focus on maternal, child and reproductive health services, the State Government has given unprecedented support to the improvement of primary healthcare services through the provision of new infrastructure and upgrading of existing ones: at least five Primary Healthcare Centres (PHCs) have been rehabilitated in each of the 21 LGAs and numerous new PHCs and general hospitals constructed across the State; essential drugs,
Anambra State University teaching hospital in Awka, which is nearing completion
Achieving the goal of ensuring environmental sustainability depends on the prevention of loss of environmental resources, provision of sustainable access to safe drinking water and basic sanitation, drastic reduction of the proportion of urban populations living in slums etc. The Peter Obi Administration has recorded remarkable achievements in this regard and, although a lot still needs to be done, its ongoing efforts and what it plans to do in the next three years, give a clear indication that this Goal 7 of the MDGs is achievable by the state. The problem of access to safe water and sanitation, which remained intractable before the Peter Obi administration, is now being effectively tackled by the state on its own, as well as in collaboration with its development partners. Some of the results include: provision of hundreds of boreholes all over the state in schools, health facilities and communities generally in both urban and rural areas; scaling up from boreholes to medium and largescale water schemes, especially through the resuscitation of water projects, most of which were abandoned many years ago (ongoing work at more than 15 major water schemes will, on completion, provide access to safe water for hundreds of thousands of people in various parts of the state); construction of hundreds of toilets (VIP, pour flush, sunplat etc) across the state, particularly in schools, health facilities and public places; provision of sanitation/ clean-up equipment, including payloaders, dumpsters, receptacles, etc; and a massive clean-up of the three major cities, particularly the commercial city of Onitsha.
Completed intervention at Ebenebe gully erosion site
cities (the Administrative/State Capital, Awka; the commercial city of Onitsha and Nnewi, the industrial hub).
3. CONCLUSION: THE NEED FOR PARTNERSHIP
Flood control & slum upgrading: dredging of Sakamori and Nwangene Creeks, Onitsha
To combat environmental degradation and loss of environmental resources, the government is battling the erosion menace in virtually every part of the State (with up to 1,000 active erosion sites across the State, Anambra is one of the worst hit areas in sub-Saharan Africa); a number of floodcontrol measures are also being adopted, including effective design and construction of roads with proper drainage, massive desilting of drainage systems in urban areas, the opening up of Sacamori and Nwangene creeks in Onitsha to stop the flooding that is threatening to submerge this giant city, identified by UN-Habitat as one of the fastest growing cities in the world. Concerned about the unplanned and uncoordinated growth of cities all over the developing world, resulting in slums in most major cities, the Peter Obi administration has taken steps to forestall this in Anambra State; with the assistance of UN-Habitat, Anambra became the first state in Nigeria to produce Master/Structure Plans for its three major
The Government of Anambra State today is working around the clock to achieve its vision of achieving the Millennium Development Goals. With a clear vision and a well-articulated and innovative strategy to achieve it, Governor Peter Obi and his team are ready to confront the State’s development problems. The greatest problem is funding to fill budgetary gaps, in view of the state’s poor revenue base. Consequently, a lot of funding support is required, particularly from international development partners and well-meaning corporate organisations. Secondly, such assistance should be demand-driven by supporting already planned and ongoing projects that meet local needs and which, ultimately, help to achieve the Millennium Development Goals. Anambra State has already acquired a reputation for accountability and faithfulness in the use of development partnership funds, as attested to by a good number of heart-warming outcomes of international development partnerships in the state: rated best overall state in the implementation of the EU-WSSSR Programme and consequently one of only three states in Nigeria currently benefiting from the EU/UNICEF additional funding for good performance to provide water and sanitation facilities. Anambra is
now rated best in the implementation of the World Bank FADAMA III Programme, although it was the last state to join. As a sign of its commitment, the state has been the first to sign the Programme Implementation Agreement with UNICEF for three consecutive years since 2009. To the delight of UNICEF and other child-friendly groups and individuals, Anambra State pioneered the Children’s Town Hall Meeting with the Governor to involve children in the participatory democracy in the State by giving them a voice in governance (the Children’s Town Hall Meeting is now an annual event, with the 2010 edition attracting more than 3,000 children who presented close to 300 questions and requests to the Governor as part of the interaction); regularly playing host to very many national and international dignitaries who can now visit the state because of the peace and decency in governance that now reign here. Indeed, Anambra State has created a conducive environment for investment and development partnership to achieve the MDGs. The need for such partnership is huge and its time is now!
Governor Obi with EU Ambassador David MacRea, commisioning an EU-supported water project
Overcoming the obstacles to FDI
Chinese company Zhongyuan Petroleum Exploration Bureau drills for oil in the Sudan, where China has invested billions of dollars
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Despite Africa’s impressive recent growth, it still fails to attract an appropriate share of foreign direct investment. Valerie Noury reports on the problems and on various initiatives to tackle them
oreign direct investment (FDI) is pouring into Africa at an unprecedented pace, increasing ninefold from $10 billion in 2000 to $88 billion in 2008, according to the World Bank. This is substantially more than FDI into India in 2008, which amounted to $42 billion, and is even edging closer to the flows attracted to China, worth $108 billion. The African Union (AU) expects that, in 2015, Africa will welcome up to $150 billion of investments – a figure at which consultancy Ernst and Young also arrived in its forecast. Africa is also one of the few regions to have successfully rebounded from the global financial and economic crisis, with a growth rate estimated at 4.5 percent for 2011 and forecast to reach 5.1 percent and 5.8 percent in 2011 and 2012 respectively, according to the World Bank vice-president for the Africa region, Obiageli Ezekwesili. Yet, although the African share of global FDI has expanded greatly over the past decade, Africa is still not necessarily receiving a degree of investment that accurately reflects the increasing attractiveness of the continent – one supported by one of the fastest economic growth rates and some of the highest returns on investment in the world. Various obstacles stand in the way of this potential being fulfilled. One of these is still a perceived legal uncertainty associated with the investment climate, which affects investor confidence. To increase foreign investment, the continent needs to develop policies aimed at correcting this perception. The AU is well positioned to serve as an instrument to achieve this goal. It has the institutional structure needed for the different
actors to coordinate the adoption of appropriate policies and laws. It is also a structure well suited to allowing the exchange of ideas and experiences to be shared and reflected by all stakeholders, such as African governments and foreign investors. These stakeholders include bodies within the AU, such as the Economic, Social and Cultural Council of the African Union (ECOSOCC), which are poised to play this role. Furthermore, the AU’s communication facilities and its own judicial body help to promote transparency, and thereby increase investor confidence, by providing investors with a legal and internationally trusted organisation.
Partnership to promote investment The New Partnership for Africa’s Development (NEPAD), a technical body of the AU that was launched in 2001, has placed transforming investment flows at the heart of its objectives. It believes that for economies to prosper, capital markets are essential, and that to achieve this, the problems of infrastructure, red tape, poverty and fears of political instability must be tackled. Objectives and obstacles for further increasing the continent’s attractiveness for FDI form part of the AU’s Strategic Plan of Action 2009-12. The plan shows that Africa is consistently making progress towards developing vital regulatory frameworks and policies conducive to investment. Yet structural issues, especially insufficient investment in infrastructure, mean that regional integration is hampered. FDI is also known to play an important role in attracting longer-term capital for investment in infrastructure. The plan, built at a time of global financial meltdown and climate change, defines the priorities of the period leading to 2012 and the human and financial resources that are required to address them. One set of issues strongly addressed in the plan, and which deeply affects FDI, is interconnectivity between different African nations, especially in terms of air, rail and Invest in africa 2011
Efforts towards connecting African nations are urgently needed, to truly integrate Africa into the global market Indian company Bharti Airtel has expanded into 16 African countries, including Kenya
road, but also of ICT and telecommunication infrastructure. These issues increase the cost of doing business, as they have a negative effect on investment flows. Efforts towards connecting African nations are urgently needed to truly integrate Africa into the global market. Other obstacles to investment include fear of Africa’s debt burden, governance, conflict and rising oil prices. A striking example of the effect of these obstacles is revealed by the United Nations. It states that between 1970 and 2002, Africa received $450 billion in loans and that, despite repaying around $550 billion in principal and interest over that period, $295 billion was left outstanding. Foreign investment in Africa is still heavily concentrated in 10 countries – South Africa, Egypt, Morocco, Algeria, Tunisia, Nigeria, Angola, Kenya, Libya and Ghana have collectively attracted more than 70 percent of new FDI projects over the period 2003-10, according to the World Bank. Furthermore, intra-African investment in new FDI projects grew by 21 percent annually over the same period, the World Bank states. The majority of investments are still mainly directed towards the extractive industries, but other sectors – such as tourism, telecommunications, consumer products and financial services – are also gathering pace quickly. A focus on the potential of emerging markets is increasingly drawing investors into Africa. On average, there were 100 new projects in 2003, compared with 240 in 2010, Invest in africa 2011
representing an annual growth of 13 percent a year, according to Ernst and Young. It says that such projects make up a significant part of investment, reaching 38 percent in 2010 – up from 30 percent in 2003. In a survey of leading emerging-market investors conducted by the consultancy, 74 percent said that Africa had become an increasingly attractive investment destination over the past three years. They also expressed considerable optimism about Africa’s investment potential in the medium to long term. The increasing attractiveness of Africa is illustrated by Helios, a leading private equity group, which is reported to have raised a $900 million fund to invest across the continent – an amount that is without precedent. If these projects succeed, they will surely attract other leading investors. Another recent development that illustrates Africa’s FDI potential is the signing of an agreement in June 2011 by African leaders, led by South African president Jacob Zuma, to launch talks on the continent’s biggest free trade bloc – plans to create a single, continent-wide market that could potentially be worth $1 trillion by 2013. South Africa would benefit enormously from the project, as its business sector is spread over three blocs. At present, the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC) both have tariffs that are, on average, twice that of the Southern Development Community (SADC) – a discrepancy that South Africa hopes to change, as it exports to both blocs. Should the Tripartite Free Trade Area (F-FTA) come into existence, it would span 26 countries. With these developments, the outlook for foreign investment into Africa is bright. The AU’s Strategic Plan of Action for 2009-12 will be implemented across four pillars: peace and security; development, integration and cooperation; promotion of shared values; and capacity-building. The plan also focuses on improving investment flows. The AU understands that improving the investment climate is a multi-faceted task, and involves bolstering every pillar of the policy to produce spill-over effects that can have a positive effect on FDI. Finally, investment needs to be diversified; commodities may be high-return sectors, but they are certainly not all that Africa has to offer.
Fishing in Mauritania. The role of fishing in reducing poverty was the focus of a NEPAD summit in 2005
Ten years of NEPAD: concerns and expectations
Ambassador Ferguson O Iheme assesses the organization’s evolution and performance to date
he New Partnership for Africa’s Development (NEPAD) grew out of the merger of two economic development programs for Africa: the Millennium Partnership for the Africa Recovery Programme (MAP), and the OMEGA plan for Africa. The former was spearheaded by former President of South Africa Thabo Mbeki, former President of Nigeria Chief Olusegun Obasanjo and President of Algeria Abdelaziz Bouteflika, while the latter was the brainchild of President
Abdoulaye Wade of Senegal. The merger was the result of a series of discussions that culminated in the acceptance of the ensuing document, NEPAD, on October 21, 2001. In 2010, NEPAD as hitherto known, with its secretariat in South Africa, was replaced by the NEPAD Coordinating Agency – a move intended as further integration of NEPAD and the African Union (AU). NEPAD was established by the former Organization of African Unity (OAU) and inherited by the AU. NEPAD has four primary objectives: to eradicate poverty, promote sustainable growth and development, integrate Africa into the world economy, and accelerate the empowerment of women. It is based on the Invest in africa 2011
NEPAD seeks to provide an African-owned framework for development as the foundation for partnership at regional and international levels. underlying commitment to good governance, democracy, human rights and conflict resolution, and the recognition that maintenance of these standards is fundamental to the creation of an environment conducive to investment and long-term economic growth. NEPAD seeks to attract increased investment, capital flows and funding, providing an African-owned framework for development as the foundation for partnership at regional and international levels. In 2002, another principle was added to NEPAD: the Declaration on Democracy, Political, Economic and Corporate Governance, which required the establishment of an African Peer Review Mechanism (APRM) to assess the compliance of assenting states to their commitments. An ad hoc committee of the Heads of State Implementation Committee recommended further integration of NEPAD with the AU, and NEPAD became the NEPAD Agency. The first few years of NEPAD’s existence are said to have been spent on what the organization described as the popularization of its key principles and the development of an action plan for its priority areas: political, economic and corporate governance, agriculture, education, health, science and technology, market access and tourism. The priority areas needed to be spelt out in order to properly assess and judge NEPAD’s performance and raison d’être.
Early tensions Skepticism about NEPAD was present from the start – following the fusion of the OMEGA and MAP plans. Whether consciously or not, the development partners appear to have been given influence in NEPAD that, if not giving them the last word, made them primus inter pares in a project intended to be owned by Africa. Those familiar with the African Development Bank looked back with concern at what happened there, even after several years of existence, and feared NEPAD would suffer the same fate. With the Bank, the ‘regionals’ – African stakeholders for whose benefit it was established – had a dominant position, but the ‘non-regionals’ – non-African members, particularly the United States and the Europeans – Invest in africa 2011
maneuvered to take control and volunteered to increase their contributions in a weighted voting regime. But in a meeting in Abuja, Nigeria, the regionals, spearheaded by Nigeria, fearing this would lead to further intervention, opposed this direction. The non-regionals were unrelenting in their effort to stop the Nigerian candidate, a former secretary-general of the OPEC Fund, from being elected president of the Bank. Nigeria’s response was to ensure that he was not defeated on his own soil, and to get the election delayed.
Critical response With NEPAD, the worry about the position of the development partners and its relationship with the AU was, therefore, not just that it had its secretariat in South Africa, and that this country’s former president, Thabo Mbeki, had excessive influence on the organization. For most, it was the emerging overall direction of NEPAD. This criticism resulted in the restructuring recommended by the ad hoc Heads of State Implementation Committee for ‘fuller integration’ of NEPAD into the AU, which led to its new name, the NEPAD Agency. The criticisms were made by scholars, politicians, economic analysts and civil society. Even an original supporter of NEPAD, President Wade of Senegal, joined the critics. For him, NEPAD was wasting money without getting results. NEPAD has as part of its goal the promotion of accelerated growth and sustainable development, the eradication of widespread and severe poverty, and checking the marginalization of Africa in the process of globalization. There is no country in Africa that does not have these as part of its development agenda. However, it is unclear whether it has brought any new perspectives to solving the problems it has identified. It would appear that NEPAD’s expectation from donor partners is misplaced, and its donor dependency focus challenges its “…focus on the empowerment of the African peoples as a genuine demonstration that Africans can solve their own problems and do not need to rely on anyone to create innovative and successful models of development and growth,” according to NEPAD Agency CEO Dr Ibrahim Assane Mayaki.
A premature Congolese baby boy receives special care in a maternity unit. Health was one of the priority areas for NEPAD in its early years
NEPAD, for most people, is ‘not there’. In discussing the programs for the 10th anniversary of NEPAD, Mayaki speaks of “reaching and sensitizing” all strata of society to make them become part of NEPAD, and to demonstrate to key stakeholders the achievements and successes of NEPAD since its creation. Ten years on, NEPAD is still talking about reaching and sensitizing society.
Focus on security
process. The NEPAD capacity-building program seeks to address capacity deficiencies of governments, including [those] in the areas of peace and security.” Elements of the initiative include: early-warning and database systems, strategic conflict assessment, policy and strategic reforms, post-conflict reconstruction and development, illicit proliferation, circulation and trafficking of small arms and light weapons, mobilization of funds for peace, and security intervention in Africa.
The key element in the NEPAD Peace and Security Initiative is capacity-building: “The stronger the capacity, coordination and governance at national level, the stronger [sic] the regional secretariat will be able to engage in early warning, early action, and post-conflict reconstruction,” says Mayaki. “Similarly, the stronger the regional secretariats are, the stronger the ability of the continental organization to assist and support the continental peace, security and governance
Ambassador Ferguson O Iheme is a consultant on peace and conflict resolution issues in Africa, currently with the Centre for Peacebuilding and Socio-Economic Resources Development (CePSERD) in Abuja. He served as Nigeria’s Ambassador to Venezuela, Colombia and Ecuador. He was also Nigeria’s Deputy Permanent Delegate to UNESCO, and a member of the UN Advisory Committee on Administrative and Budgetary Questions Invest in africa 2011
China in the driving seat China’s non-interference policy has been valuable, but Africa needs to ensure all its citizens benefit from the relationship, writes Dr Sharon T Freeman
T China Total area: 9.597 million sq km Area ranking in world terms: 4 Population: 1.34 billion (July 2011 est) Exports: $1.506 trillion (2010 est) Imports: $1.307 trillion (2010 est) Source: CIA World Factbook
he African Union (AU) and China appreciate each other. It is a relationship that is evolving, and growing more meaningful and multifaceted over time. During the initial stage – when all African leaders were invited to attend the first Forum on Cooperation between China and Africa (FOCAC) in Beijing in 2000 – former President of Botswana Festus Mogae noted that there had been no pre-trip strategy sessions orchestrated by the AU to help African leaders prepare. The African leaders simply showed up, and the Chinese rolled out their Africa strategy. Eleven years later, with FOCACs occurring every three years, neither the AU nor any of the African countries have, thus far, rolled out their own China strategies.
China is firmly in the driver’s seat and, so far, where it is taking the relationship with Africa is understood, accepted and appreciated by African leaders and by the AU. The FOCAC provides a clear and transparent mechanism for China’s ever-increasing involvement in Africa. The inking of multibillion-dollar schemes at the FOCAC summits all go in one direction – from Beijing to various African states – while African resources inevitably flow in the opposite direction. The AU is the successor body to the Organization of African Unity (OAU), whose post-war mandate was steeped in the anti-colonialism prevalent in the mid-Cold War era. By contrast, the Chinese Communist Party’s position of non-interference in African politics – the paramount prism through which Sino-African relations are conducted – distinctly lacks the colonial baggage that still taints European-African relations. It follows that China’s style of engagement with Africa, which follows five basic principles of peaceful coexistence and refrains from INVEST IN AFRICA 2011
interfering with the internal affairs of African countries, resonates with the AU. China’s stated position of “supporting African countries in exploring proper social systems and models of development that are suitable to their own conditions” resonates even more. The fact that China is willing to share its experiences in development, while not imposing its ideology and political system on Africa, is an essential ingredient for a positive relationship, from the perspective of African leaders and the AU. In the realm of diplomatic relations, China interacts with African
76 affirmative votes. Africans, for their part, equally appreciate the support that China gave them during their struggles for independence. In the realm of economic relations, China’s reluctance to paternalistically call itself a donor to African countries, and instead to define its role as a partner in Sino-African economic cooperation, is a welcome paradigm shift. China’s belief that its economic relations with Africa are not a one-way handout, but rather a mutually beneficial endeavor on a reciprocal basis within the framework of the ‘South-South’ cooperation, elevates the stature of Africa. Furthermore, China’s stated position that there should be homegrown solutions, and that there is no ‘one-sizefits-all’ approach to Africa – given that each country has a different level of development, historical background, ethnic structure, and political reality – comes at the right time in Africa’s history to strike perhaps the loudest chord of resonance of all. It also strikes at the heart of something that many fail to acknowledge at the trade and development table, which is that feelings, and style of engagement, matter. As China builds the AU’s home in Addis Ababa, it is cementing the relationship between the two. In an interview with Xinhua, China’s state news agency, during the early stages of construction, Zeng Huacheng, China’s ‘special representative’ on the ground at East Africa’s most noteworthy construction site, described the AU building project as “a perfect embodiment of the friendship between
China’s belief that its relations with Africa are not a one-way handout, but a mutually beneficial endeavor, elevates the stature of Africa countries on an equal footing, and China and Africa support each other on major international issues. China is grateful to Africa for its support on issues involving China’s core interests, such as China’s peaceful reunification with Taiwan and national security. Importantly, the late Chinese leader, Chairman Mao Tse-tung, said: “It was our African brothers who carried China on their shoulders into the United Nations.” Mao was referring to the event when China resumed its legitimate seat in the UN in 1971 with the support of 26 African countries out of the total of Invest in africa 2011
China and Africa, as well as a major milestone marking the new Sino-African strategic partnership”. If the building were to be a pyramid, at its top would be the relationship between African leaders, the AU, and the leaders of China. From that vantage point, all is well. But at the base of that pyramid, where the ordinary African people live, the foundations need shoring up.
Unequal competition When Chinese private actors move into African marketplaces, local business finds it almost impossible to compete. Poor, under-resourced African firms are no match for Chinese competitors. When Chinese private firms are willing to engage in low levels of commerce all the way down to selling food on the side of the road, competing with poor African women who are relying on the income they derive from such marginal economic activity to help pay for their children’s school uniforms, it is not China’s fault. Arguably, however, it is China’s problem, and a problem for Africa’s leaders. The people at the base of the pyramid need to understand and appreciate the new engagement with China, and all that comes with it. As the AU has shifted focus from supporting liberation movements to an organization spearheading Africa’s development and integration, and as a full member of FOCAC, it is increasingly being called upon to leverage its relationship with China to help ensure that all the people of the continent, including African small businesses, benefit from China’s engagement there. Dr Sharon T Freeman is an economic development specialist. She has worked in more than 100 countries including 40 in Africa, and is an advisor to US government agencies involved in trade
A Chinese engineer supervises construction in Khartoum, Sudan. China is also building the AUâ€™s HQ in Addis Ababa, Ethiopia
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Forging firmer links with Europe Years of dialog and trust, coupled with formal policies, have built a level of cooperation that is yielding concrete results, writes Jesse Morgan
Europe Total area: 4 million sq km Population: 495 million Source: http://europa.eu/about-eu/facts-figures/living/index_en.htm
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hen Dr Jean Ping and José Manuel Barroso met on November 29, 2010 at the third Africa-European Union Summit, the African Union (AU) Chairperson and European Commission President had much to talk about. Cooperation between the two blocs has never been closer. It is built on years of dialog and trust, and further strengthened by the successful implementation of policy initiatives. At the heart of this cooperation is the aim of creating an investment-friendly environment that creates jobs, harnessing the continent’s vast endowments of people and materials and securing mutual security and prosperity. The formalization of the dialog between the two blocs – which preceded
even the creation of the AU as the successor organization to the Organization of African Unity (OAU) in 2002 – began with the first Africa-EU Summit in Cairo in 2000 and has evolved over a period that has since seen the EU expand in its membership from 15 to 27 members – an area accounting for around 28 percent of global GDP. The relationship is crucial to both parties. The EU is by far the continent’s biggest trading partner – in 2009 it was the destination for 37 percent of African exports and the source of 36 percent of African imports. A milestone in relations between the two groups was reached at the Lisbon Summit in 2007, with the signing of the Joint Africa-EU Strategy (JAES), which built on the aims of the Summit to further “investment, economic growth and job creation”. The JAES has four pillars that define the key principles around which cooperation between the two blocs is based: the forging of closer political ties between the two groups; the promotion of peace, security, freedom, economic development, regional and continental integration and the fulfillment of the
A class at the Usratuna Dar el Salam training centre, Khartoum, Sudan, where the EU has funded treatment and education for disabled children and teenagers
Millennium Development Goals (MDGs) by 2015; effective multilateralism; and the creation and furtherance of a people-centered partnership. Following the Lisbon Summit, on December 6, 2007, Koen Vervaeke was appointed as EU Special Representative to the AU, signalling the serious desire to ensure, at the highest level, coherent dialogue between the two groups and to oversee delivery. The next major steps were taken at the third Africa-EU Summit in November 2010. This meeting resulted in the adoption of the Second Action Plan 2011-13, which identified eight key partnership areas around which cooperation was to focus.
Peace and security objectives are key and have been furthered through the African Peace and Security Architecture, which heralded a change in direction from the OAU days towards a more interventionist approach, acknowledging the duty to protect and the right to intervene enshrined in the AU’s charter.
Addressing current concerns This cooperation could not be more timely, with issues such as a peaceful resolution to the succession of South Sudan, and the ongoing situation in Côte d’Ivoire and Libya. When the International Contact Group on Libya met in June in Abu Dhabi, participants
including the United Nations (UN), EU, the Gulf Cooperation Council, and the Arab League singled out the efforts made by the AU and its contribution to finding a political solution to the Libyan crisis. Similarly, the implementation of the Platform for Dialogue on Governance and Human Rights is enabling progress on issues of democratic governance, providing recommendations to policymakers and coordinating responses to political crises. The creation of the African Court on Human and Peoples’ Rights (AfCHPR) and the African Commission on Human and Peoples’ Rights (ACHPR) are also the fruits of cooperation pursuant to these goals. Invest in africa 2011
Economic development is a priority of the relationship. The two unions are also keen to aid entrepreneurship, and to promote the role of the private sector in enabling development and providing necessary investment capital. Key goals include education and technology transfer, the creation of a knowledge-based society, economic and governmental transparency, and the formation of partnerships with the public sector. There is also a drive to complete Economic Partnership Agreements to further regional integration, aid growth and assist with the continent’s integration into the global economy. This drive forms part of the wider strategy to integrate and improve trade and infrastructure. The two unions are also looking to expand employment across the continent by implementing the Ouagadougou Action Plan on Employment and Poverty Alleviation in Africa. Measures to ensure migrants’ human rights are under consideration, as are others to bolster the availability of protection for asylum seekers and refugees.
achieved by 2020. These include doubling the capacity of cross-border electricity connections, both within Africa and between Africa and Europe; doubling the use of natural gas in Africa; and fostering major growth in the volume of African gas exports to Europe. Energy and economic needs must be reconciled with the risks that are posed by climate change – a phenomenon that is expected to affect Africa more severely than other regions. To mitigate these risks as far as possible following the UN Climate Change Conference in Copenhagen in 2009, the two groups made concrete proposals via the Africa-EU Renewable Energy Cooperation Program towards providing modern and
allows the exchange of climate information and services that will permit better development planning in order to tackle climate change – involves 45 countries, 15 of which are in Africa. The AfDB has allocated $145 million to the ClimDev fund.
Promoting technology Cooperation between the two groups, as well as dealing with legacy challenges, also involves a bold vision of the future. An evolving science and technology framework to grow the continent’s capacity in this area is being developed. The determination of the two blocs to track progress pursuant to these goals is absolute. The AU Commission (AUC) and EU Delegation to the AU met in June 2011 in Addis Ababa to discuss progress made in respect of the four pillars since the 2010 Annual Work Plan was implemented, and to make recommendations as to what the priorities should be in the 2011 Action Plan. Building institutions for the future is key. To this end, the EU provides a multi-annual grant towards assisting bodies such as the AUC, the Pan-African Parliament, the AfCHPR and the ACHPR. The two groups have also been working closely together to both monitor progress toward the MDGs, and ensure that off-track movement toward goals is efficiently remedied. The solid foundations that have been laid over the past decade have established a mature AU-EU relationship. Successful political, policy, technical and administrative cooperation have produced both a road map for the future and a plethora of concrete achievements.
Energy and economic needs must be reconciled with the risks that are posed by climate change
Raising education levels Alongside growing the economy and increasing rates of employment is the aim of improving education. Initiatives such as the Pan-African University illustrate the success that cooperation in this area can have, as the institution seeks to expose students to the finest tertiary-level education available and thus grow a new generation of African leaders. Economic development is contingent upon energy. The Vienna High-Level Meeting on Energy in September 2010 set various goals to be Invest in africa 2011
sustainable energy to 100 million Africans, as a first step toward meeting the AU’s target of 250 million Africans. Proposals include a substantial program of hydro-, solar- and wind-power projects, and energy conservation and efficiency measures. Also under way are the second phase of the Great Green Wall for the Sahara and the Sahel Initiative (GGWSSI) and the ClimDev programme. The GGWSSI is an ambitious plan to plant a forest across Africa – tackling desertification via the planting of drought-tolerant tree species. The 15-kilometer-wide wall will stretch from Senegal all the way to Djibouti – around 7,600km. The ClimDev project – which
Engagement with India progresses to new phase The subcontinent’s links with Africa are based on political as well as economic factors, writes Emanuel Misghinna
I India Total area: 3.29 million sq km Area ranking in world terms: 7 Population: 1.19 billion (July 2011 est) Exports: $201 billion (2010 est) Imports: $327 billion (2010 est) Source: CIA World Factbook
ndia’s historical relations with Africa are political, as India was a staunch supporter of anti-colonial struggles. In the post-colonial period, these links became more overtly political as India supported the national liberation struggles of many African states and was instrumental in establishing the Non-Aligned Movement. In the post-Cold War period, India has been a far more recent suitor in the courtship of Africa than China. Even though India had a substantial diaspora in eastern and southern Africa, the policy introduced by Indian prime minister Jawaharlal Nehru to disconnect with the diaspora meant India lost some of the connections that could subsequently have been used to build bridges to Africa.
Until recently, India has lacked the high-profile diplomacy that has characterized China’s relations with the continent. Much of the new engagement has occurred via Indian private-sector companies – in contrast, again, with the state-driven commercial relations of China. Indian companies are concentrated in South Africa, Tanzania, Kenya, Nigeria, Ghana, Egypt, and Algeria. Indian firms and expertise have also made impressive contributions to agricultural extension in Senegal and commercial farming in Ethiopia.
Increasing trade Between 2000 and 2007, trade between India and African nations grew in estimated value from US$3.39 billion in 2000 to $30 billion, and India’s trading relations with African countries look set to burgeon in the coming years. The Associated Chambers of Commerce and Industry of India (Assocham) projected that India-Africa bilateral INVEST IN AFRICA 2011
India is the world’s fifth largest consumer of oil, and will rise to third place by 2030. Uranium mining, essential to power India’s nuclear energy sector, is another area that has elicited great interest from Indian companies trade would grow to $150 billion by 2012. India’s trade with Africa is now touching $50 billion, and a vast potential remains to be tapped. However, the Indian government has done much to differentiate itself from China in Africa. India has been careful to distinguish its model of cooperation as being based on much more than mere natural-resource exploitation. It has embarked on a policy to balance its need for accessing strategic energy resources from the African continent with Africa’s aspirations for greater skills and sustainable development. The first India-Africa Forum Summit, in April 2008, raised the profile of cooperation with Africa significantly and was pivotal. Under the lines of credit offered here, India specifically looked at promoting regional integration through infrastructure development. However, this meeting did not match the spectacle of the Forum on China-Africa Cooperation (FOCAC) summit, held in Beijing in 2006. During the Second Africa-India Forum Summit, held on May 24-25 2011, Manmohan Singh, India’s prime minister, suggested the creation of an India-Africa Business Council that would bring together chief executive officers of major corporations from both sides. On the same occasion, Singh pledged to offer $5 billion for the next three years, Invest in africa 2011
under lines of credit, to help Africa achieve its development goals. India will also offer an additional $700 million to establish institutions and training programs, in consultation with the African Union (AU) and its institutions. Backing African solutions for African problems, Singh also pledged $2 million for the AU Mission in Somalia. In view of the forthcoming session of the United Nations General Assembly that is expected to focus on UN reforms, he also made a strong pitch for the reform of global political and economic institutions, including the UN Security Council, for which India needs Africa’s support. “The current international economic and political system is far from easy, particularly for developing countries. The world faces new challenges in assuring food and energy security,” he said.
Cooperation on policy At the political level, India has also sought to engage and work with regional bodies in Africa, supporting the New Partnership for Africa’s Development (NEPAD) via its Pan-Africa e-network, and recently agreeing a plan of action with the AU on most of the issues addressed in the 2008 framework document signed in Delhi. New Delhi is also helping Africa to bridge the digital divide. It is investing heavily in making an
e-medicine system available on the continent, with online consultation supported by the Indian government.
Need for energy resources Despite the importance of cooperation on development for India, it is a by-product of its engagement in Africa rather than a central driving force. Mining and hydrocarbons are key drivers – India is the world’s fifth largest consumer of oil, and will rise to third place by 2030. The gateway for India’s energy quest in Africa has turned out to be Sudan. India’s trade with the country began almost 5,000 years ago, through Mesopotamia. Sudan has been crucial in accessing oil from the continent. New Delhi’s close relationships helped to assuage the initial hiccups, but conflict between the Sudanese government and that of South Sudan has created some problems. Uranium mining, essential to power India’s nuclear energy sector, is another area that has elicited great interest from Indian companies. Furthermore, the Indian Ocean is a vital arena for commercial trade, and securing maritime trading routes is essential for safeguarding India’s energy supply lines. India is increasingly concerned about not losing ground to potential power rivals such as China on the continent, but equally importantly in ‘its ocean’, where China has already made some progress in establishing bases.
India’s prime minister Manmohan Singh, speaking at the first India-Africa Forum Summit, where India focused on promoting regional integration through infrastructure development. A second summit was held in May this year
India’s economic growth is facilitating a new phase of ‘South-South’ engagement, including in its relationships with African countries. The wider context is one in which India constitutes a key challenger to the uneven architectures of power, forged through colonial appropriation and maintained through the post-1945
structuring of geopolitical and economic power. India is playing its part in what will be significantly shifting geographies of power. Whether these shifts will work in the interests of less-privileged citizens, workers and consumers in Africa and India and, indeed, beyond is less sure. Will India act in ways different from
those of other external interests in Africa? One has to heed the extent to which the various rising powers will differ from the West and from each other in their relations with various African countries. India’s increasingly strategic motivations and goals may, indeed, bring mutual benefits for African countries, sectors and peoples. Invest in africa 2011
Turnaround in links with Latin America Latin America has changed its approach to international relations, including its engagement with Africa, writes Emanuel Misghinna
E Latin America Total area: 20.39 million sq km Population: 578 million (2010) Source: World Bank
INVEST IN AFRICA 2011
ven though the states of Africa and Latin America face many common problems – in part derived from similarities in their colonial pasts – most Latin American countries have perceived Africa as a continent battered by instability and, thus, by unreliability. This image has been formed by decades of economic and political upheaval – where hyperinflation figures and military interventions combined to produce a volatile and unattractive investment environment. Both regions have emerged from decades of authoritarian rule and suffer from high crime rates, violence, corruption and economic instability.
However, Latin American countries’ international relations have changed dramatically in recent years. As an emerging power with newfound wealth – especially that of Brazil and Venezuela under the leadership respectively of Luiz Lula da Silva (until recently) and Hugo Chavez – South America has combined activism in the multilateral arena with greater emphasis on bilateral relations with developing countries from the South. Both are concerned with the need to uplift poor communities. Liberal economic reforms have perpetuated a virtuous cycle, exemplified by the continued demand in Africa for effective economic and political reform, and in Latin America for spending on its ‘social agenda’. Long a proponent of a multipolar international order, South America seeks to shape a new trade geography that will place developing countries at the forefront of energy and food security, and of resource management. Commercial
Brazil’s former president Luiz Lula da Silva (left), with Teodoro Obiang Nguema Mbasogo, his Equatorial Guinea counterpart, in Malabo in 2010. The two countries have signed a bilateral cooperation agreement
activity between developing economies has increased steadily since the 1990s. Some estimates value it at more than $1.5 trillion since 2002. Given their global emergence, Latin American nations’ role in this broad strategy seems predetermined. But Africa is bound also to play a part in this and in Latin America’s global agenda. Brazil is particularly relevant as a regional hegemony and as part of the BRICS group (Brazil, Russia, India, China and South Africa – the most powerful emerging countries). While South America’s rise in world terms is well known, what sets it apart – besides the confluence of several positive variables of the local political
economy – is its nature and style of foreign engagement. Brazil’s new foreign policy is linking various agencies, such as the Brazilian Development Bank (BNDES), Brazilian Agricultural Research Corporation (EMBRAPA) and Apex-Brasil (Brazilian Trade and Investment Promotion Agency), with diplomatic agreements and business interests such as Petrobras, Vale, Camargo Corrêa and Odebrecht – companies that are involved in the commodities, real estate and energy sectors. This distinguishing feature of Brazilian foreign policy is particularly evident in Africa. In 2010, Venezuela signed the Energy Cooperation Master Agreement
with several African countries. The provisions of the agreement are to promote and intensify cooperation between both countries, based on principles of equality, mutual respect of sovereignty and advantage reciprocity, in keeping with their respective internal legislations. It will involve cooperation in energy, agriculture, economy, social, culture and any other sector on which, through common accord, the countries may decide. The National Assembly of Venezuela has also approved Energy Cooperation Agreements with Mauritania, Kenya and Sudan. The binding variable, or component, of the engagement with Invest in africa 2011
Latin America has shown interest in leveraging its agricultural expertise to help Africa become self-reliant Africa is agriculture. Latin America has shown interest in leveraging its expertise on agriculture to help African countries become self-reliant in both material goods and skills. Brazilian former foreign minister Celso Amorim speaks of an ‘agricultural deficit’, which aggravates the ‘development deficit’ that is a primary concern in developing countries across Africa and Latin America. Agriculture is also an area in which Latin American countries have achieved impressive results with their highly competitive agricultural and biofuel energy sectors, reaching a multilateral level in World Trade Organization (WTO) negotiations and coalitions. Agricultural development is clearly a point of intersection that illustrates a refreshing coherence in Brazilian foreign policy, especially in Africa. Growing aspirations for close cooperation between Africa and South America, for the sake of sustainable socio-economic development of their countries and peoples, led the leaders Venezuela’s President Hugo Chavez at an Africa and South America Summit in 2009
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of the two continents to convene in a Summit Meeting in Abuja, Nigeria, on November 26-30, 2006, and to agree to promote such objectives in an organized and rapid manner. The meeting resulted in the Africa-South America Cooperative Forum (ASACOF) – a framework for coordinating various activities. The forum also covers numerous areas of programs for partnerships. The Declaration and Plan of Action adopted by that Summit have stressed partnership among member countries as the most successful approach for realizing productive cooperation outcomes.
Strengthening ties The Summit Meeting also provided an appropriate context for strengthening existing linkages and expanding the process of cooperation by building on common ground. The energy sector is one of the areas that attracted the attention of the delegates. As with the other recommended areas for
cooperation, both the Declaration and Plan of Action have detailed the types of activities needed for carrying out the implementation of necessary programs and actions. The Abuja Declaration recommended the establishment of inter-regional partnerships with South America, and promotion of investment in Africa to meet various energy requirements. This goal encompasses fossil fuels – particularly hydrocarbons – and petrochemicals, as well as renewable energy resources such as hydropower, biofuels, solar, geothermal, and wind energy. The Declaration also called for the Alternative Fuels Renewable Energy Council (AFREC) and South America’s Union of the South (UNASUR) to elaborate an energy strategy to promote sustainable development, while respecting the sovereign right to manage and regulate natural resources, and to consider the possibility of establishing an Energy Commission for the two regions. Many prominent critics and prolific writers have exhibited concerns about the asymmetrical and predatory nature of international trade and globalization. But regional and global trade cooperation are part of the source of much of the world’s prosperity: it has, in most countries, propelled economic growth and helped reduce abject poverty. All the socio-economic agreements between Latin America and Africa can be seen as a positive step towards prosperity. However, much remains to be done and explored in the years to come.
A growing relationship with Turkey The Eastern Mediterranean country has long had links with Africa, and recently the two have become even closer, writes Valerie Noury
T Turkey Total area: 783,562 sq km Population: 78.78 million (July 2011 est) Exports: $117.4 billion (2010 est) Imports: $166.3 billion (2010 est) Source: CIA World Factbook
he past decade has seen a considerable increase in Turkey’s diplomatic and economic reach on the African continent. Africa’s relationship with the country dates back to the 16th century, and has been characterized by contrasting periods, from those of limited relations through to periods of highly significant interactions between the two. Turkey’s support of African independence after the Second World War was a historic turning point. The country also directed economic aid to help build important sectors across the continent. From 1998 onwards, the burgeoning relationship began to formalize, with Turkey first adopting the Opening Up to Africa Policy – a
framework that Turkey used as the basis to deepen economic, political and cultural ties with the continent. Another important policy was the Strategy for the Development of Economic Relations with African Countries, which Turkey adopted in 2003. Yet it was in 2005 that Africa and Turkey’s relationship truly began to enter a bold new era of closeness. Turkey heralded the political and social significance of Africa by naming 2005 the ‘African Year’. During this period, many high-profile visits were made to the continent, including one by the Turkish prime minister Recep Tayyip Erdogan, who visited Ethiopia and South Africa in March 2005 – a first in the history of Turkish premiers. Just one month later, on April 12, 2005, Turkey was granted observer status in respect of the African Union (AU). This status reinforced the importance of activities in the 1998 Opening Up to Africa Policy, now making them a priority. Turkey also formally accredited its embassy in Addis Ababa INVEST IN AFRICA 2011
to the African Union on May 5, 2005. From then on, Africa has described Turkey as a ‘strategic partner’, most notably at the AU Summit held in Addis Ababa in January 2008. In August 2008, Turkey continued to cement its determination to open up to Africa with the TurkishAfrican Cooperation Summit. Held under the auspices of Turkish president Abdullah Gül in Istanbul, it served as a platform with which to evaluate the level of cooperation and plan the steps required toward accelerating future progress. The
stimulating business environment for economic cooperation as a central pillar of the Africa-Turkey Partnership”. The summit provided an important opportunity for Turkey to hold bilateral meetings with all participating African countries. Fifty member states attended the event, with only three absentees – Lesotho, Swaziland and Mozambique. The meeting was also attended by AU Commission chairperson Dr Jean Ping, the representatives of 11 international organizations, and a diverse group of people from the business community. The Turkish AK party administration is passionately determined to ignite Turkey’s Africa initiative, and the summit provided the means to increase bilateral contacts and so work towards mutually cooperative goals. The Turkish president stated in a press release that he “had bilateral talks with the heads of delegations of 42 countries within the scope of the summit”. The event was reported to be a success by all involved, and it was decided that the next summit would be held in an African country in 2013. The AU and Turkey have agreed on four essential points for progress. Firstly, they want to strengthen intergovernmental cooperation, explore new areas of possible cooperation and capitalize on the progress of hitherto existing initiatives. Secondly, there is a need to promote the exchange of high-level visits and make sure that there are regular opportunities for inter-governmental dialogue – essential for creating a favorable business climate. Thirdly, they will seek to promote development by making use of local
Turkey now has 20 embassies in Africa, and has provided around $25 billion in bilateral assistance to the continent since 2005 summit saw two influential documents unanimously adopted: the Istanbul Declaration on Africa-Turkey Partnership: Solidarity and Partnership for a Common Future, and the Framework of Cooperation for Africa-Turkey Partnership. The framework document states that the groups are “acknowledging the critical role that trade and investment should play within the framework of this partnership as agents of development… and we pledge to create a favorable legal and Invest in africa 2011
resources, favoring the creation of employment and the development of human resources. Lastly, they want to promote platforms that enable technology transfer, technical assistance and the sharing of experience. The Istanbul summit established initiatives in a broad range of fields, including trade and investment, health, peace and security, infrastructure, energy and transport, culture, tourism and education. Since 2003, the Turkish International Cooperation Agency (TIKA) has expanded its operations, with most of the agency’s most important activities taking place in Africa. In August 2008, TIKA launched the African Agricultural Development Program, a major project that is assisting agriculture in 13 African countries.
Prosperous partnership It is undeniable that Turkey and Africa benefit mutually from a strong relationship. Economically, increased trade between the two will propel investment and benefit employment. The Istanbul Declaration on Africa-Turkey Partnership: Solidarity and Partnership for a Common Future, and the Framework of Cooperation for Africa-Turkey Partnership, both examine how progress can be made in the areas of development cooperation and also, importantly, how both partners can further their relationship through diversification. Diversification is a key challenge. Africa needs broader involvement from its partners, widening from a focus on the extractive industries to commodities. It also needs them to recognize that the continent is not homogeneous – there are contrasting characteristics throughout different regions, as well as across the nation states. This tailored approach is key for Turkey to succeed in Africa, and the country is pursuing it keenly.
Turkey’s President Abdullah Gül with his Sudanese counterpart, Omar al-Bashir, at the 2008 Turkish-African Cooperation Summit, which was attended by 50 member states
Links between the partners are growing. Around 2,000 African students on scholarships have attended Turkey’s universities. Turkey now has 20 embassies in Africa, and has provided around $25 billion in bilateral assistance to the continent since 2005. A new joint action plan is to be discussed at a meeting in December 2011. The Turkey-Africa Cooperation Senior Officials’ Meeting, to be held in Istanbul on December 13, will host representatives from the AU and the New Partnership for Africa’s Development (NEPAD), and the intention is for a Turkey-Africa Partnership Joint Action Plan 2010-14 to be approved. This is another positive indicator that Turkey is looking to both cement and further its relations with the AU, and that both parties are willing to bridge the gaps in this increasingly important relationship.
As long ago as 2007, Ethiopia saw one of its largest-ever investments originate from Turkey. AYKA Textile Industry and Trade Inc, which exports more than $50 million of its products each year, has relocated its garment factory to Ethiopia, to take advantage of the cheaper labor force and incentives such as lower taxes. Local subsidiary company AYKA Addis plc has capital of more than ETB100 million ($5.9 million), and was set up to take advantage of the African Growth and Opportunity Act (AGOA), the US’s quota- and duty-free privilege scheme for African countries. The company has invested more than $100 million to date. The factory has been operating since 2009 and is expected to push the company’s exports above $70 million this year. Such operations are a constant reminder that the power of emerging
economies in global trade is merely the froth on an growing wave of change in the global economy. The ‘South-South’ trading routes are set, perhaps, to become the most significant in the future of world trade. This trend is backed up by the recent statement of HSBC’s influential chief economist, Stephen King: “We believe that trade and capital flows between emerging areas of the world could increase tenfold in the next 40 years.” There is little doubt that the dynamic African-Turkish relationship forms part of this swelling tide. Trade between the two has more than tripled over the past decade, and amounted to $15.7 billion last year. Over the same period, imports have doubled from Turkey, making it Africa’s 12th biggest source of imports – ahead of both Brazil and Russia. Invest in africa 2011
At the beginning of the concession, Cameroon had an installed capacity of 784 MW and depended largely on the caprices of hydroelectricity as the main source of electrical energy in the country. This capacity was not enough to meet the ever-increasing demand and a deficit that was worsened by poor hydrology.
Today, we supply energy to 730,000 customers. We connect an average of about 60,000 new households annually and we plan to double the number of households that have access to electricity in the next ten years. Our objective is to reach more than 1.5 million new households by the year 2021.
AES-SONEL, therefore, brought the necessary resources:
A PUBLIC-PRIVATE PARTNERSHIP MODEL
AN OVERALL INVESTMENT OF CLOSE TO US$1,000 MILLION
In order to efficiently accomplish the mission assigned to it by the Cameroon government, AES-SONEL mobilized close to US$1,000 million from both local and international lenders to cover investments on facilities through an ambitious programme comprising the construction of new thermal power plants, extension of the transmission network, rehabilitation of existing facilities and renovation of distribution facilities. By the year 2012, through AES-SONEL and its subsidiary DPDC, KPDC, which is constructing the new 216MW gas-fired thermal power plant, will provide Cameroon with close to 400MW of additional capacity, thereby reducing the dependence of the country on hydroelectricity.
By regularly improving on its performances, AES-SONEL, strategic partner of Cameroon, has shown that under the right conditions, the public-private partnership is a pertinent approach for infrastructure financing in Africa. AES-SONEL is an AES CORPORATION subsidiary, one of the biggest private utility companies in the world. In spite of a very difficult beginning, our ambition is to contribute to the construction of a strong electricity sector in Cameroon, which is capable of supporting economic development in the country and in the Central African sub-region. AES-SONEL, P.O. Box 4077, Avenue de Gaulle, Douala; www.aes.com
Key Figures • Turnover: 203,721,804,672 FCFA (US$815,430,972) as at 31 December 2010. Today, Cameroon has, through AES-SONEL and DPDC, an installed generation capacity of 1,022MW, including: • Hydro: 720MW • Thermal: 297.2MW (including 12.8MW from remote power plants)
Length of distribution lines (km):
• 5.5 to 33 KV: 11,450 • 220 to 380 KV: 11,158
• US$517,225,000 worth of tax paid since the beginning of the concession; • Dividends to the State to date: US$ 43,650,000; • Average electricity weighting minus 3% of corporate expenses; • Three hydroelectricity power plants (Songloulou, Edea, Lagdo); • 5 thermal power plants connected to the South Interconnected Grid (SIG); • 27 remote thermal power plants; • 3 independent grids (South, North and East); • 7 main consumption centres (Douala, Yaounde, West, Kribi, North, Alucam, Bertoua & 27 remote centres).
Generation: • Volume (MWh): 3,919,679
Manpower: • 3,600 full-time employees; • 700 temporary workers; • 3,500 direct jobs through 700 local subcontracting companies.
Length of transmission lines (km):
Source of income:
• 225 KV: 480 • 110 KV: 337 • 90 KV: 1,067
• Payroll: US$76,500,000; • Subcontractors: US$1,100,000,000 between 2006 and 2010.
Joint action to unlock energy potential
Italian oil company Agipâ€™s pipelines in Obrikom, Nigeria. In future, the gas that is flared from Nigeriaâ€™s oil production could provide fuel for electricity generation
Invest in africa 2011
Although Africa as a whole is rich in energy resources, the lack of an overall strategy has stood in the way of efficient exploitation and access. Now, however, partnerships are being set up to tap the continent’s energy abundance, writes Emanuel Misghinna
he development of a coherent and effective energy policy that would coordinate energy planning, production, distribution, and consumption in Africa is vital for development, and bodies from the African Union down are working on refining a framework and implementing initiatives. The purpose of an integrated energy administration is to be better able to fund and manage major undertakings requiring long-term investments. As Liberian president Ellen Sirleaf-Johnson remarked to a meeting of the Manu River Union in July: “Without a good electricity network, our investment potential is limited, particularly with regard to manufacturing and employment opportunities for our citizens.” In 2003, the New Partnership for Africa’s Development (NEPAD) adopted a partnership strategy for the development of African energy. The energy program is a targeted approach designed to promote and enable a well-regulated energy environment and increase capacity. Key areas include: generation, transmission, renewable energy and gas pipelines. NEPAD has also drawn up a short-term Action Plan, which identifies its priorities in the energy sector. The Plan comprises 23 energy projects that fall into four categories – power systems; gas and oil, capacity building, and facilitation. In addition, in December 2007, African and European states agreed on the Africa-EU Energy Partnership (AEEP), as one of the eight strategic partnerships comprising the Africa-EU Joint Strategy. Under this partnership, the two continents will share their know-how and resources, tune their complementary interests and link their policies to meet the energy challenge. By 2020, Africa and the EU will engage in joint action to provide access to modern and sustainable energy services for an additional 100 million Africans. The plan is also to double both the capacity of cross-border electricity interconnection and the use of natural gas in Africa, and to increase African gas exports to Europe. The use of renewable energy in Africa will also be increased to 100,000MW from hydropower, 5,000MW from wind power, and 500MW from solar. As a result, Europe will have access to African gas, and its companies will also have access to the untapped African energy markets.
Under the auspices of the Economic Community of West African States (ECOWAS), a number of regional initiatives have been launched to improve both the scale and the reliability of energy provision. The West Africa Power Pool Project (WAPPP) was launched in 1999 in order to provide a reliable power infrastructure network and to create an open energy market in the region. Work is currently under way to further the WAPP Action Plan to construct a 225kV transmission line between Bolgatanga in Ghana and Ouagadougou in Burkina Faso, reinforce domestic networks, improve Ghana’s transmission grid, and electrify rural localities in Burkina Faso. Benin is currently building a 80MW gas turbine at Maria Gleta, which will be developed into a combined cycle plant that will raise capacity to 110MW. The country is also building a hydroelectric plant at Adjarrala that will have a capacity of 143MW. The plants will be interconnected with the WAPPP. Also, there is the Southern African Power Pool Project (SAAPPP), launched in 1995. Member state Zambia’s electricity supply generator, ZESCO, is aiming to complete the $420m Kariba North hydropower station upgrade by the end of the year. ZESCO estimates that capacity will increase by 360MW to 1,080MW. Thanks to SAPPP’s power-sharing arrangements, Botswana, the Democratic Republic of Congo (DRC), Namibia and Zimbabwe will all benefit from the increase in supply. In 2005, the East Africa Power Pool Project was launched to exploit the enormous hydroelectric power potential in the DRC, Ethiopia and Uganda; geothermal potential in Kenya, Tanzania, and Ethiopia; natural gas in Tanzania and Rwanda; and coal in Tanzania and the DRC. The planned Grand Inga dam on the Congo River would generate up to 66GW – twice as much as China’s Three Gorges dam. Given the enormous investment needed to exploit such huge potential, it is has been recognized by the African Union and subsidiary and affiliated organizations at regional level that only through cooperation and joint development could this be achieved. There are three key energy sources that continue to shape the energy landscape in Africa: fossil fuels, hydroelectric and renewable energy.
Fossil fuels The continent has substantial energy resources, particularly coal and natural gas. New discoveries of oil and gas have grown by 25 percent and over 100 percent respectively in the past 20 years, according to the UN, and more discoveries of oil and gas are continuing. In addition to the fossil reserves, Africa has 17 percent of the global known low-cost uranium reserves, most of it concentrated in Namibia (seven percent) and South Africa Invest in africa 2011
ISOLUX IN AFRICA Isolux Corsán is a business group specialising in developing major infrastructure throughout the world in the areas of concessions, energy, construction, environment and industrial services. It operates in over 30 countries on four continents, including Africa. Africa generates 10 per cent of Isolux Corsán’s revenues. The Group is currently rolling out projects worth almost €1 billion. Energy generation, transmission and distribution projects currently account for most of the company’s business in Africa. African countries in which Isolux Corsán is engaged in major projects include Algeria, Kenya, Angola, Gabon, Equatorial Guinea, Mauritania, Morocco and Mozambique.
government’s plan to expand the population’s access to the electricity grid. It has completed the rural electrification of Malange, with a total of 133km of grid (54 per cent underground) and the Sumbe-Porto Amboin and Lucala-Uige transmission lines (200kv). Isolux Corsán has also built Angola’s first 400kv transmission line from the Capanda dam to the capital, Luanda, and the distribution line to the Cabinda Stadium, where several of the Africa Cup of Nations games were played. Last year, Isolux Corsán handed over a floating open-cycle (96Mw) electrical power station with two gas turbines, to the government of Angola. It is also nearing completion of another 70Mw generating plant in Cabinda.
Oran tram. This 18.7km infrastructure will connect Algiers airport with the university. The company is engaged in other environmental projects in Algeria, such as the pipelines for the Mostaganem desalination plant, the El Bayad water treatment plant and the pipelines for the Mactaa water treatment plant.
Isolux Corsán builds the infrastructure necessary to distribute electricity to over 10,000 inhabitants of 33 rural villages in the north west of the country, in the provinces of Estuaire and Moyen-Ogooué, with an investment of almost €50 million.
The company has several rural electrification projects and electricity sub-stations in Morocco, worth €50 million.
Kenya is the site for one of Isolux Corsán’s largest projects in Africa. The Spanish group is to build the longest power transmission line in the country; a 428km, 400Kv line with a capex of €142 million. This project will carry the electricity generated by the largest wind farm in Africa (on the south of Lake Turkana) to the capital, Nairobi.
Isolux Corsán has rolled out a large number of power generation, transmission and distribution projects in Angola. The company cooperates actively in implementing the
The Group has been awarded several rural electrification projects that will benefit more than 40,000 people.
Isolux Corsán is engaged in one of its most important projects in Africa in Algeria: the
Isolux Corsán has been cooperating with this country for over 30 years. It has recently installed a medium-voltage rural electrification grid and a power station has been built in Bata, the country’s second largest city.
Isolux Corsán’s future challenges in Africa include planning new power transmission lines in Tanzania, Ethiopia and Nigeria. For this, it will capitalise on its longstanding experience, both in Africa and in America (it has over 3,800 kilometres of transmission and distribution lines in Brazil and the USA). It will also be focusing on new infrastructure construction projects – a key activity for Isolux Corsán, which currently has 1,700km of toll roads in Brazil, Mexico and Spain.
Isolux Corsรกn builds the largest transmission line project in Kenya
An international company in a global world
Airport of Santiago de Compostela | Spain
Plant in Loma la Lata | Argentina
Building present Shaping future www.isoluxcorsan.com
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E-mail: email@example.com www.marlinmaritime.com
The introduction of landfill gas and sugar-cane residue to the power sector could address waste-management issues (nine percent). Africa is home to an estimated 10 percent of global hydrocarbon resources, concentrated in the Great Lakes region and in countries along the Atlantic coast (34 percent). The DRC alone has 60 percent of Africa’s hydrocarbon resources, 46 percent of which are technically exploitable and 27 percent of which are economically exploitable. Natural gas has been increasingly exploited in recent years and could be a major fuel in future for thermal electricity generation. It is known that most of the newly constructed power plants in developed countries are being fuelled by natural gas rather than coal. Gas associated with oil production, methane from coal-bearing countries, and landfill gas that can be generated from waste could provide additional fuels for electricity generation that are cleaner than conventional oil and coal. Biomass by-products, such as sugar-cane residue (bagasse), are also finding their way into the electricity and power sector. The introduction of landfill gas and bagasse into the sector also helps to address waste-management issues.
Hydropower Africa has massive hydropower capacity, which represents the only significant grid-connected electrical energy source. It has been estimated that the total potential of hydropower resources nears 300,000MW of capacity, of which less than seven percent has been harnessed so far. The Congo River Basin in central Africa possesses around 100,000MW, of which the Inga Rapids have a potential of 44,000MW. Out of these Koeberg nuclear power station, near Cape Town. Most of Africa’s uranium is concentrated in South Africa and Namibia
resources, less than 5,000MW was developed on this massive river. The highlands of Ethiopia in East Africa could provide over 40,000MW of capacity, of which only about 3,000MW is under development. Overall, several new projects are planned or are under construction, and the Sudan is currently commissioning a 1,250MW dam on the Nile River. The main hydropower areas are the Congo River, the Nile, and the Zambezi in Southern Africa. However, strong potential also exists in West Africa.
Renewable energy Africa is situated over the three tropic lines (Cancer, Equator and Capricorn) and enjoys huge renewable energy resources, including solar, wind, biomass, and biofuels. It also enjoys one of the world’s richest geothermal resources along the Great African Ridge in the East African region. Africa derives a substantial amount of its energy supply biomass (predominantly wood fuels) – which accounts for 70-90 percent of the energy used by some Sub-Saharan African (SSA) countries – and hydroelectric. The use of biomass in open cooking fires, combined with deforestation from land clearance for agriculture, can lead to local shortages, and the resulting smoke is a source of health problems. Therefore, the sustainability of biomass supply is being addressed, as well as the introduction of improved cooking and heating appliances. Furthermore, only a small fraction of Africa’s vast renewable energy potential is utilized – seven percent of the hydro and one percent of the geothermal potential. Such sources could easily cover all of the continent’s current energy needs – and more. Benin is constructing its first solar plant at Kandi, with the capacity to generate 5MW, but South Africa’s Upington solar project and Desertec in north Africa, which has recently seen significantly increased interest from investors, are likely to be the largest projects in the short to medium term. Consultants Frost & Sullivan have forecast that investment in African renewable power is set to rise from $3.6 billion in 2010 to $57.72 billion in 2020, with wind power, solar and geothermal being the key sectors. Most of the technologies for converting the dispersed natural resources into utilizable forms of energy and cooperation in the development of such technologies are urgently needed Invest in africa 2011
Dr Elham M A Ibrahim Commissioner for Infrastructure and Energy
One of the African Union Commission’s numerous initiatives is the DESERTEC Industrial Initiative (DII), the world’s most ambitious solar project, which aims to turn the sunlight of the Sahara desert into carbon-free electricity that will supply 15 percent of Europe’s power by 2050. The Africa-EU Energy Partnership (AEEP) aims to increase European and African energy infrastructure investments within Africa, and between Africa and the European Union. Its objectives are to improve energy access and energy security and to promote use of renewable energy, as well as encouraging energy efficiency. By 2020, its Renewable Energy Cooperation Programme aims to: • bring access to modern energy to 100 million more people; • double the capacity of cross-border electricity interconnection and the use of natural gas in Africa, as well as gas exports to Europe; • build plants of 10,000MW, 5,000MW and 500MW in hydropower, wind and solar energy respectively; and • triple the capacity of other renewable energy sources. African transportation is among the costliest in the world and hampers the competitiveness of African products, both locally and internationally. For landlocked countries, the cost of transportation can reach 75 percent of the total export value. The AU is working with the African Development Bank (ADB), the United Nations Economic Commission for Africa (UNECA), the NEPAD Planning and Coordination Agency (NPCA) and the Regional Economic Communities (RECs) to implement projects to complete missing links in the Dakar-N’djamena-Djibouti and Djibouti-Libreville transport corridors. The Port Moresby ﬁ nancing agreement for the Africa-EU infrastructure start-up activities enables the AU to launch all four projects to complete missing links on major regional transport corridors: the Beira-Lobito and Dakar-Lagos Trans-African Highways, the Cotonou-Niamey-OuagadougouAbidjan Railway and the Tripoli-Windhoek Trans-Africa Highway. The AU’s African Maritime Transport Charter is the policy and strategic framework for developing and regulating the sector. Also, the AU addresses piracy and armed robbery at sea, particularly in the Gulf of Aden, as part of the implementation of the Durban Declaration on Maritime Safety, Security and Protection of the Marine Environment. The AU’s air-transport strategy is linked to the implementation of the Yamoussoukro Decision on the liberalization of air-transport markets in Africa, as well as the external air-transport policies of individual states. The ICT sector’s development, including the postal sector and e-commerce, is guided by the 2009-12 Strategic Plan. The improvement of ICT governance structure and the project of Institutional Architecture for Infrastructure Development in Africa (IAIDA) are in line with these concerns. The commissioner’s remit also extends to infrastructure and transportation
INVEST IN AFRICA 2011
Local experience from a global supplier Wood Group PSN is the largest provider of brownfield services to the oil and gas industry. Our global network of over 23,000 people in more than 35 countries offers high integrity services that optimise the performance of facilities, maintain production, reduce operating costs, ensure asset integrity and extend the operating life of fields. Our business in Africa is well established and we have more than 3,000 people working across 12 countries delivering engineering, construction, operations, maintenance, shutdown and project management services to a range of national and international customers. For more information on the range of services we offer, go to our website:
www.woodgroup-psn.com To find out how we can help you contact:
firstname.lastname@example.org Graphics Ref: 02092
CEC: EXPANDING AND POWERING GROWTH T
he face of Zambia is changing fast. The mining boom is not only generating revenue and attracting investment into the region, it is also imposing increasing demands on the national power infrastructure – and the Copperbelt Energy Corporation Plc (CEC) is playing its part in improving that infrastructure and ensuring that power supply will meet demand. Formed in 1997 following the privatisation of the Zambia Consolidated Copper Mines (ZCCM), CEC has established three major capabilities in the mining-intensive Copperbelt region. Firstly, it has 80MW of emergency gas turbine generation and supplies power to the mines of the region. Secondly, it owns and maintains the Copperbelt regional power transmission network for supplying the mines, which not only forms an integral part of the national transmission network and carries power to the urban population on behalf of the national power utility, ZESCO, but also links with SNEL, the national utility of the Democratic Republic of Congo (DRC). This interconnector forms the only export route for power from that nation. Finally, CEC has installed and maintains the Copperbelt regional element of the national fibre-optic communications network. Ongoing investment in infrastructure is a major theme of corporate strategy, and the company currently has two major projects under development. The first project is one that will have a significant impact on power security, not only within Zambia, but also throughout southern Africa. The neighbouring DRC is a nation rich in possible future powergeneration capacity, while the majority of those in the Southern Africa Power Pool (SAPP) are facing power shortages. Since 1951, the DRC and Zambia have been linked by a single 220kV interconnector, the Zambian section of which is owned by CEC. “This line is important for the region,” explains Owen Silavwe, CEC’s Commercial Director, also overseeing the development phase of the DRC transmission-line project. “The DRC has a surplus in terms of power generation, and the only route through which it can export power to the SAPP at the moment is through this interconnection. However, there has been no expansion in terms of capacity on this line since it was installed.” Working together, CEC and SNEL are scheduled soon to begin construction work on two additional transmission lines and the supporting infrastructure. Not only will this increase the capacity of the interconnector from its current 260MW to a maximum of 750MW, but it will also safeguard the security of supply. Although the new interconnector could theoretically handle 750MW, the aim is to limit the entire corridor to a capacity of 500MW. This will ensure good, firm trade on the line and safeguard it, such that if a fault develops on one of the lines, for example, the remaining two will still be able to handle the load without tripping.
The Zambian element of the project, which, at US$18 million, includes the construction of some 51 kilometres of dual transmission lines, along with significant upgrades to the Michelo and Luano substations. The Michelo substation supplies power to the mines around the town of Chililabombwe, while the Luano substation supplies power to the mines in Chingola and the surrounding areas, and both will link the new interconnector lines to the transmission network. Two main contractors have been appointed for the project – KEC International of India and ABB OY of Finland. The Company’s second major project will boost the country’s power-generation capacity by a further 40MW. The work includes the construction of a hydroelectric power station and dam at the Kabompo Gorge, a site located in the North-Western province of the country, between Solwezi and Mwinilunga. The environmental impact assessment for the dam and power station, and the feasibility study have been completed, with positive outcomes. “The feasibility report shows there are no obvious fatal flaws, so we are now gearing up to proceed with the project,” says project director Aaron Botha. The preliminary plan for the project is in two parts: a dam is to be constructed at the entrance to the Kabompo Gorge, while an underground power station is to be built on the western side of the gorge and connected to the dam and the river outflow by a system of tunnels. In the earlier part of 2011, CEC went out to tender for the various elements of engineering and construction, consultancy and advisory work. In parallel with this, work is in progress to present the scope of the project and the results of the feasibility study to the financial institutions and investment banks for project financing. “This is a fairly long process,” Botha says, “and if all goes to schedule, we hope to begin construction work early in 2012 and complete it by the end of 2015, ready to begin operational testing of the first of two 20MW generation machines.” Both of these projects will have a significant impact on power security for Zambia, and will bring the added benefit of job creation, both in the short term during the construction phase and in the long term, running and maintaining the new facilities.
Contact: Chama Nsabika Kalima Head Public Relations email@example.com www.cecinvestor.com
Renewable energy goals for 2020
by Africa. The development efforts would be accomplished through sustained research and development, and demonstration programs in a long-term enterprise that requires not only joint efforts from the institutions involved in this field, but also a re-orientation of their objectives and activities. The African and EU Joint Action Policy on Energy is an excellent example of a program that has been implemented to this end.
Investment to harness potential
Wind turbine near the outskirts of Cape Town, South Africa
Invest in africa 2011
Africa clearly possesses sufficient energy resources to fuel its own development, but so far most of the fuel is consumed externally. This is the case with oil that is sold in crude form and imported back as refined products. Yet, the continent has some countries with refinery capacity that can supply the bulk of Africa’s needs. The huge potential of hydroelectric and natural gas requires significant investment if it is to be fully exploited, and this is an area that requires increased cooperation as individual countries cannot cope on their own. To date, NEPAD has gathered significant and useful data on the state of energy provision and projects, which it has been able to use to prioritize projects accordingly. The Bio Energy Program has been launched to allow the energy, agriculture, and science and technology sectors to work together towards common goals. NEPAD is encouraging all stakeholders from SMEs to major companies – via public-private partnerships, as well as institutions like the Power Institute for East and Southern Africa – to build capacity and infrastructure. Market access is key, too. Trading of energy, especially for oil and electricity, among African countries can significantly improve the uneven distribution of energy resources across the continent. To achieve that, some capacity-building for various institutions in financing is also imperative. Apart from a need to address the problem of systems of delivery being poor, access can also be improved by good pricing and market policies. Targeting markets with potential to grow, such as small-scale commercially oriented holders, is likely to enhance sustainable supply and access to modern energy. In summary, there is a severe shortage of access to modern energy in Africa, hampering efforts towards poverty eradication and sustainable development. A number of institutional structures have now been erected from AU level to NEPAD, and to numerous regional initiatives to address these challenges systematically and effectively. The benefits of improved access to electricity are self-evident, and significant enterprise is taking place towards realizing Africa’s energy potential through the development of appropriate institutions and partnerships.
Cirrus Oil Services Ltd
A brief history of Cirrus Oil Services Ltd
Woodfields Energy Resources Ltd (previously known as Cirrus Energy) is our parent company, which started trading in 1999. They partnered Vitol SA in Ghana in their trading activities and business initiatives in the country. Born from Cirrus Energy, we attained the license to trade as a bulk oil distributor in 2007 and have since grown extensively. Cirrus Oil is known within the sector for its strict adherence to quality and its world-class safety standards, coupled with being a market leader in the storage and distribution of premium petroleum products in the West African sub-region. In a market with a growing need for energy, energy services and related products, Cirrus Oil is uniquely positioned as the preferred partner in the trading and distribution of downstream petroleum products. As a regional distribution hub, the company has over 70,000 cubic meters of storage capacity in Tema and Takoradi, equipped with stateof-the-art terminal and loading gantries for the distribution of petroleum products to its customers – including the mining, aviation, offshore exploration and production industries – with product lines including gas oil, gasoline and aviation fuel.
To be a leader in oil trading, storage and distribution of petroleum products in the West African sub-region and beyond.
To serve our clients with the highest quality petroleum products and services, and to invest in assets to ensure efficient product delivery. For our clients – We aim to create sustainable and superior value in all our business relationships and transactions. For our people and our company – We aim to be an employer of choice through a culture of openness that fosters people development, professionalism, and sustainably contributes to long-term individual and organizational goals.
Our strategic objectives
To invest in strategic infrastructure and facilities that ensure the most reliable and efficient supply of petroleum products, under optimum safety and environmental conditions.
Our people and management
In Cirrus Oil, the people make the difference. – they are the organization’s most priceless asset. Our business is only as good as the value that our people bring, so staff training and development are key. The Cirrus success story is a pointer to a proven, competent leadership team with industry expertise, enabling the organisation not only to make better investment choices, but also to win the confidence of suppliers, and local and multinational clients, and to maintain its top industry ranking in sub-Saharan Africa.
Contact details Tema Office Plot 25/3/5, Trusty Food Road Heavy Industrial Area, Tema Tel: +233 303 308084 Takoradi Office No. NTA 20, First Industrial Road Poasi, Takoradi Tel: +233 312 06353 Accra – Head Office No. 219 West Airport Street, Sankofa House Airport Residential Area, Accra Tel: +233 302 781524 Our Postal Address P. O. Box KIA 3O414 Airport, Accra, Ghana firstname.lastname@example.org email@example.com www.cirrussoilghana.com
Maximizing the return from minerals
Africa is rich in minerals, yet this abundance has not always benefited the continent directly. Now, however, a more integrated approach is set to yield results, writes Jesse Morgan
iven the staggering scale of its mineral resources, the African Union Commission (AUC) has sought to coordinate a continent-wide approach to capitalizing on the unique opportunity for prosperity and development that this presents to the people of Africa. The continent is already the worldâ€™s largest producer of platinum-group metals, phosphate, gold, chromium, vanadium, cobalt and diamonds. It possesses the largest known reserves of all of these minerals and of aluminium
Checking for traces of gold in waste rock near Tanzaniaâ€™s North Mara mine. The country is one of several that have written mining codes with the aim of attracting foreign direct investment
Invest in africa 2011
Loading iron ore onto a barge at Saldanha Bay, South Africa. Developing competitive infrastructure will help the continent to make the most of its mineral resources
(bauxite ore) and manganese – yet Africa remains relatively uncharted in mineral terms. One of the first steps taken by the AU was the integration of the African Mining Partnership (AMP) – an intergovernmental body of mining ministers established in Cape Town in 2003 – with the work of the AUC. The AMP seeks to pursue the wider goals of the New Partnership for Africa’s Development (NEPAD) in the context of the sector: to assist small-scale and artisanal miners with access to markets, tackle illegal mining, and attract investment to grow a sustainable industry. The stagnation in the nationalized mining sector needed to be addressed. The problem had resulted from political interference in business decisions – and a corresponding inadequate respect for managerial and technical expertise; low levels of reinvestment, which resulted in capital consumption; and a lack of access to finance. The AUC sought to set out a policy framework that would draw on the lessons learned elsewhere – such as in Australia and Canada – to ensure both sustainable exploitation of mineral resources and the sharing of dividends across the generations. Invest in africa 2011
The AUC sought to ensure both sustainable exploitation of mineral resources and the sharing of dividends across the generations To this end, the AUC – in conjunction with the United Nations Economic Commission for Africa (UNECA), the United Nations Conference on Trade and Development (UNCTAD), the United Nations Industrial Development Organization (UNIDO), the African Development Bank and the Regional Economic Communities (RECs) – convened a meeting in August 2008 of the technical taskforce, the International Study Group on Africa’s mineral regimes, to draft the African Mining Vision (AMV).
Perfection takes time... 91 years and still refining. At Rand Refinery we don’t believe that perfection is a destination. Or that perfection is a pinnacle that one reaches. To us, perfection takes refinement. It’s something one constantly strives for. It’s this belief that has made us the world’s largest single site gold refining and smelting complex and largest manufacturer of 400 oz London Good Delivery Bars since 1921. Which is why we are considered the hub for African mined gold and the perfect launchpad to a diverse international market. And when you service such a global market, the only thing more important than the gold you refine is your name. Which is why over our 90-year history we’ve worked hard to build and maintain a sterling reputation for unquestionable honesty and integrity. Testament to this is how we define ‘refinement’. To us, it’s more than just a process. It speaks to how we choose to value our partnerships, staff, environment and colleagues.
This is evident in our relentless pursuit of employing bestof-breed expertise and technology value chain in Recovery, Refinement, Investment, Luxury and Industrial Products. And even though we’re evolving our emblem, our DNA remains the same. So our partners and customers can expect to benefit from the same quality, expertise and heritage they’ve come to expect and enjoy from Rand Refinery over the years. It’s just another step in our constant pursuit and strive for perfection.
INTERESTING FACTS ABOUT RAND REFINERY • Since 1921, Rand Reﬁnery has reﬁned more than 50,000 tons of gold – nearly one third of all the gold ever mined in the world.
• Rand Reﬁnery has an alliance with the SA Mint and has manufactured, marketed and sold well over 60 million ounces of the Krugerrand range of coins. A minted product track record that it is now extending into minted bars. • Rand Reﬁnery is the only London Bullion Market Association (LBMA) accredited precious metals reﬁner and fabricator in Africa. • Rand Reﬁnery has been appointed as one of only ﬁve international LBMA Referees, meaning it has the authority to adjudicate on metal content disputes between other refineries and their customers, anywhere in the world.
STRIVING FOR PERFECTION
Ghana OfďŹ ce No 3 North Airport Road
ra OfficeAirport Residential Area
Mali Office C/- Bureau de Bamako Cite du Niger 2 Villa MAEVA 7 +233 (0) 302 763875 Bamako +233 Mali (0) 302 772844
PMB KIA, Accra, Ghana 3 North Airport Road Tel: PO BOX 221 ort Residential Area Tel: Tarkwa, Ghana B KIA, Accra, Ghana Fax: +233 (0) 302 763274 Tel. +233 (0) 302 763875
BOX 221,Tel. +233 (0) 302 772844 wa Ghana Fax. +233 (0) 302 763274 Email: firstname.lastname@example.org
Tel. +223 20 21 42 42 Tel. +61 8 9467 2905 Fax. +223 20 21 42 44 Email: email@example.com
Burkina Faso Office 11 BP 1145 CMS Ouaga 11 Secteur 13 Zone du Bois Rue Baor Ouaga Villa No.66 Ouagadougou Tel. +226 50 36 01 17 Fax. +226 50 36 01 19 Email: firstname.lastname@example.org
nearthing Opportunities with xtensive Mining Expertise
can Mining Services (AMS) is an operational company owned Ausdrill Limited and offers competitive contract surface mining vices to the mining industry throughout Africa.
Unearthing Opportunities with Extensive Mining Expertise
S offer load and haul, drill and blast, grade control drilling and sher feed as well as exploration drilling for the African mining industry. ng personnel management, core industry skills, a diverse fleet and ipment capability that can also add value for clients. African Mining Services (AMS) is an operational company owned by Ausdrill Limited that offers competitive contract surface-mining services to the mining industry throughout Africa.
AMS offers safe and cost-effective load and haul, drill and blast, grade control drilling, pit dewatering, crusher feed, stock pile re-handle and associated civil earthworks to the African mining industry. In addition, AMS provides an exploration drilling service through a modern and well maintained fleet of reverse-circulation, diamond and rotary air blast drilling rigs. We offer strong personnel management, including a culture committed to the training and progression of African nationals for industry development, core industry skills and experience, and a diverse and well maintained fleet with specific equipment capabilities in order to respond to all requirements. Ask our clients.
AMS is a subsidiary of
African Mining Vision 2050 The African Union’s African Mining vision is based on a knowledgedriven African mining sector that catalyses and contributes to the broad-based growth and development of, and is fully integrated into, a single African market through: • Downstream linkages to mineral beneficiation and manufacturing; • Upstream linkages to mining capital goods, consumables and services industries; • Sidestream linkages to infrastructure – power, logistics, communications,
water – and skills and technology development; • Mutually beneficial partnerships between the state, the private sector, civil society, local communities and other stakeholders; • A comprehensive knowledge of its mineral endowment; • Ensuring that it is sustainable and wellgoverned – effectively garnering and deploying resource rents and that it is safe, healthy, inclusive in terms of gender and ethnicity, environmentally friendly,
This document formed the basis of a discussion at the First African Union Conference of Ministers Responsible for Mineral Resources Development in October 2008, as nations sought to harmonize their approach to policy. The meeting saw the adoption of the Addis Ababa Declaration on Development and Management of Africa’s Mineral Resources, by which the signatories agreed to formulate a concrete plan for the implementation of the finalized AMV. The AMV was then finalized and endorsed at the AU Summit in February 2009, setting out as its goal the “transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development”. It is based on an acknowledgement of the vital role that mineral resources can play in wealth creation, balanced by the importance of ensuring that potentially transient benefits are transformed into lasting benefits. Additionally, the benefits of a successful sector needed to be better understood. The sector requires greater vertical and lateral integration if the value chain is to be fully harnessed. Some examples are: downstream linkages to beneficiation – the separation of mineral ore from
socially responsible and appreciated by surrounding communities; • Ensuring that it has become a key component of a diversified, vibrant and globally competitive industrializing African economy; • Ensuring that it has helped to establish a competitive African infrastructure platform, through the maximization of its propulsive local and regional economic linkages; • Optimizing and husbanding Africa’s finite mineral resource endowments and ensuring
diversification, incorporating both high-value metals and lower-value industrial minerals at both commercial and small-scale levels; • Harnessing the potential of artisanal and small-scale mining to stimulate local and national entrepreneurship, improve livelihoods and advance integrated rural social and economic development; and • Being a major player in vibrant and competitive national, continental and international capital and commodity markets.
impurities – and manufacturing; upstream linkages to mining capital goods, consumables and services industries; and sidestream linkages to infrastructure and skills and technology development. To this end, Botswana has managed to boost its diamond sector by persuading leading diamond company De Beers to conduct more of its value-adding processing within the country. Also, South Africa has established an innovative research and development fund.
Responsible production This kind of integration requires the development of a knowledge-based, investment-rich climate with clear and transparent rules, as well as greater equity in sharing revenues, both with industry and within the population. These goals can be achieved only if resource rents are appropriately managed. Production must be safe, sustainable and socially responsible. It is essential that management takes account of the interests of the various stakeholders and generations. Mining is also, of course, an essential part of the global economy and a sector on which Africa is especially well placed to capitalize. It can do so through developing competitive Invest in africa 2011
physical infrastructure, as well as appropriate local and regional economic cooperation, to enable optimal exploitation of mineral resources, regardless of scale or value. Given the central importance of minerals to all economies, especially to the high-growth BRICS (Brazil, Russia, India, China and South Africa) nations that consume proportionally more mineral resources per unit of economic growth, the continent’s ability to capitalize on this sector could grant it a pivotal position at the centre of global commodity and capital markets. The AMV recognizes both the need and the advantages of the continent speaking with a single voice on this crucial issue. While Africa is a major producer of many minerals, it has not yet fully harnessed its comparative and competitive advantages; most exports are of raw, unprocessed materials.
The potential yields from mineral beneficiation are enormous. Growth of the sector, it is envisaged, will be the catalyst for improvements in infrastructure, education and the development of other sectors. The role of the emerging market giants provides a unique opportunity for investment in a competitive climate that favours the continent’s states. Between the old strategic focus on either nationalized industries or Western-favoured ‘Washington Consensus’ economics, there is a third way based on government and industry working in conjunction to plan long-term, mutually beneficial development in the interests of all stakeholders. This is what the AMV seeks to enable with its three goals of wealth creation, social and economic development, and the
Leading mineral resources in Africa (as a proportion of global totals)
Source: African Union. Figures are for 2005. The continent ranks first in world production levels of minerals listed, except manganese (second) and aluminium (seventh) Invest in africa 2011
TSX-V: AAA OTCQX:ALLRF
Developing Potash In Africa • Measured and Indicated Mineral Resources of 673M tonnes containing 126M tonnes of KCl • Additional Inferred Mineral Resources of 579M tonnes containing 119 M tonnes of KCl • Feasibility Study initiated, completion approx. Q3, 2012 • Strategic investors include IFC, a member of World Bank, and Liberty Metals and Mining Holdings, a division of Liberty Mutual Group • Unique shallow potash, possibly amenable to open pit mining, solution mining and solar evaporation • Potentially lowest CAPEX and lowest OPEX, possible to produce MOP and SOP • Proximity to India and China
Christian Scovenna, Investor Cubed Tel: 647 258 3311
Elisabeth Tankeu Commissioner for Minerals
Africa has for far too long relied on extracting, producing and exporting natural resources as raw materials, including agricultural products, for earnings. While this sector has been profitable for many countries on our continent, we need to pay equal, if not more attention to the many other industries that can provide revenue, foreign-exchange earnings, employment, and the general revitalization of the private sector in Africa. This will lower poverty in both rural and urban communities, thereby contributing to one of the Millennium Development Goals. The African Union (AU) has developed a comprehensive Plan of Action for the Accelerated Industrial Development of Africa, which is a framework for a host of initiatives aimed at developing industrial production in Africa. We have also created the Comprehensive Africa Agriculture Development Program (CAADP), which is designed to foster policy reform, capacity development and, critically, to spur investment in the sector. Minerals and mining, another important industry, was given a further boost by the 2009 adoption of the African Mining Vision 2050. At the 2008 AU Conference of Ministers Responsible for Mineral Resources Development, this department also proposed a series of measures including harmonizing the mining policies of Africa’s nations, as well as technological development, and regulatory reform. These will ensure that the sector is harnessed not just for private profit, but also for the sustainable development of Africa. Lastly, although African trade with the world has been good for the continent, it is equally important to further develop intra-African trade links. The trading partners of most African countries are the United States or Western European countries. Developing industries, improving technologies, and creating markets will enlarge the range of goods and services available for export to other African countries, while developing transportation connections will decrease often-prohibitive export costs. All of these areas present lucrative opportunities to create economic partnerships for the mutual benefit of international investors and the AU. The commissioner’s remit also extends to trade, manufacturing and industry
sustainable management of mineral resources and the environment. Resource rents will provide funds for investment in human and physical infrastructure. Improved infrastructure allows for the growth of other sectors, such as agriculture, forestry and tourism. The growth of added-value industries that process resources, as well as high-tech industries, will also feed other sectors, creating a clustering effect and the invention of new products. The challenges that the AMV seeks to tackle include the so-called ‘resource curse’ and ‘Dutch disease’, whereby mineral wealth is stolen or squandered and/or currency accumulation throttles other sectors. Tackling these
challenges means structuring tax regimes so that they are fair to both industry and citizens; robust, yet remaining sufficiently flexible to accommodate changing economic circumstances; and neither strangling struggling industries nor resulting in nations missing out on windfalls during booms. This process requires the formation of effective partnerships with industry to ensure that investment is forthcoming and, at the same time, the creation of a competitive local business environment. Governments are seeking to ensure that there are enough educated staff locally to capture the benefits of investment fully. New approaches are being tried as a result of the AMV: from innovation in INVEST IN AFRICA 2011
Between the old focus on either nationalized industries or ‘Washington Consensus’ economics, there is a third way based on government and industry working in conjunction An iron mine in Northern Cape Province, South Africa. The country’s Black Economic Empowerment policy is increasing the participation of indigenous people in the industry
licensing schemes such as competitive auctioning over differentiated terrain, as was tried in Liberia, to the Angolan model of extraction-for-infrastructure deals. The AMV aims to improve African states’ ability to negotiate contracts and its capacity to administer the sector, via regulation, monitoring, auditing and the creation of robust institutions to meet these ends. Therefore, accurate estimates of mineral resources, and of the scale and quality of data on both reserves and industry activity, are vital if decision-makers are to negotiate effectively with industry. The declaration also sets the AUC and ECA the task of building on the work started by the International Study Group to Review Africa’s Mining Regimes, to develop templates, guidelines, standards and codes to assist African countries in maximizing the benefits of the activity in their mineral sectors. Invest in africa 2011
The AMV emphasizes the need for ongoing auditing, reviewing and, if necessary, renegotiation of resourceexploitation regimes – as has happened in the Democratic Republic of Congo (DRC), Liberia, Sierra Leone and Zambia – if countries are to be able to manage their mineral wealth better. One instrument for improved governance is the African Peer Review Mechanism, a NEPAD initiative, of which half the AU countries are members and which provides for oversight. The Extractive Industries Transparency Initiative, and the Kimberley Process of diamond certification, also provide frameworks for a more smoothly functioning sector. With the aim of attracting foreign direct investment, mining codes have already been written by several countries, including the DRC, Ghana, Guinea, Nigeria and Zambia. In Malawi, Namibia, South Africa and Tanzania, the process
Turning mineral wealth into national wealth Major investor in ZaMbia’s econoMy USD1.5 billion investment in Trident, a new large-scale mine and a smelter in Zambia’s North Western Province. The investment is expected to trigger further infrastructure developments and growth of diversified industries coupled by linking Zambia to major markets through Angola, Namibia and Botswana. Largest taxpayer • Tax contributions of USD1.273 billion to date from 2006, making it the single largest contributor to Zambia’s national treasury • Effectively pays USD1.5 million per day in various taxes. positive iMpact on eMpLoyees, their faMiLies and Larger coMMunity • Some 4400 directly employed by First Quantum and additional 1000 jobs through contractors coupled by the multiplier-effect of spin-off businesses such as construction, retail, hospitality and services • Hundreds of contracts totalling millions of dollars with small and medium sized local businesses. increasing the fLow of benefits and opportunities for ordinary ZaMbians • USD16 million investment in corporate social responsibility (CSR) aimed at uplifting the lives of ordinary Zambians. First Quantum CSR programmes are in health, education, infrastructure, conservation farming, sport, arts & culture, human resource development, environmental protection and other areas • Listed shares on the Lusaka Stock Exchange (LuSE) to allow ordinary Zambians to identify with and participate in the growth of the company • Developing a home-ownership scheme for employees and others as a way of unlocking personal wealth • Creating multi-facility economic zones to foster innovation and entrepreneurship.
AwArds: 2010 Taxpayer of the Year 2010 Employer of the Year for more information visit www.first-quantum.com
was also accompanied by a broad-based consultation with stakeholders. South Africa and Zimbabwe have their Black Economic Empowerment and indigenization policies, respectively, to increase the participation of black, ‘indigenous’ nationals in the industry. Nigeria and South Africa have already incorporated Corporate Social Responsibility (CSR), which hitherto operated on a voluntary basis, into law. The DRC, Ghana, Namibia and Tanzania are also seeking to include CSR within their policy framework in the future. There has also been an increase in the use of Environmental Impact Assessments (EIAs) to ensure tests of sustainability are employed and quantified.
Need for public-private cooperation At the macro level, to improve confidence, investment and participation by the private sector, exchanges, foster trade bodies and public-private partnerships need to be created. Equally crucial is ensuring that small and medium-sized enterprises can play a larger role in the sector and that junior resource companies are developed. A worker walks underground in South Deep mine outside Johannesburg, South Africa. Investment in infrastructure has reduced accident levels and increased output
Invest in africa 2011
Both collaboration and cooperation in the sector will provide mutually supporting advantages in terms of competency, innovation and diversification. At the micro level, the Yaounde Vision has provided an excellent and widely praised model for managing the artisanal and small-scale mining (ASM) sector. In the wake of the AMV, individual nations are responsible for drawing up and implementing concrete action plans towards these goals, guided and measured by the AUC. The regional groupings of the Economic Community of West African States (ECOWAS), the Southern African Development Community (SADC) and West African Economic and Monetary Union (UEMOA) – which is focused on Francophone West Africa – have already made concrete steps towards implementing action plans in furtherance of the AMV, and have begun harmonizing their policy frameworks. The AMV is a blueprint that lays out the principles by which individual nations and regional blocs can act, to ensure they maximize the lasting return of their mineral resources over their lifespan, in the context of the value chain as a whole and in a coordinated and mutually sustaining fashion.
Making light of heavy work Manitou machines have increased productivity on mining operations worldwide, with our strong focus on versatility, low fuel consumption, low maintenance cost, longer equipment life and ease of use. We have even helped design local solutions for underground drilling and charging. What a Manitou can do on your mine • Drilling and boring • Installing wire mesh for roof support • Charge up for blasting • Removing/replacing motors or engines underground • Automated method to replace large tyres underground • Loading/unloading and lifting • Cleaning and digging • Towing up to 30t
Ranging from telescopic forklifts to rough terrain loaders, a Manitou machine clearly outperforms alternative materials handling solutions on a mine, from lower fuel consumption to better manoeuvrability and much higher versatility, allowing several machines to be replaced by one Manitou. For a FREE demonstration on site, call a Manitou product specialist now and learn more about our FREE ﬁrst service, 24/7 support and Toll-free: 080 626 4868 • Fax: 011 975 4646 E-mail: email@example.com Web: www.manitou.co.za Represented throughout South Africa with dealers in Gauteng, KwaZulu-Natal, Eastern Cape, Western Cape, Vaal Triangle/Freestate, North West Province, Botswana, Namibia, Mozambique, Zambia, Zimbabwe
mineral exploration exploration and and mineral Amlib is an exploration company focussing on gold in Liberia. We are developing the vast underexplored mineral wealth the country has to offer. Amlib holds four 25-year Mineral Development Agreements with the Government of Liberia covering over 3,000km2 of land with known gold anomalies. For more information visit: www.amlibgroup.com
Included within our portfolio is a licence covering 1,870km2 of arguably the most geologically interesting and prospective 90 strike km of the Cestos shear zone. According to Liberia’s own Ministry of Lands, Mines and Energy:
“Liberia’s ‘Cestos Shear zone’ is part of the West African gold fields which hosts Siguiri mine (Guinea), Ity mine (Ivory Coast), Syama Mine (Mali). There is an overwhelming prospectivity for major gold deposits.”
Ministry of Lands, Mines and Energy
Water: progress in the pipeline
Drinking from a pump in South Africa. The continent aims to halve the proportion of its population who lack sustainable access to safe drinking water by 2015
Invest in africa 2011
Africa faces several challenges in dealing with water provision and managing its environment, but the continent is now putting in place the appropriate infrastructure, writes Jesse Morgan
roviding safe, clean drinking water across the continent and managing Africa’s environment are two tasks that go hand in hand. Both require the handling of a scarce, precious, yet essential, resource in such a way as to ensure they sustainably benefit the continent’s population. The African Union Commission (AUC) has backed several initiatives, in particular in furtherance of the Millennium Development Goals (MDGs), and three specifically that seek to: “integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources; reduce biodiversity loss, achieving, by 2010, a significant reduction in the rate of loss; halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation”. These goals build on, and supplement, those of the Africa-European Union Declaration on Climate Change (AU-EUDCC) of November 2008, which in turn followed the Addis Ababa Declaration on Climate Change and Development of the previous year. The two groups underlined their joint commitment to the objectives and principles of the United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol, the principal aims of which are to halve 1990 emissions levels by 2050 and limit temperature rises to no more than 2°C above pre-industrial levels. But the AU-EUDCC also focused on initiatives of particular relevance to the continent, which complement the work of regional mechanisms such as the Global Climate Change Alliance and the Global Energy Efficiency and Renewable Energy Fund. The former plays an important role in the coordination of policy, while the latter focuses on the provision of clean and secure energy supplies to those situated in poorer regions. Water provision faces several threats. Environmentally, there is climate change, increasing scarcity of water as a result of both shrinking water bodies and desertification, and the problem of unpredictable rain patterns. Human threats include poor governance of resources, pollution, environmental degradation, deforestation and insufficient investment in improving infrastructure and in developing the water supply and sanitation.
One of the first comprehensive, pan-African schemes to tackle these issues is the Africa Water Vision 2025, which in 2000 set out a 25-year scheme to coordinate national and regional efforts. This program is complemented by the work of African Water Week, an initiative by the African Ministers’ Council on Water (AMCOW) to ensure access to clean water and sanitation, which met for the third time in November 2010. The first pillar of the Comprehensive Africa Agriculture Development Program (CAADP), in conjunction with the New Partnership for Africa’s Development (NEPAD), aims to coordinate initiatives across the continent that are mobilizing national and regional resources to improve irrigation levels, with the aim of increasing the quantity of irrigated land from 12.6 million ha in 2002 to more than 20 million ha by 2015. Water also has a political dimension, so it comes as no surprise that the G8/Africa Summit in May 2011 declared it deemed “of the utmost importance that the use of large river water resources should have in due consideration the interests of both upstream and downstream countries in order to reach agreements aiming at common development”.
Threat to the region Climate change and a deteriorating environment are key challenges to sustainability, biodiversity, food security and stability across Africa. Pollution, deteriorating soil quality, desertification and poor air quality are threatening the lives and futures of all of the continent’s people. The region is one of the most exposed to the perils of climate change. NEPAD’s Climate Change and Natural Resource Management program plays a pivotal role in coordinating and an advocacy role in promoting regional and national programs aimed at counteracting environmental threats. NEPAD recognizes that addressing environmental issues is a precondition for sustainable growth and development. One of the key concerns when tackling these issues is the development of appropriate systems for gathering and monitoring data, to ensure that decision-makers have the information they need to make the most efficient use of their resources, and to provide feedback as to what and where progress is, or is not, being made. The AUC, in conjunction with the EU, has founded a program with the intentions both to improve monitoring of the environment and to promote sustainable development. African Monitoring of the Environment for Sustainable Development (AMESD) aims to improve information management systems in order to better manage environmental change, and thus aid the alleviation of poverty. Invest in africa 2011
DevCoCast allows users to access data ranging from oceanic salinity and temperature through to sonar and radar imaging that can track fish and bird populations The organization works closely with the five key regional bodies: the Economic Community of Central African States (CEMAC), the Economic Community Of West African States (ECOWAS), the Intergovernmental Authority on Development (IGAD), the Indian Ocean Commission (IOC) and the Southern African Development Community (SADC). Initiatives are under way to improve the management of water resources, crops, land degradation, marine resources, environmental and agricultural resources. There is also the Global Monitoring for Environment and Security (GMES) and Africa project, which was launched following the Maputo Declaration on October 15, 2006. This initiative aims to strengthen and further develop infrastructure to allow for a more coherent exploitation of
Treated water from the St Martin wastewater plant in Mauritius is used to irrigate sugarcane fields. Environmental projects are receiving increasing support from the AU
Invest in africa 2011
observation data, technologies and services in support of environmental policies â€“ again, to assist with the sustainable development of the continent. Similarly, DevCoCast is a EU-funded program which allows a wide variety of users in developing countries to access data crucial to the management of their local environment and natural resources, from data on oceanic salinity and temperature through to sonar and radar imaging that can track fish and bird populations. DevCoCast already transmits data and information â€“ including that provided by meteorological stations and weather balloons recording air quality and monitor rainfall trends â€“ that is of relevance to water management in Africa. This capacity will be expanded as African research institutions
HE Mrs Rhoda Peace Tumusiime Commissioner for Rural Economy and Agriculture
The objective of the African Union Commission’s (AUC) Department of Rural Economy and Agriculture (DREA) and its regional technical agencies is to provide political leadership and coordinate multi-stakeholder efforts to address challenges related to agriculture, rural development, environment and natural resources, and disaster-risk reduction. The DREA has elaborated a three-year Strategic Plan, which was developed in line with, and builds on, the AUC’s Strategic Plan 2009-12. Future major projects include: Africa Food and Nutrition Security Day (October 30, 2011); a side event celebrating an African Fisheries Day; an Africa Pavilion at the COP 17 event; a Parliamentarian Colloquium to sensitize African MPs to the importance of mainstreaming environment into developmental plans and policies; and law-enforcement training to build the capacity of African enforcement officials on Multilateral Environmental Agreements. The DREA and its technical regional agencies have been contributing to the development and adoption of policies by the AU. In recent years, the DREA’s efforts, combined with those of other stakeholders and partners, have enabled an increase in the number of countries achieving six percent annual agricultural growth rates in agriculture. Also, Ghana is on track to achieve the Millennium Development Goal 1 (MDG1) target of halving hunger and poverty by 2015, and more countries are allocating at least 10 percent of their national budgets to the agricultural sector. Also, African negotiators on climate change are now speaking with one voice, and Africa’s concerns are now given due attention by the global community. The continent will now see greater benefits from climate-change negotiations. The commissioner’s remit also extends to rural economy and agriculture
and water agencies and authorities work ever more closely together, on tasks such as more thorough assessments of water-related issues in Africa, which will then allow them to clearly define their data needs. The UN Economic Commission for Africa released a report this year called Institutional Innovations for Transition Towards a Green Economy in Africa, which highlights the importance of a green economy in improving human development, lowering environmental risks and managing scarce resources. Dr Patrick Mwesigye, Regional Industry Officer at the UN’s Environment Programme (UNEP), says: “A green economy comprehensively challenges the myth of a trade-off between environmental investments and economic growth. It is not only relevant to more developed countries, but also a key catalyst for growth and poverty eradication in developing ones, too... In order to achieve sustainable development, we are going to need a new economic paradigm.”
These remarks come in the wake of the AU’s growing stress on working towards achieving sustainability goals and furthering environmental initiatives. In support of these goals, the African Development Bank has highlighted several funding options available to African countries for sustainable development projects, from concessional loans and microfinance to funds such as the Africa Water Facility and the Africa Green Fund, as well as using capital markets and freeing up capital via debt-relief programs. Providing and sustaining the provision of free water, preventing the loss of biodiversity, managing climate change, planning for a low-carbon future, while measuring and monitoring progress of all these priorities, all adds up to a complex and challenging task. But there is no doubting the determination of the stakeholders and the quality of the AUC’s policy framework. The necessary infrastructure, both human and physical, is being put in place to achieve these goals. INVEST IN AFRICA 2011
As one of the worldâ€™s largest food and beverage companies, PepsiCo has an ability to make a difference. We are
known for our brands that stand for quality and are respected household names around the world such as Pepsi-Cola, Layâ€™s, Quaker Oats, Tropicana and Gatorade along with other popular brands such as Aquafina, 7UP, Mirinda, Chipsy and Simba.
Performance with Purpose
means At PepsiCo, continuing to build a product portfolio of enjoyable and wholesome foods and beverages, finding innovative ways to reduce the use of energy, water and packaging, and providing a great workplace for our associates. We respect, support and invest in local communities where we operate by hiring local people, creating products designed for local tastes and partnering with local farmers, governments and community groups.
PepsiCo understands the unique challenges that Africa faces. For example, the Food and Agriculture Organization declared that food production must increase by 70 percent over the next 40 years. Currently, 25 percent of people who go to bed hungry live in Sub-Saharan Africa and in 2050 there will be no additional land or water.
PepsiCo believes is aeconomic new economic frontier, PepsiCo believes AfricaAfrica is a new frontier, that by investing in research and thatand by investing in research and development to expand our and development to expand our more affordable, offeringoffering of moreof affordable, nutritionally nutritionally relevantrelevant productsproducts for underserved and lower for underserved and lower communities, income income communities, we can we can be a catalyst for economic be a catalyst for economic development job creation development and job and creation on the continent. on the continent.
PepsiCo that corporations canaplay a major PepsiCo knowsknows that corporations can play major role role in food security and environmental stewardship by focusing efforts on: in food security and environmental stewardship by focusing efforts on: o Funding agriculture that encourages o Funding agriculture science science that encourages diversification plant sources including diversification of plant of sources including biofortification and promotes use biofortification and promotes efficientefficient use of resources natural resources such as water of natural such as water o Developing and delivering new product o Developing and delivering new product types types that include: consumer related to that include: consumer insightsinsights related to perception; environmentally sensory sensory perception; environmentally suitablesuitable packaging, and improved quality control packaging, and improved quality control o Initiating partnerships that promote o Initiating partnerships that promote new new and execution of business researchresearch and execution of business models models for low-income for low-income settingssettings
We look forward to working We look forward to working withwith you.you. ÂŠ 2011, PepsiCo, Inc. AllThis Rights Reserved.valuable This ad contains valuable owned andInc. used by PepsiCo, Inc. ÂŠ 2011, PepsiCo, Inc. All Rights Reserved. ad contains trademarks ownedtrademarks and used by PepsiCo,
Richfield Your Partner in Progress
Engineering, Procurement, Construction Contractors Engineering, procurement and construction Richfield’s capability covers engineering, procurement and construction – including conceptual study, design, detailed engineering, procurement, fabrication, supply construction and commissioning for various plant and unit operation equipment. Richfield has to its credit various products and projects work covering engineering, which were completed in compliance with international codes, including: BS, ASME, DIN, JIS and IS.
Installation of steam-generation stations • Package boilers • Industrial boilers • Waste heat recovery system • Economizers stations • Incinerators • Flash steam coil boiler stations
Engineering requirements to international standards have been fulfilled by Richfield to the complete satisfaction of clients.
Manufacturing under license • Package boilers up to 30 ton/hr capacities • Economizers • Waste heat recovery boilers • Heat exchangers • High-performance, special-duty pressure vessels • Materials-handling cranes • Cryogenic vessels • Storage vessels
Design and construction for refineries and petrochemicals • Fuel storage tank farms • Fuel handling and distribution systems • Fuel heating systems • Fuel unloading and loading systems • Thermal insulation • Fire-fighting systems • Process pressure vessels • Cryogenic vessels • Heat exchangers • Piping works • Petroleum products storage tank farms
Pipework High- and low-pressure carbon steel; stainless steel pipelines for conveying steam, chemicals, petroleum products, paper pulp; and instrumental pipework.
Structural steel for: • High-rise buildings • Warehouses • Process plants • Bridges • Dam gates
Our Contacts Richfield Engineering Ltd Off Mombasa Road, PO Box 18802, Nairobi, Kenya. T: 254 20 651503/4/5 E: firstname.lastname@example.org, email@example.com, firstname.lastname@example.org
Construction Richfield construction activity is managed by a highly experienced team, established as leaders in the construction industry and offering a wide range of services to clients – from small contracts to major multidiscipline construction projects. Transport and haulage equipment • Fabrication and supply of trailers • Fabrication of special trolleys • Hydraulic systems and axles Installation of electro-mechanical plant and equipment for: • Sugar factories • Cement plants • Paper mills • Petrochemical plants • Power plants • Refineries • Steel plants • Steam turbines and generators • Hydro-mechanical structure and equipment • Food & edible-oil industry
Hemisphere Technology Limited. 1, Adeyemi Bero Crescent, llupeju Industrial Estate, PO Box 3574, Marina, Lagos, Nigeria T: +234 1 4977602 04, 8991818 27 | F: +234 1 4977605 E: email@example.com
A road map for agriculture
An agricultural development program agreed by African governments is helping their nations to tackle challenges in this sector. Jesse Morgan takes a look at what is involved
I An abundant maize crop for a farmer near Lilongwe, Malawi. Using irrigation, rather than just relying on rainfall, has helped the country to achieve food security
mproving food security and nutrition and increasing incomes in Africa’s largely farming-based economies are key concerns of the African Union (AU). The AU and the New Partnership for Africa’s Development (NEPAD) recognized, upon their founding in 2002 and 2001 respectively, the need to ensure that the diverse range of stakeholders – internationally, regionally and nationally – work in concert; share information and know-how; analyze each others successes and failures; support the sector as a whole; and promote joint and separate efforts at these various levels. Invest in africa 2011
These ambitions complement and extend the Millennium Development Goal (MDG) that aims to “halve, between 1990 and 2015, the proportion of people who suffer from hunger”. To create a concrete plan to eliminate hunger and reduce poverty through agriculture, African governments adopted the Comprehensive Africa Agricultural Development Program (CAADP) at the AU assembly in 2003. This, the agricultural program of NEPAD, which is in turn an initiative of the AU, aims to enable the continent’s nations to leverage economic growth through developing the agricultural sector. Specifically, the CAADP centres on an agreement to increase public investment in agriculture to a minimum of 10 percent of annual government spending and to raise agricultural productivity by at least six percent per year. The Food and Agriculture Organisation (FAO) estimates that, currently, only seven percent of the continent is irrigated (and only 3.7 percent of sub-Saharan Africa), compared with
inhabitants will have improved and secure access to land, as well as to improved physical, human and financial infrastructure – so that sustainable development of the sector becomes possible. The CAADP seeks to cement Africa’s role at the forefront of agricultural science and technology, as it aims to meet the demands of its citizens, as well as grasp the export opportunities available. Technological innovation also better enables viable agricultural productive development in the long term. In 2007, Rwanda became the first nation to sign up to the CAADP Compact. Since then, another 25 nations have followed suit. The CAADP is comprised of four pillars for improving husbandry and investment:
Pillar one: sustainable land and water management (SLWM) Under the technical leadership of the University of Zambia, participants are pursuing partnerships for SLWM. The TerrAfrica Initiative has mobilized $1 billion for investment in countries to aid sustainable land and water management via the Global Environment Facility (GEF) Strategic Investment Program. To begin with, the GEF provided $150 million, which was quickly followed by a further investment by the initiative of $900 million. In addition to the invaluable work of the CAADP country roundtables, country programs are already being drafted and preparations for the distribution of funds are under way.
The UK has launched a fund to raise investment for African agribusiness joint ventures, while an Act in the US is helping to clarify the rules for African exports 41 percent for South Asia. Presently, fertilizer productivity is 36 percent lower than in Asia; and the proportion of soil classified as having slow nutrient reserves is 16 percent in Africa, as against four percent in Asia. While these figures are troubling, they also illustrate the vast potential for African agriculture. The CAADP directly tackles both policy and capacity issues across the whole of the agricultural sector and across the continent. The program is wholly managed by Africans for Africans, and constitutes the collective vision of its nations’ leaders with regard to tackling agricultural development on the continent. The goals are that, by 2015, there will be flourishing and dynamic agricultural markets nationally, regionally and internationally as Africa becomes a net exporter of agricultural products. There will be greater equity in the distribution of wealth, in addition to an increase in income levels. Rural Invest in africa 2011
Pillar two: market access The Secretariat has already drafted the final technical review and necessary processes toward improving market access by improving infrastructure and assisting the growth of trade. The framework is being distributed to stakeholders, ready to be considered for political endorsement by the AU heads of state and government before being handed over to the technical leadership of the Conference of Ministers of Agriculture of West and Central Africa (CMA/AOC) for implementation. Further to the Abuja Declaration, NEPAD, the AUC and the African Development Bank have established the Africa Fertilizer Financing Mechanism, with more than $35 million already mobilized and ready to be distributed to countries via the country roundtable processes. Funds are being provided by the Common Market for Eastern and Southern Africa (COMESA) and Economic
The ‘Amiran Farmers Kit’ revolution An agribusiness tool to end poverty in Africa Farming and the AFK In pursuit of accelerated growth and sustainable development in the region, a new innovation has been born that seeks to improve livelihoods of those who embrace it. Based on an agricultural approach, which aims to “grow more with less”, the AFK (Amiran Farmers Kit) is an all-inclusive package incorporating high-quality inputs aimed at ensuring the small-scale farmer achieves the highest possible yields using modern technology in a simplified and user-friendly way. Awarded for its efforts towards the Eradication of Extreme Poverty and Hunger (MDG 1) by the MDG Trust Fund in September 2010, the AFK bridges the gap between farmers and success. In a continent that has plenty of land, water and labour, the AFK allows all-year-round crop production in a controlled environment and has seen farmers who have adopted it move from subsistence to commercial farming.
Agribusiness approach Bringing a holistic approach to agribusiness, the AFK rests on three pillars: knowledge, know-how (how to implement the knowledge) and highquality inputs. The AFK is not just a food production unit – it is an income-generating activity (IGA) that offers the farmer the opportunity to achieve high returns from a relatively low investment. Besides being a production unit that self-sustains its owner through production of high-value crops, the AFK promises a broad development impact in addition to its strong role in poverty reduction. The AFK, which is a modern sustainable agribusiness farming unit, allows growing of crops in the greenhouse, as well as in an open field. It comprises of a greenhouse, with a metal frame, insect nets and the high-tech Solarig cover. In the spirit of offering a user-friendly product to the farmer, the farmer’s greenhouse, which is collapsible, can easily be shipped with the other components of the AFK in the back of a pick-up. The AFK is anchored on the Family Drip System (FDS), a gravity-fed drip irrigation system that does not require an energy source to pump the water through the drip lines. Drip irrigation, adopted widely all over the world, is the highest yielding and most water-conservative system of irrigation practiced across the globe today. The knowledge and know-how components are unique to the AFK and rarely offered as a service by the private sector. This component involves training and agro-support, which ensures that the farmers understand the AFK, its maintenance and improved agronomic practices. Additional components of the AFK include high-yielding seeds, top-quality fertilizers, agro-chemicals, a 600-litre collapsible water tank, protective gear and a 16-litre knapsack sprayer.
Seeking long-term solutions Food crises stagnate the economic development of a country and raise the cost of living. Various institutions understand that the only way to
alleviate this is to form a sustainable means of wealth creation, such that the farmers will have a sustainable, steady mode of income, rather than relying on handouts from the government and wellwishers for survival. The Kenya Red Cross Society, for example, has identified the AFK as a tool to mitigate famine, especially in drought-stricken areas. Other partnerships include the Food Agriculture Organization (FAO), the European Commission’s Drought Management Initiative and many other NGOs, donors and government ministries.
Next Generation Farmers Many youths have already taken a keen interest in the AFK technology, as is evident in the fact that the average age of the Kenyan farmer is in the mid 50s while the average age of the Amiran farmer is in the mid 30s. With an aim of making agribusiness attractive to the next generation of farmers, Amiran has established partnerships that have seen the youth embrace Amiran’s agribusiness approach. Through the “Amiran Next Generation Farmers Initiative”, many schools have acquired the AFK. In addition to strengthening food security in these schools and enriching the diet of the students, the AFK serves as an educational tool, a practical classroom for the students. Amiran is turning
around the mindset of many youths who are now taking up this technology, and farming in general, not just as a traditional way of earning a livelihood, but as an exciting career! Through its Facebook page, ‘Amiran K’, Amiran continues to attract young farmers, who get to interact with Amiran, chatting, sharing experiences and making enquiries on agricultural matters and the complete solution that Amiran offers. Indeed, Amiran is proving to the youth that “farming is cool”.
Impact created by AFK The AFK has already proved itself. As governments, NGOs and donor agencies seek to empower communities, a more sustainable approach is being adopted, training the community to fish as opposed to giving them fish. As we continue to look for ways to improve livelihoods, Amiran believes that modern agribusiness is the most available and sustainable means of wealth creation.
For more information visit: www.amirankenya.com or contact: firstname.lastname@example.org
Corn Products International: creating ingredient solutions for a growing world All over the world, people are demanding more from the products they use every day. They want an increasing variety of foods that are both available and affordable. They demand beverages with exceptional taste and a variety of sweetness levels, they want foods that promote health and they want personal care products made from natural ingredients that they can trust. This is the focus of Corn Products International and its subsidiary, National Starch, and we have been delivering highquality ingredients for more than 100 years. Our starches, sweeteners and other ingredients are the building blocks of some of the worldâ€™s most-recognized products â€“ from foods and beverages to pharmaceuticals, personal care products, industrial goods and animal feeds. This makes us a vital partner in the everyday lives of consumers all around the world. Our ingredients make yogurts creamier; soups and sauces thicker; soft drinks sweeter; snack foods crispier; cereal bars more moist; cosmetics, shampoos and soaps smoother; and paper products stronger. The company has operations in 40 nations and employs nearly 11,000 people. We operate world-class ingredient development and engineering laboratories on four continents to provide the latest technology and ingredients for our customers, wherever they are located. Corn Products International has a long history in Africa, having first established a presence on the continent nearly 40 years ago. Corn Products Kenya Ltd, which has offices in Nairobi and a facility in Eldoret, manufactures starches and sweeteners for the food and beverage markets, providing both employment for Kenyans and a reliable market for local farmers. The company works closely with smallscale local farmers and introduces them to new farming techniques, bringing a sense of empowerment, self-sufficiency and
Corn Products International and National Starch - supplier of functional, nature-based ingredients
sustainability to the local communities. In addition to supporting agriculture, National Starch has invested in a technical service laboratory and state-of-the-art culinary development kitchen at its facilities in Johannesburg to provide customer support for sub-Saharan Africa. Our employees are committed to making the company a trusted, corporate citizen throughout the world. We adhere to a global set of corporate policies that ensure responsible business conduct standards. This is demonstrated through our support of a variety of vital community activities, ranging from educational initiatives to agricultural support. We have established a corporate-wide sustainability initiative that governs everything from emissions to water usage to waste reduction.
Our goal today is the same as it was a century ago: at Corn Products International we are committed to working with our employees and our communities to build both a better business and a better world. Mark Lindley, director, corporate communications and Alan Bradley, vicepresident Africa, Corn Products International For further information, contact Alan Bradley Email: email@example.com Telephone: +27 11 867 9260
Welcome to Innovation
Introducing your food ingredients supplier for the next decade Corn Products International and National Starch Our name signals our commitment to the future of the global food industry. A future that will see us align our comprehensive capabilities with the major consumer trends driving food innovation. Todayâ€™s Corn Products International and its subsidiary, National Starch, has evolved from its roots as a starch and sweetener supplier into a multi-faceted business. We have the ability to partner with food and beverage manufacturers at any point and at every point of your development process. For 40 years, weâ€™ve contributed to the success of food and beverage companies in Africa. We work closely with local farmers, teaching them skills and techniques to build productive, sustainable agricultural communities. Plus, weâ€™re fully committed to reducing emissions, water usage and waste across all our operations. Above all, it is our goal to become your partner of choice to harness the power of innovation for the next generation of food products. Supplier of modified food starches, functional native starches and sweeteners. Alan Bradley - Tel: +27 11 867 9260 - www.foodinnovation.com - firstname.lastname@example.org
Corp ad 210 x 276.indd 1
Quality Quality starts with commitment The global fertilizer company with long term presence in Africa
Contributing to African agriculture, using our global knowledge
Dedicated partner of Agricultural Growth Corridors and the African Green Revolution
Yara International ASA is the worldâ€™s leading chemical company that converts energy, natural minerals and nitrogen from the air into essential products for farmers and industrial customers. As the number one global supplier of mineral fertilizers, we help provide food for a growing world population. Our industrial product portfolio includes environmental protection agents that prevent air pollution. Yaraâ€™s global workforce of 7,300 employees represents the great diversity and knowledge that enables Yara to remain a leading performer in the industry. Visit us at www.yara.com
Community Of West African States (ECOWAS) to assist with the integration of regional markets and to improve the competitiveness of local products, nationally and regionally. Assisting the CAADP, the United Kingdom’s Research into Use Program has launched the African Enterprise Challenge Fund, to raise investment funds for agribusiness joint ventures and other business-to-business initiatives. Additionally, the United States’ African Growth and Opportunities Act (AGOA) is helping to clarify the rules for African exports by consolidating the provisions of previous Acts, as well as offering duty-free and quota-free treatment for various eligible products imported from sub-Saharan Africa. The Act extends the 4,600 products currently exempted under the Generalised System of Preferences (GSP) legislation to 6,400 under the AGOA GSP rules.
Pillar three: food supply and hunger Tackling famine by increasing the food supply across the continent is crucial. Among the principal goals are improving smallholder productivity, and improving the ability of states and
non-state actors to respond to food crises. There is also a focus on the chronically food-insecure – those populations especially vulnerable to, and affected by, crises and emergencies. This approach is in line with CAADP’s commitment to meet both its agricultural growth agenda and the MDG targets of cutting extreme poverty and hunger in half by 2015. This pillar seeks to coordinate the key elements of the CAADP vision, to make sure that increased agricultural output, improved market functioning, and growth in income and income equity collectively result in the elimination of hunger, malnutrition and poverty. The key objectives are to improve domestic production; facilitate trade in staple foods; improve household productivity; and develop assets. Several initiatives aiming to achieve these goals are already under way. Major projects include the Regional Enhanced Livelihoods for Pastoral Areas (RELPA), which has received US Agency for International Development (USAID) funding of $19.8 million to aid farmers in three countries. The Regional Food Security and Risk Management Programme for Eastern and Southern Africa (REFORM) has received EU funding of
Funding for projects to tackle food supply and hunger in Africa (US$)
Making Markets Work for the Poor (MMWP) Funded by: the World Bank/ the UK’s Department for International Development (DfID)
Regional Food Security and Risk Management Programme for Eastern and Southern Africa (REFORM) Funded by: the European Union
Regional Enhanced Livelihoods for Pastoral Areas (RELPA) Funded by: the US Agency for International Development (USAID)
Improved Regional Trade in Food Staples (RTFS) Funded by: the World Bank
Cassava Transformation in Southern Africa (CATISA) Funded by: the Swedish International Development Agency (SIDA)
Invest in africa 2011
€10 million ($14.9 million) to build capacity and enable skills transfer, technical studies and the creation of best-practice principles to help shape policy. Another project is Making Markets Work for the Poor: Enhancing Food Security and Productivity Growth in Eastern and Southern Africa (MMWP), which is funded by the World Bank and the UK’s Department for International Development (DfID) with around $3.8 million. The project involves practical analysis, policy outreach, consensusbuilding, and capacity-strengthening to improve food security, reduce poverty and grow agricultural productivity. Improved Regional Trade in Food Staples (RTFS) is being funded with $5 million from the World Bank to gather spatial evidence
on existing regional production and trade in food staples. It aims to develop predictive analytical tools that will enable geographical mapping of the results of the sector and, in particular, of crisis events – including policy shocks. Cassava Transformation in Southern Africa (CATISA), funded with $2 million from the Swedish International Development Agency (SIDA), will analyze and help to accelerate cassava commercialization in Southern Africa, again to improve food security. For the solution of a different, but equally vital, problem, the Home-Grown School Feeding (HGSF) programme – alongside the World Food Programme (WFP) and the DfID funding of $25 million, NEPAD, the WFP and the Millennium Hunger Task Force (MHTF) – aims to link food provided in schools with agricultural development by purchasing and using locally and domestically produced food. These investment initiatives are designed to help in developing programmes to tackle food insecurity, to enable the MDG to be met, and to complement and enhance the country roundtable processes.
Pillar four: agricultural research
A bumper vegetable harvest in Kenya. Africa as a whole needs to increase its food supply, with goals that include improving the productivity of smallholders
Invest in africa 2011
This pillar is designed to improve agricultural research and systems, to leverage appropriate technological innovation. Its intention is to support farmers working in conjunction with the DfID Research into Use (RIU) programme. Progress has been made through the adoption of the Framework for African Agricultural Productivity to boost the application of science and technology. Funding is being provided for research organizations such as the Conseil pour la Recherche Agricoles en Afrique (Council for Agricultural Research in Africa) in West Africa and the Association for Strengthening Agricultural Research in East and Central Africa, as well as national programmes in Ghana, Mali, Senegal and Kenya. In addition to developing agricultural research, the pillar also seeks to ensure that lessons and results are widely disseminated so that they will result in application in the field. The Forum for Agricultural Research in Africa (FARA) is the lead technical agency and, working with the CAADP Secretariat, is developing strong links with the RIU. This mutual support aids in funding events, providing training and building the partnerships necessary to fulfil these goals. Crop production will grow with investment to improve intensification, in the form of improved crop yields and higher cropping intensities, and via arable land expansion. The four pillars of the CAADP represent a cogent and coherent policy framework that amounts to a road map for the future of African agriculture.
AGCO – African agriculture’s powerful partner Thinking of investing in an agricultural project in Africa? Then you need to speak to AGCO.
As a world-leading farm machinery manufacturer, AGCO has unrivalled experience of African agriculture, with Massey Ferguson, the region’s leader, now joined by Valtra tractors as well as Challenger tracked tractors and equipment. Together, these top brands offer a diverse range of equipment developed and built specifically for African conditions. AGCO’s unparalleled expertise and local knowledge, which have been amassed over many generations, puts it in prime position to develop African agriculture – whatever ever the size or enterprise – from the largest commercial farming operations through to small-scale farmers. It always pays to pick a strong partner and with a $6.9 billion turnover in 2010, AGCO is the largest pure-play, full-line agricultural manufacturer, which sells machinery in 140 countries. A truly global corporation, AGCO has the power, equipment and support structure to make an immediate impact. AGCO’s strong reputation in the region is built on building partnerships with customers to ensure their success.
The best support gets even better
Construction of a new African AGCO Academy begins later this year. This significant investment, further underlines the corporation’s commitment to African agriculture. The new technology training centre and model farm are set to be the first, and most advanced, facilities of their type on the continent. This new centre of excellence will feature purpose-built customer and distributor staff training facilities, alongside a 100ha demonstration farm.
Valtra is making big inroads in Africa, recently supplying a consignment of 100 tractors to one government’s project.
The MF 100 is one of a range of new planters from Massey Ferguson, introduced to help all farmers benefit from Conservation Agriculture techniques.
This is just the first phase in AGCO’s continuing investment strategy, and further strengthens what is already probably the best parts and service support across the whole of Africa.
Appropriate technology for all African farmers
AGCO, through its Massey Ferguson, Challenger and Valtra brands, offers an unrivalled array of equipment designed, developed and proven to excel in the most arduous conditions. AGCO and its staff understand African agriculture. For more than 60 years, Massey Ferguson has been at the forefront of mechanising African farming, with today’s range encompassing a vast array of equipment including combine harvesters, balers and materials-handling machinery, as well as drills and planters. Recently, Massey Ferguson has added 30 new planters, in seven ranges to its vast range of equipment developed for African farmers. These are aimed at helping customers to benefit from the enormous gains that can be achieved through switching to growing crops using conservation agriculture techniques. For large-scale commercial farming operations and projects, Challenger tracked tractors are proven to improve output and cut operating costs. For ultimate output, the MT800C Series offers four models with
maximum powers from 474hp to 609hp, which are complemented by the 290hp to 355hp maximum power MT700C Series. The latest GPS positioning, AutoSteering and advanced control technology ensure all machines work at top efficiency and provide the highest level of accuracy. Valtra is the number-one brand in South America for sugar cane haulage, accounting for about 70% of all tractors sold into this specialist sector. This experience shows, and it is why Valtra is also gaining a good reputation for durability and reliability in all sectors in Africa, with one government recently investing in 100 Valtra tractors, choosing the T171H and T191H models. As a world-leading farm machinery manufacturer, AGCO is not only strengthening its position in the region, but also delivering on its mission: ‘To provide high-tech solutions to farmers feeding the world.’ With Africa’s population set to rise to two billion by 2050, the need for the highest-quality mechanisation and training, service and support has never been greater. “The only choice is AGCO, If you want your project to succeed”
ABOUT AFRICA A COMPANY THAT IS PASSIONATE ABOUT AFRICA The world’s attention today is being placed on the emerging nations within Africa. Much work lies ahead in bringing these countries up to speed with the rest of the world’s modern and developed nations. As an aspiring and top-notch global project development and management company, we at OIA believe in the vast opportunities that lie ahead for the people of Africa and we are squarely focused in playing a meaningful role in this great story of progress. With skill-sets leveraged from across a broad spectrum of advanced Indian industries, we are setting new benchmarks of excellence with every project we undertake. With offices in India, Ethiopia, Mozambique, Sudan and Benin, we are extremely passionate about Africa. OIA TAKES PRIDE IN EXECUTING THE FOLLOWING PROJECTS IN AFRICA: ADDING ECONOMIC VALUE EPC Contractor for Ethiopia’s Prestigious Sugar Expansion Project -Finchaa Sugar Factory LIGHTING UP THE REALM EPC Contractor for ‘Rural Electrification Project’ -Electricidade de Mozambique (EDM) ENGINEERING FOOD SECURITY EPC Contractor for one of Africa’s Largest Greenfield Sugar Project -Tendaho Sugar Factory, Ethiopia ENERGY FOR IMPROVING LIVELIHOODS Partnering Ethiopian Electric Power Corporation for Power Transmission & Distribution Project CREATING SUGAR SELF-SUFFICIENCY EPC Contractor for -Mashkour Sugar Factory, Sudan TAKING CARE OF THE SOCIETY OIA India Eye Care Hospital, Ethiopia
SIXTY-FOUR YEARS OF PROGRESS IN INDIA In August 2011, India completed her 64th year as a free nation. In just this short history of a brand new nation, India has produced world-class scientists, engineers, journalists,
soldiers, bureaucrats, politicians and doctors. We have built complex infrastructure and have sent satellites and rockets into space. We have increased our exports from a few million dollars at the time of independence to more than $125 billion now, with about $150 billion of imports. We have had a “Green Revolution” which transformed India into a food-surplus economy from a food-deficit economy and lifted the lives of at least 400 million Indians. We have had a “White Revolution” from which we have become the largest producer of milk in the world. The economic reforms of 1991 has opened up the minds of Indian corporate leaders to the power of global markets, helped them accept competition at home and abroad, and raised the confidence of consumers. We have also had the “Software Revolution” in which information technology exports has grown from a mere $150 million in 1991-92 to reach $60 billion by 2010. Our hard currency reserves have gone up from a mere $1.5 billion in 1991 to over $310 billion today. The reforms encouraged entrepreneurship and gave confidence to businessmen and entrepreneurs to dream big, create jobs, enhance exports, acquire companies abroad and follow the finest principles of corporate governance. INDIA IS READY… India’s advancement has been lead by key visionaries that took the challenge for progress into their own hands. Today, Africa too is at an inflexion point towards sustained growth and it too can seize the day to take control of its destiny. To attain Africa’s promise, much needs to be done and India is ready to share its own experience of 64 years to transfer meaningful technology and knowledge. No one can deny the big role that India can today play in capacity building in Africa. With its $1.42 Trillion economy, the fourth largest in the world, it is a shining example of a technologically advanced economy. It feels that it should join hands with its African brethren as partners in their development stage to mutual advantage. Today, India is a ready and capable economic powerhouse with rich experience, a diverse culture and an open heart to share its knowledge to bring about transformational changes in Africa. At the 2nd Africa-India Forum Summit held in Addis Ababa in May 2011, Indian Prime Minister, Dr. Manmohan Singh observed that: “There is new economic growth story
An ISO 9001: 2008 Certified Company emerging from Africa. Africa possesses all the prerequisites to become a major pole of the world. The India-Africa partnership is unique and owes its origin to history and our common struggle against colonialism, apartheid, poverty, disease, illiteracy and hunger…India will work with Africa to realize its full potential.” The Indian PM also announced new initiatives that included $5 billion as line of credit on soft terms, catalyzing additional private investment in Africa. Another $700 million has been earmarked for establishing new institutions and training programmes for skill development and capacity building, with as many as 22,000 technical scholarships offered over the next three years. OIA – AN INDIAN EPC COMPANY IN ACTION… In Africa, OIA’s track record and passion speaks for itself. It is the acknowledged leader and a pioneer on how to contribute to capacity building, knowledge, skill development and training in a wide range of engineering solutions. Whether it is power distribution, healthcare, water management, e-governance, sugar or low cost housing - OIA is a fully integrated EPC player with its seasoned and professional team of committed personnel. OIA invariably delivers even complex projects successfully, meeting time, cost and quality criteria. Its expertise lies in identifying development bottlenecks and design customized solutions that are designed to be both commercially successful and employment generating. Today, we are a leading EPC company out of India, that stands out through its exemplary efforts in Africa. OUR CORE EXPERTISE: AGRO-BASED INDUSTRY SOLUTIONS ENERGY TRANSPORTATION INFRASTRUCTURE IT & ITES CORE INFRASTRUCTURE GAS DISTRIBUTION ADVISORY SERVICES HEALTHCARE & DISTRIBUTION
We believe in the future of Africa and are deeply committed towards it. Let’s seize this moment, move forward as partners and shape our common destinies and future.
OVERSEAS INFRASTRUCTURE ALLIANCE (INDIA) PRIVATE LIMITED Registered Office: K. K. Square, 470 Cardinal Gracious Road, Andheri East, Mumbai 400 099, India Tel.: +91-22-6675 5000, Fax: +91-22-6675 5001/2825 2981
Corporate Office: 1205, Surya Kiran Building, 19, Kasturba Gandhi Marg, New Delhi - 110 001, India. Tel.: +91-11-4300 1111, Fax: +91-11-4351 6321
Offices in : India | Ethiopia | Mozambique | Sudan | Benin
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An ambitious strategy to improve infrastructure
Road sign near Tamanrasset, Algeria. The Program for Infrastructure Development in Africa (PIDA) creates a platform for the whole continent, from north to south
Invest in africa 2011
A bold new approach is enabling faster action on reducing the continent’s infrastructure gap, writes Samallie Kiyingi
frica’s infrastructure deficit is well documented. It is also common knowledge that infrastructure development, particularly in the areas of energy, transport, communication and water, is of critical importance to sustainable economic development and growth. However, solving the infrastructure equation has so far eluded the African continent. While efforts to address the infrastructure gap in the past have been commendable, they have been marked by the absence of continent-wide coordination and a unified strategic outlook. A direct response to this problem has been the creation of the Program for Infrastructure Development in Africa (PIDA), which outlines an ambitious strategy to accelerate the continent’s infrastructure development. PIDA is a joint initiative between the African Union (AU), the African Development Bank (AfDB), the New Partnership for Africa’s Development (NEPAD) and the Regional Economic Communities (RECs) in Africa. Launched in July 2010, the program has the goal of promoting socio-economic development and poverty reduction across the African continent through the creation of, and the improvement of access to, integrated regional and continental infrastructure networks and services. By providing a single African platform for the implementation of an infrastructure strategy, PIDA serves to consolidate various infrastructure initiatives, including the AU Infrastructure Master Plans, the NEPAD Short-Term Action Plan, the NEPAD Medium- to Long-Term Strategic Framework and various regional initiatives. The platform will, in turn, enable the continent as a whole to leverage the experience and expertise of all stakeholders, in order to accelerate the process of infrastructure development.
A common vision PIDA will, for the first time, create a coherent programme for African infrastructure and provide a common vision on infrastructure development for the entire continent. It will cover four key sectors: energy – including electricity, renewable energy, petroleum products and gas; transport – including air, water, rail and roads; information and communication technology (ICT); and trans-boundary water management – which will focus on irrigation, hydropower, and lake and river transport. The AU is a key stakeholder in PIDA. The AU Commission, which has a general mandate to provide
leadership on matters relating to Africa’s economic and social development, will play a crucial leadership and coordination function. Important features of this function will be the facilitation of consultation and dialogue, and the development of continental sector policies based on the regional policies and master plans developed by RECs. The AfDB will be the executing agency for the initiative, and will manage all contractual, financial and administrative issues relating to PIDA. NEPAD as a program sponsor will, together with the AU and the AfDB, contribute to prioritizing and harmonizing the various projects that PIDA will undertake. Other key stakeholders in PIDA include African heads of state, RECs and Africa’s development partners. PIDA will be implemented in two major phases: the study phase, which will include diagnosis of the need, planning and prioritization of projects and consensus-building across all stakeholders; and the implementation phase, in which the results of the study will be implemented. In seeking to further the goals of the program, PIDA will seek to: establish a strategic framework for the development of regional and continental infrastructure; establish an infrastructure investment program based on the priorities agreed to by its stakeholders; and prepare an implementation strategy, together with monitoring and evaluation processes. In addition to its stated objectives, there are several other issues that PIDA hopes to address. Firstly, it wants to consolidate information on Africa’s infrastructure deficit, to assist the program in identifying and prioritizing infrastructure needs. Secondly, it hopes to study and identify the causes of the delay in developing regional and continental infrastructure. In addition to identifying such causes – which to a large degree are known – PIDA will endeavor to undertake a causal analysis, based on a rigorous methodology, to determine the causal links between the measures taken in the past to address the infrastructure deficit and the impacts and outcomes obtained. It is hoped that this causal analysis will assist PIDA in devising realistic priorities and designing more effective implementation strategies and processes. Lastly, PIDA wants to address poor implementation, by analyzing past projects and determining incentive mechanisms and processes to increase the likelihood of more efficient implementation. The planning timeframe under consideration is for the period up to 2030, and is phased as follows: 2010-15 for the short-term and priority action plan; 2016-20 for the medium term; and 2021-30 for the long term. Invest in africa 2011
A recently built bridge connects Lobito, Catumbela and Benguela in Angola. Another bridge project for the continent is one of seven priority developments endorsed by PIDA
Progress so far PIDA has made considerable progress since its launch in 2010. As part of the PIDA process, the AU heads of state have facilitated consultations and regular stakeholder workshops. In addition, at the AU Summit in January 2011, the heads of state identified, endorsed and prioritized seven infrastructure projects. The projects are: • in Algeria, the development of the Missing Link of the Trans-Sahara Highway Project and the Optical Fibre Project along the same alignment; • in the Republic of Congo, the development of the Kinshasa-Brazzaville Road-Rail Bridge Project; • in Egypt, the development of several water-management, river and rail transport infrastructure projects; • in Nigeria, the development of a gas pipeline linking to Algeria; • in Rwanda, the development of broadband ICT and links to fiber-optic networks in neighbouring states; Invest in africa 2011
• in Senegal, the development of the Dakar-Ndjamena-Djibouti Rail and Road project; and • in South Africa, the development of the North-South Corridor rail and road project. Despite being a relatively recent newcomer to the discourse on infrastructure development in Africa, PIDA has facilitated a significant shift in focus, support and, increasingly, resources to an ambitious approach for a coherent and comprehensive infrastructure development strategy for Africa. In the words of President Jacob Zuma of South Africa, the current president of PIDA, “Africa’s time has come, and, without infrastructure, our dreams will never be realised… The infrastructure that we want to create will provide new opportunities for our continent.” Samallie Kiyingi is a senior lawyer in the finance practice at Clifford Chance, where she specialises in capital markets and derivatives. She is also involved in coordinating the firm’s Africa practice and plays a strategic role in the development of its Africa-focused business
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Transport: still a long way to go
Walking to work across the Benguela railway, which links Lobito in Angola to the border with Zambia. China International Fund money is helping to rebuild the 2,200km railway
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The AU has been proactive in marine, road, air and rail transport. Progress is being made, but rail – potentially the most cost-effective mode – is lagging behind, writes Jonathan Hyman
he African Union (AU) was established in 2002 to develop the work of its predecessor, the Organisation of African Unity. The AU aims to accelerate the process of integration across the continent, and to enable it to play its rightful role in the global economy while addressing multifaceted social, economic and political problems. Peace, security and justice have been the principal focuses of the organisation. Indeed, as declared in the AU’s founding charter, peaceful intergovernmental relations and domestic security are the fundamental preconditions for social and economic development, closer regional relations and integration. But these goals of achieving greater unity and solidarity – promoting political and socio-economic integration, sustainable development and cooperation in all fields of human activity to raise living standards within the continent – can be achieved only through developing the region’s physical connections, thereby facilitating the exchange of peoples, ideas and trade. The political and security picture in Africa has improved immeasurably in recent years, with political regimes opening up and conflicts becoming less frequent. Every year the electoral calendar in sub-Saharan Africa becomes more crowded, and every year most posts – from the presidency to seats in the National Assembly and town mayoralties – are competed for, rather than seized or bestowed. Sub-Saharan Africa has no shortage of failed states, such as Somalia and Zimbabwe, but some have been rescued, including Liberia and Sierra Leone, while transfers of power by unconstitutional means appear to be
declining. However, in terms of transport infrastructure, despite several infrastructure development programmes since the late 1970s, Africa still has a long way to go. For decades, sub-Saharan Africa’s abysmal infrastructure has held back the continent’s competitiveness, economic growth prospects and standards of living. According to the Economist Intelligence Unit, the regional economy is forecast to grow by five to six percent per year over the medium term. This growth will place even greater strain on the continent’s insufficient infrastructure to meet strong international demand for commodity exports, especially from Asia, and rising domestic consumer demand for both domestic and imported goods, driven in particular by rapid urbanization. Infrastructure investment is increasing substantially, underpinned by the revenue effects of high commodity prices, generous and cheap loans and resources-for-infrastructure deals from China, strong donor support, and a rise in private participation.
Costly and inefficient According to the Africa Infrastructure Country Diagnostic (AICD, a study on Africa’s infrastructure conducted by the World Bank in partnership with other organizations), the region experiences the worst rates of service disruption, and frequently higher costs, than any other region, owing to inefficiency, inadequate competition and higher operating costs. Transport costs as a share of trade are an estimated 30-40 percent higher than in other developing regions. Most ports are inefficient, with container waiting times averaging 12 days in East Africa and 15 days in West Africa – well above the international benchmark of seven days or fewer. Some challenges are difficult to address, such as low population density and geography – 15 African countries are landlocked – and these problems raise the costs of infrastructure provision. To address infrastructure shortfalls, Africa needs to spend $93 billion per year, Invest in africa 2011
The development of the Trans-African Highway – a transcontinental network of nine road corridors that touches all but eight countries – has been accelerated The challenge of road transportation
of freight is transported by road
of roads are paved
according to the AICD. But currently it spends only $45 billion from public, private and donor sources – around five percent of regional GDP – because governments have prioritized other areas, such as health and education. At a basic level, the AU’s peacekeeping activities and logistics needs have helped to bring improvements in local transport and logistics infrastructure through a spillover effect. In Cameroon, for example, the port city of Douala – the country’s largest city – is set to become the continental base of the AU’s African Standby Force (ASF) operation, with planning having already started. Douala already serves the region as the main port of entry for goods and military equipment to the six-country grouping CEMAC (Communauté Économique des États d’Afrique Centrale) – comprising Cameroon, Chad, Central African Republic (CAR), Equatorial Guinea, Republic of the Congo-Brazzaville and Gabon. The increased demand for material to both build and operate the base will necessitate improving further the capacity of the port and developing rail and road infrastructure linking the base to secondary sites. The whole scheme is expected to cost up to $7.9 million, according to Fai Yengo Francis, chairman of the project’s technical committee. Similarly, the 17th African Union summit, held in June, precipitated several infrastructure upgrades, including the international airport. Invest in africa 2011
However, spillover benefits are not enough to impel wholesale transport infrastructure development. Given that these developments are driven and funded by foreign donors to support social and economic development, and invariably foreign investment to support extractive resource operations, the AU’s role is much more about creating appropriate policy frameworks, and advising and encouraging governments and regional groupings on their implementation.
Sea change in marine transport Arguably, the AU’s biggest policy initiative so far in this respect is in the field of marine transport. A unified policy on marine transport is essential to enable Africa to increase international trade. Yet the continent is the only major region of the world that does not have its own maritime and transport policy or strategy. In pursuit of such a strategy, in 2007 the AU promulgated the Abuja Declaration and Plan of Action on Maritime Transport in Africa. With this document, African ministers responsible for maritime transport recognized the severe level of underinvestment in the region’s port facilities and procedures and the need for regional coordination. They agreed to identify and give priority to maritime transport infrastructural projects that promote regional and
Sacks of cocoa being transferred to a lorry at San Pedro port, Cote d’Ivoire. The African Maritime Charter aims to harmonize the port legislation of AU member states
intercontinental trade; promote harmonization and better management of Africa’s maritime infrastructure and related companies; explore different funding mechanisms; and facilitate access to the sea for landlocked countries. This plan led to one of the biggest transport-related achievements of the AU – the adoption in October 2009 of the African Maritime Charter, in which the member states agreed to: • adopt and, where necessary, update their existing maritime legislation so as to make them compatible with the promotion of national maritime and port activities; • examine with a view to revising and harmonizing, if necessary, their maritime and port legislation in order to make them compatible with each other and with the relevant international maritime conventions in force in the field of maritime transport and related activities. Progress in this respect has been limited, but it does demonstrate that it is possible to devise pan-regional policy which can be developed in other areas such as road and rail – although these are more complex as they traverse borders.
The road is long To move freight around the continent, and to and from coastal ports, around 90 percent is carried by road. Rural Africa has only 34 percent road access, compared with 90 percent in the rest of the world, according to the African Development Bank (AfDB), while what does exist is often in a decrepit state. The total length of classified road networks in Africa is estimated to
Modern highways such as Nelson Mandela Boulevard in Cape Town, South Africa, are much needed across the entire continent
be about 2.3 million km – only 20 percent of which is paved. Poor transport infrastructure renders intracontinental trade far more costly than external trade. The Organisation for Economic Co-operation and Development (OECD) found in 2006 that the cost of trucking a 22- to 24-tonne container from Maputo to northern Mozambique was almost 2.5 times higher than that of shipping the same container from Dubai. To address these needs, the AU – in conjunction with the United Nations Economic Commission for Africa (UNECA), the AfDB and regional economic zones – has accelerated the development of the Trans-African Highway, originally proposed in the 1960s by the OAU. This is a transcontinental network of nine road corridors, amounting to 56,683km, that touches all but eight countries – although three of these have paved roads connecting to the network. However, despite being the flagship infrastructure project on the continent, it still has many missing links, and many of the roads remain unpaved owing to higher goals of regional integration coming up against national priorities and budgets.
Slow ascent in air transport Little progress on air transport has been made since the Yamoussoukro Decision (YD) in 2000, the goal of which is to fully liberalize the continent’s aviation under the AU’s supervision. The decision may be legally binding, but aviation services have only very recently begun to develop significantly in Africa, resulting in a hitherto uncoordinated, erratic and poor air transportation service with a poor safety record. The AU’s own New Partnership for Africa’s Development programme (NEPAD) is seeking to develop a process based on the AU’s Invest in africa 2011
African Peer Review Mechanism to bring together countries that are prepared to fully implement the Decision. In January, the AU signed a Memorandum of Understanding with the Nairobi-based African Airlines Association (AFRAA) – a trade association of airlines of AU member countries – to help create economic and political support for the region’s carriers in order to improve their share of traffic to the continent, as well as to accelerate implementation of the YD.
Getting back on track Rail networks remain marginal. Africa has, according to the OECD, only about 89,000km of rail, a density of 2.5km per 1,000 sq km – significantly below the 40km per 1,000 sq km found in Europe – and much of the infrastructure and rolling stock is old, owing to severe underinvestment since independence. Rail could present a much more efficient and
The AU is becoming increasingly aware of the importance of infrastructure to improve economic growth and enhance integration. Therefore, together with the AfDB, NEPAD, and the Regional Economic Communities (RECs), the AU is formulating a long-term infrastructure strategy for the region’s transport, energy, trans-boundary and information and communication technologies – the Programme for Infrastructure Development in Africa (PIDA). The ambitious goal is for the continent to have a fully integrated infrastructure system by 2030. As the continent’s political stability and economic prospects develop, the infrastructure gap is set to improve, although in many countries the pace of progress is likely to remain painfully slow. Key reasons for this lag are Africa’s persisting leadership crisis and often limited policy implementation effectiveness. These factors will retard progress on all fronts: implementing action plans; stemming leakages; reforming bureaucracies; and introducing effective regulatory bodies. Socio-economic development in sub-Saharan Africa needs stable, effective and responsive governments and institutions, that can accommodate a transfer of power to legitimate opposition groups without causing instability. But this goal remains distant in most states. In some cases, infrastructure may not improve because there is a limited commercial basis to invest in upgrades. It is not necessarily the AU’s business to address such problems directly. Where the body can continue to continue to influence and advance much-needed transport and logistics development is to provide both a universal harmonised policy and policy leadership; set regional priorities; ensure that the continent remains as peaceful, stable and corruption-free as possible in order to encourage international investment which brings with it infrastructure improvement; and act as a regional forum. Such a forum will allow individual countries to debate and resolve national concerns and priorities, and discuss problems of domestic vested interests that would otherwise complicate and impede the introduction of institutional reforms. It will also help governments to reduce bureaucracy and integrate international conventions into national legal codes.
The ambitious goal is for the continent to have a fully integrated infrastructure system by 2030 cheaper mode of freight transport, but the high sums needed to rehabilitate and develop networks are likely to prevent this transpiring in the near future. That said, some railways have seen new investment and renewed interest in development. Key projects include: • the 2,200km Benguela railway connecting the port of Lobito in Angola to the border with Zambia, being reconstructed with funding from the China International Fund; • Rift Valley Railways, a private group with a 25-year concession to run the 2,200km track linking Mombasa in Kenya to the interior of Kenya and Uganda, making significant capital injections into the railway; • the donor-supported North-South Corridor project’s plans to rehabilitate some railway lines, including the 1,860km Tazara railway between Dar es Salaam in Tanzania and Kapiri Mposhi in Zambia; • the overhaul and recapitalization of the Dakar-Bamako line, and its eventual extension to Djibouti and Libreville. Invest in africa 2011
Jonathan Hyman is a deputy editor at the Economist Intelligence Unit’s sub-Saharan Africa department, where he forecasts economic and political risk, specializing in Francophone Africa
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Comprehensive Services Toll project management and coordination of multiple disciplines Road and toll financing policy analysis Formulation and evaluation of alternative toll strategies and analysis of traffic reaction to toll Financial and economic feasibility studies, including Open Road Tolling (ORT) feasibility analysis Multi-disciplinary planning, design and construction supervision of toll facilities, including ORT facilities Planning, design and tender documentation for ORT Systems and Operations Toll Collection Systems design, procurement, installation, commissioning and maintenance Development, implementation and management of toll road operations and maintenance contracts Tender preparation and adjudication of Build-Operate-Transfer (BOT) toll projects Independent Engineer function in respect of BOT toll projects Tolplan (Pty) Ltd ● Pretoria, South Africa Tel: +27 12 369 7600 ● Fax: +27 12 369 7700 website: www.tolplan.co.za ● e-mail: email@example.com
Exploiting the power of ICT
Usage of mobile phones is increasing rapidly across Africa â€“ for calls, messaging, internet access and money transfers
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The AU is seeking to harness ICT's potential for an entire continent that, although it has embraced the mobile phone, is lacking in infrastructure and suffers from a digital divide, writes Valerie Noury
frican countries are realising the potential of information and communications technology (ICT) to become a catalyst of socio-economic prosperity. Indeed, the potential of such technologies has revolutionized many sectors across Africa and has the capacity to fast-track vital services to the continent’s poorest, especially when adapted to the existing financial constraints and to the underdeveloped network of ICT infrastructure that persists across much of the continent. A pair of United Nations-sponsored events, titled the World Summit of the Information Society (WSIS), has been aiming to bridge the global digital divide, using the internet as a key tool. The summit adopted a final document on this matter, the Tunis Commitment, during its second phase in Tunis, in November 2005. The African Union (AU) responded to this initiative by launching the first African ICT Week (AICTW) during the second phase of the WSIS process. The AU firmly believes in progress toward a knowledge-based economy, with knowledge and information being a key driver of productivity and economic growth. If used efficiently, ICT is clearly capable of impelling Africa’s development towards achieving the ambitious 2015 Millennium Development Goals, complementary to the more detailed and various initiatives of the AU Commission. The star stories in ICT developments in Africa are not necessarily the groundbreaking technologies, as important as they are, as much as those that have the key capacity to be able to continuously improve the price
performance of computing and communications; those aided by the rapid explosion of bandwidth capacity in fixed and mobile networks; and, of course, the many internet applications that have followed suit with the growth of the internet and the advent of cloud computing. The AICTW initiative provides an important platform for creating awareness about the opportunities and challenges for the further adoption of more sophisticated and relevant ICT policies across Africa.
Flourishing mobile market In Africa, the potential of ICT is clearly illustrated by the example of the mobile phone, which has taken the continent by storm. Regional and international investors are flocking to a sector that promises – and delivers – high returns. It is also highly suited to Africa, bringing mobility to the large percentage of the continent’s population who still suffer from a lack of fixed lines, poor internet connectivity and no access to a computer. For this reason in particular, smartphones have also witnessed huge growth, given their capacity to harness the internet in places that bandwidth has previously failed to reach. The number of mobile phone users is expected to almost double by 2015, reaching 172.4 million in Nigeria, Côte d’Ivoire and Cameroon, compared with 92.6 million in 2009, and reaching combined revenues of $12.6 billion in 2016, according to a recent report from Frost and Sullivan. Africa’s West and Central regions remains the most dynamic to date in this respect, with each of their countries having an average of more than three mobile phone service providers and significant infrastructure development as many of these countries have invested heavily in fiber-optic cables. Another statistic to illustrate this momentum is found in Kenya, where the success of mobile banking has set a shining example. Nine out of 10 adult Kenyans Invest in africa 2011
Undersea telecoms cables – active and planned
Mediterranean undersea cables Atlas Offshore
SEA-ME-WE 4 I-ME-WE Marseille, France Monaco
Vigo, Spain Sesimbra, Portugal Chipiona, Spain
t ia, Eg yp Alexandr iro Ca
Active Active Active
ia tan ur i Ma
Fajairah, UAE Oman
Port Sudan, Sudan
al eg en r, S bia ka Da e Gam au e i s s ne a e o n Th L a-B , Gui ine e ra r Gu akri e ia Si n er Co n, ib ow a, L et i Fre nrov o M
Massiwa, Eritrea ô te D ’I A cc voi ra, re Lom Ghana e CCo , Togo t o no u, B enin La go s, N ig Bo e nn ria y
Trip oli, Liby
Altavista, Canary Islands
320 gigabits 1,280 gigabits
Annaba , Algeri a Bizerte, Tunisia
Asilah, Morrocco Casablanca, Morrocco
Ab ija n, C
Dijbouti C a, ual
Colombo, Sri Lanka
ea Guin rial ua t o , Eq a t a B , Gabon Librevile
Mogadishu, Somalia Seychelles Mombasa, Kenya
Pointe Noir, Congo Muanda, DRC
Dar Es Salaam, Tanzania
Cacuaco, Angola Luanda Tamatave, Madagascar Baie du Jacobet, Mauritius
Swakopmund, Namibia Maputo, Mozambique
Africa west coast SAT3/SAFE MaIN OnE GLO-1
340 gigabits 1,920 gigabits 2,500 gigabits 5,120 gigabits
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Africa east coast SEAS
,SA tein d r f on Yze osstran b lk Me
320 gigabits 1280 gigabits 1280 gigabits 1280 gigabits 1280 gigabits
Q3 2012 Active Active Q2 2012 Active
4,720 gigabits Q2 2013
Jean-Pierre Ezin Commissioner for Human Resources, Science and Technology
The Department of Human Resources, Science and Technology covers three main areas, namely education; human resources and youth; and science, technology and information and communications technologies (ICT). Education in Africa is a challenge that requires urgent attention. Given the challenges of obtaining a quality tertiary education in many African countries, many of our citizens go abroad for university and don’t return home for want of opportunities to advance professionally on a par with their peers in wealthier nations. This phenomenon is commonly known as the ‘brain drain’ and must be halted immediately. Accordingly, in order to better address the specific developmental needs of African people as they concern education and professional capacity, the African Union has decided to create the Pan-African University (PAU), which will enhance the quality of African higher education and research. Preparations are under way to ensure the September 2011 launch of its fi rst three institutes, which are: the PAU Insitute of Earth and Life Sciences at Ibadan University in Nigeria for Western Africa; in Eastern Africa the PAU Institute of Basic Sciences, Technology and Innovation at the Jomo Kenyatta University of Agriculture and technology; and in Central Africa, the PAU Institute of Governance, Humanities and Social Sciences at the University of Yaounde. Another critical area is information and communications technology (ICT), for which the African Union has developed the African Regional Action Plan on the Knowledge Economy (ARAPKE). One of its important concrete initiatives is the African Leadership in ICT program (ALICT), developed as part of the 8th Partnership of the Africa-European Union Strategy, 2008-10. This Strategy intends to deal with the challenges Africa faces in science, information and space. Its pilot program focuses on capacity development of future leaders, policymakers, educators and human resources in ICT in Southern and Eastern Africa. The Government of Finland and the Global e-Schools and Communities Initiative (GeSCI), for example, have proven valuable partners for implementing the ALICT program. The commissioner’s remit also extends to human resources and education
subscribe to a mobile phone service, and 15 million people transfer around $7 billion a year using their phones; this represents around 20 percent of the national GDP that is transferred by phone in general, with everything from electricity, school fees and salaries being paid through mobiles. Such examples are just the beginning, as mobile phones are being improved consistently through the creation of new applications, while smartphones are becoming better performing and more cost-effective. Outsourcing is also gaining increasing popularity. The general globalization of the supply chain through ICT is a key
driver of growth and profitability, enabling actors that outsource their activities to charge considerably lower prices. The internet’s potential to transform vital sectors is undisputed. It has the potential to fundamentally transform the structure of healthcare by bringing a more integrated approach to the sector, linking the various actors – such as providers, financial institutions and consumers – with the aim of significantly cutting administrative costs and improving the quality of service. ICT is also an important tool for facilitating banks’ organizational structures, business strategies and customer INVEST IN AFRICA 2011
Nine out of 10 adult Kenyans subscribe to a mobile phone service, and 15 million people transfer around $7 billion a year using their phones; this represents around 20 percent of the national GDP that is transferred by phone in general services. There are two broad avenues in which ICT can be used in banking – firstly, to improve communication and connectivity; and secondly, to improve infrastructure, implement reliable techniques to control risks, and help to connect people by allowing financial actors to reach geographically distant and diversified markets.
African approach to ICT, through various commitments including the development of telecoms backbones and exchange points, the expansion of infrastructure (especially in rural areas), establishing a regulatory environment and a universal access service. This plan was agreed in different forums, including the AU Summit – it was adopted by the Executive Council of the AU in Khartoum, 2006.
Breaking down cost barriers Yet to keep these positive developments moving in the right direction, the AU must tackle the web of important challenges that lie ahead. A top priority is the need to redirect greater investment toward infrastructure development, as Africa is still seen to be lagging behind in this regard. Infrastructure development is the key to breaking down high cost barriers and capitalizing on the potential of ICT. In broad terms, the AU’s AICTW aims to increase the awareness of all Africans of the ways in which they can profit from the development and broad range of ICTs. Two events have been at the centre of the AICTW initiative, starting with the Geneva phase of the WSIS process in December 2003, which set out the objectives and plan of action to attain an inclusive information society. The Tunis Commitment, adopted during the second phase, further enforced the engagements agreed in Geneva. Both phases see education as a central pillar for everyone to acquire the necessary skills to benefit from an information society. This capacity-building is done through government, stakeholders and partnerships, which must channel ICT skills through education and teaching programmes aimed at removing ICT illiteracy. Another vital cornerstone to the AU’s AICTW initiative is the African Regional Action Plan on Knowledge Economy (ARAPKE), a preparatory conference before the Tunis meeting, which was held in Accra, Ghana, in February 2005. The Action Plan aims to build a region that fully benefits from ICT services by the year 2015 by building a specifically Invest in africa 2011
The ARAPKE objectives address 10 important obstacles to making ICT a motor for African development: • efforts towards bridging the digital divide; • promotion of the right of all to have equal access to ICT services and to experience all the advantages derived from using them; • developing, maintaining and stimulating people’s curiosity, interest and enjoyment in technologies; • promoting the acquisition of appropriate technological skills, concepts, principles, methods and vocabulary; • boosting security and trust in the sectors that rely on the use of information networks; • encouraging people to develop informed opinions about their technological services and to be able to support them by reasonable arguments; • leveraging ICT as a tool for creating an informed African society; • promoting greater ICT awareness among African governments, community and stakeholders; • using technologies in a variety of subject areas and contexts; • attracting more and new investments to the African technology market, especially the ICT market. These developments and policies demonstrate the AU’s focus on harnessing ICT’s potential for the continent. Efforts need to be extended to remaining African countries, so that they can benefit from the knowledge economy.
Making the most of manufacturing
Imported shoes on sale in Kampala, Uganda. East Africa has been flooded with Chinese goods and cast-offs from Western charities
Invest in africa 2011
Industrialization was meant to be the engine driving African development, but it faltered along the way. However, valuable lessons have been learnt, writes Dr Sharon T Freeman
frican nations had a dream when they became independent. Many new governments saw industrialization as a logical means of shaking off colonial trade patterns and of attaining sustainable development. Along with the rest of the developing world, many African countries adopted import substitution strategies in order to promote industrialization. They erected high tariff walls, and put in place overvalued currencies and direct and indirect subsidies, with the hope of creating a manufacturing base that would compete with the rest of the world. At first, the strategies worked: Africa’s manufacturing sector’s share in GDP increased and industrial employment rose. The growth spurt was unsustainable, however, owing to limited domestic market sizes, the inability to expand beyond local markets, and a lack of foreign exchange to import intermediate and capital goods to support the industries. By the mid 1980s, most African countries were left with little choice but to adopt Structural Adjustment Programs (SAP) designed by the Bretton Woods institutions. Under the SAPs, tariff and non-tariff barriers were reduced, currencies were devalued, and subsidies for state-owned enterprises were removed. Although the goal was to make exporting more profitable than producing for local markets, the reforms failed to deliver because they were not supported by the development of the physical and institutional infrastructure that was needed to make exporting viable. High transport costs, poor product quality and standards, poor logistical services for international trade and low labor productivity contributed further to Africa’s inability to transform and develop industrially. In addition, the fact that the continent had the highest number of civil wars from 1960 to 1999 – with almost 20 African countries experiencing at least one such episode during this period – resulted in a lack of foreign investment in the continent and which left it further marginalized1. Consequently, with a few notable exceptions such as South Africa and Mauritius, for the most part Africa has not significantly industrialized and has failed to reduce its initial dependence on primary commodity exports, in stark contrast
to the rest of the developing world. Its share of global trade remains low, hovering at around three per cent. For the first time in four decades, Africa is beginning to attract an increasing flow of foreign direct investment (FDI) that has grown from $9 billion in 2000 to $88 billion in 20082. While investment in the oil sector attracts the largest portion, investment in manufacturing and agriculture is also growing, but not in amounts that are sufficient to create a vibrant industrial sector in most African countries.
A fading dream At a meeting recently with a group of around 30 students who were studying entrepreneurship in an elite private high school in Kenya, a country that has shown modest success in expanding its manufacturing base, the students were asked if they were serious about wanting to establish a business one day. They all replied “Yes”. When asked what kind of businesses they wanted to establish, the first young man to raise his hand said: “I want to start an import business, since everything we have is imported from China.” A subsequent meeting with around 50 members of Students in Free Enterprise (SIFE) from 16 universities in Kenya, all of whom were studying entrepreneurship, similarly revealed a lack of interest in producing goods. When asked directly if any of them wanted to go into manufacturing, none raised their hands; when asked whether any of them knew the names of any manufacturers, none did. Building a manufacturing business, in contrast to going into the service sector, is something that is completely foreign to these students. Nothing in the society or in their education is pushing them in that direction. We got a further glimpse of the reality on the ground when we were informed earlier in the day by a banking representative that, of all of the sectors, the least amount of financing goes into manufacturing.
Lessons from Asia Between 1960 and 1990, Asia experienced average investment growth rates of 20 percent, while in Africa it was considerably lower, according to the UN Economic Commission for Africa3. Asia also implemented radical agrarian reforms, which rapidly led to strong growth in agricultural production, while by contrast the agricultural modernization policies that were tried out in Africa failed. The Asian experience was also different from that in Africa as industrial development played a major part in the growth of the Asian economies, which brought about a rapid Invest in africa 2011
Africa is on track to improve its manufacturing performance and to expand and diversify trade. Positive factors include major investments in infrastructure, and new links with big Southern trading partners transformation in export structures and increases in manufactured exports at the expense of traditional exports. Perhaps the most meaningful difference between African and Asian countries lies in their development dynamics, and their capacity to formulate and implement medium- and long-term visions to support the growth process begun in the mid 1960s. Critically, Asian growth and diversification strategies entailed investing revenue from natural resources into infrastructure, human resources, and new technologies.
Trade Area (FTA); infrastructure development to enhance connectivity and reduce the costs of doing business; and industrial development to address the productive capacity constraints. In addition, they agreed to put in place mechanisms to facilitate harmonization, and coordination within and among the Regional Economic Communities (RECs). These initiatives, and South Africa’s recent addition as one of the BRICS group of emerging economies, give rise to further optimism.
Making the dream a reality Reviving Africa’s prospects Africa is on track to improve its manufacturing performance and to expand and diversify trade. Positive factors include major investments in infrastructure development, and new links with big Southern trading partners that are raising commodity prices, investing in the extractive industries and engaging in new development initiatives. China, in particular, has been a main driver in the increasing share of developing countries’ trade with Africa, having increased its trade with the continent almost tenfold between 2000 and 2008, making China the second largest trading partner of Africa, after the United States. China is also helping to build the infrastructure that will contribute to greater regional integration, and contributing to Africa’s development through several sectoral development initiatives. A meeting between the heads of state and government of the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC) Tripartite on June 12, 2011, launched negotiations to establish an integrated market of 26 countries with a combined population of almost 600 million people and a total GDP of around $1 trillion. The groups adopted a developmental approach to the Tripartite Integration process that will be anchored on three pillars: market integration based on the Tripartite Free Invest in africa 2011
Time is still on Africa’s side. While its infrastructure is being built, there is hope that the continent can finally realize its dream of product diversification and export expansion – as long as the continent makes further investments in developing its human capital; learns from and forms strategic partnerships with others; builds its institutions; and leverages its new relationships to ensure that they contribute positively to Africa’s diversification into manufacturing, services, and agriculture. While there is no single policy prescription that will serve all countries, an essential ingredient is the need for visionary and committed leadership to transform Africa’s current state of industrialization. And, as in the case of Asia, to be successful, leaders will have to invest revenues from natural resources into the productive sector and tap into their diaspora, not only for remittances, but also for their intellectual resources and market linkages. References: 1. Nkurunziza, JD: Civil War and Post-Conflict Reconstruction in Africa, United Nations Conference on Trade and Development (UNCTAD), Geneva, Switzerland, 2008 2. United Nations Conference on Trade and Development: World Investment Report, 2009 3. UN Economic Commission for Africa: Trade Liberalization and Development: Lessons for Africa, 2004
Traders follow market activity at the Cairo Stock Exchange. A commodities and derivatives exchange is being proposed for Egypt â€“ one of several new specialist exchanges in Africa
Filling the financial services gap
The African Union is taking an active part in facilitating the growth of the financial services sector, writes Samallie Kiyingi
ne of the principal objectives of the African Union (AU) is to establish the necessary conditions to enable the continent to play its rightful role in the global economy and in international negotiations. Nowhere is this challenge â€“ and resulting opportunity â€“ more clearly exemplified than in the sphere of finance. The African financial services sector has been the scene of innovation and considerable growth. Arguably still in its infancy, this sector is one of the driving forces behind the pre- and post-credit crisis African renaissance. Sub-sectors of the finance industry in which attractive opportunities exist include insurance, retail banking, corporate and investment banking, the capital markets, investment management, mobile phone banking and microfinance. Invest in africa 2011
The growth of capital markets across the continent has been a particularly exciting development. Deep, liquid and transparent capital markets play a crucial role in oiling the wheels of an economy and providing access to competitively priced capital. Over the past 20 years the number of African stock exchanges has grown from five to 22. This includes two regional stock exchanges, La Bourse Régionale des Valeurs Mobilières (BRVM) in West Africa and La Bourse des Valeurs Mobilières de l’Afrique Centrale (BVMAC) in Central Africa. While many of the stock exchanges on the continent are characterized by relatively low capitalization and low numbers of listed stocks, there are signs that the industry is maturing relatively quickly. Firstly, in recognition of the uneven development of capital markets across various African countries, there are ongoing discussions around consolidation. In particular, West Africa is considering establishing a single regional stock exchange to cover the entire region. Secondly, the past decade has seen the development of specialized trading exchanges, such as a proposed commodities and derivatives exchange in Egypt, the Ethiopian Commodities Exchange trading agricultural produce, a proposed exchange for commodities in Ghana, a multi-asset derivatives exchange in Mauritius, as well as the existence of agricultural commodities exchanges in Zambia, Malawi and Zimbabwe. Thirdly, both domestic and international companies are increasingly viewing domestic African capital markets as an effective and efficient method of raising capital. The issuance
Counting notes of the new Sudanese currency, launched by the country’s central bank in July
Invest in africa 2011
of corporate bonds, local currency bonds and initial public offerings are becoming increasingly common. In 2010, there was a 406 percent jump in total IPO proceeds from listings on African exchanges, according to Ernst & Young. Increased issuances of both debt and equity on exchanges in turn foster more liquid and disciplined markets – as evidenced by the rapid development of Nairobi as a capital markets hub – while giving local citizens a stake in the development of companies operating in Africa and, consequently, the wider economy.
Need for infrastructure finance Despite the growing interest in the African financial sector from international and domestic investors, the continent is still struggling to address the daunting gap in infrastructure finance. The development of infrastructure and the promotion of regional integration are two of the continent’s most pressing needs. United Nations experts estimate that the funding gap for infrastructure finance over the next 10 years is in the region of US$50 billion. The experts at the African Development Bank suggest that this figure is actually closer to $90 billion. What everyone does agree on, however, is that the funding gap is substantial and the plug to fill it remains elusive. The AU has risen to the challenge of addressing the funding gap for development on the continent with ambition and dynamism. It has been open and frank in its acknowledgement that the funding gap for Africa is too
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AFRICAN EXPORT-IMPORT BANK
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Afreximbank: the dependable partner during a time of crisis African economies were not spared the ravages of the global economic crisis of 2008-09 due to the increasing integration of the continent into the global economy. For a continent whose economic performance is driven largely by activity levels in the tradables sector, comprising agriculture and the extractive industries, the weak international commodity prices that prevailed during the last quarter of 2008 and into 2009 constrained the trade and economic growth performances of African economies, as a group. Other effects of the global financial and economic crises on African economies and trade included: (i) lower export receipts, due to weaker commodity prices, which reduced the import capacity of many resource-rich African economies; (ii) sudden cuts in external financing and a virtual dry-up of trade finance flows to Africa; (iii) a sharp retreat in tourism receipts, migrant remittances and other forms of capital inflows, among others. On account of these developments, the value of total African trade, which rose by an impressive 29% year on year to reach an alltime high of US$1,141 billion in 2008, shrank by about 26% year on year to US$843 billion in 2009. Intra-African trade also declined by a significant 16% from a level of US$115 billion in 2008 to US$97 billion in 2009. In an attempt at ensuring that African trade does not suffer as a result of the global financial crisis, Afreximbank sought, among other strategic initiatives, to diversify its sources of funding to include Export Credit Agencies (ECAs) and Development Finance Institutions (DFIs) to boost its liquidity and enable it to support essential African imports, such as oil, food and medicine, as well as export-generating capital imports. Specifically, the Bank, under its ECA Loans Facilitation Programme (ECALFP), confirmed Letters of Credit issued by African banks in support of African imports from OECD and other non-African countries; offered reimbursement guarantees to support Letters of Credit originating from Africa issued in favour of non-African suppliers;
Mr Jean-Louis EKRA, President & Chairman of the Board of Directors
and mobilised direct credit from ECAs or from commercial banks on the back of ECA guarantees, for direct disbursement to suppliers shipping goods to Africa. On account of aggressive pursuit of its ECALP, ECA financing and credit cover were obtained from leading ECAs, namely EKN-Sweden (US$150 million); Exim Bank of India (US$30 million); Exim Bank of China (US$100 million); from SACE (US$32 million); US Exim (US$10 million); EDC (US$30 million); Korea Exim Bank (US$50 million); JBIC (US$100 million); Saudi Export Programme (US$40 million) and GSM102 (US$164 million) of the US government. Furthermore, the Bank deepened its business relations with development finance institutions (DFIs) with a view to leveraging such partnerships to support African trade at the height of the crisis. In this regard, a number of DFIs offered the Bank credit lines to enable it to fund essential imports of African countries at the height of the crisis, including African Development Bank (US$150 million), International Finance Corporation (US$200 million), China Development Bank
(US$100 million), and Development Bank of South Africa (US$50 million). Managementâ€™s anticipation of the impact of the crisis on Africa enabled it to take appropriate pre-emptive measures that contributed to ameliorate the adverse effects of the global financial and economic crises on some of its member countries, while taking advantage of the business opportunities that the crisis offered the Bank.
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Dr Maxwell M Mkwezalamba Commissioner for Economic Affairs
The Department of Economic Affairs is mandated to initiate and promote policies and strategies geared towards enhancing the coordination, harmonization and facilitation of continental collective initiatives in economic integration. The department also undertakes measures that support investment promotion, mobilization of development financing and the building of continental financial institutions. Africa features prominently among the world’s 10 fastest-growing economies over the last decade, in addition to offering some of the world’s highest returns on investment – performance that is expected to be maintained in the coming years. As global investors explore promising new markets, Africa attracts much attention. However, efficient and reliable banking and fi nancial services underpin expanding prospects in the real economy, New opportunities are in microfi nance, as only 20 percent of African households use fi nancial services. In recognizing microfi nance’s importance, the African Union Commission commissioned a study in April 2007 to create a plan for developing the sector. This culminated in the AU heads of state and government adopting guidelines for developing microfi nance in Africa. The AU also created the African Central Bank, the African Monetary Fund and the African Investment Bank to give member states the means to address their development challenges. The Investment Bank will pool capital necessary to enhance integration, the Central Bank is required to create a monetary union and the Monetary Fund will provide balance-of-payments support. Significant progress has been made in setting up these institutions and, in the case of the Investment Bank, the member states’ ratification is the only step remaining before work begins. The AU also aims to integrate domestic financial markets and establish regional capital markets, including a pan-African stock exchange. Such initiatives will deepen links with more-developed financial systems and integrate Africa into the global economy.
large for any single institution to address. Consequently, the AU has moved to provide policymakers across the continent with the next best thing: greater diversity of viable financing options; and leveraging of expertise and experience in order to achieve a better pan-African result and a stronger voice for its members on the international playing field. The AU has put a clear stake in the ground regarding its commitment to the finance sector through the development of three new institutions: the African Investment Bank (AIB), the African Monetary Fund (AMF) and the African Central Bank (ACB). The mandate of the AIB is to foster economic growth and accelerate economic integration. Key components of its responsibility will be supporting the development of the INVEST IN AFRICA 2011
African financial services sector, and also playing a significant role in financing and providing innovative solutions to address the funding gap for regional integration and infrastructure development. The bank is awaiting ratification from AU member states before commencing operations. Once launched, it will be tasked with: mobilizing resources from the capital markets both, within and outside Africa, for the financing of investment projects on the continent; promoting the investment activities of both the public and private sectors that target the regional integration of member states; using its resources to implement investment projects that contribute to the strengthening of the private sector and the modernization of the rural sector; and providing technical assistances to its members.
The African Central Bank’s goals will be to build a common monetary policy and eventually create a single currency Donald Kaberuka (right), president of the African Development Bank (AfDB) with Dotun Ajayi, regional manager of the African Business Roundtable. AfDB experts suggest that the funding gap for infrastructure finance over the next 10 years is almost $90 billion
The AMF is still in the early stages of development, as technical experts and policymakers seek to finalize its protocol. However, the role it will play in Africa’s economic growth and stability is just as important than that of the AIB. Its aim will be to facilitate the integration of African economies through the enhancement of monetary integration and the elimination of trade restrictions. Key functions will include: providing financial assistance to member states in a manner not dissimilar to the International Monetary Fund; acting as a clearing-house for large-scale transactions across the continent and in this way providing investors with greater comfort on risk; coordinating monetary policies of member states and promoting cooperation between monetary authorities; and encouraging capital movement between member states. The ACB is still some time away and, to a large extent, its development will build on the success of the AIB and AMF. Invest in africa 2011
In line with the AU’s general goal of accelerating economic integration within Africa, the end goal of the ACB will be to build a common monetary policy across the continent and eventually create a single African currency. In the process of achieving the goal of a common monetary policy, the ACB will work to promote international monetary cooperation on behalf of its members, assist in the establishment of a multilateral system of payments for transactions between members, and eliminate foreign exchange restrictions that inhibit regional and international trade. The AU is committed to a united and strong Africa, as demonstrated by the development of ambitious and game-changing initiatives in the continent’s finance sector. The AIB, the AMF and ACB will serve to reinforce the potential of the continent. But, more importantly, they will accelerate the process of achieving that potential.
Testing a vaccine against malaria in Tanzania. One of the Millennium Development Goals, which the African Union is seeking to reach and extend, is to halt and then reverse the spread of major diseases
Healthcare: in need of a tonic Africa has a long way to go in healthcare, but as it progresses towards its goals, an expanding market will present a wealth of investment opportunities, writes Jonathan Hyman
espite progress made in terms of development across Africa, inadequate healthcare services are still hampering growth in both living standards and economic prosperity, with a large proportion of people still not receiving adequate healthcare. The policies of the African Union (AU) are to reach and extend those of the Millennium Development Goals (MDGs), which in healthcare are: reduce by two-thirds the under-five mortality rate, which largely results from measles,
pneumonia and diarrhea; reduce by three-quarters the maternal mortality rate; ensure universal access to reproductive healthcare; halt and then reverse the spread of HIV/AIDS, tuberculosis, malaria and other major diseases; and provide universal healthcare access to those afflicted with HIV/AIDS. According to the World Health Report 2010 from the World Health Organization (WHO), the limiting factors in progress towards the MDGs in health are primarily a lack of financial resources, but also poor governance and accountability, underdeveloped infrastructure, weak health systems, a lack of focus on results and the inadequate harmonization and alignment of aid. Exacerbating factors such as political instability and natural disasters are also at play. Another aggravating circumstance for Africaâ€™s healthcare policymakers is the disproportionately high levels of exposure Invest in africa 2011
to disease, which places a major strain on health resources. According to the AU’s Africa Health Strategy (AHS), Africa has 10 percent of the world’s population, yet only three percent of its medical workers – who are trying to manage 25 percent of the world’s disease burden. Tackling this level of disease is a key element of the AU’s health policy, since diseases are often preventable and generally treatable, as long as there is suitable access to healthcare services. To address the problem, it is essential to ensure adequate financing. The need for greater health financing in Africa was a focus of the 15th Ordinary Session of the Assembly of the AU in Kampala, Uganda, held July 19-27, 2010. The session was alarmed by the fact that, given Africa has the highest disease burden, the continent still has the lowest per capita spending on health, on average, of anywhere on earth. Consequently, the heads of state present resolved that they would “provide sustainable financing by enhancing
The Assembly resolved to end the mother-to-child transmission of AIDS, and to reduce the payment of out-of-pocket expenses – in particular, by abolishing charges for pregnant women and the under-fives, as well as by instituting national health insurance schemes. Investment in quantative as well as qualitative programmes is important, if useful data is to be gathered in order to aid effective policymaking. So the Assembly also resolved to introduce a monitoring and evaluation framework at the national level to enable progress towards all goals to be evaluated.
Roles for partner organizations However, despite evidence of lagging performance with regard to some key indicators – around two-thirds of the world’s HIV/ AIDS-infected people live on the continent – and the important challenges ahead to improving healthcare in Africa, the sector is capable of providing remarkable investment opportunities. These opportunities are mainly due to an ever-increasing demand for healthcare services, an increase in the roles for partner organizations, and an increasing focus of energy by national governments into making healthcare an integral and effective part of national policy. To illustrate this, the International Finance Corporation (IFC) estimated in a 2007 report that the market for healthcare will double by 2016, reaching $35 billion, and that the private sector will assume up to 60 percent of this demand in sub-Saharan Africa. Healthcare is an essential pillar of the AU’s objectives, notably through its strategic document The Africa Health Strategy 2007-15, which aims to tackle the major challenges faced by African health systems and provides a strategic framework for doing so. The AU’s health strategy, which involves mobilizing all human resources for the development of health across Africa, aims to coordinate policy and strategic plans, and intervene in other vital areas such as training and education. Further, the structure of The Africa Health Strategy 2007-15 is such that it wishes to harmonize existing health strategies rather than contradict them. This is being implemented by coordinating Regional Economic Communities (RECs) as well as member states. Therefore the AU strategy does not compete with existing health strategies, but instead complements the existing strategies found in Africa, by adding the coordinating perspective of the AU.
Africa has 10 percent of the world’s population, yet only three percent of its medical workers – who are trying to manage 25 percent of the world’s disease burden domestic resource mobilization, including public-private partnership and national health insurance, so as to meet the 15 percent Abuja target” – the level of public budget spending agreed at the Abuja Declaration of 2001. Ten years after the Declaration was made, according to the Assembly, 32 out of 53 African countries were forecast to be spending less than half the $40 per person per year on health recommended by the WHO. Eleven nations spend just $5 or less. Almost 30 percent of the total health expenditure was sourced from governments and around 50 percent from private sources. But of these private sector funds, 71 percent came from households and the remaining 29 percent from donors. This ratio is of obvious concern for the AU in its approach to healthcare across Africa, since it implies there is a significant dependency on a fickle, unreliable source of income. Invest in africa 2011
Medical testing in Kampala, Uganda. The continent, on average, has the lowest per capita spending on health
The AU’s Health Strategy identifies the high disease burden as being due to seven main points: • health systems remain underdeveloped, and too under-resourced to target a reduction in disease burden; • the existing health interventions still do not match the scale of the problem; • people, mostly through a lack of awareness, are not sufficiently empowered to address their health – cultural factors also play a significant role in health-seeking behaviour; • those in areas of the greatest disease burden do not receive the greatest health services; • poverty, marginalization and displacement play a significant role in increasing the health burden; • there is simply insufficient action; • environmental and degradation of infrastructure are not being sufficiently addressed. Essential to the achievement of a viable health strategy is healthcare financing, and the AU is undertaking numerous efforts towards aiding this. For example, the consultative meeting at the United Nations Economic Commission for Africa (UNECA) in September 2009 saw parliamentarians
lobby for legislation that would allow new taxes to be raised on airline tickets and other commodities, such as tobacco, in order to create new funds to aid healthcare. There are also some positive developments. The AU’s Health Strategy, a follow up to the Abuja Declaration, noted that some countries have increased their budget allocation to health in real terms to levels that exceed 10 percent of the total public budget. However, only six countries have so far reached the 15 percent target set in the Abuja Declaration back in 2001, according to the Assembly. The AU also states that development partners have, on average, increased their levels of development aid toward Africa. Aid for health has risen to more than $10 billion a year. This increase represents a doubling in funding over 10 years with the emergence of organizations such as the Global Fund to Fight Aids, Tuberculosis and Malaria and the Global Alliance for Vaccines and Immunization (GAVI), the Bill and Melinda Gates Foundation and, recently, the International Health Partnership. This development has been accompanied by a general evolution in the funding of core public health budgets, with Sector Wide Approaches (SWAPs) being integrated intersectorally – a positive move away from fragmented and inefficient vertical funding projects. This development has Invest in africa 2011
Advocate Bience Gawanas Commissioner for Social Affairs
The remit of the Department of Social Affairs covers many areas affecting the welfare of African citizens. Some of these are labor and employment, human trafficking and health issues – including e-health and telemedicine, polio, sexual and reproductive health, maternal and infant mortality – as well as measures to fight the scourges of HIV, tuberculosis and malaria. Others are the affairs of vulnerable groups, which include children, youth and the elderly. Of the many issues addressed by the Department of Social Affairs, I wish to discuss health, which is critical to Africa’s development. Despite the challenge of raising fi nance for health initiatives, the African Union has achieved a number of important successes. Our Polio Eradication in Africa campaign, for example, has recently yielded some noteworthy results. I am proud to report that the number of polio cases in Africa declined by 68 percent between 2009 and 2010, while the number of polio-infected countries in Africa also fell from 20 in 2009 to 12 in 2010. Furthermore, the AU Conference of Ministers of Health in May 2009 made recommendations for harmonizing existing health initiatives, including ongoing fundraising initiatives such as airline ticket levies and increased tobacco sales taxes. Youth welfare is also very important to Africa. Due to the challenging economies of many of our member states, our youth often have difficulty securing employment or the necessary fi nancing and support to create businesses. These unemployed youth, at times, resort to crime and have often been forced to fight in some of our continent’s wars. They are the ones who should continue to guide Africa’s growth and development. In recognizing this critical issue, the AU created an African Youth Charter, which includes an African Youth Decade. We also have a Plan of Action, which is a framework for engaging stakeholders in various sectors to achieve the Charter’s objectives. We reviewed our progress at the AU Summit of June 2011 in Malabo, the theme of which was ‘Accelerating Youth Empowerment for Sustainable Development’, and the AU looks forward to the achievement of more of its goals.
followed on from the International Commitment on Aid Effectiveness agreed at the High Level Forum in Paris in 2005. The forum aimed to manage donor funding to ensure that it fits neatly within a given national plan. More recently, in March 2011, the idea that “Investment in Health is an Investment in Economic Development” was discussed at the Meeting of the Committee of Experts of the Fourth Joint Annual Meetings of the AU Conference of Ministers of Economy and Finance and ECA Conference of African Ministers of Finance, Planning and Economic Development, held in Addis Ababa. The title was a response to the perceived problem with improving INVEST IN AFRICA 2011
levels of healthcare spending by the Committee. In addition to problems of culture and cooperation between finance and government health ministries, there was an accompanying perception of health spending merely as a cost and not as an investment. Yet no capital can be mobilized without human capital. The objectives of the conference were “more health for money and more money for health” – greater efficency with current spending, coupled with increased spending to achieve the healthcare goals of the AU. With these goals in mind, it becomes clear that investment in the healthcare sector in Africa has been never more both necessary, nor more attractive.
A class in Maseru, Lesotho. The African Union is backing the Millennium Development Goal seeking to ensure that by 2015, all children should be able to complete primary schooling
Leaps in learning A robust plan of action, and links with foreign partners, are helping the AU to achieve impressive results in the second phase of its education program, writes Jesse Morgan
ducation is vital to the development of individuals, societies and nations. As we move to a more knowledge-based economy, the African Union Commission (AUC) is at the forefront of enabling and coordinating innovative educational initiatives across the continent at every level of governance: institutional, national, regional and continental. Dr Jean Ping, the chairperson of the AUC, speaking at the Ninth High Level Group on Education in February last year, expressed the AU’s wish that all actors and stakeholders in education should promote it at every level to enable Africa to meet the Millennium Development Goal (MDG) in education. The goal states that stakeholders must “ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling”. The First Decade of Education for Africa, which ran from 1997 to 2006, aimed to enable Africa to address the
key issues that were hindering its educational development, ensure educational considerations were fully incorporated into policies at all levels, enable the coordination of program activities, and harmonize the organizational structures of the AUC and Regional Economic Communities (RECs). The policy was based on four priority areas: equity and access to basic education; quality, relevance and effectiveness of education; complementary learning modalities; and capacity-building. However, there were concerns that the First Decade had not made as much progress, in as many areas, as had been hoped, and the AU sought to address these when, in 2006, it launched its Second Decade of Education for Africa. The Second Decade, which runs until 2015, focuses on seven pillars: gender and culture; education-management information systems (EMIS); teacher development; tertiary education; technical and vocational training; curriculum and teaching and learning materials; and quality management. These pillars are the basis of all educational initiatives on the continent. One reason for the lack of progress during the First Decade was that a Plan of Action, detailing the role of stakeholders, was not adopted until two years after its launch. Therefore, when the AU launched the Second Decade, it simultaneously published a Plan of Action. Invest in africa 2011
The guiding principles decided upon by the AU to enable the successful implementation of the Plan of Action are: • ensuring enhanced political support, especially at national levels, but also at regional, continental and international levels; • concentration on strategic issues, the implementation of which will make a significant difference at member-state and regional levels; • enhancing mutual assistance among African states as the norm; • enhancing the capacities of RECs and national focal points: this will involve a needs assessment of national and regional implementing agencies, and appropriate capacity-building in such areas as program-cycle
SADC Regional Education and Training Implementation Plan, one of the various programs that seeks to integrate the Second Decade Plan of Action with the work of the RECs and to review progress towards the MDG. Then, in May 2011, African education ministers met in Nairobi, Kenya, for the First Extraordinary session of the Conference of Ministers of Education of the AU (COMEDAF) to discuss the theme of “preparations for launching the Pan-African University (PAU)”, before the AU Summit in July, and to consider the “Africa Regional Convention for the Mutual Recognition of degrees and qualifications in Higher Education”. The meeting emphasized the need for more investment in education. Other topics under consideration at the meeting were: the Pan African Conference on Teacher Development (PACTED); the April 2011 meeting of the Association for the Development of Education in Africa (ADEA); and a meeting on the School Feeding Program, seen as critical in improving children’s nutritional levels in order to improve school attendance and to enhance pupils’ attention and performance levels.
Centre of excellence
A volunteer and a local teacher help young Ghanaian students with their lessons
management, monitoring and evaluation, data-gathering and statistics; • establishing strong and effective mechanisms for monitoring; • avoiding the creation of new structures – capitalizing on existing structures and supporting their capacity-building and reform to accommodate new imperatives; • establishing as common practice the documentation, sharing and celebration of positive experiences and successful initiatives among member states. March 2010 saw the Southern African Development Community (SADC) education ministers meet in Kinshasa, Democratic Republic of Congo, with AUC representative Professor Jean Pierre Ezin to review the implementation of the Invest in africa 2011
The PAU is a complex, challenging and ambitious project to establish a continental centre of excellence in education that will enable national development goals to be pursued through the provision of academic programs. PAU currently offers graduate programs in business through the Lagos Business School and School of Media and Communications. Speaking at COMEDAF, Kenyan Education Minister Professor Sam Ongeri said, “The PAU is the culmination of continental initiatives of the Commission of the AU to revitalize higher education and research in Africa. It is a project that will exemplify excellence; enhance the attractiveness and global competitiveness of African higher education and research; and establish the African University at the core of Africa’s development.” In 2009, the AUC signed a Memorandum of Understanding (MoU) to formalize substantive cooperation with Fairleigh Dickinson University (FDU) in the United States. The MoU sets out a plan to develop educational opportunities for FDU students, identify and provide technical expertise for the AU, and jointly explore ventures to support and advance higher
The African Youth Forum aims to foster an integrated holistic approach towards educational development, focused on human capital and the potential of the large proportion of youth in need of education and training education on the African continent. Student exchanges between the two institutions, and internships, will take place. More than 30 students from 17 African countries were attending FDU at the time that the MoU was signed. This partnership is a promising initiative of the kind that can deliver on Ongeri’s desire to “significantly raise educational achievement, while addressing teacher education and higher education for development concerns”. Another project dealing with education is the African Youth Forum (AYF), an initiative of the AUC’s Department of Human Resources Science and Technology (HRST), which met in April this year to consider the theme of ‘Accelerating Youth Empowerment for Sustainable Development’. The goals are to foster an integrated holistic approach towards educational development, focused on human capital and the enormous potential of the large proportion of youth in need of education and training, so that they can contribute to both their own personal growth and the development of their societies as a whole.
Assistance from India Also hugely significant for education on the continent was the Second India-Africa Summit in May this year, and the adoption by the AUC and 14 AU member states of the Delhi Declaration and the Africa-India Framework for Cooperation. This covered several areas, including education, with important assistance focused on capacity-building. India will help to improve African capabilities in higher education – especially in the pure sciences, information technology and vocational education – and will endow several scholarships to African postgraduates to attend Indian universities. Already, around 432 African students have received training in subjects including economic offences and cyber-crimes; food quality and safety; disaster risk management; infrastructure development; entrepreneur development; and combating desertification. Invest in africa 2011
A Joint Action Plan (JAP), based on the Africa-India Framework for Cooperation, was announced in March 2010. Specifically, the JAP entails the setting up of several joint initiatives between the Government of India and the AU. These will include the India-Africa Institute of Foreign Trade in Uganda; the India-Africa Institute of Information Technology in Ghana; the India-Africa Institute of Educational Planning in Burundi; the India-Africa Diamond Institute in Botswana; and 10 India-Africa vocational training centres, to be located in Ethiopia, Rwanda, Burkina Faso, Gambia, Burundi, Gabon, Mozambique, Zimbabwe, Egypt and Libya. The framework includes provisions for several investments in research and development, including in renewable forms of energy and agricultural development, through these institutions. India is also investing US$116 million, by way of a grant, in the Pan-African e-Network Project, which was launched in 2009. Using Indian IT capability, the flagship scheme aims to bring the benefits of improved healthcare and higher education to Africa. The project involves five Indian universities and 12 super-speciality hospitals – hospitals that have a special focus on more than one specialist branch of medicine – as well as 47 African nations networked to five regional universities, five regional super-speciality hospitals, 53 learning centres, 53 remote hospitals and 53 Very Very Important Persons (VVIP) nodes across the continent. Around 23 countries are already linked. An EMIS is seen as a vitally important part of educational development, and so IT schemes of this kind are crucial in enabling the monitoring and measurement of progress in educational development. While significant challenges remain in fulfilling the goals of the Second Decade, nevertheless, when COMEDAF next meets in Nigeria in July 2012, the continent’s ministers can reflect upon the enormous number of achievements made to date. For instance, in March 2010, between 76 percent and 98 percent of children were enrolled in free primary education – levels that represent excellent progress towards the MDG.
Jufureh in the Gambia – the town made world famous by Alex Haley’s book Roots. The country has made tourism a national priority after seeing its contribution to stability and growth
The attractions of tourism Cooperation between the AU and the continent’s travel body is bolstering the sector, which has much to offer visitors – both internally and from abroad, writes Valerie Noury
he development of the tourism industry has been recognized as one of the principal engines for continued socio-economic development across Africa. Tourism is also a highly suitable priority for Africa, which boasts a unique set of natural and cultural attractions. Developments over the past 30 years have demonstrated positive trends for the sector in Africa. As early as 2005 and 2006, the World Trade Organization (WTO), named Africa as the world’s fastest-growing tourist destination. The prospects for 2020 are equally promising, with an estimated 77 million tourist arrivals expected, making tourism one of Africa’s most
dynamic sectors. The evolution of tourism, among other things, is being supported across Africa by the general improvement in foreign currency earnings to the balance of payments, the beneficial impact of tourism on the creation of direct and indirect employment, and the many positive spill-over effects toward other sectors of the economy. Africa was the only region in the midst of the 2009 global financial crisis to grow by more than three percent, according to Kazi A Rahma, Deputy Special Representative of the United Nations World Tourism Organization, speaking at the Africa Travel Association’s Fifth Annual Presidential Forum on Tourism in New York in September 2010. The rest of the world recorded negative growth of minus four percent. The continent attracted 46 million tourists in 2009, representing five percent of global international tourism. In 2010, the sector’s growth accelerated, with the first six months recording a growth rate of seven percent. This performance has encouraged African countries to view tourism as a key national Invest in africa 2011
Wildlife viewing, Kenya. The AU and ATA want to ensure eco-tourism does not obscure historical and other cultural attractions
A tranquil night at Okonjima Private Game Reserve, Namibia. Visitors seeking luxury accommodation are a key market for Africa
priority toward increasing growth. International tourism is only one side of the coin; trans-boundary tourism also holds much potential in terms of regional integration and growth in trade. Yet despite all these promising prospects, Africa’s tourism sector development remains relatively nascent compared with its competitors in an increasingly competitive global economy. Some of the problems facing the industry are simply seasonal, while others are linked to perceived poor service. There are also wider issues plaguing progress, such as the mounting international debt burden and a poor image due to inadequate promotion and marketing. Tourism needs to be better reflected in policy at a national level, whether via monetary and fiscal policies or via employment, transport, infrastructure and travel facilitation policies. The continent needs strong cooperation between state and institutional actors. The African Union Commission (AUC) framework does provide an invaluable structure at the supranational level, and countries are increasingly incorporating this into national policy. However, the diversity of different service providers and stakeholders in the tourism industry makes coordination across the sector a challenge to achieve. In this respect, interventions are required to realize its untapped potential. The New Partnership for Africa’s Development (NEPAD)/AU Action Plan, which the World Tourism Organization Commission for Africa adopted in 2004, seeks to tackle these challenges. Invest in africa 2011
In May 2010, the African Travel Association (ATA) held its 35th annual world Congress in Banjul, the Gambia. The Gambia’s government has made tourism a national priority after witnessing its significant contribution to growth and stability, and has greatly benefited from such a policy. The ATA is a partner of the AUC, cooperating on their common goal of promoting sustainable development of tourism across Africa. The ATA events, which are held across Africa and the United States, bring industry leaders together every year to discuss and share ideas on how to advance Africa’s tourism agenda.
Tourism grows in the Gambia The Gambia, which is the smallest country on the African continent, has a population of around 1.6 million, a beautiful shoreline favored by tourists, and is surrounded by Senegal. It receives around 120,000 charter tourists arrivals a year, mainly from Europe. The country’s tourism ministry says it aims to attract 500,000 tourist arrivals by 2012, targeting the US marketplace, through looking to attract a higher-end clientele and making the tourist season run all year round. Public-private sector partnerships have begun the construction of more accommodation space and a conference centre. Travel and tourism account for 16 percent of the Gambia’s gross domestic product (GDP). One of the cornerstones of the conference was the signing of a Memorandum of Understanding (MoU) between
the AUC, represented by Dr Elham Ibrahim, the AU Commissioner for Infrastructure and Energy, and Shamsa Mwangunga, the outgoing president of the ATA and the Minister for Natural Resources and Tourism of the United Republic of Tanzania, creating for the first time a working alliance between the two parties. This agreement calls for both parties to work towards the AU/NEPAD’s Tourism Action Plan, which addresses the important challenges ahead and is designed to focus AU state policies in regard to tourism and to better cooperation between government and industry on the marketing, planning and execution of the action plan. At the conference, Ibrahim said the MoU was a significant step toward putting Africa on the global tourism map. “We have just concluded and signed an MoU that enables us to work closely together to advance Africa’s agenda in the development of its tourism resources. This cooperation is very important, especially considering that Africa has yet to put in place a continental body responsible for tourism matters.” The Tourism Action Plan announces eight areas in which the AU and the ATA will cooperate, including marketing and promotion, research and development, promoting investment, mobilizing financial resources, and strengthening human resources.
attractions are unique to Africa and attract many tourists every year, they can obscure other attractions, especially those linked to history and human civilization; Promotion of research and development. Keeping the wheels of innovation oiled is paramount to the success of any player wishing to keep and increase its competitive edge in the global tourism and travel market. Furthermore, there are problems that stem from the multisectoral nature of the industry, which is highly dependent on the activities of other sectors. This means that industry players need to collaborate for the success of all, with competitive products and cost-effective packages; Promotion of investments in tourism infrastructure and products. Infrastructure constraints are not new to Africa, yet there have been positive signs for the tourism and travel industry in Africa since the mid 1980s. According to a WTO report, Tourism: 2020 Vision, an average annual rise in international tourist arrivals in Africa of 5.5 per cent is envisaged between 1995 and 2020. A similar rate of growth is expected for intra-African tourism, despite a weak financial situation for a large proportion of Africans, yet this needs to be improved via the provision of better tourism infrastructure; Mobilization of financial resources; Establishment of a code of conduct and ethics for tourism; Strengthening of human resources and quality assurance.
An average annual rise in international tourist arrivals in Africa of 5.5 per cent is envisaged until 2020
These eight points are as follows: • Creation of an enabling policy and regulatory environment – the AU is a well-positioned institutional actor for this; • Institutional capacity-building; • Promotion of tourism marketing. Africa’s tourism potential is still hampered by a negative image of the continent via the global media, with natural and man-made disasters gathering more importance in the press and overshadowing the many positive developments. This image also affects Africans who wish to explore their continent. Another problem with tourism marketing across the continent is a prevalent focus on eco-tourism – exploration of the many exceptional wildlife and natural reserves found across the continent. While some of these
• • •
Owing to the cross-sectoral nature of tourism, the industry needs to be integrated into each country’s overall economic and social policies – a task that is now under way. Africa is increasingly concentrating its efforts toward achieving the Millennium Development Goals (MDGs) by the rapidly approaching deadline in 2015. The AU understands this, and believes that directing more energies towards the huge growth potential of tourism constitutes an ideal springboard for the achievement of these MDGs. Invest in africa 2011
doing business in africa
Clear road ahead for smart investors
The N7 route connecting Cape Town, South Africa, with Namibia. Infrastructure is one of the four main sectors in Africa that McKinsey Global Institute is recommending to investors
Invest in africa 2011
doing business in africa
Opportunities abound across Africa, which has already made progress as a place to do business and is now tackling a second round of reforms, writes Dr Sharon T Freeman
frica’s recovery from the global economic crisis has been faster than in many other parts of the world, according to the Africa Competitiveness Report 2011 – a joint publication by the African Development Bank (AfDB) and World Bank. The report underscores that Africa has seen what can be termed an “economic resurgence over the past decade: between 2001 and 2010, gross domestic product growth on the continent averaged 5.2 percent annually … and higher than the global average of 4.2 percent”.
Growth creates opportunities The continent’s economic growth is creating substantial new business opportunities that multinationals often overlook, claims McKinsey Global Institute (MGI), in Lions on the Move: The Progress and Potential of African Economies. The report, published in June 2010, reviews the outlook for sectors such as retailing, telecommunications, banking, agriculture, natural resources and infrastructure, and concludes the future is bright. Strong prospects await global companies that invest in a broad range of industries, including the consumer, agriculture, natural resources and infrastructure sectors, according to MGI. These four categories could together be worth $2.6 trillion in annual revenues by 2020, its projections show. Reforms undertaken in Africa over the past two decades have created a plethora of new business and
investment opportunities. Meaningful reforms have included, for instance, putting more sustainable fiscal policies in place, controlling inflation and managing debt. Hefty dividends have also accrued through governments addressing fundamental structural rigidities by divesting from private-sector activity, opening up some publicly dominated sectors – such as telecoms – and through reducing public-sector borrowing from the banking sector, which was previously crowding out private investment. Today, there is new hope for the continent that is grounded in improved macroeconomic frameworks and policies, the rise of a middle class, the opportunities presented by tighter links with fast-growing emerging markets, and development in infrastructure. However, as Africa tackles much tougher second-generation reforms – aimed at boosting competitiveness and increasing the volume and diversification of exports – its financing needs for the future are massive.
Who is doing business? “If there was any more of Africa, we’d be investing in it,” says Graham Mackay of SABMiller. The brewing giant, formerly of South Africa and now headquartered in London, has interests in 30 African countries. This sentiment is backed by Shawn Ladd, an analyst at the Africa Department of the International Monetary Fund (IMF), in the IMF Survey Magazine (2011): “Emerging Africa expected to see a rise in investment… particularly from Africa’s new trading partners in Asia… and demand for African bonds is set to increase,” he says. The IMF’s Regional Economic Outlook for sub-Saharan Africa in
October 2010 adds: “African trade is already shifting toward the dynamic emerging markets, notably China.” Trade between China and Africa has been expanding rapidly, growing by an average of 30 percent a year over the past decade alone. New partners will continue to show strong demand for goods that Africa can supply, and will be alert for opportunities to invest directly, and to take advantage of new business opportunities that can be seized because of new investments. With new financial windfalls from natural resources, newfound access to private capital, and additional official development assistance, African countries are positioned to fund transformative investments. Solid investment projects, especially in transportation and power, could radically improve growth prospects and the ability to efficiently deliver public services, while laying the foundations for boosting competitiveness and increasing the volume and diversification of exports.
New prospects Negotiations are under way for the establishment of an integrated market of 26 countries, with a combined population of almost 600 million people and a total gross domestic product (GDP) of around $1 trillion, following a meeting of the heads of state and government of the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC) Tripartite on June 12, 2011. The establishment of a Tripartite Free Trade Area will bolster intraregional trade by creating a wider market, increase investment flows, enhance competitiveness and develop cross-regional infrastructure. Invest in africa 2011
doing business in africa
Many free, web-based resources can assist firms in mapping out a strategy for targeting countries of interest, given demand, supply, and competitive factors Graham Mackay, chief executive at SABMiller. The brewing giant has interests in 30 African countries
McKinsey managing director Dominic Barton. Africa’s future is bright, the firm predicts
The number of Export Processing Zones (EPZs) in Africa is also growing, including those being built by the Chinese. These zones are increasingly being viewed as proven incentive regimes for attracting export-oriented manufacturing investment.
Pre-investment planning The World Bank’s ‘Doing Business’ rankings indicate the ease of doing business as measured in terms of regulations directly affecting businesses; they do not directly measure more general conditions, such as a nation’s proximity to large markets, quality of infrastructure, inflation or crime. By the Bank’s index – based on an average of 10 sub-indices including, for instance, procedures involved in starting a business, employing workers, and enforcing contracts – many African nations rank among the Invest in africa 2011
worst in the world. Similarly, the Global Competitiveness Report (GCR), a yearly report comparing 133 major and emerging economies, published since 1979 by the World Economic Forum, ranks Africa at the low end of the scale. While such competitiveness indicators don’t tell the whole story about competitiveness, they are useful reminders that it’s important to engage in proper business planning before investing in African countries. Before spending money to retain experts, firms should note that there are many free, web-based resources that are available to assist them in preliminarily mapping out a strategy for targeting countries of interest, given demand, supply, and competitive factors. For instance, the United States Government’s Export.gov website (www.export.gov) includes ‘Country
Commercial Guides’ for many African countries, which offer a wealth of information about their respective overall economic and trading profiles. The Africa Portal of Export.gov (www.export.gov/africa) also provides useful market research and information about business opportunities. To identify business opportunities associated with upcoming major development initiatives, companies should monitor the websites of the AfDB (www.afdb.org), the World Bank (www.worldbank.org/africa), the International Finance Corporation (IFC) (www.ifc.org/africa), and the Millennium Challenge Corporation (www.mcc.gov). Every African country also has a wealth of internet-based information that explains its trade and investment regimes and identifies the investment incentives that are offered.
doing business in africa
A worker in a brick factory in Burundi. The continent has introduced legislation to encourage both indigenous entrepreneurs and the use of local items in production
Addressing investor concerns The focus of fears has shifted to corruption, instability and insecurity. But none of these affect investment as much as might be thought, writes Ambassador Ferguson O Iheme
o much has been said and written about the problems of doing business in Africa that should worry investors about the safety of their investment. During the Cold War, investors’ fears would have been sequestration by a nationalist or Communist government.
But with the end of the Cold War, and diminished ideological competition, Africa is now attracting investors from diverse countries. The concerns of these new investors – governments, individuals and corporations – seem to focus on the security of their investment, principally because of corruption, the fear of political instability and lack of security, the nature of the labour markets and local content, and unreliable power. While such fears are genuine, in Africa today, no investment has been wasted because of one, or a combination of, the factors under discussion. Invest in africa 2011
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Of these factors, corruption is the most salient and the most worrying. It complicates the process of entry and, in combination with the other factors mentioned above, makes business operations difficult and more expensive. However, studies have shown that the risk factor of corruption is quite often exaggerated. Assessments by private rating agencies have been criticized as being based on media reports and not on experience, as well as being “biased against poor or smaller countries” (Elizabeth Asiedu and James Freeman in the Review of Development Economics, 2009). This must not be misinterpreted to mean that the evil of corruption is being denied or downplayed, but it does mean that the investor should be circumspect.
Corruption and regulation Corruption is engendered by several factors that fall under the rubric ‘regulation’, according to Paolo Mauro, division chief at the fiscal affairs department of the International Monetary Fund (IMF). These factors are trade restriction, government subsidies, price controls, multiple exchange-rate practices, foreign exchange allocation, low wages in the civil service, natural resource endowment and psychological factors. The positive news is that the governments of African states are adopting the correct measures, where necessary, to deal with any adverse effect and provide investor-friendly regimes. Most countries in Africa have set up agencies to fight corruption, and though success is uneven and commitment questioned in some cases, the populace is angry and pushing governments for firmer action. As an aside, do investors unwittingly contribute to corruption? Do any come with a mindset conditioned by Invest in africa 2011
what they have read or heard, to join the rot in order to get through?
Political stability and security It is understandable that political stability and security should be concerns for the investor. It has been a difficult process, but clearly the Peace and Security Architecture of the African Union (AU) is largely succeeding in ensuring political stability in the continent by leaving no one in doubt that undemocratic accession to power is no longer accepted. The days when a
No investment has been lost as a result of regime change. Successor governments have respected agreements subaltern went onto radio or television to ridiculously announce a ‘dawn-todusk curfew’, and a takeover of government by the military, are almost entirely over. Any military adventurer has to think long and hard, because he faces ostracism. And to avoid circumstances that encourage military incursion, the AU is continually nudging those leaders that have overstayed to relinquish power. The process of democratic succession has not always been smooth, and where
elections have led to conflicts, the AU has stepped in to ensure justice. But the interventions of the ‘international community’ – the code phrase for the United States and the European Union – in some of the conflicts arising out of disputed elections have not always been helpful. They have been perceived to be partisan, and tend to subvert the best efforts of the AU for a solution. However, no investment has been lost in Africa as a result of regime change. Successor governments have respected agreements with investors. What hurts investment is political instability that is accompanied by lack of security.
Labor market The labor market in Africa is thickly populated, with massive and debilitating unemployment. Many able-bodied young people are without work. University graduates sell prepaid mobile phone cards, some are newspaper vendors, and others operate the motorcycle taxi popularly known in Nigeria as the ‘okada’. Yet every year, people graduate from the tertiary institutions in increasing numbers. Ironically, the labor market lacks the proper expertise needed to drive the economies of African countries. Without downgrading or deprecating the status of any discipline, the lack of opportunity for science education must be addressed, because a great many of those who read non-science subjects do so not by choice, but by necessity. Non-science education is not being diminished or given a lower status, but it must be recognized that the African labor market, for now, is skewed. Notwithstanding this lament, there are brilliant people who can be assets to their employers, if given the chance. After all, Africans are running the various sectors of the economy. But the labor
doing business in africa
Voting in Nigeria. The AU has helped to ensure a far greater level of political stability across the continent
market is also infected by corruption. The best is not hired because his father’s name doesn’t ring any bells, or because he has not been introduced by a senator or minister. The bright side is that this is not a doomsday scenario. It is not meant to scare, but to urge the investor to come in and be pleasantly surprised. The labor market has suffered from ‘brain drain’. If the brilliant engineers, doctors, researchers and specialists in other disciplines who were constrained to leave for other lands, particularly Europe and the US, for better opportunities could be attracted back home – and African countries are already doing this through programs targeting the diaspora – then there would be sufficient expertise on the continent. These professionals are ready to come back. Another bonus for the investor is that the labor market is not turbulent. Labor leaders understand the needs of their different countries, and of
labor itself, in a choked employment market and are no longer readily antagonistic to government. Legislation has been introduced, to encourage both capacity-building through indigenous participation, and incorporation of local items in production where available. These measures will facilitate the participation of indigenous entrepreneurs. It is expected that they will also promote a peaceful business environment, because the locals will not feel left out.
Power shortage Little needs to be said about the power problem in Africa – it is common knowledge. Factories have to produce from a failed natural grid system. This adds to the cost of production, which is then passed to the consumers. Some experts complain that the governments have not fully exploited all the possible sources of power – such as solar, hydro, wind, fossil fuels – and that reliance on
thermal generation, with the associated problems of delivery of gas to stations, is partly responsible for the unsatisfactory situation. The gas sector, therefore, is a fertile field for investment. Clearly, we have made no attempt to deny the fears of the investor. They are genuine, and that is why the problems have not been glossed over. It would be difficult to do so anyway, because these problems hurt everybody, every day. On the other hand, these problems are not insurmountable and not disabling. They do, however, definitely make investment much more difficult. More importantly, policymakers admit that the position is unacceptable, and are making serious efforts to overcome them. Investors are strongly encouraged to come in with their expertise as they could be part of the solution, earning financial rewards from their investment and the goodwill of a grateful people who see the benefits they have brought. Invest in africa 2011
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of the business and political fields in which they work. Africa Practice Bridge House, 63-65 North Wharf Road London W2 1LA, United Kingdom T: +44 20 7087 3780 E: email@example.com
Africa Practice R&B
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18 Isaac John Street, Ikeja GRA Lagos, Nigeria
An Africa-focused business advisory and intelligence company, committed
T: +234 (0)14967558
An international business risk consultancy operating in over 130
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countries that enables corporate, government and NGO clients to minimize operational risks in complex and hostile environments.
An international risk-management company that provides intelligence and technology solutions to enable
companies, investors and governments to mitigate business and legal risks, and take advantage of opportunities. Kroll 600 Third Avenue New York NY 10016 United States T: 888-209-9526 (US toll-free); +1 212-593-1000 www.kroll.com Songhai Advisory An Africa-focused business intelligence consultancy specialising in investment insight by providing country risk, due diligence and executive search services for the Gulf of Guinea and surrounding countries. T: (UK) +44 7981 182288; (Switzerland) +41 (0)22 548 11 63 E: firstname.lastname@example.org www.songhaiadvisory.com
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Aegis Defence Services Limited A private security and risk-management company with security and advisory divisions, providing services that enable multinationals, governments and international agencies to minimize risk and maximize opportunity. Aegis Defence Services Limited 39 Victoria Street London SW1H OEU United Kingdom T: +44 20 7222 1020 E: email@example.com www.aegisworld.com Economist Intelligence Unit An internationally recognized, independent economic and business research, forecasting and analysis resource, providing both customized and off-the-shelf research. The website includes free access to the Unitâ€™s latest data. Economist Intelligence Unit: London 26 Red Lion Square, London WC1R 4HQ United Kingdom T: + 44 20 7576 8181 E: firstname.lastname@example.org
Economist Intelligence Unit: New York 750 Third Avenue 5th Floor New York, NY 10017 United States T: + 1 212 698 9717 E: email@example.com Economist Intelligence Unit: Hong Kong 6001, Central Plaza, 18 Harbour Road, Wanchai Hong Kong T: +852 2802 7288 E: firstname.lastname@example.org www.eiu.com Business Monitor A consultancy offering a comprehensive range of products and services in order to help clients understand and manage operating risks, and exploit business opportunities. Business Monitor International Senator House 85 Queen Victoria Street London EC4V 4AB United Kingdom T: +44 20 7248 0468 E: email@example.com www.businessmonitor.com Diligence Diligence is a business intelligence firm that helps its clients confront business challenges by providing intelligence and analysis to identify, manage and mitigate both normal and unanticipated business risks. Diligence London One Canada Square, 10th Floor Canary Wharf, London E14 5AA
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Veracity provides business
An investment advisor focusing on emerging markets that advises multinationals and investment funds on ways in which they can benefit from the high growth opportunities available.
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Malachite Advisors Ltd 1 Lyric Square London W6 0NB United Kingdom T: +44 20 8877 8970 E: firstname.lastname@example.org
Eurasia Group (New York) 475 Fifth Avenue 14th floor New York NY 10017 United States T: +1 212 213 3112
Oxford Analytica (New York) Suite 54B, 405 Lexington Avenue New York NY 10174 United States T: +1 646 430 9014 www.oxan.com
Eurasia Group (Washington, DC) 1818 N Street NW 7th floor Washington, DC 20036 United States T: +1 202 298 6300
Malachite Advisors Ltd Belvedere Harare, Zimbabwe T: +263 772 133 226 E: email@example.com www.malachitegroup.co
Eurasia Group (United Kingdom) 30-31 Great Sutton Street, 1st floor London ECIV ONA United Kingdom T: +44 20 7553 9820 E: firstname.lastname@example.org www.eurasiagroup.net
business that relies solely on the
IHS Global Insight
judgment of people with
A global information company with expertise in energy, economics, geopolitical risk, sustainability and supply-chain management, employing more than 5,100 people in over 30 countries.
A global analysis and advisory firm that assists its corporate clients in identifying the main political, economic, legal and regulatory factors that affect their commercial interests in complex markets.
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www.veracityworldwide.com Hakluyt and Company A strategic intelligence and advisory firm specializing in upmarket
on-the-ground experience in the countries in which it operates. Hakluyt and Company Limited 34 Upper Brook Street London W1K 7QS United Kingdom T: +44 20 7491 7091
Hakluyt and Company (US) Limited 230 Park Avenue Helmsley Building, 10th Floor New York, NY 10169
IHS Inc. 321 Inverness Drive South Englewood, CO 80112 United States T: (US and Canada) +1 800 525 7052; (ROW) +1 303 790-0600 www.ihs.com
United States T: + 1 212 808 6546
Hakluyt and Company (Singapore) Pte Ltd Level 30, 6 Battery Road Singapore 049909 T: +65 6550 9630
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Eurasia Group A leading global political risk research and consulting firm that helps clients in their response to business risks around the world by providing information and insight into how political developments affect markets.
Oxford Analytica 5 Alfred Street Oxford OX1 4EH United Kingdom T: +44 1865 261 600 Oxford Analytica (Paris) 5, rue de Surene 75008 Paris France T: +33 1 4289 0836 Oxford Analytica (Washington, DC) 1069 Thomas Jefferson Street NW Washington DC 20007 United States T: +1 202 342 2860
International business advisory firm offering strategic planning, capital raising, risk management, market development, ongoing operations, and asset sales services tailored to help clients capitalize on emerging business opportunities in international markets. Scowcroft Group 900 Seventeenth Street, NW, Suite 500 Washington, DC 20006 United States T: +1 202 296 9312 www.scowcroft.com Stratfor Global Intelligence Stratforâ€™s global team of human intelligence professionals provides insights into political, economic, and military developments, to reduce risks and identify opportunities around the globe. Stratfor Global Intelligence 221 W 6th Street, Suite 400 Austin, TX 78701 United States T: +1 877 978 7284 (US toll-free); +1 512 744 4300 www.stratfor.com FTI Consulting FTI Consulting, Inc, is a specialist business advisory firm in Asia
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www.fronteiraglobal.com Investigation and Intelligence Limited An agency that specializes in providing political risk reporting, to include academic research and hard and soft intelligence at the diplomatic level. Investigation and Intelligence Limited Communications House York Street London W1U 6PZ United Kingdom T: +44 20 7138 2845 E: firstname.lastname@example.org www.corporateinvestigator.com
Kuranga & Associates Global Consultancy Kuranga & Associates Global Consultancy provides economic and political risk analysis, mainly for investors in emerging economies, focusing on Africa, with an emphasis on West Africa and Nigeria. Kuranga & Associates Dr David O Kuranga 73-12 35th Ave, Suite 26D Jackson Heights, NY 11372 United States T: +1 212 363 0936 E: email@example.com www.kaglobal.net Smith Brandon International Inc This firm provides clients around the world with a comprehensive range of international information and intelligence-gathering services – including security consulting, risk-avoidance counsel and plans of action, and political risk assessment. Smith Brandon International Inc 1156 15th Street NW, Suite 150 Washington, DC 20005 United States T: +1 202 887 9363 E: firstname.lastname@example.org www.smithbrandon.com Aon Corporation Aon works with financial institutions, corporations, traders and exporters, to help them mitigate and manage their risk, utilizing a full-service political risk-management practice.
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American River International ARI identifies areas of political risk and export credit risk, as well as marine insurance, product liability, workers’ compensation, kidnap and ransom exposure that your firm has doing business internationally. American River International 1229 Old Walt Whitman Road Melville NY 11747 United States T: +1 800 524 2493 (toll-free US and Canada); +1 631 396 6800 E: frankagliardi @americanriverintl.com www.americanriverintl.com/ consulting/risk.htm Invest in africa 2011
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Republic of Cape Verde
Arab Republic of Egypt
Republic of Guinea
Republic of Algeria
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General Authority for Investment in Egypt (GAFI) 3 Salah Salem Street, Nasr City, Cairo 11562 Egypt T: +202 240 55 452 E: email@example.com www.gafinet.org
Union of the Comoros
Federal Democratic Republic of Ethiopia
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Republic of Namibia
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Index of advertisers AES-SONEL..................................................................... 62 Afreximbank (African Export-Import Bank)......................... 138 African Mining Services (AMS)...........................................84 AGCO............................................................................ 111 Air Nigeria...................................................................... 168 Allana Potash...................................................................88 Amiran Kenya................................................................. 105 Amlib..............................................................................94 Anambra State................................................................. 36 Bannie & Archer............................................................... 10 BCI............................................................................... 141 Cee Cee Freight.............................................................. 117 Centre for Development of Advanced Computing (CDAC)........................................... 131 Cirrus Oil Services Ltd....................................................... 75 Coal India Limited............................................................ 87 Copperbelt Energy............................................................ 72 Corn Products International............................................. 106 Damagix Nigeria Limited.................................................. 167 DRA International............................................................. 81 Elemental Minerals Limited................................................ 76 Escom............................................................................... 8 First Quantum Minerals Ltd............................................... 91 General Electric (GE)........................................................ 20
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HSBC.............................................................................. 12 Hydromine, Inc................................................................... 2 Illovo Sugar Limited.......................................................... 16 Isolux Corsรกn...................................................................66 ITG............................................................................... 149 John W Ffooks & Co.......................................................... 31 Kolin............................................................................... 24 Manitou........................................................................... 93 Marasa Central Reservations..............................................46 Marlin Maritime Ltd (MML)................................................68 Overseas Infrastructure Alliance (OIA)............................... 112 PepsiCo......................................................................... 100 PwC Kenya....................................................................... 32 Rand Refinery.................................................................. 82 Randgold Resources.......................................................... 78 Richfield........................................................................ 102 South African Airways....................................................... 18 Standard Bank............................................................... 137 Sungate............................................................................. 4 Tolplan (Pty) Ltd............................................................. 123 Volta River Authority............................................................ 6 Wood Group PSN.............................................................. 71 Yara.............................................................................. 108 Zambian Border Crossing Co (ZipBCC).............................. 124
The leading indigenous suppliers of casings, tubulars, line pipes and ﬁttings to all major oil companies operating in Nigeria. Damagix represents some of the world’s biggest pipe manufacturers, whose total capacities are more than twenty (20) million tons of pipes annually.
DAMAGIX GROUP COMPANY PROFILE
DAMAGIX NIGERIA LIMITED (DAMAGIX), incorporated in 1993, metamorphosed into DAMAGIX GROUP; made up of DAMAGIX NIGERIA LIMITED, now the leading Indigenous Pipes Supplier to the Nigerian Oil and Gas Industry, DAMAGIX OIL AND GAS LIMITED, which handles Pipeline Construction, and DAMAGIX ENGINEERING LIMITED, which handles Engineering Projects and Consultancy Services. DAMAGIX is managed by a set of core professionals who have gained a total of over 60 years working experience in the Nigerian Oil and gas Industry.
SUPPLIER OF 42" LINE PIPES TO TOTAL’s OML 58, O.U.R UPGRADE PROJECT IN NIGERIA
DAMAGIX represents dozens of Pipe Mills (in Nigeria) from all over the world, whose total Milling Capacity is over twenty (20) million tons of pipes annually. DAMAGIX has executed numerous Pipes Supply Contracts for the Multinational Oil Companies operating in Nigeria, such as Total, Shell, Agip, Chevron and Conoil Producing. In addition to our proven track-record, and in our determination to remain the Most Preferred Oil Services Company in the Nigerian Oil and Gas Industry, DAMAGIX has just achieved another Golden Milestone, in the biggest Pipes Supply Contract ever awarded by TOTAL to an indigenous Company in Nigeria, by the timely execution of a Major Contract for TOTAL’s OML 58 O.U.R. Pipeline Upgrade Project, for the Procurement, Fabrication, Coating and Supply of 25,000 tons, 46 km of 42 , X65, 3-layer PE coated Line Pipes Induction Bends. Following this successful completion TOTAL awarded DAMAGIX another Contract to supply 75,000 m of 24" Line Pipes to its NOPL Project, which DAMAGIX again successfully executed, in time! With the Local Content Bill now signed into Law in Nigeria, and with the collaboration of our Technical Partners, DAMAGIX has strategically accelerated its plans to immediately establish an LSAW Pipe Mill and a Threading Plant, which will be commissioned in the next 2 years.
OUR CONTACTS Nigeria LAGOS 19B, Maitama Sule Street Ikoyi, Lagos, Nigeria Tel: + 234 1 463 1395 + 234 803 307 3408 + 234 803 323 2222 Fax: + 234 1 463 1395
In order to improve its Management System DAMAGIX has commenced the ISO 9001:200 Certification Processes, which will be concluded very soon.
PRODUCTS AND SERVICES
DAMAGIX stocks and supplies all sizes and grades of Casings, Tubulars (OCTG), Line Pipes and Fittings. In collaboration with our Technical Partners, we provide the following Supply Services: 1. Line Pipes and Bends/Accessories.
312, Port Harcourt Aba Expressway,
2. Casings Pipes and Tubulars (OCTG).
10, Pride Loop, Behind Voltic House, Dzorwulu,
3. Stainless Steel Pipes.
4. Piling Sheets/Piling Pipes.
Tel: + 234 1 463 1395
INTERNATIONAL EXPANSION PROGRAM
With the increased Oil and Gas exploration activities in Ghana, DAMAGIX has already opened a Branch Office in Accra.
Email: firstname.lastname@example.org, email@example.com