The Africa Logistics December 2020

DECEMBER 2020

Africa Logistics

THE

www.theafricalogistics.com

Savino Del Bene In the Logistics business since 1899

ignazio Messina& C.

State of Cold Chain infrastructure

SME Competitiveness in Benin

1899 - 2020

EDITORIAL

Air Connectivity Crisis Threatens Global Economic Recovery The International Air Transport Association (IATA) released data revealing that the COVID-19 crisis has had a devastating impact on international connectivity, shaking up the rankings of the world’s most connected cities. “The dramatic shift in the connectivity rankings demonstrates the scale at which the world’s connectivity has been re-ordered over the last months. But the important point is that rankings did not shift because of any improvement in connectivity. That declined overall in all markets.

The rankings shifted because the scale of the decline was greater for some cities than others. There are no winners, just some players that suffered fewer injuries. In a short period of time we have undSone a century of progress in bringing people together and connecting markets. The message we must take from this study is the urgent need to re-build the global air transport network,” said Sebastian Mikosz, IATA’s Senior Vice President for Member External Relations.

IATA’s 76th Annual General Meeting called on governments to safely re-open borders using testing. “The systematic testing of travelers is the immediate solution to rebuilding the connectivity that we have lost. The technology exists. The guidelines for implementation have been developed. Now we need to implement, before the damage to the global air transport network becomes irreparable,” said Mikosz.

Air transport is a major engine of the global economy. In normal times some 88 million jobs and $3.5 trillion in GDP is supported by aviation. More than half of this employment and economic value is at risk from the collapse in global air travel demand.

“Governments must realize that there are major consequences for peoples’ lives and livelihoods. At least 46 million jobs supported by air transport are in peril. And the strength of the economic recovery from COVID-19 will be severely compromised without the support of a functioning air transport network,” said Mikosz.

IATA’s air connectivity index measures how well connected a country’s cities are to other cities around the world, which is critical for trade, tourism,

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Managing Editor Kenneth Omondi Editorial consultant Anthony Kiganda

Writers Ken Okore VeronicahMuthoni Graphic Design Felix Rurigi Nick Amanya

investment and other economic flows. It is a composite measure reflecting the number of seats flown to the destinations served from a country’s major airports and the economic importance of those destinations.

COVID-19 impacts on connectivity by region (April 2019-April 2020, IATA Connectivity Index measure) Africa suffered a 93% decline in connectivity.

Ethiopia managed to buck the trend. During the first peak of the pandemic in April 2020, Ethiopia maintained connections with 88 international destinations.

Many aviation markets reliant on tourism, such as Egypt, South Africa and Morocco, were particularly severely impacted.

Asia-Pacific saw a 76% decline in connectivity.

Stronger domestic aviation markets, such as China, Japan and South Korea performed better among the most connected countries in the region. Despite the relatively large domestic aviation market, Thailand was severely impacted perhaps because of the country’s high reliance on international tourism.

Europe experienced a 93% fall in connectivity.

European countries saw significant declines across most markets, although Russian connectivity has held up better than Western European countries.

Middle East countries saw connectivity decline by 88%. With the exception of Qatar, connectivity levels reduced by more than 85% for the five most connected countries in the region. Despite border closures, Qatar allowed passengers to transit between flights. It was also an important hub for air cargo.

North American connectivity declined 73%. Canada’s connectivity (-85% decline) was hit more heavily than the United States (-72%). In part, this reflects the large domestic aviation market in the United States, which despite a significant passenger decline, has continued to support connectivity.

Latin America suffered a 91% collapse in connectivity. Mexico and Chile performed relatively better than the other most connected countries, perhaps due to the timing of domestic lockdowns in these countries and how strictly they were enforced.

DISCLAIMER: The publisher does not accept responsibility for the accuracy or authenticity of advertisements or contributions contained in the journal.

Views expressed by contributors are not necessarily those of the publisher. © All rights reserved.

No part of this publication may be copied or reproduced without prior permission from the publisher.

Circulation Ken Kilozo Robert Kimani Marketing Executives George Otieno Liz Kyalo

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inside ...

COVER STORY Savino Del Bene is a proudly Italian, multinational Company operating worldwide in international shipments and logistics support services, with over 120 years of history.

Savino Del Bene:

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In the Logistics business since 1899

NEWS & FEATURES

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6. Transforming African ports 7. NLG regassification plant

in Ghana

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8. Oxford University Covid-19 vaccince 8. Kuehne+Nagel invests

in global vaccine distribution network

9. Turkish Cargo is best

cargo brand in Europe

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11. Food deficit in south

Africa blamed on Loss, Waste

12. Ignazio & Co. 14 Business confidence in

South Africa

15. Imperial partners with

lori systems to boost e-logisticstechnology in Africa

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The Africa Logistics

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OPINION

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Lenias Hwenda:

The State of Cold Chain Infrastructure The second phase of the Covid-19 pandemic is already underway. Like the rest of the world, Africa is pinning its hopes on the anticipated imminent approval of a Covid-19 vaccine that could begin mass production by early 2021.

Zimbabwe’s restrictions on mobile money transfers are a blow to financial inclusion

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Promoting SME Competitiveness in Benin

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African Farmers are younger than you think.

Here is why

UNECA expert highlights importance of digital ID for Africa’s post COVID-19 economy

The Lead Advisor for the United Nations Economic Commission for Africa (UNECA’s) Digital Centre of Excellence, Tunde Fafunwa, has explained why African nations must be more intentional about developing digital. www.theafricalogistics.com

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NEWS

Transforming Africa’s ports Six recommendations for a world-class port sector

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ransforming Africa’s ports: six recommendations for a world-class port sector On the back of the success of the African logistics sector report published in 2019, the AFRICA CEO FORUM, in partnership with Okan, has repeated the experience, centring its attention on ports this year.

Through numerous expert opinions, case study success stories and statistical analyses, the report breaks down the multiple changes and trends holding back the development of the port sector. The report provides six pragmatic and ambitious recommendations – such as better structure public investment, eradicate operational inefficiencies, mobilise private investment through public-private partnerships, improve business climate and fast-track integrated industrial port projects – that seek to accelerate the modernisation of the port sector.

At a time when 80% of trade in Africa moves through ports, the sector’s modernisation is pivotal in order for it to be able to support the continent’s economic transformation, industrialisation and regional integration. Despite the immense amount of progress made over the past 15 years, including the emergence of world-class African ports able to accommodate next-generation vessels and a significant increase in private investment ($15bn over the period), the development of Africa’s ports continues to be uneven.

What’s more, there is still considerable room for improvement: out of Africa’s top 20 ports, only Egypt, Morocco and South Africa had a cargo handling capacity of more than 4 million TEU in 2018. If Africa wants to draw attention to its vast resources, including its mining and agricultural products, and be able to export them, then it will need efficient ports.

To address these issues, the AFRICA CEO FORUM, The Africa Logistics

in partnership with the firm Okan, is publishing an exclusive report that formulates pragmatic recommendations aimed at accelerating the modernisation of Africa’s port sector. Better structure public investment, eradicate operational inefficiencies, mobilise private investment through public-private partnerships, improve business climate and fast-track integrated industrial port projects: from Tangier to Durban, not to mention Djibouti, Port Said and Lomé, this report draws on African case study success stories, as well as the many challenges holding back sector development, to provide recommendations intended to meet investors’ and entrepreneurs’ needs.

At a time when the Covid-19 pandemic has plunged the world into an unprecedented economic crisis, the report analyses its short-term impact – e.g., the reorganisation of operations, the drastic slowdown of trade flows and problems arising due to overloaded storage facilities – on the business activity and development of Africa’s port sector.

It is also focused on taking stock of impacts – ones that are difficult to clearly grasp – on the sector in the medium to long term, starting with the acceleration of digitalisation, the promotion of regional trade and the inking of a series of port terminal privatisations and concession processes.

“Much as the Africa CEOs Survey 2020 published last September, the release of this exclusive report resonates with the AFRICA CEO FORUM’s mission to highlight the challenges African businesses face, offer concrete solutions and make the voice of the private sector heard on the continent’s major development challenges,” says Amir Ben Yahmed, founder and president of the AFRICA CEO FORUM.

NEWS

Innovative floating NLG regasification plant in Ghana gets funding

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IDG company, the Emerging Africa Infrastructure Fund (EAIF) is lending US$31 million over 10 years to Access LNG B.V., a provider of specialist floating LNG infrastructure, to support the construction of a new Liquid Natural Gas (LNG) storage and regasification facility at Tema port in Ghana.

Financial close was achieved on 16th November.

Tema is home to a number of Ghana’s largest power stations and to industry that relies on energy from them. The new facility enables thermal power generators to move from burning Light Cycle Oil (LCO) and Heavy Fuel Oil (HFO) to using natural gas, which is up to 30% cheaper, produces 30% less Co2 and almost no sulphur dioxide, which is the cause of acid rain. Industrial users have welcomed the development and the flexibility and reliability of supply that the LNG Terminal will deliver.

Construction of the Floating Regasification Unit and the Floating Storage Unit are both at advanced stages.

Delivery of the vessels is expected before the end of the year. EAIF’s loan is part of the financing for the Floating Regasification Unit (FRU) which will be integrated with a Liquid Natural Gas (LNG) carrier serving as a Floating Storage Unit.

The fixed infrastructure element of the project, was financed under a separate financing package, consists of a breakwater, mooring facilities, a subsea pipeline and an 8km onshore pipeline to take the gas from the port to Tema’s industrial area.

Martijn Proos, a Director at EAIF’s managers, Ninety One, says;

“The new terminal at Tema is an innovative approach to securing reliable and cost efficient gas supply. The investment by EAIF will contribute to reducing carbon emissions, contributing to Ghana’s long-term energy needs and strengthening its economic stability and economic development efforts. The project gives local and international power and industrial sector investors added confidence in the future of the country, which is good for jobs, good for business, good for communities and good for Ghana.”

To continue growing its economy and meet the needs of its people, Ghana needs to ensure it has reliable sources of affordable natural gas that will minimise supply failures, contribute to national competitiveness and stimulate investment. The new Tema facility answers Ghana’s need for greater fuel security and optimal supply. The project will reduce the cost of power generation for Ghana’s power sector, provide an adequate margin of fuel reserves and benefit the ongoing expansion of the country’s electricity and gas grids.

The construction phase of the Tema project began in 2018. Some 600 people are involved in creating the facility. The majority were locally recruited. 30 to 45 permanent jobs will be created when the facility becomes operational.

Access LNG B.V was established as a joint venture between Helios Investment Partners, a leading Africa focused private investment firm and Gasfin Development SA, a pioneer in LNG infrastructure, to develop and operate new LNG facilities for developing markets. Delivering the floating infrastructure for the new LNG facility at Tema is the first project for the joint venture.

Ogbemi Ofuya, a Partner at Helios Investment Partners, says; “We have worked successfully with EAIF over many years on the financing of telecommunications and affordable housing projects across Africa. We have benefited from its deep knowledge of Ghana’s energy sector and its expertise in port infrastructure developments, gained in other parts of Africa. Our project at Tema positions the energy sector in Ghana for both growth and environmental sustainability so that when the world recovers from Covid-19, Ghana will have the energy infrastructure needed to help it compete.”

This project also positions Access LNG as a first mover in bringing right-sized LNG infrastructure solutions to sub-Saharan Africa, establishing a model for future developments across the region.

With global LNG markets currently well supplied for the foreseeable future, there is a great opportunity for Access to support markets switching to natural gas as a clean, cheap transition fuel as we push developments to support a greener, more efficient energy economy” Roland Fisher, a Director at Gasfin Development SA, says: “We are extremely proud of our involvement with Access LNG and to have earned the trust and support of EAIF for this ground-breaking project.

As with all infrastructure developments, the new LNG terminal at Tema has required the concerted effort and alignment of multiple stakeholders to achieve. “

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NEWS

Oxford University announces breakthrough on global COVID-19 vaccine

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niversity of Oxford, in collaboration with AstraZeneca plc, today announces interim trial data from its Phase III trials that show its candidate vaccine, ChAdOx1 nCoV-2019, is effective at preventing COVID-19 (SARS-CoV-2) and offers a high level of protection.

Professor Andrew Pollard, Director of the Oxford Vaccine Group and Chief Investigator of the Oxford Vaccine Trial, said: ‘These findings show that we have an effective vaccine that will save many lives. Excitingly, we’ve found that one of our dosing regimens may be around 90% effective and if this dosing regimen is used, more people could be vaccinated with planned vaccine supply.

Today’s announcement is only possible thanks to the many volunteers in our trial, and the hard working and talented team of researchers based around the world.’

Professor Sarah Gilbert, Professor of Vaccinology at the University of Oxford, said: ‘The announcement today takes us another step closer to the time when we can use vaccines to bring an end to the devastation caused by SARS-CoV-2. We will continue to work to provide the detailed information to regulators. It has been a privilege to be part of this multi-national effort which will reap benefits for the whole world.’

Following the trial reaching the target for interim analysis, the independent Data and Safety Monitoring Board (DSMB) recommended that the team at Oxford conduct its first analysis on all the cases with data locked on 4 November 2020.

These preliminary data indicate that the vaccine is 70.4% effective, with tests on two different dose regimens showing that the vaccine was 90% effective if administered at a half dose and then at a full dose, or 62% effective if administered in two full doses.

Additional cases are expected to accrue by the time of the final analysis and future analyses will determine the duration of protection. No serious safety events related to the vaccine have been identified. \Oxford will now support AstraZeneca in submitting both the interim Phase III efficacy data and the extensive safety data to all regulators across the world, including in the UK, Europe and Brazil for independent scrutiny and product approval, including for emergency use. Many of these regulators have been reviewing the trial data on a rolling basis during the trial.

In parallel, Oxford is submitting the full analysis of the Phase III interim data for independent scientific peer review and publication. The coordination of the programme and execution of the trials in the UK would not have been possible without the support of The Africa Logistics

the National Institute for Health Research and UKRI. These data also suggest that this half dose and full dose regimen could help to prevent transmission of the virus, evidenced by lower rates of asymptomatic infection in the vaccinees, with further information to become available when trial data are next evaluated.

The interim Phase III data builds on Oxford’s phase I/II peer-reviewed trial results which have shown that the vaccine induces strong antibody and T cell immune responses across all age groups, including older adults, and has a good safety profile.

The clinical trials, enrolling over 24,000 participants from diverse racial and geographical groups in the UK, Brazil and South Africa, will now continue to final analysis. Further trials are being conducted in the United States, Kenya, Japan and India and the trial team expect to have under 60,000 participants by the end of the year. These trials will provide regulators with further information about the efficacy and safety of the Oxford candidate vaccine, including its ability to both protect against and stop the transmission of COVID-19.

The Oxford vaccine (ChAdOx1 nCoV-19) is made from a virus, which is a weakened version of a common cold virus (adenovirus), that has been genetically changed so that it is impossible for it to grow in humans.

Adenovirus vaccines have been researched and used extensively for decades and have the significant benefit that they are stable, easily manufactured, transported and stored at domestic fridge temperature (2-8 degrees C). This means they can be easily distributed using existing medical facilities such as doctor’s surgeries and local pharmacies, allowing for the vaccine, if approved, to be deployed very rapidly.

Oxford University’s collaboration with AstraZeneca has been crucial to the successful development of the vaccine and vital for its global manufacturing and distribution across the world. AstraZeneca already has international agreements in place to supply three billion doses of the vaccine, with access being built through more than 30 supply agreements and partner networks.

A key element of Oxford’s partnership with AstraZeneca is the joint commitment to provide the vaccine on a not-for-profit basis for the duration of the pandemic across the world, and in perpetuity to low- and middle-income countries.

Professor cellor at

Louise Richardson, Vice-Chanthe University of Oxford, said:

“This is a great day for the University of Oxford and for universities everywhere. Pushing at the frontiers of knowledge with partners across the globe and putting our extraordinary brainpower in service to society, is what we do best.”

Pascal Soriot, Chief Executive Officer, AstraZeneca, said: “Today marks an important milestone in our fight against the pandemic. This vaccine’s efficacy and safety confirm that it will be highly effective against COVID-19 and will have an immediate impact on this public health emergency. Furthermore, the vaccine’s simple supply chain and our no-profit pledge and commitment to broad, equitable and timely access means it will be affordable and globally available supplying hundreds of millions of doses on approval.”

NEWS

Turkish Cargo is the best air cargo brand of Europe

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he successful brand of national flag carrier Turkish Airlines, Turkish Cargo is chosen as the best cargo brand of Europe and received “Best Cargo Airline – Europe” award during the Air Cargo News Awards 2020 which was organized for the 36th time this year. Organized on a digital platform for the first time due to the global pandemic, 12 awards met with their winners. Award winners were chosen by the votes cast by experts of supply chain with criteria such as quality, innovation, efficiency, speed, reliability and vision in mind, open to all sector which offers innovative products, services and operations that can help developing air cargo sector further.

On the award, Turkish Airlines Chairman of the Board and the Executive Committee M. İlker Aycı stated; “Receiving the best cargo airline of Europe award, our cargo brand Turkish Cargo continues to make our country proud by maintaining a sustainable success with its air cargo operations conducted to all over the world. Despite the crises that grip the world such as the current pandemic period, Turkish Cargo continues its success story with more effective solutions by developing and using new technologies and innovative approaches. One of the significant examples of these approaches will be the SmartIST, one of the biggest and most modern air cargo facilities in the world. Located in Istanbul Airport, facility will use technologies such

as drones, robotic automation and optimization.

With its smart technology developments and digitalization works, our brand will soar to many more achievements. I congratulate our flag carrier air cargo brand and all of our employees that contributed to its success.”

Turkish Cargo is building air cargo bridges between continents As the fastest growing air cargo brand, Turkish Cargo continued its air cargo operations without any interruptions during this global pandemic period and transported food, aid, medicine, masks and medical equipment to all over the world. Carrying on its works selflessly 24/7 to maintain global medicine supply chain, Turkish Cargo managed to carry 1 out of every 20 air cargo in the world.

Turkish Cargo boasting the widest cargo aircraft network Boasting the world’s widest direct cargo aircraft network, Turkish Cargo reaches over 300 destinations, 95 of which is direct cargo destinations, and offers its services 24/7 to its customers over its global network.

As the best air cargo brand, Turkish Cargo continues to raise its bar for success every day by combining its wide service range with the unique geographical advantage of Turkey and aims to become one of the top 5 air cargo brands in 2023.

www.theafricalogistics.com

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NEWS

Expert blames food deficit on food loss, waste

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eak consumer goods value chain has led to huge food deficit in South Africa despite the country producing enough food to feed all its people, an expert has observed.

Andy Du Plessis from FoodForward SA says that food loss or waste is a major factor contributing to food deficit in South Africa. But the situation has been worsened by the Covid-19 pandemic that continues to destroy jobs and the economy in general.

Mr Du Plessis notes that about one third of food produced for human consumption in South Africa is lost or wasted.

“Approximately 50% of this food loss takes place during harvesting,” he reveals .

Processing, packaging, distribution and retail account for a further 45% of wasted food. The remaining 5% of food waste is the responsibility of consumers.

Mr Du Plessis Statement Surplus food is NOT expired food, lower grade food, The Africa Logistics

or rotten food. It is perfectly good food. Because of unforeseen circumstances throughout the food value chain, more than 10 million tons of food is lost or wasted annually.

Some examples of why food becomes surplus include: Overproduction Poor forecasting Specification requirements Incorrectly labelled products Damaged goods Errors in manufacturing, packaging or logistics phases Short-dated products and confusion around date labelling Sadly, almost all of this good quality edible surplus food is dumped in landfill or incinerated. If timeously intercepted, surplus food can be diverted to address the growing problem of hunger and food poverty across South Africa – which is what FoodForward SA has been doing for more than 11 years now.

We recover edible surplus food from our supply chain partners and redistribute it to registered charities that use the food to make meals for vulnerable people in underserved communities.

NEWS

According to the Department of Environment, Forestry, and Fisheries’ (DEFF) 2020 Waste Management Report, in 2018, South Africa generated 55 million tons of general waste, with only 11% of this waste being diverted from landfills. More than 50% of this is organic waste, of which food waste is in all likelihood a major contributor.

The wasted resources used to produce this food that ends up in landfills and the negative impact it has on our environment are serious warning signs that must be heeded and addressed with urgency. We have too many South African households experiencing acute food shortages not to tackle this problem. We’re also experiencing severe constraints regarding the availability of landfill space.

We need to be more innovative and creative around how we manage surplus food and intercept it early enough for it to be usable. One way to manage this better is the introduction of laws that make dumping and incinerating edible usable food illegal.

France, four years ago, was the first country in the world to ban supermarkets from throwing away or destroying unsold food, forcing them instead to donate this to charities and food banks (The Guardian International Edition:

2016). Campaigners now hope to persuade the European Union to adopt similar legislation among member states.

What is very encouraging and exciting is that, following France’s bold move, countries like Norway, Australia, Italy, Denmark, Dubai, Japan and South Korea have all either set hard targets for the reduction of food waste by companies or created an environment that makes it easier for companies to donate surplus food. We need similar action in South Africa.

Another important recent development in South Africa is that food manufacturers, suppliers and retailers have committed to a landmark voluntary agreement to reduce food waste and loss.

The agreement will mark the beginning of initiatives to ensure that surplus food which is still safe for human consumption can be donated to serve needy families in South Africa. The Consumer Goods Council of South Africa’s (CGCSA) Food Safety Initiative (FSI) has already partnered with the Department of Trade and Industry to secure funding from the SAEU Dialogue Facility to support the initiative.

FoodForward SA has been part of these discussions for a while now and we are excited for the opportunities that this will bring to organisations like FoodForward SA. This initiative speaks directly to what FoodForward SA focuses on and which we believe is a more effective and cost-effective way to address food insecurity.

A third area where we can be more proactive is to have accurate data collection at the actual origin of the various waste streams and volumes. We can put proper measures in place for improved implementation of food waste management. Transparency in terms of disclosure, monitoring and reporting of ‘waste’/surplus food is critical.

The DEFF is working towards reducing carbon emissions and mitigating climate change, which is key to a more sustainable socio-economic development plan and ensures the stability of the country’s natural resources, systems and environment. One of the targets set by DEFF is to prevent waste and where waste cannot be prevented to ensure 40% of waste is diverted from landfill within 5 years, 55% within 10 years and at least 70% within 15 years.

While this is a step in the right direction, these targets are not enough given the magnitude of the problem. More stringent targets are needed within the next 5 – 7 years.

Food security and national development are mutually dependent. Nutrition is critical to educational outcomes and success in the job market. If we fail to ensure that all our people in South Africa have access to sufficient nutritious and safe food, it will have devastating consequences for our development as a nation.

We, therefore, call on all the actors within the consumer goods supply chain to work with organisations like FoodForward SA that have a national footprint and impact, along with the required infrastructure and logistics capacity, to donate surplus food timeously so that we can use this food to address food insecurity at a national level and realise the right to food for all our people.

www.theafricalogistics.com

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ADVERTORIAL

Ignazio Messina & C. The secret of specialization

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et’s start with some historical facts: Ignazio Messina & C. started operating in 1921 as a familiy enterprise and, over the last century, gradually expanded until it become one of the main Italian shipping companies in the world, dealing with the challenges of global competitiveness.

Today, Ignazio Messina & C. provides regular liner services that connect the Mediterranean to Africa, the Middle East, and the Indian subcontinent, reaching more than 50 ports and supplying over 40 different countries. Thanks to the development of an efficient ground logistic system, the company serves more than 100 inland destinations in Africa, the Middle East and India, as well as in Europe.

History and tradition have allowed Ignazio Messina & C. to acquire greater and greater ability and experience in developing avant-garde solutions for moving and stowing special cargos. Thanks to several important investments in highly specialized RoRo ships and equipment such open top, platforms, and mafi trailers, today the company is able to offer regular scheduled services for project cargos even if they have outstanding size and weight.

“A strong advantage of our company – as CEO Ignazio Messina says - is without a doubt its property fleet that has been totally renewed during the last years: it is composed by last generation ro-ro container ships, whose projects have completely designed in-house by the company, proudly flying the Italian flag.These eco-friendly ships are equipped with high-tech anti-pollution system such as an innovative gas cleaning system able to operate both in navigation and in port. They also obtained the Greenplus certification from the Italian Register, Rina.But, above all, they are highly specialized vessels, with a unique operational flexibility: in fact, they can efficiently operate even in unequipped ports because they can load trough their ramp every kind of heavy or special cargo”.

So, let’s see some figures: the ramp is specifically designed to allow boarding heavy lift cargo for more than 350 tons, thanks to a total 12,5 metres draft as useful passage. The stern door is 27 metres wide and 7 metres high.

The Africa Logistics

The new vessels are 240 metres long by 37,50 wide; with a 3.900 teu and 6.350 metres of ro-ro cargo capacity, 21.5 knots speed.

We can say that every branch of Ignazio Messina & C. organization is characterized by a strong specialization: in fact there is a dedicated team for project cargo and extremely qualified in exceptional/special shipments, with reference not only to sea transportation, but also for inland and intermodal logistics.

Between the main assets of Ignazio Messina & C. we can find its IMT, Intermodal Marine Terminal based in the Port of Genoa: it is a real multipurpose terminal, a complex capable of moving any type of cargos, except for liquids and dry bulk: containers, rolling cargos, general cargos, equipment, yachts, boats and special cargos.

The port area of IMT is about 253,000 square meters and it will become 316,000 sq. m. as soon as the works to fill up the water space between Molo Ronco e Molo Canepa will be completed.

It has a 1,300-meter-long dock that can host 5/6 ships, two berth are equipped with mast steps for ro/ ro units. The medium draught is 13 meters deep. The range of equipment is really wide and includes: 4 shipto-shore cranes, 2 transtainer cranes and a mobile one; in the loading area work 12 reach-stackers, 22 fork lifts, 25 tug masters, 23 trailers and 8 roll trailers.

IMT has a total storage capacity of 10,000 TEUs, with a special area reserved for dangerous goods (for a maximum of 305 TEUs); moreover, we provide 350 plugs for refrigerated containers, up to 7,000 cubic meters and is directly connected to the railway and motorway networks through several private gates.

In addition to the headquarter in Genoa, Italy, the Ignazio Messina & C. can boast: - commercial offices in Italy: Modena and Naples; - representation commercial offices in Europe: London, Barcelona and Valencia; - controlled agencies in Europe: Marseille; - controlled agencies in Africa: South Africa (Durban, Cape Town, Johannesburg), Côte d’Ivoire (Abidjan), Senegal (Dakar), Kenya (Mombasa, Nairobi), Tunisia (Tunis), Uganda (Kampala) and Mozambique (Maputo).

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FEATURE

Business confidence in South Africa powers ahead in the fourth quarter Manufacturing confidence climbed from 22 to 31 due to noticeably better domestic sales as well as increased exports.

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fter crashing to an all-time low of five at the height of the COVID-19-induced lockdown in the second quarter, the RMB/BER Business Confidence Index (BCI) increased noticeably further from 24 in the third quarter to 40 in the fourth quarter – a welcome surprise.

But, regardless of the improvement in sentiment, questions remain about its sustainability.

The fourth quarter survey was conducted between 5 October and 16 November. It covered about 1 800 executives spread across the building, manufacturing, retail, wholesale and motor trade sectors.

Details Confidence rose in all the sectors making up the BCI. The new vehicle sector and the wholesale trade recorded the largest increases in the quarter. Confidence among retailers and wholesalers jumped to 50 and 59 respectively, making them the first sectors in over two years to see confidence rising back into net positive terrain.

Retail confidence rocketed from 36 to 50 in the fourth quarter – an increase which is bigger than the seasonal improvement usually linked to Black Friday and festive holiday sales. Sales volumes of food, groceries, electronics, furniture and building materials rose impressively, while that of clothing remained under pressure.

Pent-up demand, 300 basis points of interest rate cuts, substitution away from spending on services such as restaurants, entertainment and travel, to spending on readymade meals, office equipment and DIY products related to work-from-home, savings resulting from less spent on petrol by those working from home, as well as the COVID-19 related top-ups in social grants, new cash grants to the unemployed and UIF pay-outs, all supported retail sales in the quarter.

Wholesale confidence soared from 33 to 59, a six-year high, owing mainly to a sharp increase in spending on consumer goods.

New vehicle dealer confidence leapt from 16 to 41 as sales continued to strengthen in the fourth quarter.

The Africa Logistics

Building confidence improved slightly (from 14 to 21), as both residential and non-residential building activity remained weak. The increased attractiveness of buying an existing house rather than building a new one, the prevailing oversupply of retail as well as office space and the delays in local authorities’ processing of the backlog of building permits and plans, all dampened activity. In contrast, residential sub-contractors continued to benefit from ongoing renovations as people spent more time working from home.

Besides the mentioned factors having boosted confidence in the respective sectors making up the RMB/ BER BCI, two other overarching ones also played a role: • It appears that some respondents in the sectors other than building and new vehicle trade, were pleasantly surprised by the extent to which the latest rebound in activity exceeded their expectations about the future at the time of the third quarter survey; and • It’s quite possible that the relief respondents felt after having survived the trauma of the COVID19-induced lockdown, combined with the sensation related to the general strength of the bounceback in the economy after the “re-start”, inspired a sense of optimism above and beyond what can be explained by the fourth quarter improvement in activity alone.

Bottom line “Although the surge in business confidence is encouraging, it only signifies an economy that’s out of intensive care, and not out of high care” said Ettienne Le Roux, chief economist at RMB. Indeed, while the easing of lockdown restrictions in recent months has led to a resurgence in activity, the tempo of growth in 2021 and beyond remains highly uncertain.

A durable recovery of the global economy, especially as the vaccine is rolled out, and continued high prices and strong demand for South Africa’s mineral exports, as well as the resumption of international travel, will surely bolster the local economy.

Yet many risks abound. For instance, the strong rise in confidence among consumer facing sectors could easily turn out to be temporary if the “kicker” having come from pent-up demand peters out. Equally, poorer-than-expected Black Friday and festive sales could also dent confidence, while uncertainties associated with special COVID-19 income support measures lapsing, is another potential sentiment dampener. Furthermore, after significant layoffs in the second quarter, employment prospects remain bleak.

The increase in the RMB/BER BCI since the second quarter has mainly been driven by retail, wholesale and new vehicle trade, but it’s imperative that activity in sectors linked to the supply-side of the economy (i.e. the building and manufacturing sectors) catches up more strongly to help ensure that the upward trend in confidence lasts.

FEATURE

Imperial partners with Lori Systems to boost e-logistics technology in Africa Imperial, an African and European-focused provider of integrated market access and logistics solutions, announced an investment in and partnership with Lori Systems to expand its cutting-edge e-logistics technology solutions across Africa. This strategic partnership is the first of its kind at this scale and scope on the African continent.

Lori Systems is the leading e-logistics platform in Africa and seamlessly coordinates haulage in frontier markets. The Imperial Venture Fund, managed by Newtown Partners – a US venture capital firm – recently concluded an investment in Lori Systems to support its growth in East and West Africa. The Imperial and Lori Systems partnership in the Southern African Development Community (SADC) region will help develop and enhance Africa’s road freight industry through digital innovation and enablement.

“We believe that Lori solves a real problem when it comes to matching volatile demand and reliable supply in Africa’s highly fragmented road freight industry.

As a business that is focused on efficient and innovative logistics and market access solutions, this is a crucial business investment for Imperial and the continent. Investing in Lori Systems will enable the creation of further business opportunities in Africa and provide efficiency for Imperial’s clients and transport operators with whom we collaborate,” noted Mohammed

Akoojee, Group CEO, Imperial.

Lori Systems launched in 2017, with the vision to develop technology that provides practical solutions to the challenges frontier markets face with logistics, namely the lack of visibility, coordination, and data. Imperial will have access to Lori’s proprietary platform through this partnership, providing shippers and transporters in Southern Africa with access to a flexible suite of software applications and data. This will lead to more efficiently managed operations and fleets, resulting in tangible cost savings.

“Lori Systems partnership with Imperial is validation of our vision of a new era of digitally-enabled and efficient logistics not only in Africa but in frontier markets more broadly,” said Joshua Sandler, Co-Founder and CEO, Lori Systems. “As a leading African logistics and market access player, innovation is at the heart of Imperial, and we couldn’t be more proud to partner with an industry veteran that embraces this digital disruption while expanding Lori’s reach across Southern Africa.”

Lori Systems has successfully driven efficiency across fragmented East and West African markets by providing end-to-end visibility for customers and integrations across the entire supply chain.

This partnership brings together Lori’s technology and Imperial’s expertise in logistics to drive similar efficiencies in Southern African markets.

“We believe digital freight exchanges are a compelling business model in emerging markets that complement Imperial’s traditional strength in contracted road freight,” said Llew Claasen, Managing Partner, Newtown Partners. “We have considered many road freight investment opportunities on the African continent and believe that the Lori Systems team, product and the opportunity that presents itself through the Imperial partnership will create a lot of value.”

Beyond the African continent, Lori has drawn increased interest from frontier markets experiencing similar challenges, where Lori’s technology can provide digital solutions and add value. The COVID-19 pandemic has further highlighted the critical need to ensure efficiency in logistics and transportation and digital solutions.

The partnership between Imperial and Lori Systems will provide additional support in Lori’s established East and West African markets and facilitate Lori’s expansion across Southern African markets.

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13.05.16 14:13

FEATURE

Air France KLM Martinair Cargo partner with SkyCell

S

kyCell and Air France KLM Martinair Cargo have signed a partnership agreement to expand access to SkyCell’s hybrid containers in supply chains, enabling further safety and sustainability solutions for pharmaceutical shipments.

The new deal is part of a shift towards the adoption of enhanced technological solutions to meet both the demands of pandemic logistics and

requirements of environmental agreements.

The agreement coincides with rising demand for greener solutions and ambitious environmental goals set out by pharma companies. As the pharma logistics industry pushes to prepare for a future global distribution of Covid-19 vaccines, sustainable solutions will be crucial given the volume and global scale of the distribution ahead.

Since SkyCell’s solutions are able to secure products within a temperature range of 2-8°C and 15 – 25°C and now -60°C to -80°C, SkyCell is well-prepared for the varying needs of vaccines and other sensitive pharmaceuticals.

Chiara Venuti, Director of Business Development & Airline Partnership, SkyCell, stated that, “Due to our shared vision of providing the highest quality standards in the supply chain of temperature-sensitive products, our collaboration will ensure that our clients are guaranteed a safe, secure and sustainable service.”

The deal with Air France KLM Martinair Cargo is part of a shift towards the adoption of enhanced technological solutions to meet both the demands of pandemic logistics and requirements of environmental agreements. For the 16th consecutive year, Air France-KLM secured a place in the top three of the Dow Jones Sustainability Index (DJSI) Airlines category in November 2020.

Enrica Calonghi, Global Head Pharmaceutical Logistics at Air France KLM Martinair Cargo, told SkyCell, “Shipping pharma and healthcare products is a core activity for AFKLMP Cargo. Partnerships, such as those with our container suppliers, play a crucial role in the entire chain, especially when it comes to guaranteeing the necessary quality, reliability and connectivity. Together, we are ready to play a key role in the distribution of www.theafricalogistics.com

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FEATURE

Covid-19 vaccines, thereby helping to ensure that as many people as possible around the globe will have access to vaccines in these challenging times.”

All SkyCell containers help to eliminate medical waste ending up in landfill by preventing product damage as they move around the globe. Tracked with IoT (‘Internet of Things’) sensors, hybrid containers monitor the temperature conditions inside and outside the containers to secure the full efficacy of pharmaceuticals is maintained until they reach patients.

In the process, they reduce a shipment’s carbon footprint by up to 50% due to their capability to charge independently without the need for dry ice and electricity. Across SkyCell’s client base, SkyCell’s containers provide protection on average for about 202 hours (8.4 days), which is extended by trucking or storage under refrigerated conditions.

SkyCell hybrid containers have been known to se-

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cure medicine even under extreme climate conditions swinging between as low as -30°C and as high as +70°C . That means, if we move into an era of high demand for fast-paced deliveries to all corners of the world to defeat the coronavirus pandemic, the hybrid is ready to tackle the differing infrastructures and climates of these countries together with the support of airlines around the world.

“Air France KLM Martinair Cargo is a pioneer in pharmaceutical airfreight and, like SkyCell, is committed to minimizing its environmental footprint through technological innovation,” said Richard Ettl, CEO SkyCell.

With the reintroduction of SkyCell’s hybrid container to Air France KLM Martinair Cargo’s existing range of pharma container offering, clients can choose to move a step closer to meeting their sustainability goals and simultaneously maintain high standards of safety for their pharmaceutical cargo.

FEATURE

Rwanda becomes first backer of Afreximbank’s export development fund

R

wanda has become the first nation to sign up to the African Export-Import Bank’s (Afreximbank’s) new Fund for Export Development in Africa (FEDA), which will soon set up headquarters in the country’s capital.

At a ceremony over the weekend, the Rwandan government penned an agreement for the establishment of the new equity investment fund, while also inking a memorandum of understanding for the hosting of FEDA’s permanent HQ in Kigali.

Afreximbank says that there is an initial fund target size of US$500mn, which is expected to grow to over US$1bn within a few years. The bank has itself committed US$350mn to the fund.

It notes that FEDA has been established to facilitate foreign direct investment flows into Africa’s trade and export sectors and to fill an annual equity funding gap of US$110bn in export-related sectors.

The aim is for FEDA to provide seed capital to companies and boost intra-African trade and valueadded exports, with support targeted across a range of sectors, such as manufacturing, technology, healthcare, logistics and agribusiness.

With a particular emphasis on small and mediumsized enterprises (SMEs), FEDA will also offer related financial, non-financial and support services.

Speaking at the signing, Afreximbank’s president, Benedict Oramah, said: “Credit to the private sector [in Africa] remains stubbornly low compared to other regions of the world. Long-term commercial credit and investment funds are almost non-existent.”

Oramah added that Rwanda is the first of the bank’s 51 member nations to sign the agreement, but he believes others will follow. “What is critical is for countries to sign the establishment agreement to make it possible for FEDA to operate in their countries.”

Although, he noted that Rwanda must go through the process of ratifying the deal.

Afreximbank first announced plans for expanding

its offerings to include equity investments nearly two years ago, having launched FEDA as a subsidiary in early 2019.

Since then, Philip Kamau, based in Cairo, has been acting as CEO of the fund, which also has two directors of investment.

According to Oramah, the government of Rwanda will initially provide a rent-free space for a period of two years in Kigali’s financial centre.

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COVER STORY

We always challenge the concepts of time and space

S

avino Del Bene is a proudly Italian, multinational Company operating worldwide in international shipments and logistics support services, with over 120 years of history.

It was back in 1899 when Mr. Savino Del Bene founded this Company in Florence, and since then there have been many historical and social events that have involved it. From a commercial activity related to the mediation and migrants travel arrangements to the Americas, with the consequent gradual decline of the overseas migration, the Company specializes in the national and international transport of goods.

In more than a century, Savino Del Bene’s business has been renewed, always up with the times and needs of the market.

The King’s of Labour Paolo Nocentini, in the

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Company since 1957 and owner since 1979, was able to lead the Company into the new millennium, by bringing together continuity and change, two opposing elements whose balance and harmony have transformed Savino Del Bene into an extraordinary story of success.

With a network of more than 288 offices and over 4.400 employees across the five continents, the Company manages air, sea, and land transport services through established relationships with the major carriers of the industry. When requested, it offers tailor-made logistics solutions for the shipment and distribution of any type of merchandise.

Savino Del Bene’s organization in Vertical Markets demonstrates all the specializations the Company has developed over the years: Au-

Savino Del Bene: Since 1899 tile and competitive products, Savino Del Bene’s Web Portal serves as the gateway to its IT services, allowing online oversight of the supply chain, integrating the physical flow of goods with the electronic delivery of information through our proprietary software.

Customer satisfaction is at the very foundation of Savino Del Bene’s mission, and has been since its inception. Human capital represents the fundamental and essential resource of the Company, which recognizes its skills and competences as the true added value. Continuous and constant training of the staff in every department, with the belief that this business attitude is the main reason behind its customers’ loyalty.

The Company’s main resources are its men and women, and their skills and abilities are recognized as the true added value. The driving forces for over 120 years are the historical, human, and cultural values of Savino Del Bene that have been inherited by every office and spokesperson everywhere in the world.

Today the Company is more alive than ever and proudly celebrates over 120th anniversary serving its customers.

tomotive and Agricultural Machinery, Fashion, Wholesale and Retail, Food & Beverage, Furniture and Houseware, Fresh Fruits & Vegetables, HighTech, Marble, Stone & Ceramic Tiles, Pharma & Healthcare and Project Cargo. For each of these, the Company offers dedicated logistics solutions and services.

To support the shipping and logistics process, for more than 30 years, the internal Company Savino Del Bene IT develops and proposes a myriad of solutions that minimize risks, costs, and distribution times. Operating in complete transparency and with secure data and transactions, the traceability of flows and the exchange of information with the customer and its information systems are guaranteed.

Offering its clients the most innovative, versa-

Palazzo Davanzati - first Savino Del Bene Office www.theafricalogistics.com

21

COVER STORY Always your reliable logistics partner Savino Del Bene is quickly recovering from COVID-19. The Group specialized in logistics and transport solutions had closed 2019 by consolidating the previous year results, with a turnover amounting at â‚Ź1.61 billion, increasing by 3% compared to 2018; then, the virus has put everything in question.

The epidemic has imposed a reorganization of activities, as for the transport request of personal protective equipment (PPE) and other essential goods has been high and, since the beginning of pandemic, Savino Del Bene has been committed in the logistics distribution activity of PPE and healthcare medical devices overall the world, ensuring weekly charter shipping services from China in order to supply pharÂŹmacies, hospitals and other healthcare facilities.

In response to the cargo space shortage, due to passenger flights cancellations, Savino Del Bene offers charter cargo services to support and guarantee the continuity of the business worldwide.

The Company has always been fully operational all over the world and continues to provide its national and international transport services, by respecting health measures against COVID-19.

Thanks to a worldwide presence, technology and the multimodal management system for international transport services, Savino Del Bene continues to fully support its global customer network.

Charter cargo The Africa Logistics

Savino Del Bene South Africa Head Office – Johannesburg

Yo S gisti Afric will grow eco exp S Coa geri Afric cou tion W is ab thro ders offic In tom logis core and ers.

S into and nesb serv carg vice A con the com entia in b emp

our Global Solution in Africa Savino Del Bene believes that the global transportation and loics industry can no longer afford to ignore developments in ca and that logistics service providers and ports in particular, continue to play a key facilitating role in enabling economic wth across sub-Saharan Africa. The world has seen African onomies have proven a diverse growth through the import and port of manufactured goods and other products.

Savino Del Bene serves the East Coast, West Coast, North ast and Southern Africa thanks to its facilities equipped in Alia, Republic of Congo, Egypt, Ghana, Mozambique, South ca, Tunisia, and with certified correspondents in many other untries, in order to provide the customers best services soluns in the entire continent.

With a professional team available at all times, Savino Del Bene ble to adapt to the various requirements of individual markets ough the company’s widespread presence and have a full unstanding of local customs and administrative regulations with ces and warehouses in all major centers. n Africa, the Company offers advanced shipping services, cusms clearance, warehouse management and a wide range of stics support products as well as enhancing relationships with e air and ocean carriers, in order to provide the highest quality d flexibility services at the most competitive rates for custom.

Savino Del Bene South Africa is ideally situated as a gateway o Africa and as a strategic hub serving both Southern, Eastern d West Africa. With a State-of-art facility of 24.000m² in Johanburg, Savino Del Bene also offers warehousing and related vices in Durban, Cape Town and Port Elizabeth. High value go, bonded facilities and in-house customer brokerage seres are only some of the logistics services provided.

As a successful, growing business in Africa, Savino Del Bene ntributes to wealth creation, provides jobs and assists to raise standard of living for all in Africa through trade facilitation. The mpany has achieved B-BBEE level 2 status with 125% preferal procurement recognition. Savino Del Bene’s commitment building a world class facility and providing skills upgrading the ployees, so they can contribute in their communities.

Savino Del Bene: Since 1899

Savino Del Bene Group today 52 Countries 4.400 Employees 288 Worldwide Offices 183 Branches Offices 105 Subsidiaries 1.61 Billion euro of revenue (2019) Worldwide Headquarters Savino Del Bene S.p.A. Via del Botteghino, 24/26 50018 Scandicci – Firenze Ph. +39 055 5219 1 headquarters@savinodelbene.com Find your closer office in the Network section at: www.savinodelbene.com

“

Crises are proof of the involved forces; those who are strong overcome them and become stronger at the expense of those who fail.”

(Paolo Nocentini – End of year speech 2017)

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African farmers are younger than you think. Here is why

FEATURE

O

ver the past 20 years sub-Saharan Africa has registered the highest rate of agricultural production in the world. There have been knockon effects with the region also seeing the fastest growth in off-farm employment and non-farm labour productivity.

There’s a widely held view that Africa’s agricultural growth trajectory could be jeopardised by an ageing farm population because young people are fleeing from farming. Several sources indicate that the average age of Africans in farming has risen to 60 years or more. But we are unaware of any empirical evidence to support this claim.

To understand what’s really going on, we used nationally representative survey data collected by the government statistical offices of six African countries – Ghana, Rwanda, Uganda, Zambia, Nigeria and Tanzania. Because these surveys were replicated multiple times in each country between 2000 and 2018, we can compute how much time people spent annually in farming and off-farm jobs. We can examine trends in the age distribution of the labour force in farm and off-farm employment since 2000.

This was done as part of our research into young people’s access to land as well as their migration decisions and employment opportunities.

Breaking the myth Our findings debunk the myth that most farmers in subSaharan Africa are over 60 years of age – far from it in fact.

According to the national government-administered data in the six countries, the average age of the agricultural workforce ranges from about 32 years to 39 years. Even when not counting young adults in the 15 to 24 year old range, the average age of the agricultural workforce ranges from 38 to 45 years of age. And even going beyond the generally accepted labour force age range of 15 to 64 years to include all elderly people of any age working in farming, the mean age of farmers barely changes.

This is explained by the fact that only 3% of sub-Saharan Africa’s population is 65 years and over. And less than half of this group is economically active and engaged in farming.

Secondly, the average age of the agricultural workforce in the six African countries examined has either increased by one or two years or remained constant over the past decade.

Between the first and latest survey periods, which spanned from seven to 12 years, the average age of the labour force in farming increased by less than two years in four of the six study countries (Ghana, Rwanda, Uganda, Zambia). The mean farmer age remained unchanged in Nigeria and declined slightly in Tanzania.

In other words, the age of Africans in farming is barely rising, if at all. Considering that roughly 7 million to 10 million young people are entering the labour force in sub-Saharan Africa each year, it is easy to understand why the average age of the farming population is not rising, even with large numbers of young people partially or fully moving out of farming.

Based on these nationally representative surveys, it is clear that of the region’s many agricultural challenges, an ageing workforce in farming is fortunately not one of them.

Third, our study found that individuals in off-farm jobs are on average one to three years younger than those in farming, especially when the sample excludes the 15-24 year old age group.

How to make farming profitable for young people As highlighted in previous studies, the share of employ24

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ment in farming has been declining over time as opportunities for off-farm employment expand in Africa’s rapidly transforming economies. But farming still accounts for a significant proportion of the jobs held by working-age individuals and remains the single largest employer of rural youth.

Most of the jobs, however, are, part time.

It is true that many young people from rural areas are leaving farming as off-farm opportunities continue to expand.

Nevertheless, most young people who are economically active remain engaged in farming. What is missing, however, is a critical mass of skilled young Africans with access to finance and know-how to drive productivity growth in farming and related value chains.

The idea of keeping young people in farming for fear of African agriculture becoming the preserve of the elderly is misplaced. A more effective strategy would prioritise resourcing the millions of rural youth already engaged in farming to make farming more profitable. Making agriculture “sexy” is not nearly as important as making it profitable. Young people will flock to agriculture if and when it becomes clear that it can make good money.

A related priority is to encourage skilled young Africans to apply their expertise to address the many policy, regulatory, and financing barriers that inhibit them from starting and expanding agribusiness firms that provide important services to African farmers.

Felix Kwame Yeboah, Assistant Professor of International Development, Michigan State University.

Thomas Jayne, MSU Foundation Professor, Agricultural, Food and Resource Economics, Michigan State University

There is need for proper management of the interface between the continental and the regional free trade regimes to generate a range of win-win outcomes for various stakeholders in Africa’s integration agenda.

According to Dr. Stephen Karingi, the Director, Capacity Building Development at the United Nations Economic Commission for Africa (UNECA), the successful implementation of the African Continental Free Trade Area (AfCFTA) will depend, on how smoothly or otherwise, it is interfaced with pre-existing regional economic communities FTAs and related instruments.

He was speaking during his keynote address at the opening of the 7th COMESA Annual Research Forum whose theme is “Harnessing Intra-COMESA Trade through the Interface with African Continental Free Trade Area (AfCFTA)”.

“One of the main objectives of the AfCFTA is to accelerate regional and continental integration through the consolidation of the multiple and overlapping trading regimes, embodied in pre-existing RECs FTAs, such as the COMESA,” Dr Karingi noted.

“However, as law scholars have already argued, some wordings in the AfCFTA Agreement suggest that this relationship is likely to be more complex. And although this is not what was originally imagined, it now needs to be properly analysed and understood.”

He cited Articles 5 and 19 of the AfCFTA which are

intended to help navigate the complexity of the relationship with pre-existing intra-African trade instruments.

Article 5 for example, does not only recognize ‘RECs’ Free Trade Areas as building blocs for the AfCFTA,it also points to the need to leverage their best practices.

Further, Dr Karingi noted that some RECs, individually or collectively, have made great strides in some dimensions of integration, way ahead of what is currently envisioned in the AfCFTA with four African Union-recognized RECs having FTAs that have achieved higher levels of integration than the AfCFTA at the time of its entry into force.

He therefore observed that the AfCFTA, could lean on the progress that RECS such as COMESA have made in important areas of integration including the COMESA Investment Area, COMESA Competition Policy, COMESA’s progress on the issue of Intellectual Property Rights, and the COMESA Digital FTA. He added: “The AfCFTA can also benefit from COMESA’s experience in building trade supporting institutions, such as in the areas of trade finance, trade insurance, regional payment systems, and in the context of simplified trade regimes.”

By safeguarding the achievements of RECs, he observed, the AfCFTA has in the short run, allowed for some level of flexibility on the co-existence of a web of connected, yet distinct, trade regimes, which would www.theafricalogistics.com

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FEATURE be consolidated at some later stage.

He said this requires careful and thoughtful management – backed by evidence-based research which the COMESA Forum provides.

In her statement, the Secretary General (SG) of COMESA Chileshe Kapwepwe noted that since 1950s, there has been a proliferation of regional integration agreements (RIAs), making them the centerpiece of many questions of global governance.

“For instance, do RIAs deliver the intended benefits for members? Why do governments sign these agreements, and do they work towards attainment of anticipated long-term consequences of doing so? Within the context of the Africa Continental Free Trade Area, what for instance are the optimal options for allocation of duties between regional economic communities, ACFTA, Member States and Private Sector? ” she posed.

“These are questions that only indepth research and analysis can find appropriate solutions.”

The SG said the capacity building interventions in research and training carried out by COMESA are aimed at enhancing not only the capacity of the COMESA Secretariat but also that

26

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of the Member States in economic and trade policy analysis and research, as well as trade negotiations.

Mr. Escipión OLIVEIRA GÓMEZ, Assistant Secretary General Structural Economic Transformation and Trade, Organisation of African, Caribbean and Pacific States (OACPS) said the COVID-19 pandemic has demonstrated that no country or region can go it alone. His organization was therefore keen to collaborate with regional economic communities towards implementation of innovative initiatives to promote integration.

Mr. Prudence Sebahizi, the Chief Advisor of AfCFTA & Head of AfCFTA Negotiations Unit, Africa Union Commission (AUC) kicked-off the presentations with a status report on the AfCFTA negotiations and the Interface between AfCFTA and regional economic communities.

The three days Forum will review nine best research papers selected from a list of 39

submitted to COMESA in response to a call for papers made early this year. It is funded by COMESA, OACPS and the European Union.

“For instance, do RIAs deliver the intended benefits for members? Why do governments sign these agreements, and do they work towards attainment of anticipated long-term consequences of doing so? Within the conte xt of the Africa Continental Free Trade Area, what for instance are the optimal options for allocation of duties between regional economic communities, ACFTA, Member States and Private Sector? ”

FEATURE

How technology is upgrading traditional mobility services in Africa Minibus taxis have been a fixture of many African cities for decades. Applying modern e-hailing technology to private mass transport could produce mobility solutions that reduce congestion and car usage.

I

n the international arena, the buzzword ‘mobility’ conjures images of high-tech mass-rapid-transit systems in international cities, linked with entrepreneurial, tech-driven start-ups such as e-hailing companies, micro solutions like e-scooters and share bike programmes linking efficient, high speed rail and air solutions modernized to meet our contemporary transport needs.

In South Africa, however, ‘mobility’ denotes the urban transport imperative that is integral to our economic activity, an informal modality all but void of innovation, propped up and supported by our often ominous minibus taxi industry.

The minibus taxi is an often colourful 14-16 seater minivan, loved and hated by both the 15 million passengers who use them daily, and by those who share the roads with them. These taxis operated illegally from 1977 until they were formally legalized in 1987, carrying passengers from outlying areas dedicated by the Apartheid Government’s spatial planning regime into racially exclusive city centres and economic hubs.

Road-favouring transport policy, lack of government funding and a lack of reinvestment in the extensive rail infrastructure have led to a situation where minibus taxis are able to punch above their weight by offering provincial commuters a nimble solution to their transport needs – in a country that possesses 75% of the African continent’s track, and where, therefore,

rail should be untouchable. The resulting environment is one in which minibus taxis are responsible for 25% of South Africa’s passenger transport mix, placed between private car use (38%) and walking (21%), whereas rail is responsible for only 4% of the market.

Beyond South Africa, other nations on the continent rely on similar mobility systems. East Africa’s minibus taxi equivalent is the matatu, which is possibly even more colourful and erratic than its southern counterpart, and which enjoys an even stronger position in the transport mix of the average East African. Where East Africa differs is in the use of motorcycles, known as boda-bodas, to address micro-mobility requirements. In South Africa, once again, the minibus taxi addresses this segment.

Applying Africa’s unique transport system to international mobility trends, we see an interesting convergence. Global cities are focusing policy frameworks and public mandates on reducing emissions and congestion by reducing the number of vehicles on their roads, with goals such as the Mayor of London’s transport strategy, which aims for 80% of all trips in London to be made by bicycle, walking or public transport by 2041. Cities are encouraging modality shift (people replacing their cars) through modal densification with the use of innovative tech-driven solutions.

Uber’s chief executive, Travis Kalanick, famously said that his company’s service would lead to a decrease in congestion in our cities, however the Wall Street Journal has pointed out that ride-hailing solutions have made congestion worse. Although ehailing may have increased congestion, it has also paved the way for entrepreneurial entities to innovate. Applying the e-hailing solution to systems de-

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FEATURE

Minibus taxiare responsible for 25% of South Africa’s passenger transport mix, placed between private car use (38%) and walking (21%), whereas rail is responsible for only 4% of the market.

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signed to efficiently increase mobility such as privatized mass transport, you have an ideal currently sought by many global cities.

One such solution is ViaVan, a partnership between an American mobility-as-aservice (MAAS) company, Via, and Mercedes Benz Vans, which uses a proprietary algorithm to aggregate demand on particular routes, promoting a densification of passengers who require a vaguely similar origin/destination trip to share a vehicle. They do this by taking the riders needs into account, creating a virtual bus stop or pick-up point, and pooling their riders to achieve efficiencies not yet seen in our major tech-driven mobility start-ups. This solution emulates Africa’s minibus taxi method of operation, except instead of contested routes and taxi associations, algorithms and big data run the aggregation.

SWVL – an Egyptian based start-up, founded in 2017 and already operating in five countries – is possibly moving into this space. SWVL has managed to merge tech with Africa’s

established mobility offerings and is capitalizing on the efficiencies gained. The efficiencies are enjoyed on the supplier side, with better demand forecasting, market accessibility and certainty. The demand side enjoy planned rides, appsupported transactions and being able to book your seat.

This solution, which addresses the gap between expensive on-demand ride hailing and inconvenient, unreliable public transport, has been widely accepted by both its daily riders, as well as investors, raising over $80 million in funding to date.

Challenges certainly exist on Africa’s path to fully realizing the benefits of MAAS. Operator buy-in is key, as an efficient system relies on participant co-ordination and access to open-based data gathered from across the transport mixes to efficiently aggregate demand across operators and sectors, ultimately integrating these services into the most efficient offering. This approach, when coupled with a strong policy framework where governments no longer are providers of public transport but rather issue permits and licenses for the private sector to assume services, will allow competition to further increase rider satisfaction and modal shift.

Further to the benefits of decreased congestion, emissions increased access to economic hubs and ridership, this would encourage further innovation through the private sector building a stronger skill base to develop different kinds of MAAS supporting systems – further increasing efficiencies, possibly allowing Africa to compete on the global stage.

The African minibus taxi industry leaves a lot to be desired; however, is the world of mobility taking a leaf out of our book? As public transport is the backbone of technologydriven mobility solutions, ride-sharing services have shown to work best in environments where public transport is widely available. Competencies and efficiencies shown in the African environment are now applied in cities across the world, conversely, the space for innovation in our own nodes and links is immense. We need to change our perception of the minibus taxi being a competing mode, and rather allow technology to manage it with its competitive characteristics in mind, a cog in the system rather than a system on its own.

FEATURE

Addressing supply chain disruption and compliance in the IMT sector in Africa

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ndustrials, manufacturing and transportation (IMT) companies have some of the most complex supply chains of any sector and have been particularly hard hit by quarantines, travel restrictions, and other disruptions brought about by the global COVID-19 outbreak.

Marc Yudaken, Partner and Head of the Industrials, Manufacturing and Transportation (IMT) at Baker McKenzie in Johannesburg says that African IMT companies that have operations in multiple jurisdictions, or source products from other regions, have faced intense challenges when reacting to and minimising supply chain impacts.

“The lockdowns, closed borders and travel restrictions put in place to stop the spread of the virus did not only affect people, they affected the transportation of goods, both between and within countries, and severe delays and shortages were the result. This made it difficult for IMT companies to resume and maintain operations even after the virus was brought under control in some countries,” he explains.

Yudaken explains that manufacturing products, industrial machinery and transport equipment constitute over 50% of Africa’s import needs, with the most important suppliers being Europe (35%), China (16%) and the rest of Asia including India (14%). Supply chain disruptions in these regions have therefore severely impacted Africa’s ability to access essential products and components and has led to a decrease in the availability of manufactured goods imported into Africa.

“African IMT companies with disrupted global supply chains have also found it difficult to identify where the problem areas were in their supply chains, especially since the spread of COVID-19 around the world has been unpredictable. As a result, they are having to consistently update their supply chain risk assessments with new information,” he says.

Further, IMT companies operating in South Africa, will soon be subject to localisation targets for the sourcing of goods in the IMT sector, including when procuring

industrial equipment, construction materials and transport rolling stock, with their supply chains set to become more localised as result. This was announced as part of President Cyril Ramaphosa’s Economic Recovery Plan, on 15 October 2020. He said that it had been agreed at the National Economic Development and Labour Council that both the private and public sector would have to disclose the value of goods and services they procured locally, in their annual reports.

Yudaken notes that changing manufacturing locations or suppliers, is risky, and might not be possible in areas with limited options and infrastructure. It is also difficult to assess new suppliers within tight deadlines, to ensure they are fully compliant with local and international laws.

John Bell, Partner in the Dispute Resolution Practice at Baker McKenzie notes that IMT companies must conduct full risk assessments of the impact of COVID-19 on their business operations and any changes that have to be made as a result.

“Included in these risks assessments should a study of the options available to support existing suppliers who are facing supply chains disruptions. If companies have to re-source any of their products, they must assess their current contractual obligations and ways to mitigate the risks of not being in a position to fulfil these obligations. Further, any new contracts entered into should contain clear COVID-19 provisions and cover future pandemic eventualities. IMT companies also need to keep fully up-to-date with constantly changing regulations and policies, implemented to counter the effects of the pandemic, and ensure they are compliant in every country in which they operate,” says Bell.

“In the longer term, supply chain digitisation will help IMT companies in Africa to build resilience in their supply chains, assisting them to streamline their supplier selection process and help to manage relationships. This will assist IMT companies to be able to comply with localisation requirements in the procurement process as well.”

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29

OPINION

Provisions for Africa’s Covid-19 Vaccination Campaign: The State of Cold Chain Infrastructure

Lenias Hwenda, immunologist and international health expert The second phase of the Covid-19 pandemic is already underway. Like the rest of the world, Africa is pinning its hopes on the anticipated imminent approval of a Covid-19 vaccine that could begin mass production by early 2021. The continent’s urgent need for vaccines emanates from a desperately weak health system. The region remains vulnerable to the potential devastation from unmitigated spread. Africa’s timely access to a vaccine will be critical to its ability to limit phase II viral spread and protect the vulnerable while avoiding further lockdown of economies as the primary means of controlling viral transmission within communities.

Africa as a region needs to urgently articulate a plan for securing vaccine for its most vulnerable populations, and for safely delivering it to African destinations from manufacturing sites outside the continent without the risk of it getting spoilt by temperature fluctuations. Africa cannot effectively deploy a Covid-19 vaccine and run an effective large-scale vaccination campaign without addressing its cold chain infrastructure gap. This is one of the most urgent infrastructure requirements for Africa’s Covid-19 vaccine deployment preparedness.

An adequate cold chain infrastructure to effectively deploy a Covid-19 vaccine Nine of 300 candidate vaccines worldwide are in various stages of phase III clinical studies. Three are leading the race – Oxford-AstraZeneca, BioNTech-Pfizer and NIH-Moderna.

Outside the West, China has two biotech companies CanSino Biologics and Sinopharm, both with phase III vaccines.

Sinopharm is co-developing one of its two vaccines with the multinational Johnson & Johnson, but this trial has become the second to be suspended due to serious complications affecting one of its participants. The Gamaleya Research Institute of Russia also has a vaccine in phase III trials posited in the race to become the first to reach the market.

Whichever vaccine wins the race, its delivery anywhere in the world will face many hurdles including the availability of safety data, acceptance and finance. Each of these vaccines will require adequate cold chain facilities to be effectively

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deployed in vaccination campaigns. Low-middle-income countries (LMICs) will face the challenge of limited access to vaccine brought on by the limited cold chain infrastructure available for effectively deploying and managing large-scale vaccination campaigns of Covid-19 proportions. In particular, Africa has limited cold storage facilities across its airports.

This elevates the risk that Covid-19 vaccine destined to some African destinations could get spoilt by temperature fluctuations en route.

Africa’s successful public health campaign against Covid-19 is not a mystery Following a first wave of the Covid-19 pandemic that has taken more than 1 million lives worldwide, the second wave is already underway in Europe and elsewhere. Africa is widely recognized for its successful Covid-19 phase I response. According to the WHO, Africa remains one of the least affected regions in the world. This is largely explained by the fact that Africa took some basic public health interventions that have been proven to be effective at mitigating Covid-19 spread.

When basic scientific facts are acknowledged, for instance, the fact that the average Sub-Saharan African country imposed more stringent containment measures more quickly than the average EU country and the United States, Africa’s Covid-19 outcomes are not a mystery. The majority of African countries adopted comprehensive contact tracing policies including at airports well before Covid-19 began spreading in Africa countries. The Africa CDC instituted a sustained, agile and responsive policy that continues to be adjusted in real time in line with emerging scientific evidence on contact tracing and isolation, which governments have tailored to their cultural and national contexts. Africa’s population is regularly sensitized to the reality of disease outbreaks like Ebola, yellow fever and lassa fever. Such awareness amongst the public created strong buy-in by African communities and widespread acceptance of the necessity of control measures. Effective communication, community by-in and public acceptance are critical ingredients in any successful public health campaign. Africa also drew on its rich previous experience with contact tracing and isolating, for instance with Ebola and tuberculosis patients. These experiences enabled African governments’ greater success at isolating high-risk contacts than other governments, including the UK’s.

These public health measures have been proven and demonstrated to significantly reduce the impact of Covid-19 spread in countries around the world. Whilst this does not rule out the possibility that other factors may have played a role, there is little data to support the proposed explanations for why and how Africa escaped the worst fate predicted.

The world, it seems, is willing to accept any other explanation – genetics, the youthful population, cross protection from exposure from other pathogens, even the weather, before accepting that this was a success born of deliberate actions taken by African leaders. The willful refusal to acknowledge the facts – that the scientifically proven public health interventions that were taken into account for the public health outcomes that were observed in preference of the unproven hypothesis to explain Africa’s Covid-19 phase I outcomes – is driven by arrogance.

It would take some humility to acknowledge the basic

OPINION facts. Africa mounted a robust response. It instituted concrete actions that were vigorously implemented through its multilateral institutions and government leaders working with businesses and the general population to protect its weak health systems from getting overwhelmed. These things made a critical difference in the way that the pandemic played out on the continent. However, in a world that is much more comfortable with its preferred narrative – of Africa’s perpetual failure and inability to achieve anything unless the West is holding its hand – the success of Africa’s phase I response will likely continue to be considered a mystery for some time to come.

It should however be noted that a successful phase I response does not mean similar results will be achieved in subsequent phases of the pandemic. The pandemic conditions are evolving and will be markedly different in subsequent phases. For instance, the number of Covid-19 cases in communities will be much higher making contract tracing much more challenging than during phase I. Unmitigated phase II spread of the SARS-Cov-2 virus on the African continent could create the doomsday scenarios that the region avoided during its rapid and effective phase I response.

Phase I success was however achieved at a huge cost to the people of Africa. Most African countries went into lengthy lockdowns early, sometimes even before any cases had been detected. On a continent where the majority of people survive on the informal economy, early lockdowns caused untold damage to national economies and livelihoods. Reversing the impact will likely take decades. By the World Bank’s estimate, Covid-19 could drive 43 million Africans into poverty. Further lockdowns will cripple African economies and drive millions of its people deeper into poverty to unravel decades of economic gains.

Africa needs a strategy for effectively deploying Covid-19 vaccine Timely access to a vaccine will enable the region to avoid deterioration of a public health and economic crisis projected to sink millions of Africans into poverty. History has shown that when the world cannot produce enough vaccine as was seen during the 2009-H1N1 pandemic, the harsh reality is that poorer countries will only get access to the vaccine after the wealthy are satisfied. The global capacity to produce Covid-19 vaccine is not enough to meet the unprecedented need for it. It remains to be seen whether LMICs like those of Africa can get any vaccine at all and how much they can expect to get. How much vaccine Africa can get will depend on which vaccine technology platform successfully makes it to market, its capacity for mass production, who will be manufacturing it and how much spare stock will be available after wealthy nations are served.

Nevertheless, even if there is uncertainty as to whether a vaccine will be available to Africa, the region still needs to have a clear strategy and a well-articulated plan for securing vaccines and their safe delivery and deployment within countries. A multipronged regional strategy must at a minimum seek to secure enough vaccine to protect the most vulnerable populations. In particular, vaccination for frontline health workers and those with pre-existing conditions like diabetes, obesity and cardiovascular disease that make them more vulnerable to severe Covid-19 illness will be critical to limiting phase II impact of the Covid-19 pandemic. Africa’s Covid-19 vaccine delivery strategy must include measures to ensure that the available cold chain infrastructure is adequate. What little vaccine stock Africa can secure for its 1.3 billion people will need to be deployed optimally to achieve the most impactful and meaningful public health benefits. The risk of loss must be kept minimal. Policymakers need to make practical and easy to deploy solutions to address limited shipping capabilities in the region.

The geopolitical context is constantly evolving with new vaccine candidates emerging including from nations like China and Russia. If considered safe and effective by regulators, these vaccines will provide viable alternatives for Africa.

There must also be genuine global efforts to ensure enough vaccine is produced, and that some of the vaccine produced will be reserved for the poorest people. The Serum Institute of India has been contracted to produce vaccine for LMICs. If these mechanisms work and the West does not divert these quotas for their domestic needs, these will be available for Africa. This however should not be taken for granted. Africa’s regional leaders must leave no stone unturned. The economic and public health stakes for the people of Africa are much too high.

Africa’s preparedness requires addressing cold chain infrastructure gaps Vaccines are a high value product with a higher risk of getting spoiled when they are not kept at cold temperatures.

They need to be transported and kept under refrigerated conditions at all times to maintain their integrity. Their transportation requires faster delivery options such as air cargo instead of ocean freight which takes a long time. However, the Covid-19 pandemic has stretched global supply chains and raised the need for additional capacity to transport vaccines and pandemic health products at a time when there are significantly fewer international passenger flights globally.

This limits the available options for air freight cargo. Major regional airlines like Ethiopian Airways that have been moving pandemic products onto and around the continent may not have enough capacity to handle the additional needs to transport vaccines. Africa must have a plan for ensuring that it can effectively manage the risks of spoilage which could lead to huge losses of a scarce and difficult to find Covid-19 vaccine resource. The region’s strategy must be pragmatic about how it secures vaccine for its most vulnerable with in-built contingencies for addressing the most critical anticipated supply chain challenges.

Developing criteria for priority infrastructure development Africa has a USD 50-90 billion infrastructure gap that has been neglected and not given development priority. According to the African Development Bank Vice President for Private Sector Infrastructure and Industrialization Solomon Quaynor, African nations must re-evaluate national infrastructure development programmes and develop criteria for prioritizing the most important infrastructure projects. The IMF estimates that the damage caused by Covid-19 will cost African economies and the health sector about USD 1.2 trillion over the next three years. African governments need to put resources towards improving health infrastructure in their countries.

Last minute solutions needed to reach people with medical products and services are a critical area of investment that also require cold chain capacity. They are needed for the region’s preparedness and resilience when responding to disease outbreaks. Additional supplementary health infrastructure will help to expand Africa’s capacity for largescale multi-nation vaccination campaigns during Covid-19 and in the future. With public funding being overstretched, policymakers should explore public-private partnerships with business leaders and international organizations to develop simple, effective and easy to execute solutions for mitigating cold chain risks.

Financing mechanisms that have been put into place to fund Africa’s Covid-19 response effort by development banks like the African Export Import Bank, the African Development Bank and others should provide the resources needed to enhance the region’s cold chain infrastructure within countries.

In addition, the World Bank has been considering making USD 12 billion available for countries to buy Covid-19 vaccine using a fast-track approval process. If these funds are easily accessible under reasonable terms, they could provide an additional much-needed financial lifeline that countries could use to improve their preparedness. The World Bank and IMF funds have been criticized in the past for processes so cumbersome that they make finances inaccessible for countries. www.theafricalogistics.com

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OPINION

Promoting SME Competitiveness in Benin

T

he COVID 19 pandemic is an unprecedented global crisis, affecting human health and economic welfare across the globe. The economic earthquake unleashed by COVID 19 does not affect everyone in the same way. With fewer resources to ride out the storm, small businesses have been particularly vulnerable to the repercussions of the crisis.

Small and medium-sized enterprises (SMEs) are at the heart of the Beninese economy. Many of the country’s jobs are in such firms, even though each one employs fewer than 100 people.

This makes the impact of the pandemic on small businesses in Benin all the more alarming, as the implications for employment could be catastrophic. Increasing the competitiveness of small companies can spur resilience to the current crisis and future shocks, promoting inclusive and sustainable growth. Empirical evidence on the strengths and weaknesses of Beninese SMEs can shed light on opportunities to improve their competitiveness and resilience.

To set this process in motion, the International Trade Centre (ITC) partnered with the Chamber of Commerce and Industry of Benin (CCIB) and the Ministry of Industry and Trade of Benin. The ITC SME Competitiveness Survey was administered to 502 businesses across the country in 2019.

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CCIB collected this data, which was then complemented by the ITC COVID 19 Business Impact Survey, administered to 45 Beninese respondents in early 2020, to understand how they have been affected.

This report examines data from these two surveys, identifying challenges and strengths in the capabilities of firms and the business ecosystem, and how they affect resilience.

Although the focus is on SMEs, large companies are included in the analysis for the sake of comparison. Specific analyses on selected competitiveness themes yields insights into the realities confronting the economy. Drilling down into how these themes are addressed among SMEs and in particular sectors and regions – and by companies led by women and youth – shows the detailed pattern of competitiveness across enterprises in Benin.

The pandemic has strongly affected Beninese businesses Findings from the ITC COVID 19 Business Impact Survey suggest that almost all (97%) interviewed firms have been affected by the pandemic.

Three out of four Beninese firms reported a drop in sales (domestically and/or abroad), while only 4% saw an increase in sales. At the same time, about half of surveyed firms had trouble accessing inputs, impairing their ability to prepare their goods and services. Beninese respondents to the COVID 19 survey

highlighted tax waivers, temporary tax relief and financial programmes as the most helpful measures the Government could implement, confirming the liquidity crisis that accompanies lockdown measures.

Transparency and information are vital for firms to benefit from government assistance programmes. It is therefore worrisome that more than half of survey respondents in Benin found it difficult or very difficult to access information and benefits from government COVID 19-related assistance packages.

Financial inclusion promotes resilience to COVID 19 Most Beninese companies practice good financial management. For example, almost 90% of firms keep multiple economic records. However, the degree of financial management varies widely across regions, firm size and sector. Micro and small firms were less able to keep track of their financial transactions than larger companies.

Only two-thirds of farmers maintain economic records, while 96% of enterprises in the services sector keeps some form of records. Access to finance is an obstacle for most firms, and particularly those led by youth. Overall, four in five surveyed companies in Benin need a loan.

Businesses rated the quality of the banks quite low on average, indicating that there is room for improvement in private sector access to finance. Astute financial management and access to finance are becoming increasingly important as firms contend with ix COVID 19-related lockdowns. The pandemic has also generated a liquidity crisis, with almost two-thirds of respondents in Benin reporting that clients are not paying their bills.

Data show that Beninese firms with good financial management practices are less at risk of permanent closure than those with poor financial management practices.

Signalling quality through certification Beninese enterprises score relatively low on meeting quality requirements. Four in five surveyed firms were not certified to any quality, safety, sustainability or other internationally recognized standard. Lack of certification means that Beninese firms are not signalling quality to potential new buyers both at home and abroad.

In fact, only 20% of interviewed Beninese firms export, but 33% would like to engage in international markets.

Certified companies are more exposed to supply chain disruptions because they are more active in international trade than non-certified companies.

Combining data from the COVID 19 Business Impact module with data on SME competitiveness shows that the pandemic has hit certified firms harder than those without certification. This is likely due to production halts and the economic slowdown in source countries (notably Europe and China) due to COVID 19 safety measures.

Reliable infrastructure helps firms deliver on time Benin has invested heavily in infrastructure over the last 30 years, making considerable progress.

Sizeable investments in basic infrastructure are still needed, however. One in five firms interviewed identified infrastructure as its top challenge. For example, only 10% of roads are paved.

Reliable delivery of goods is becoming increasingly important as more consumers shop from home due to lockdowns and social distancing. Inventory management will become more important as the crisis strains supply chains, making it harder to access inputs and new inventory quickly. Evidence suggests that enterprises with good inventory management practices have been more resilient to COVID 19.

Skills and innovation prove crucial to cope with the crisis Beninese respondents were satisfied with the skill sets of their workers and those available in the labour market.

However, a closer look at the labour force situation in the country showed that youth lack relevant skills, which hin-

OPINION ders productivity.

The COVID 19 crisis has brought tremendous changes and disruption to business life, and companies will need both creativity and innovation to cope with the economic changes caused by the pandemic.

Combining competitiveness data with the COVID 19 module shows that firms with good skill matches and those that innovate are more likely to take resilient approaches to the crisis.

Firms need internet to access vital government information Respondents report that lack of access to internet is a major obstacle to obtain information and connect with the wider economy. Internet access is most concentrated among businesses in the capital and along the Atlantic coast. Outside of this narrow region, 50% of firms say they cannot access the internet. In addition, enterprises increasingly rely on information and communications technology (ICT) to remain open during the crisis. The pandemic changed the way people do business across the world, and firms need reliable computer and telecommunications technologies to reach customers and get information about government regulations.

Most small companies in Benin face environmental risks Three in four surveyed businesses reported facing environmental risks. Many Beninese enterprises depend on the environment and have consequently adopted sustainable production patterns to safeguard the environment for the years to come. Companies that are proactive about addressing climate risks are also better positioned to withstand the pandemic.

Data from the SME Competitiveness Survey show that almost all of the firms (92%) that have adopted measures to reduce their negative impact on the environment have also developed resilient strategies to cope with the crisis. In contrast, just 59% of businesses that have not invested in measures to lessen their negative environmental impact have adopted resilient coping strategies.

Policy insights Several policy recommendations emerge from the survey findings. Chief among them is broadening access to finance. The Government of Benin can help improve the financial sector with credit guarantees and seed capital. In addition, the Government can offer low-interest lines of credit and tax breaks to help firms survive the crisis.

Investing in better financial and inventory management practices can help firms meet the quantity, cost and time demands of international and domestic markets. It also improves resilience to crises. Policies and programmes that bring together training institutions and the private sector can promote the suitable matching of workforce skills and business needs so companies can access the skills needed to compete internationally.

Skills and education are particularly important today, given the tremendous changes and disruption brought by COVID 19. Lack of internet access holds back many small and medium-sized enterprises in Benin, especially those outside of Cotonou. Policymakers could invest in broadening access to the internet across the country. ICT has been crucial for firms to manage their responses to the pandemic.

They need internet access to stay up to date about government support programmes and new regulations. As e-commerce grows in popularity during lockdowns, enterprises without reliable internet access will be left behind. Finally, efforts to reduce exposure to environmental risks would help SMEs become more resilient and sustainable, especially as evidence suggests that the next crisis may arise from climate change. www.theafricalogistics.com

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35 2016/07/05 2:27 PM

OPINION

Zimbabwe’s restrictions on mobile money transfers are a blow to financial inclusion

By Marcia Kwaramba Scholar-in-Residence in the Social Responsibility and Sustainability Division, University of Colorado Boulder

M

obile financial services are, in most African countries, born out of crises. In 2011, Zimbabwe had gone through a volatile decade of economic crises – hyperinflation, currency instability and a collapse of the formal financial system. Consumers, mostly employed in the informal sector, had a widespread mistrust of the formal banking system.

In came Econet, a major mobile operator, to launch a mobile money service called Ecocash. Taking advantage of the country’s high mobile penetration, the service had 2.3 million users within 18 months.

Today, close to 90% of adult Zimbabweans use Ecocash. In addition, Ecocash paved the way for competitors such as OneMoney, Telecash and Mycash.

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Mobile money transfers in Zimbabwe are mainly from one person to another.

The economic crisis in Zimbabwe spurred the rapid adoption and use of mobile money. First came cash shortages coupled with higher cash withdrawal fees and lower withdrawal limits. Then loss of savings to soaring inflation and loan denials in the formal banking system engendered mistrust among consumers. This forced a government-led drive towards a cashless economy and non-cash transactions.

Mobile money transfers in Zimbabwe are mainly from one person to another. This allows for urban to rural money remittances for family support, payment for goods and services in retail settings and financial flows between the formal and informal business sectors. Another important use of mobile money is to store money securely in high crime areas.

Get news that’s free, independent and based on evidence.

An important benefit is the cash-in and cash-out functionality. This allows users to deposit cash into a mobile account through a mobile money agent and withdraw physical cash at a convenient time and place. They can avoid the long queues and withdrawal limits set by the formal

OPINION banking system.

Despite the compelling value proposition that mobile money offers, the Reserve Bank of Zimbabwe recently placed significant regulatory restrictions on its operations. The regulator said mobile money services were fuelling illegal foreign currency exchange, money laundering and fraud, especially through the cash-in/cash-out service.

The restrictions followed the Reserve Bank’s audit of the four mobile money platforms, including Ecocash. It found that some accounts were opened using fictitious or unverified identification documents. There was also a rampant misuse of mobile money accounts for money laundering schemes and fraudulent overdrafts or fictitious credit. It also cited cases of foreign currency trading outside the formal channels.

Users are now restricted to just one mobile wallet account per person and a daily transfer limit of ZW$5,000 (US$50). In addition, users can no longer transact through mobile money agents. Their operations have been abolished.

As a result, close to 50,000 mobile money agents have lost their source of income. This is likely to affect customers in the rural areas of Zimbabwe who depended on the agents to access mobile money services. These agents gave rural consumers the opportunity to be integrated into the financial system.

The overall effect is that mobile money accounts can only be used for transacting but not “store of value” purposes.

Store of value means savings or investment accounts. This is seemingly at odds with findings by academics and development practitioners that mobile money accounts encourage poor customers who are not well served by the formal financial sector to save regularly.

This is all the more so in a country battling with a shortage of banknotes and coins and the collapse of the traditional financial system. The stringent restrictions could stifle innovation among mobile money operators and hinder access to financial services for many unbanked Zimbabweans.

Alternative approaches

The blanket restrictions may have the unintended consequence of excluding legitimate merchants and consumers from accessing financial services. The new regulations also appear out of proportion to the risk. For instance, a tiered approach to know-your-customer regulation could have allowed the regulator to distinguish between risky high-value transactions and low-value transactions.

Zimbabwe has a national population registration system which is only accessible by authorised government workers. The ordinary mobile money agent would not have access to it. But customers without adequate identification could still sign up for a basic account with low transaction and withdrawal limits, instead of being excluded entirely from the financial system.

Alternative forms of identification could have been used for opening accounts. These could include utility bills or letters from local church and village leaders.

The mobile money agent network increased access to financial services in rural and hard-to-reach areas of Zimbabwe. Instead of abolishing the role of mobile money agents, the financial regulator could have reprimanded and fined agents found guilty of money laundering and the trading of foreign exchange without a licence.

The Reserve Bank also needs a financial sector policy that facilitates the development of safe and accessible mobile money services for Zimbabweans who currently don’t have access to financial services. This would require that all stakeholders, including the regulator, mobile money operators, telecommunication regulators and financial intelligence authorities, develop a collaborative regulatory framework.

Such a framework would seek to protect the integrity of the financial system from fraud and misuse. At the same time it would ensure that consumers and merchants enjoyed the full benefits of mobile money services. At all times, the end goal of greater financial inclusion must remain a priority.

Article first published by the Conversation

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37

OPINION

Don’t Underestimate the Power of Natural Gas to Transform Africa’

By NJ Ayuk, Executive Chairman, African Energy Chamber (EnergyChamber.org)

A

frica has already made an indelible mark in the oil industry. It is home to four of the world’s top 20 crude oil producers — Nigeria, Angola, Algeria, and Libya — and these same four countries also have some of the largest oil reserves in the world.

So far, it hasn’t made quite as much of a splash in the gas industry. The only African countries on the list of the world’s top 20 gas producers are Algeria and Nigeria, and one of the states that has the largest gas reserves is Mozambique, which is still several years away from bringing its major fields on line.

But the gap between African oil and gas doesn’t have to be permanent. The continent’s gas industry is on the verge of real transformation, as the African Energy Chamber (AEC) notes in our 2021 Africa Energy Outlook, released earlier this month. I’d like to describe what forms that shift might take — and explain how the changes would benefit Africans.

New Sources of Production Some of the change I expect is going to happen in the upstream sector — that is, in the realm of exploration and production.

First, the continent’s current leading produc-

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ers are likely to produce more. North African states such as Egypt and Algeria will account for part of this increase, as they are looking to ramp up development at existing natural gas fields. But another part of it will stem from programs designed to reduce the flaring of associated gas found in oil fields. Both Nigeria and Angola, for example, have plans to expand the use of associated gas. The former aims to deliver its production to the domestic market, while the latter is looking to split its production between the local market and the export-oriented Angola LNG project.

The upshot of these trends is that the list of Africa’s top gas producers will probably remain static until the middle of the decade. As the AEC’s outlook explains: “The (continent’s) top five crude oil producers — Nigeria and Angola from the west, and Algeria, Egypt, and Libya from North Africa — complete the top five natural gas producers for 2020 and 2021. These five countries contribute about 90% of the overall natural gas output from the continent for both (2020 and 2021), and the expected forecast suggests the share of these countries will remain the same going into the mid-2020s.”

At that point, though, new producers will start to play a more prominent role. Mozambique is due to launch its first greenfield project at Area 1 in 2024, and its offshore zone may become a major source of natural gas by 2025-2026. The Mauritania-Senegal offshore zone may follow a similar timeline, as the Greater

OPINION

Tortue/Ahmeyim blocks may begin yielding natural gas in 2023, followed later by the Yakaar-Teranga and BirAllah projects. What’s more, all four of the projects mentioned in this paragraph will support gas liquefaction plants capable of producing and exporting LNG. By the end of the decade, then, there will be more than five countries accounting for the bulk of Africa’s total gas production. Nigeria, Angola, Algeria, Egypt, and Libya will be joined by at least three others — Mozambique, Mauritania, and Senegal.

Domestic Consumption vs. Exports Meanwhile, consumption patterns are going to shift along with production patterns. Once again, this shift is likely to begin once the large new fields in the Mozambique and Mauritania/Senegal provinces come online.

The change may not be obvious on a macro level, because it won’t be evident in the split between exports and domestic consumption. That is, Africa will continue to use about 70% of the gas it extracts and will export continue to the remaining 30%. As the AEC’s outlook explains, though, the geography of African gas exports will not remain static.

“The pattern has been relatively stable since 2012 with about 70% serving local markets, 20% exported to Europe and 10% exported to Asia,” the report states. “The mid-2020s LNG startups are also expected to distort this picture by increasing the market share for East Asia LNG exports. This development is, however, not (a consequence) of local markets’ (rising demand), but rather the shrinking ability of North African countries to maintain their export capacity to Europe on the back of strong domestic demand growth. By 2030, the expectation is effectively for East Asia and Europe to be inverted, while domestic market share remains constant.”

In short, Africa is on track to produce more gas by the end of the decade but will keep the same share of the total for its own use. At the same time, Asia will replace Europe as the most important market for African gas exports.

Gas Means Jobs These trends are interesting, but you may want to ask: What do they mean for ordinary Africans, for people who are less concerned with production data and trade balances than with questions about how to support their families?

They mean a great deal.

As I’ve mentioned, the 2021 Africa Energy Outlook report projects that African gas production is going to rise, especially after new fields come on line and ramp up development in the middle of the decade. It also anticipates that African gas consumption will rise, even if domestic consumption continues to absorb a full 70% of total production.

As production goes up, upstream operators will create jobs. They will need people to help them build, operate, maintain, and repair production, transportation, and processing facilities. They will also need people to administer their local operations.

Additionally, they will need to meet legal requirements or contractual commitments for local content, so they will need to hire African contractors. Those African contractors, in turn, will need employees of all kinds, and so will hire African workers.

And as consumption goes up, even more jobs will be created. Distributors will need new pipelines to deliver the gas to end-users, so they will need people who can help them build, operate, maintain, repair, and administer those pipelines, along with

associated infrastructure facilities such as storage depots. And even in the absence of pipelines, they will need to acquire tankers and containers so that they can bring gas to customers by road, rail, or river.

Accordingly, they will need people to procure, operate, maintain, repair, and administer these operations.

Meanwhile, there’s more. The hiring of more African workers is sure to have knock-on effects. If, for example, employees of upstream operators need a way to get to a remote worksite, local transportation companies may be able to serve them. If so, those transportation companies may have to hire more people to drive their vehicles. Likewise, if African construction firms need to procure extra building materials to uphold their contracts with upstream operators, local suppliers may be able to meet their needs. And if so, those local suppliers may have to hire more people to handle their inventory.

In other words, as Africa’s gas industry grows, it has the potential to create thousands and thousands of jobs! Of course, some of them, such as construction jobs, will be temporary. Some of them will be more permanent, though, especially if the governments of gas-producing states work with upstream operators to develop local hiring and training standards that expand the capacity of the local workforce.

All the Way Down the Value Chain But the knock-on effect doesn’t have to stop there.

In my most recent book, Billions at Play: The Future of African Energy and Doing Deals, I urged African oil and gas producers to look as far down the value chain as they could. I advised them to pursue projects that treated hydrocarbons not just as exportable raw materials but as inputs for value-added operations such as fertilizer or petrochemical manufacturing. I also suggested that they look for ways to focus on gas-topower projects with the intent of improving domestic electricity supplies — and not just because new power grids would benefit African businesses.

It is true, of course, that some African businesses will be able to create more jobs if they do not have to worry about blackouts. Likewise, it is true that gas-topower projects will create jobs of their own in areas such as construction, operations, maintenance, and administration. But it is also true that African households need and deserve access to reliable energy supplies, regardless of employment levels — and that gas-to-power plans can help them!

I’m hardly the only person to reach this conclusion.

When I wrote Billions at Play, several African countries had already rolled out ambitious gas-to-power schemes. Nigeria, for example, was in the process of implementing a program that promoted associated gas as fuel for new power plants. Since then, others have followed suit. For instance, as the AEC’s energy outlook notes, Senegal has unveiled plans for using its future gas production to generate electricity for the domestic market. Mozambique already has a couple of gas-to-power projects in the works, too.

But it shouldn’t stop there. I’d like to see more gas producers do this as they ramp up gas production in the second half of the decade. If they do, they will have accomplished something beyond merely increasing output levels. They will have taken concrete action to strengthen their economies and benefit their own citizens. And in so doing, they will have made their mark on the world!

NJ Ayuk is Executive Chairman of the African Energy Chamber, CEO of Centurion Law Group, and the author of several books about the oil and gas industry in Africa, including Billions at Play: The Future of African Energy and Doing Deals. www.theafricalogistics.com

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OPINION

UNECA expert highlights importance of digital ID for Africa’s post COVID-19 economy

T

he Lead Advisor for the United Nations Economic Commission for Africa (UNECA’s) Digital Centre of Excellence, Tunde Fafunwa, has explained why African nations must be more intentional about developing digital identity systems especially as they look to rebuild stronger economies in the post-COVID-19 era.

Fafunwa made the point in a recent interview he granted to COVID-19 Africa Watch, an initiative of economic think tank Milken Institute.

In the interview, the UNECA official, who is said to have worked over the years to help develop digital identity initiatives in Africa, touched on other key issues related to digital ID in Africa such as how it affects financial inclusion and what can be done by governments to speed up the implementation of digital ID projects for citizens.

According to Fafunwa, the case for a digital ID in Africa is more significant now than ever before, cognizant of the economic ravages of the pandemic and how it has affected physical business and government transactions.

“The case for digital ID is significant, and we’d say overwhelming… Now, the move towards a cashless society to reduce physical interaction is gaining traction: many locations are closed or restricted in terms of access, so virtual transactions –online digital transactions – become the key way to get information, to get services and to perform financial transactions. And in many cases, the only way to do that is with some kind of digital identification. So a digital ID is even more important now than it was before,” Fafunwa said.

Political can help realize digital ID dream He said for the digital ID dream in Africa to be effectively realized, there is need for political will from governments as well as broad-based consultations and stakeholder collaboration, despite an existing key challenge where about 500 million Africans lack a foundational ID document with which to carry out official transactions. “…we need to use, across the continent, whatever records are available. And that means election records, that means population databases, and conduct a widespread registration. It requires organization, but it’s possible. Malawi has done that, where they registered almost 18 million citizens over a period of several months. So it can be done quickly and effectively where there’s a political will to do so,” the UNECA expert explained.

“So a rollout of an ID system in today’s environment involves financial regulators, security overview, internal administration, the political decision-making, because identification and counting people and different groups have political implications. It becomes a lot more complicated in today’s environment than it might have in the past. In order to be successful, there’s a very clear need to convene discussions and planning with broad stakeholders,” he added.

Digital ID can reduce digital divide Speaking on the aspect of digital ID and financial inclusion for women, Fafunwa said it has the potential to help them have access to financial tools, and can

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also play a role in closing up the digital divide that is very much evident in Africa.

“The benefit of digital ID is that it provides an opportunity for women, for minorities, and for populations at risk to gain access to financial tools, to payment systems, to the ability to receive benefits. Digital ID can and should be used to reduce the digital divide and improve access, but it has to be designed in. The benefits of doing so are enormous,” explained Fafunwa.

African continental free trade initiative and digital ID On the significance of digital ID in the context of the African Continental Free Trade Agreement, a free trade zone initiative already ratified by many African countries, the UNECA official said discussions about the digital aspects of the agreement have just been concluded, and that will be the basis for digital transactions, digital payments, digital ID and digital trade, among others.

“While the African Union is the overall body, and the treaty has been ratified across the continent, it still requires these very complex discussions on rules and protocols. The Economic Commission for Africa’s approach to this is, while those are developing and ongoing, to provide the technical work, the use cases, and the pilots that we are currently engaged in. These can act as references to the discussions and provide real test cases as those protocols are being discussed and finalized,” he stated.

In the interview, Tunde Fafunwa also talked about the various models which Africa countries can use to set up digital ID systems, citing Aadhaar as a reference model for foundational IDs. He mentioned other comprehensive approaches to IDs such as Estonia, but sustained that he believes in a “federated approach to ID,” which he says, is developing and has the potential for multiple sources of identification.

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