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Imperial partners with lori systems to boost e-logisticstechnology in Africa
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.
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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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Häfele representation Botswana | Cameroon | DR Congo | Egypt | Ghana | Ivory Coast | Kenya | Lesotho Libya | Mauritius | Morocco | Mozambique | Namibia | Nigeria | Réunion | Madagascar Rwanda | Seychelles | South Africa | Swaziland | Tanzania | Tunisia | Uganda | Zambia
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
SkyCell and Air France KLM Martinair
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
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 secure 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.
Rwanda becomes first backer of Afreximbank’s export development fund
Rwanda 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.
We always challenge the concepts of time and space
Savino 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 The Africa Logistics
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-
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
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 €1.61 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 phar¬macies, 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
Savino Del Bene South Africa Head Office – Johannesburg
Your Global Solution in Africa
Savino Del Bene believes that the global transportation and logistics industry can no longer afford to ignore developments in Africa and that logistics service providers and ports in particular, will continue to play a key facilitating role in enabling economic growth across sub-Saharan Africa. The world has seen African economies have proven a diverse growth through the import and export of manufactured goods and other products.
Savino Del Bene serves the East Coast, West Coast, North Coast and Southern Africa thanks to its facilities equipped in Algeria, Republic of Congo, Egypt, Ghana, Mozambique, South Africa, Tunisia, and with certified correspondents in many other countries, in order to provide the customers best services solutions in the entire continent.
With a professional team available at all times, Savino Del Bene is able to adapt to the various requirements of individual markets through the company’s widespread presence and have a full understanding of local customs and administrative regulations with offices and warehouses in all major centers.
In Africa, the Company offers advanced shipping services, customs clearance, warehouse management and a wide range of logistics support products as well as enhancing relationships with core air and ocean carriers, in order to provide the highest quality and flexibility services at the most competitive rates for customers.
Savino Del Bene South Africa is ideally situated as a gateway into Africa and as a strategic hub serving both Southern, Eastern and West Africa. With a State-of-art facility of 24.000m² in Johannesburg, Savino Del Bene also offers warehousing and related services in Durban, Cape Town and Port Elizabeth. High value cargo, bonded facilities and in-house customer brokerage services are only some of the logistics services provided.
As a successful, growing business in Africa, Savino Del Bene contributes to wealth creation, provides jobs and assists to raise the standard of living for all in Africa through trade facilitation. The company has achieved B-BBEE level 2 status with 125% preferential procurement recognition. Savino Del Bene’s commitment in building a world class facility and providing skills upgrading the employees, so they can contribute in their communities.
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
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)
African farmers are younger than you think. Here is why
Over 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 employment 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
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 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.
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.
In 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-
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.
Addressing supply chain disruption and compliance in the IMT sector in Africa
Industrials, 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.”
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 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
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.
Promoting SME Competitiveness in Benin
The 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. 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 hinders productivity. OPINION
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.
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
Mobile 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. The Africa Logistics
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
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
Don’t Underestimate the Power of Natural Gas to Transform Africa’
By NJ Ayuk, Executive Chairman, African Energy Chamber (EnergyChamber.org)
Africa 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 producThe Africa Logistics
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
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.
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 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 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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