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sOUTH AfRIcA Three divorces and an election

NIgERIA The Sanusi Legacy

EAsT AfRIcA Oil, gas & the new Great Game

w w w.t hea f r ic a r ep or t .c om

N ° 5 8 • M A R C H 2 014


Rich The hARd WAy

q Daphne Mashile-Nkosi

The new leaders behind Africa’s industrial renaissance


Bassem Loukil

u Aliko Dangote

t Innocent Chukwuma

groupe jeune afrique INTERNATIONAL EdITION

Algeria 550 DA • Angola 600 Kwanza • Austria 4.90 € • Belgium 4.90 € • Canada 6.95 CAN$ • Denmark 60 DK • Ethiopia 75 Birr • France 4.90 € • Germany 4.90 € • Ghana 7 GH¢ • Italy 4.90 € • Kenya 410 shillings • Liberia $LD 300 • Morocco 50 DH • Netherlands 4.90 € • Nigeria 600 naira Norway 60 NK • Portugal 4.90 € • Sierra Leone LE 9,000 • South Africa 30 rand (tax incl.) • Spain 4.90 € • Switzerland 9.90 FS • Tanzania 6,500 shillings • Tunisia 8 DT • Uganda 9,000 shillings • UK £ 4.50 • United States US$ 6.95 • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA

SOUTH AFRICA Three divorces and an election

NIGERIA The Sanusi Legacy

EAST AFRICA Oil, gas & the new Great Game

w w w.t heafr icarep or

N ° 5 8 • M A R C H 2 0 14

SOUTH AFRICA Three divorces and an election

EAST AFRICA Oil, gas & the new Great Game




The Sanusi legacy

q Daphne Mashile-Nkosi

The new leaders behind Africa’s industrial renaissance



N ° 5 8 • M A R C H 2 0 14



HOW TO GET RICH The new industrialists do it the hard way

w w w.t heafr icarep or

What comes next ?

Bassem Loukil

u Aliko Dangote

MONTHLY • N° 58 • MARCH 2014

The AfricA reporT # 58 - mArch 2014

t Innocent Chukwuma


Algeria 550 DA • Angola 600 Kwanza • Austria 4.90 € • Belgium 4.90 € • Canada 6.95 CAN$ • Denmark 60 DK • Ethiopia 75 Birr • France 4.90 € • Germany 4.90 € • Ghana 7 GH¢ • Italy 4.90 € • Kenya 410 shillings • Liberia $LD 300 • Morocco 50 DH • Netherlands 4.90 € • Nigeria 600 naira Norway 60 NK • Portugal 4.90 € • Sierra Leone LE 9,000 • South Africa 30 rand (tax incl.) • Spain 4.90 € • Switzerland 9.90 FS • Tanzania 6,500 shillings • Tunisia 8 DT • Uganda 9,000 shillings • UK £ 4.50 • United States US$ 6.95 • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA

M 08980 - 58 - F: 4,90 E - RD



Algeria 550 DA • Angola 600 Kwanza • Austria 4.90 € • Belgium 4.90 € • Canada 6.95 CAN$ • Denmark 60 DK • Ethiopia 75 Birr • France 4.90 € • Germany 4.90 € • Ghana 7 GH¢ • Italy 4.90 € • Kenya 410 shillings • Liberia $LD 300 • Morocco 50 DH • Netherlands 4.90 € • Nigeria 600 naira Norway 60 NK • Portugal 4.90 € • Sierra Leone LE 9,000 • South Africa 30 rand (tax incl.) • Spain 4.90 € • Switzerland 9.90 FS • Tanzania 6,500 shillings • Tunisia 8 DT • Uganda 9,000 shillings • UK £ 4.50 • United States US$ 6.95 • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA

M 08980 - 58 - F: 4,90 E - RD


country focus

4 Editorial Where are the blessed peacemakers?

45 nigEria Divide or conquer President Jonathan fields demands for restructuring, division of states and autonomous control.

6 lEttErs cover crediTs - inTernATionAl: simon dAwson/BloomBerg viA geTTy imAges; cArl courT/Ap/sipA - nigeriA: pius uTomi ekpe; ivm; hichem; cAmille millerAnd for JA; Jerome fAvre/BloomBerg viA geTTy imAges

8 thE QuEstion

Briefing 10 signposts 12 intErnational


16 pEoplE

64 FrancE-aFrica Romance back on track Faced with limp economic growth French President François Hollande is seeking to boost trade with Africa.

18 opinion 20 calEndar


72 rEnEWablEs The sparks of a clean energy revolution

22 industrY Getting rich the hard way A new generation of business leaders are investing in Africa’s capacity to manufacture cars, process raw materials and build equipment. Some governments are now looking for ways to support infant industries without encouraging crony capitalism.


73 MacroEconoMics Africa sidesteps emerging markets crisis 74 lEadErs Fertiliser firm Guanomad and One Thousand & One Voices CEO Hendrik Jordaan 76 FinancE Capitec spreads its net in South Africa

poLitics 30 East aFrica The new Great Game Fighting in South Sudan has brought East Africa’s political crises into sharp focus at a time of great optimism for the region’s economic take-off. 34 intErViEW UN special representative to the AU Haile Menkerios 36 south aFrica The birth of the new left? 38 intErViEW South African trade unionist Sdumo Dlamini 40 cEntral aFrican rEpublic Still a long way to go



78 transport Kenyan and Ethiopian railway expansion; ports in Côte d’Ivoire and Ghana; South African Airways

Art & Life 88 traVEl 15 wonders of the continent 92 in briEF Tunisian hip-hop, books and an interview with singer Angélique Kidjo

41 libYa Rebels run the show

94 liFEstYlE Working out in Africa; Behind the Scenes with Nigerian actor Kunle Afolayan; and Trendhunter on Africans making it big in Hollywood

42 anansi At the African Union summit

98 daY in thE liFE Alice Nana, taxi driver

41 ZaMbia Sata’s successor

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The AfricA reporT A Groupe Jeune Afrique publication

By Patrick Smith

57‑Bis, rue d’Auteuil – 75016 PAris – FrAnce tel: (33) 1 44 30 19 60 – FAx: (33) 1 44 30 19 30

Where are the blessed peacemakers?


s he rushed from meeting to meeting at the African Union (AU) summit in Addis Ababa in late January, Donald Kaberuka, the in-demand president of the African Development Bank (AfDB), was asked to make sense of the latest African dilemma. Why is it, when more investment is pouring into the continent than ever and the International Monetary Fund has just upgraded its forecasts for African growth to an average of 6.2% in 2014, that political violence is on the rise again in both outright civil wars and armed insurgencies? Kaberuka pointed out that there are AU or United Nations peacekeeping missions in 11 African states. That covers about 15% of the continent’s 1.1 billion people. This does not mean Africa is heading for a new Armageddon as its economies are taking off, but there are some dangerous trends. The mass killings in South Sudan and Central African Republic have clear political causes. Better economics can help only if the political dynamics are understood. The AfDB was investing heavily in water and power projects in both countries, but outsiders need a better understanding of the political as well as fiduciary risks, according to Kaberuka. So governments and institutions such as the AfDB have to focus sharply on some core political questions. At the top of the list is political inclusion. Kaberuka has been working with Nkosazana DlaminiZuma, chair of the African Union Commission, and other leaders to find ways to shore up countries wracked by conflict. They are looking for ways to deal with what has become a coalition of losers in too many countries, despite rip-roaring

Cha i r m a n a nd f o und e r Béchir Ben yAhMed P ub l i s he r dAnielle Ben yAhMed e x e Cut i ve P ub l i s he r JérôMe MillAn

economic growth across the continent. They concluded that the standard response to political conflict – more trade and investment accompanied by a team of financial experts advocating structural reform – needs a rethink. Smart politics needs to go with the money, and the rationality of the market is no match for the warlords. Liberia’s President Ellen Johnson Sirleaf was trying to shut down the operations of Krahn militia fighters in Grand Gedeh County last year. Her solution was to build a highway, enabling farmers in the area to get their crops to market in a The response tenth of the time. Although the project was to political hopelessly uneconomic conflict in accounting terms, needs a giving people a stake in the local economy is rethink – the an incalculable benefit market is no in the longer term. That kind of local match for politics must be a the warlords critical part of the response to the threatening insurgencies. Africa’s Peacemakers, an intriguing new book about Africa’s nobel laureates edited by Adekeye Adebajo, analyses the successes and failures of the continent’s peacemakers and campaigners from Nelson Mandela and Albert Luthuli to Wangari Maathai and Ellen Johnson Sirleaf. Almost all of them flew in the face of conventional wisdom. Their starting point was always to offer an answer to that ubiquitous question: ‘What stake do I have in the system?’ The next question is where to find the next generation of such peacemakers. ●

m a r K e t i nG & d e ve l o P m e nt AlisOn KinGsley‑hAll e d i t o r i n Chi e f PAtricK sMith m a na G i nG e d i t o r nichOlAs nOrBrOOK a s s i s ta nt e d i t o r chArlie hAMiltOn e d i t o r i a l a s s i s ta nt AMA nti Osei r e G i o na l e d i t o r PArselelO KAntAi (east Africa) a rt & l i f e e d i t o r rOse sKeltOn s ub - e d i t o r s AlisOn culliFOrd MArshAll vAn vAlen P r o o f r e a d i nG KAthleen GrAy a rt d i r e Ct o r MArc trensOn desiGn vAlérie Olivier christOPhe chAuvin éMeric thérOnd P r o d uCt i o n PhiliPPe MArtin christiAn KAsOnGO r e s e a r Ch AnitA cOrthier P ho t o G r a P hy clAire vAtteBled o nl i ne JeAn‑MArie Miny Prince OFOri‑AttA sales sAndrA drOuet tel: (33) 1 44 30 18 07 – Fax: (33) 1 45 20 09 67 cOntAct FOr suBscriPtiOn: Webscribe ltd unit 8 the Old silk Mill Brook street, tring hertfordshire hP23 5eF united Kingdom tel: + 44 (0) 1442 820580 Fax: + 44 (0) 1442 827912 email: 1 year subscription (10 issues): All destinations: €39 ‑ $59 ‑ £35 tO Order Online: d i f Co m internAtiOnAl AdvertisinG And cOMMunicAtiOn AGency 57‑Bis, rue d’Auteuil 75016 PAris ‑ FrAnce tel: (33) 1 44 30 19‑60 – Fax: (33) 1 44 30 18 34 a d ve rt i s i nG d i r e Ct o r nAthAlie Guillery with AnnGie AvilA cArdenAs r e G i o na l m a na G e r s cArOline Ah KinG FAdOuA yAqOBi liliA BenAceur us r e P r e s e ntat i ve AzizA AlBOu

the africa report

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Printer: sieP 77 ‑ FrAnce n° de cOMMissiOn PAritAire : 0715 i 86885 dépôt légal à parution / issn 1950‑4810 the AFricA rePOrt is published by GrOuPe Jeune AFrique


letters For all your comments, suggestions and queries, please write to: The Editor, The Africa Report, 57bis Rue d’Auteuil - Paris 75016 - France. or

Following rwanda’s example


NIGERIA PDP prays that the opposition fall apart

MOÏSE KATUMBI The reluctant politician in Congo’s powerhouse

PAX AFRICANA Fragile peace and hot conflicts face AU

his kind of economic success ceremony TOP [‘Will the bargain hold?’, TAR57 Feb 2014] is far from taking place in my own country, Sierra Leone, which is endowed with abundant mineral resources and foreign donor African companies funds. But yet we still find ourselves in a dire economic situation. So, when can we get out of this mess? It is a shame and a tragedy for our people! The Rwandan people love their country and have worked very hard in terms of reducing poverty and developing their country. Despite the country’s limited natural resources and enduring a terrible civil war in the mid 1990s, it has grown rapidly. Today, the people of this small country Rwanda are enjoying the fruits of their hard labour in combating their abject problems. Bravo Paul Kagame and his assiduous team. Abdul Sheriff via Facebook w w w.t hea f r ic a repo r t .c om

N ° 5 7 • F E B R U A R Y 2 014



• Corporate boom slows • Firms poised for global recovery • Finance, retail and agribusiness lead rally



Algeria 550 DA • Angola 600 Kwanza • Austria 4.90 € • Belgium 4.90 € • Canada 6.95 CAN$ • Denmark 60 DK • Ethiopia 75 Birr • France 4.90 € • Germany 4.90 € • Ghana 7 GH¢ • Italy 4.90 € • Kenya 410 shillings • Liberia $LD 300 • Morocco 50 DH • Netherlands 4.90 € • Nigeria 600 naira Norway 60 NK • Portugal 4.90 € • Sierra Leone LE 9,000 • South Africa 30 rand (tax incl.) • Spain 4.90 € • Switzerland 9.90 FS • Tanzania 6,500 shillings • Tunisia 8 DT • Uganda 9,000 shillings • UK £ 4.50 • United States US$ 6.95 • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA

misleading statistics

“Africa’s economies have been growing steadily over the past decade, but poverty has remained stubbornly high.” [‘You can’t eat GDP growth’, TAR56 Dec-Jan] This is a shrewd observation. The GDP figures announced in the [Ugandan] national budget and which were outlined during the state of the nation address are nauseating. In a situation where people are sleeping with empty stomachs we hear that GDP is growing at 6%. Really? Do these statisticians ever leave the cities and venture deep into the villages? Please move away from the towns and cities to get an understanding of the true figures.

Emmanuel B’Gisha via Facebook

Facing up to the economic truth

leave propaganda behind and join hands to solve the problems facing us. The reality is that the cedi has The economic crisis we are flirting depreciated consistently over the past with [in Ghana] has persisted 20 years, even as the GDP has grown because people with no real and without regard to Ghana grounding in economics and business becoming an oil producing nation. realities keep preventing objective Let us put partisan political games discussion about our problems. aside and stare at the real, They see everything as part of fundamental problem straight, then a propaganda battle between the offer solutions to attack the problems party in power and opposition at the root level. What Nkrumah, parties. So everything bad must Busia, Limann, Rawlings, Kufuor, be painted positive and goats turned Atta-Mills and others did not do into cows so their party does not lose is interesting but is behind us. This favour with the people. So we discuss is the time of the NDC with John the symptoms but not the real Mahama in front to solve problems. Papa Kwesi Nduom fundamental or underlying problems. in an open letter via Facebook The election was in 2012 so we should

stymying ghanaian growth How do I sum up the Bank of Ghana rules? Bad for business. To introduce so many restrictive rules at a time when business confidence is low, inflation is rising and interest rates are high only further shatters confidence in the cedi, leading to a rush for more foreign exchange on the black market and ‘under-the-bed’ banking. My forecast is that this month the cedi will experience its biggest monthly drop for five years and could end up selling at three to a dollar before March.

Gabby Asare Otchere-Darko in an open letter via Facebook

How To gET youR copy of THE AfRIcA REpoRT On sale at your usual outlet. If you experience problems obtaining your copy, please contact your local distributor, as shown below. ghana: GREENWICH MAGAZINES & BOOKS, Mr Ernest Asare, +233 (0)208 142 374, – Kenya: NATION MEDIA GROUP, Josephine Bonareri Abuga, +254 (0)20 32 88507, – nigeria: NEWSSTAND AGENCIES LTD, Solomon Otinwa, +234 (0)709 8123 459, newsstand2008@gmail. com – sierra leone: RAI GERB ENTERPRISES, Mohammad Gerber, +232 (0)336 72 469, – southern aFrica: MCS CAXTON, Luisa Rebelo, +27 (0)11 602 9800 • – tanZania: MWANANCHI COMMUNICATIONS, Erasto Matasia, +255 (0)713 512 551, ematasia@ – uganda: MONITOR PUBLICATIONS LTD, Stephen Eselu, +256 (0)702 178 198, – united Kingdom: COMAG, Mark Swan, +44 (0)1895 433791, – united states & canada: LMPI, Sylvain Fournier, +1 514 355 5610, – ZimBaBwe: MUNN MARKETING (PVT) LTD, Nick Ncube, +263 (0)4 662755, For other regions go to


n° 58

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the question To respond to this month’s Question, visit You can also find The Africa Report on Facebook and on Twitter @theafricareport. Comments, suggestions and queries can also be sent to: The Editor, The Africa Report, 57bis Rue d’Auteuil, Paris 75016, France or

investors pulled $9bn from emerging market stock and bond funds in the last week of January due to concerns about lower growth rates and the winding down of the united states Federal Reserve’s quantitative easing programme

Are emerging markets less attractive than they used to be?

Yes Sharmin moSSavarrahmani Chief investment officer Private Wealth Management Group, Goldman Sachs

Growth in emerging economies fell well short of expectations in 2013, marking the second consecutive year of below-trend expansion. The failure of emerging countries to implement meaningful structural reforms is holding back their growth potential. For the year ahead we fear this trend will continue, as looming elections will again delay needed reform measures. After all, countries holding elections in 2014 account for almost a quarter of emerging market gross domestic product (GDP). Despite these structural challenges, the cyclical backdrop for emerging economies is arguably improving. The stronger global growth we expect should increase external demand, boosting emerging market exports. However, tighter financial conditions arising as the Federal Reserve tapers its bond purchases will likely temper this improvement. The interplay between these structural and cyclical dynamics will not be uniformly felt. Those countries with twin fiscal and current account deficits, such as Turkey, South Africa and India, will have to curtail domestic demand growth and raise rates as the Federal Reserve tightens monetary policy, or else risk even larger deficits and destabilising capital outflows. By contrast, countries with stronger balance sheets, such as South Korea and Mexico, will have more freedom to pursue pro-growth policies and let their exchange rates absorb external shocks. With structural and cyclical forces pulling in opposite directions we project only a moderate rise in GDP growth in emerging economies, from 4.9% in 2013 to 5.2% in 2014. ●

No Pravin Gordhan Finance minister, South Africa

What we have is a regrettable short-term view about prospects in emerging markets, which doesn’t align with the long-term view – that this is where billions of consumers are. This is where there are millions of people getting into the middle class. This is where there are rich natural resources, new forms of innovation taking place and both new markets and sites of production. So this period that we are experiencing in relation to what we can call the ‘post-quantitative easing’ turbulence is just that: a period. And one in which we will have to absorb surprises and shocks. Every economy in the world today has to confront certain constraints. Every government in the world has to command the technical and political will to overcome those constraints. We have our fair share in emerging markets, but so too have developed countries. But if we recognise we are in an interconnected world, then there will be periods where advanced economies support emerging markets and also vice versa. ●

RESpONSES to last month’s question:

Can government regulation and internet spying be justified? How does government spying make you a victim? [It is a] violation of privacy, but what is private with information communications technology and tech? Twitter or Facebook? Joseph Onwuamaeze via Twitter Sensible 21st-century regulation should protect journalism and freedom of expression on every platform. Online surveillance threatens digital freedoms, which are still to be defined and understood. Andy Heslop via email Government regulations [in Zimbabwe] compel telecommunication companies like Econet Wireless, Tel•One and Telecel to have a database of network users and to make these records available to the government if needed. The government justified [this law] as being in the interest of national security and research. Charles Auernheimer Nyamudze via Facebook I think that the scope of the US government’s programme is both impressive and disgusting. Jeremiah Walker via Facebook

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EGyPT Pro-army demonstrators gathered at Cairo’s Tahrir Square on the third anniversary of the revolution.

TUNiSia President Moncef

Marzouki signed into law a muchdebated constitution.

ETHiOPia Security was high on the agenda at the African Union summit held in Addis Ababa, after recent violence in South Sudan and CAR.


30% Dangote

Some safer shores


70% rest of

the nigeria stock exchange

the nse posted stellar

45% growth

NiGEria a fraGilE STOck ExcHaNGE?

in 2013

Aliko Dangote’s cement company represents nearly a third of the value of the Nigerian Stock Exchange. The NSE posted stellar 45% growth in 2013… but 80% of that growth was provided by Dangote Cement. If it stumbles, so does Nigeria.

GHaNa THE fall aNd fall Of THE cEdi


elief for captains navigating the Gulf of Aden. The International Maritime Bureau reports that hijacking incidents off the coast of Somalia fell to 15 events in 2013, compared to 75 in 2012 and 237 in 2011. Just two of those hijack attempts were successful, and the attackers released both ships the following day. Good news stories about Somali pirates recycling themselves into other professions abound, perhaps because of the dense network of middlemen who got a cut of the action. The World Bank says companies paid between $315m and $385m in ransoms there since 2005. While the decrease in East African piracy is celebrated, piracy in West

Africa gets less attention – but it is spreading beyond its usual reaches. On 3 January, a ship owned by Spanish company Martínez Hermanos disappeared between Malabo and Bata in the waters off Equatorial Guinea. On 30 January, Nigeria’s State Security Services announced they had saved the crew who had been taken hostage. Despite the claims of the Nigerian authorities, the government in Malabo confirmed that the Spanish firm had paid a ransom for the release of the ship. And on 18 January, a Nigerian gang used a stolen tugboat to attack the MT Kerala, an oil tanker, off the coast of Luanda – the southernmost point yet recorded for West African piracy. ●

18/4/08 1 = $1

Beginning of election season, end of Kufuor govt.

3/1/09 0.79 = $1

14/12/09 0.69 = $1

Election of President John Atta Mills


First commercial oil pumped from Jubilee field

27/1/13 0.41 = $1 24/7/12 0.51 = $1 Death of Atta Mills. John Mahama takes over

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NIGERIA Africa said goodbye to one of its Mandla Maseko to be first most beloved photographers, JD ‘Okhai Ojeikere, who died at his home in Lagos aged 83. black African in space.


RWANdA The trial of

suspected genocidaire Pascal Simbikangwa opened in Paris.

ISRAEL Hundreds of asylum seekers from Sudan and Eritrea protested outside the Interior Ministry in Tel Aviv.


“Rwanda did not kill this

person—and it’s a big no. But I add that, I actually wish Rwanda did it. I really wish it”


Rwandan President Paul Kagame in an interview with The Wall Street Journal in which he compared the death of dissident former intelligence chief Patrick Karegeya to the assassination by the US of Osama Bin Laden

CONSTITUTIONS NORTH AFRICA RENEWS ITS FOUNdING TExTS The wave of protests that erupted in Tunisia and shook North Africa has resulted in a shake-up to the legal frameworks that govern countries. For some this is an opportunity to enshrine basic protection for civilians, but the old order has not been entirely swept away.

MOROCCO Royal rights

TUNISIA Islam light

A constitution was voted in July 2011 after protesters demanded democratic reforms. The palace is less involved in daily politics, but the king retains complete control of the armed forces, foreign policy and the judiciary; he appoints the prime minister and maintains control of all religious matters.

Taking two years to draft (see photo page 10), Tunisia’s constitution is not founded on Islamic law, unlike others in North Africa. A chapter is dedicated to citizens’ rights, including protection from torture, right to due process, and freedom of worship. It guarantees equality for men and women before the law.

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LIBYA Work in progress After the overthrow of Gaddafi and more than two years of chaos, Libya will elect a Constitutional Assembly on 20 February to draft a new constitution. Political divisions, demands of tribal and regional interest groups and rivalries among rebel groups all complicate the drafting process.

EGYPT Army on top The two-term president can be impeached by parliament, the state guarantees “equality between men and women”, and parties may not be formed based on “religion, race, gender or geography”. But the military can haul civilians in front of military courts, and gets to appoint the defence minister for the next eight years.

Ethiopia has refused an Egyptian request to put its multibillion-dollar dam project on hold, following a visit by an Egyptian delegation to Addis Ababa. The dam will generate 6,000MW, but Cairo fears it will affect the throughflow of water in the Nile.

CLIMATE CHANGES CROP PATTERN CHAOS Research by the CGIAR shows areas in Africa where cassava will grow better (green) and worse (red) with rising temperatures.




3 1



7 2 8





Taiwan’s President Ma Ying-jeou visited São Tomé e Príncipe and Burkina Faso in January. Together with Swaziland, these are the only three African countries that officially recognise Taiwan.


United StateS

Uncle Sam’s summit





Talks in Geneva; misery in camps

A temporary ceasefire in the rebel-held city of Homs in early February allowed civilians to flee and aid agencies to deliver supplies. The government has conducted a siege of the city for more than a year and a half. Government and rebel forces held talks in Switzerland. However, there was no sign of consensus within the United Nations (UN) Security Council for a change in policy. The rebels continue to fight for the creation of a transitional authority with full governmental powers, something that President Bashar al-Assad’s government refuses in principle. Refugees continue to flee as the civil war grinds towards its third anniversary. UN agencies estimate there to be about 2.5 million, with almost a million in Lebanon and more than half a million each in Jordan and Turkey. Hundreds of thousands more have travelled to Iraq and Egypt. Nearly half of the refugees are under 18. Conditions in the camps in which they cluster remain grim. Limited schooling is attempted in some, while others still face huge shortages of food and basic medical supplies. ●


The United States (US) is playing diplomatic catchup in Africa. President Barack Obama is inviting 47 of Africa’s 54 presidents to a first ever US-Africa Leaders Summit in August to discuss boosting trade and security ties, as he seeks to counter China’s economic foothold on the continent. Egypt and Zimbabwe were the only (unsuspended) members of the African Union not to receive an invite to the Washington event. Secretary of state John Kerry says that the main topics of discussion will be initiatives on trade, electricity production and youth. Meanwhile, India’s foreign minister Preneet Kaur visited Côte d’Ivoire in late January as Delhi sought to court African leaders ahead of the third India-Africa Summit scheduled for May. ●


Marijn Dekkers, chairman of German drug giant Bayer, responding to a decision by Indian authorities to allow the manufacture of a generic version of anti-cancer drug Nexavar.

“We did not develop this medicine

for Indians. We developed it for Western patients who can afford it ” ER


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Protests disrupt polls The country was left in limbo when anti-government protesters disrupted hastily organised elections in early February. Prime Minister Yingluck Shinawatra’s troubled government called the polls but oppositionists blockaded polling stations in Bangkok and southern Thailand. Millions of voters were unable to cast their ballots. The elections were a bid to break the deadlock caused by more than three months of protests that followed an attempt by Yingluck to pass an amnesty that would allow her brother, former prime minister Thaksin Shinawatra, to return. ●



Agriculture accounts for


of India's GDP,

but over


of India's labour is in agriculture.

The World Bank’s chief economist says that while India’s large population is a potential strength, much of the workforce is tied up in agriculture, compared to the more efficient Chinese use of labour.



EU threatens sanctions The tug of war over Ukraine continues as the European Union (EU) said in mid-February that it would consider sanctions against Kiev if the crisis worsens. Anti-government campaigners have held street demonstrations since November in protest at President Viktor Yanukovych’s decision to forge closer ties with Russia rather than the EU. Yanukovych accepted the resignation of pro-Moscow prime minister Mykola Azarov at the end of January in a bid to ease tensions, but the Russian government responded by announcing it would freeze a $15bn bailout payment. ●


Solomon KaPErE

Social worker and advocacy officer, africa Gay and lesbian Organisation against homophobia

Playing politics with homosexuality From Putin to Museveni, politicians look to score points with policy related to sexual rights


he Sochi Olympics in Russia have been in the headlines, but not just because of the sporting achievements of the athletes. Much of the attention has focused on Russia’s hostile stance on gay rights. President Vladimir Putin had hoped that hosting the Olympic Games would be an opportunity to gain international credibility for his country on the world stage. Instead, the gay rights issue has stolen the limelight. Decisions like that of United States president Barack Obama to select an openly gay athlete, Billie Jean King, to lead the US Olympic delegation send a powerful message to Russia that will resonate with many African leaders. The reception that gay people in Africa receive varies country by country. In my country, Uganda, the issue of homosexuality is heavily politicised, with the media and government ministers always seeking to bring negative attention to the subject. However, the reality in Kampala is that there are many gay organisations that operate openly, and the government tolerates it. For the majority of the population, it is not an issue. But among the political elite, there are a large number of evangelicals who hate homosexuality and are trying to politicise the matter in the minds of the public. Ultimately, what we are talking about is politicians trying to moralise about people’s behaviour. Mostly, this politicisation comes from the evangelical quarter. It began in the 1990s, when the issue of HIV

and AIDS came to the forefront of people’s minds as there were few proper programmes set up to fight the disease. In contrast, in Kenya now, there is some progress on the issue of sexual rights. They have clinics to treat HIV/ AIDS patients and toll-free telephone lines to offer advice. Kenya is not necessarily welcoming to homosexuals, but the country seems more tolerant than Uganda. For Uganda’s President Yoweri Museveni, homosexuality is simply a political issue. He does not have a strong personal opinion on it. He is a politician, and he plays politics with the issue. When he talks about homosexuality, sometimes he is against it and sometimes he is for it. In my opinion, he is not against homosexuality, not at all. He is simply playing the political game and trying to keep the evangelicals on-side. What will make a difference for him is if the country’s economy is affected. UK businessman Richard Branson announced in December 2013 that he was not investing in Uganda as a result of negative attitudes towards homosexuality. Now that kind of consequence will be noted. Uganda has a growing tourism industry. If the government’s stance on homosexuality starts to have a negative economic impact – if it becomes harder to sell Uganda to the European tourist market – that is when the government is likely to really stop and listen. After all, the president is a good economist. He will listen to the numbers. ● the africa report

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briefing March

AfricA Business conference At HArvArd Business scHool 28 feb-2 March Boston | united stAtes

Power & electricity world AfricA 11-12 March JohannesBurg | soutH AfricA

guineA-BissAu PresidentiAl And PArliAMentAry elections 16 March Citizens are seeking post-poll stability after the november 2013 general elections were postponed and 2012 elections cancelled because of a military coup.


engineers, suppliers and operators will come together to tackle issues facing the power generation sector.

tHe econoMist nigeriA suMMit 2014 19-20 March Lagos | nigeriA turning growth into prosperity.

MozAMBique Mining, oil & gAs And energy conference & exHiBition 27-28 March Maputo | MozAMBique

euro-AfricA youtH PArliAMent 27 March-4 April BerLin | gerMAny More than 100 young africans and europeans will come together to thrash out social, economic and politicial issues at this event organised by the Youth Bridge Foundation of accra, ghana – which also organises the annual african Youth and governance Conference – and the european Youth parliament.



eAst AfricA ProPerty investMent suMMit 2-3 April nairoBi | KenyA

gHAnA suMMit oil & gAs 8-10 April aCCra | gHAnA

PresidentiAl election AlgeriA 17 April May

AfricA HeAltH foruM 16-17 May

28-29 March Cape town | soutH AfricA

geneva | switzerlAnd

tHe AfricA ceo foruM 17-19 March

Abdelmalek sellal and Mugabe at the Au summit

geneva | switzerlAnd the african Development Bank, groupe Jeune afrique and rainbow unlimited bring together the continent’s top business leaders for two days of conference and high-level panels.

Jiro ose/reDuX-rea


4tH AfricA-euroPeAn union suMMit 2-3 April

Power-gen AfricA 17-19 March Cape town | soutH AfricA a range of experts including policy makers, project developers, financiers,

BrusseLs | BelgiuM Diplomats expect a bumpy road to the africa-European Union (EU) summit. The European commission hopes to shake off its dry and technocratic image to create a style based more on diplomacy and political engagement. it is perhaps an attempt to compete with emerging partners such as china, india and Brazil. The European Union finally invited Zimbabwe’s president robert Mugabe to the summit after the african Union had threatened to withdraw from proceedings if he was not allowed to attend. There are tense discussions to be had over the controversial Economic partnership agreements. as we went to press Botswana, Namibia, cameroon, Ghana, côte d’ivoire, Kenya and Swaziland were yet to sign up. the africa report

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Rich the haRd Way A new generation of business leaders are investing in Africa’s capacity to manufacture cars, process minerals and build equipment. Some governments are now looking for ways to support infant industries without encouraging crony capitalism By Nicholas Norbrook


o, you want to get rich? OK, let us count the ways. Follow me, follow me, please. Do you have a conscience? You don’t? Great! Step this way. Behold, the myriad criminal activities we have on offer: drugs, people trafficking, gun running, oil bunkering… Too dangerous, you say? You are not some cheap Viktor Bout? Ok, let us find you something a little more ‘white collar’. With just a few strokes of your pen, you can help a multinational export goods out of your country tax free by turning a blind eye to their egregious accounting… What’s this, you have found God all of a sudden? Congratulations, what a shame, fine. Why not just continue to export your cocoa and gold? Everybody is happy. You want more? Why not rattle the tin in front of the do-gooder charity muzungus? They will throw money at anything… Still more?

Ah, you want to make money like the Chinese? My friend, you will have to do it the hard way… With the exception of Goldman Sachs, African leaders do not have a Mephistopheles-like adviser to show them the way. But perhaps the past can be a guide. The central point to the following polemic is that adding value to a product – whether it is canning tomatoes, turning iron ore into steel or building cars – is difficult. But ultimately, it is what makes a country rich. If you keep selling pineapples, you will end up with peanuts. “If you look throughout economic history,

there is not a single [country] that has got rich without manufacturing, outside a few resource-rich countries in the Middle East – and even they will face an unemployment crisis,” says Hinh Dinh, a senior economist at the World Bank. The continent’s current economic boom, welcome though it is, depends largely on the export of raw materials. In 2010, two-thirds of Africa’s total exports were oil and minerals. To which one can add soft commodities: coffee, tea, cocoa, sesame, peanuts, bananas, cashews, cotton, livestock and horticultural products. Manufacturing, outside some honourable exceptions, is scarce in Africa. The total manufacturing output of the continent is just over $150bn, compared to the $2trn in total exports for China in 2012. Cars are made in Morocco and South Africa. Tunisia and Egypt have some heavy industry, ● ● ●

Leading Africa’s industrial charge: Aliko Dangote, Innocent Chukwuma, Bassem Loukil and Daphne Mashile-Nkosi

Pius utomi EkPE; iVm; HicHEm; camillE millErand for Ja; JEromE faVrE/BloomBErg Via gEtty


frontline | get ting rich the hard way

while Zimbabwe and Ghana have factories in various states of decay. With Africa’s daunting youth bulge about to unleash millions of people onto the job market, turning this situation around becomes an imperative. But how? Economist Erik Reinert explains: “Rich countries got rich because for decades, even centuries, their states and ruling elites set up, subsidised and protected dynamic industries and services.” Ironically, the World Bank, itself set up to help poor countries get rich, got caught up in a Cold War-fuelled denial of this historical fact. In his book How Rich Countries Got Rich … and Why Poor Countries Stay Poor, Reinert says: “If you want to understand the causes of American and European prosperity, study the policies of those who created it, not the advice of their forgetful successors”. A wayward colony, fed up with being cheated and forced to sell its raw materials to the United Kingdom (UK), rebelled to start a vigorous campaign to have its own industries. Ghana in the 1950s or Kenya in the 1960s, perhaps? No, this


is the United States (US) in 1776. Just 14 years later, Alexander Hamilton was writing about infant industry protection. Between 1816 and 1945, tariffs in the US were among the highest in the world. royal BrainWaVe

Perhaps the world’s first example of national industrial policy was set in motion by King Henry VII of England in 1485, when he realised that England should be a textile-exporting country rather than exporting raw materials. He placed tariffs on wool exports and gave tax breaks and monopolies to selected newly established wool manufacturers. The UK and US have enjoyed a fairly good run. But enough of economists and historians: a small band of industrialists and politicians across Africa are ditch-

ing the ideological straightjackets inherited from the World Bank and the International Monetary Fund’s ‘Washington Consensus’ and are adopting the policies and business strategies that have made Japan, South Korea, Taiwan and China rich, and the West before them too. Daphne Mashile-Nkosi is one of them. Imprisoned by the apartheid regime, she became a political and women’s rights activist, and is perhaps an unlikely candidate for African industrial heavyweight. Her partners in the Kalagadi Manganese mining project in South Africa, ArcelorMittal, had their reservations. “They thought, here is a black woman, with no experience, saying she is going to build a sinter plant”, MashileNkosi told The Africa Report. “Of course,

Daphne Mashile-Nkosi Mashile-Nkosi has developed kalagadi MaNgaNese’s processiNg plaNt iN NortherN cape, oNe of the few New beNeficiatioN projects iN south africa

Camille millerand for Ja


“There are 1.2 million people there, appalling poverty, but at the same time there are all these minerals” We are beginning to see, like all of Africa, that for as long as our people and communities are not benefiting from our natural resources – which are Godgiven – we will never get to where we want to be,” says Daphne Mashile-Nkosi. Her mining and beneficiation project is based in South Africa’s Northern Cape Province. “There are 1.2 million people there, appalling poverty, but at the same time there are all these minerals – the largest iron ore deposits, the largest manganese deposits. It means

that something is wrong with the old models of doing things.” The mine project included rural electrification and water provision into its infrastructure outlay, gathering tax breaks from the treasury along the way. President Jacob Zuma is very keen to showcase the new sinter mine in the run-up to elections. “Beneficiation is the way the whole of Africa has to go,” Zuma said, at the launch of the Kalagadi integrated manganese mine and sinter plant. But Mashile-Nkosi says she is not taking aim at the previous government of Thabo Mbeki,

whose economic policies were more clearly liberal in intent. She points to Mbeki’s black economic empowerment programme as a clear attempt to develop local businesses, “but of course it’s always about the how, the implementation.” Others are keen to associate themselves with Mashile-Nkosi’s project, with the African Development Bank lending R2.2bn ($200m), and the Industrial Development Corporation a further billion rand. Meanwhile, South Africa’s Public Investment Corporation is looking to buy out

ArcelorMittal’s stake in the Kalagadi project, which some analysts see as overpriced. It is not always the kiss of death to have politically connected businesses. Look at China or indeed the constant stream of Goldman Sachs partners in US administrations. Just how well Mashile-Nkosi can use her political connections will be quickly visible. For the planned smelter at Coega Industrial Zone in Port Elizabeth, South Africa’s rail parastatal Transnet will have to strengthen the line from Northern Cape to Coega in Port Elizabeth. ●

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you want to protect your investment, but mostly you don’t believe in her.” Nevertheless, in November 2013, Kalagadi’s plant was officially opened. “Here is a heroine”, said South Africa’s President Jacob Zuma at the launch. Rather than exporting raw manganese ore, the manganese sinter project refines it to around 48% purity. The R7bn ($633m) project in the Northern Cape will eventually be accompanied by a smelter at the Coega Industrial Development Zone. It will produce 320,000tn of high-carbon ferro-manganese alloy annually, a key input for the steel industry (see profile, page 24). Proving the economics of the project have good fundamentals, Kalagadi has secured an off-take agreement with the Johannesburg Stock Exchange-listed Metmar. The logic of beneficiation, or adding value to locally produced raw materials, is clear for Mashile-Nkosi: “It brings more jobs and more skills. The further down the road to beneficiation, the more you need your metallurgists, your highly skilled artisans. And you can use these opportunities to train and employ people.” from trade to industry

Africa’s richest and most successful businessmanappearstoagree.AlikoDangote, who for many years contented himself with importing refined sugar and cement into Nigeria, has caught the beneficiation bug. Dangote’s cement factories now dot the landscape, and his Dansa Foods is building a $36m food-processing plant in Kano, northern Nigeria. It will turn part of Nigeria’s tomato crop into tomato paste. The country currently imports more than 300,000tn of tomato paste annually, costing $360m. Not content with tomatoes, Dangote is also tackling Nigeria’s number one commodity,oil.Hiscompanyisbuildinganoil refinery with a capacity of 400,000 barrels per day and a polypropylene plant that can produce 600,000tn per day. With the project cost totalling $9bn, it is a weighty bet against free-market theorists who insist Nigeria’s comparative advantage remains as a commodity exporter rather than as an industrial powerhouse. The real money is in manufacturing goods. Clustered around the heavy roller at the Mediterranean Industrial Group (MIG), engineers shout to make themselves heard. Machines bend a nearly two-inch thick sheet of steel relentlessly into a neat hoop. A shower of sparks the africa report

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Lucky NxumaLo/city Press/GaLLo imaGes/Getty imaGes

get ting rich the hard way | frontline

engulfs the welding team. Slowly and surely, the mast that will eventually carry a wind turbine emerges from the work yard. From their base in Sfax, the long-neglected industrial city at the gateway of Tunisia’s greater southern region, MIG represents a manufacturing success story, building metal structures such as telecom masts and energy sector infrastructure. Bassem Loukil, CEO of Groupe Loukil, which owns MIG, appreciates the 1015 years of breathing space the government gave to infant industries in Tunisia. “Imagine trying to set up a unit like this today without protection, with all the Turkish and Chinese dumping strategies you have in Africa today! We would not have survived.” More than 3,000km to the south in Nnewi, Nigeria, another workshop hums with life – grimy and less automated, it is a car factory owned by Innocent Chukwuma. “Yes, the government is helping me. The current tariff on imported cars is 10%, but this is going up to 35% in February,” says Chukwuma.

Nissan Rosslyn car plant in South Africa, which developed its automotive industry early on

There is a culture of building in Nnewi that stretches back many decades. A cluster of small workshops dot the town. Chukwuma’s company, Innoson, is an echo of Loukil’s and indeed Dangote’s. All of them started off as traders and importers who went into manufacturing (see profiles, page 26 and 29). All had foreign partners at a critical moment of their development. All are trying to climb their way up the technology tree to gain a competitive advantage. “At the moment, we import the engine blocks from a specific factor y in China, but we have ordered a die-casting machine which we ●●●

EXPORTS BRING IN THE MOST CASH Africa losses from capital flight/year


Africa FDI in 2012

Africa average aid flows from 2006-2011



China exports in 2012


frontline | get ting rich the hard way

● ● ● should be getting at the end of the year,” says Chukwuma. Thinking at the World Bank about supporting local companies is evolving. Its vice-president for Africa, Makhtar Diop, told The Africa Report (TAR 56, January 2014): “This is a taboo subject, I know, but I would like to look at how to take the trader in Cocody [in Abidjan] and help him move towards manufacturing, investing in the productive sector. How can we help him transition?”

Innocent Chukwuma NigeriaN automobile maNufacturer iNNosoN motors is growiNg, targetiNg local demaNd aNd markets throughout west africa

“My cars are cheaper than the foreign ones, so people are happy with it” In five years’ time, I want people to be talking about Innoson Motors in the whole of Africa, not just in Nigeria,” says Innocent Chukwuma. The top-of-the-range 4x4s sold by Innoson cost half the price of the Toyota Prado, a vehicle favoured by businesspeople and politicians. “My cars are cheaper than the foreign ones, so people are happy with it,” says Chukwuma, who started business as a trader in 1976. He gradually moved from importing spare parts for motorcycles into the manufacture of those mostly plastic spare parts. If you are sitting on a plastic chair in a church or restaurant in the south-east of Nigeria, chances are it was made

in the Innoson plastics factory in Enugu. With the help of a Chinese technical partner, Chukwuma moved into the auto sector. His company now makes jeeps, buses and lorries. And this is not just an assembly factory from knockdown kits. “We manufacture all the plastic components. And we use iron sheets from Nigeria to manufacture certain parts. We import the engines, axels and some electrical parts. We also manufacture motorcycle engine blocks,” says Chukwuma. Innoson exports about 10% of production to other countries, including Benin, Ghana and Mali. “This figure will increase because they have told me what they want and why they want it, so we can build specific models for them,” he says.

Certainly, if there was one domestic market in Nigeria that clearly could bear a local manufacturer, it was cars. The country imports 400,000 cars per year. Innoson currently produces about 10 vehicles a day, though the factory is being overhauled. “By the end of April, we should be doing about 25 units a day,” says Chukwuma. To do that, he needs the manpower. “People need to be trained for automotive work – like electricians, panel beaters, mechanics, all those things – so that anyone who wanted to open a maintenance station or workshop can pick up these trainees,” he concludes. The government is responding to the challenge and is funding an automotive skills institute. ●

froM JAGS to riCHeS



There are other ways for governments to boost entrepreneurs, such as requiring local content in government contract tenders – not unlike the Buy American Act of 1933. And though many laughed at Indian officials forced to drive around in the dowdy first iteration of locally made Tata cars, Tata Motors now owns Jaguar and Land Rover, two former flowers of the UK car industry. “Anambra State government has ordered 1,000 vehicles,” says Chukwuma. “And the government has announced that local manufacturers will be considered first choice for procurement [deals].” Nigeria seems to have a taste for industrial policy, which is ironic given that coordinating minister of the economy Ngozi Okonjo-Iweala used to be second-in-command at the World Bank. At the launch of Nigeria’s Automotive Industrial Policy Development Plan in October 2013, trade and industry minister Segun Aganga, himself a former Goldman Sachs employee, said: “Recognising the strategic effects of the automotive industry in industrialisation, emerging economies like Brazil, China, Malaysia, India, Iran, Indonesia, Thailand and South Africa took deliberate steps to develop their automotive industry between the 1960s and 1980s.” So far, so rosy? Let a thousand factories bloom across the continent? It is very easy, particularly for those who naturally swing to the left, to get high minded about US president Ronald Reagan and UK prime minister Margaret Thatcher’s ideological crusades. But beyond the Cold War, there was a reason why there was such a strong pro-market wave in the 1980s. “We need to learn the lessons of proactive governments in the 1960s and 1970s in Africa,” says Justin Yifu Lin, a former chief economist at the World Bank. “They introduced all kinds of distortions and wanted to build up large-scale industry in poor ● ● ● the africa report

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BY THIS TIME TOMORROW, NIGERIA WILL HAVE PRODUCED OVER 2 MILLION BARRELS OF OIL And that’s nothing compared to what the country will be doing twenty years from now. Making the most of untapped potential will never be an easy business. It means making sure you have the most important information in the hands of the best people. Which is why the people we recruit are dedicated experts with knowledge and understanding well ahead of their time.

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frontline | get ting rich the hard way

If African governments choose to go slow on manufacturing, there are plenty of others that are keen to eat their lunch. Explosive wages in Asia are forcing manufacturers of all stripes to look for cheaper production sites. For Lin, governments need to bulldoze through traditional business handicaps of red tape and bureaucracy by creating export processing zones. The Chinese government is sponsoring several such zones across the continent. African governments will have to look long and hard at the Mexican maquiladoras (factories in free trade zones) experience and see if that is for them. For example, because maquiladora companies import nearly all components and technology, there is very little secondary industry stimulated by the vast export processing zones on the Mexican side of the 3,000km border with the US. Perhaps China and South Korea’s experiences in pushing for joint ventures and requiring technology transfers would be an interesting model to follow. Internationally minded manufacturers will first go to countries where they are welcomed by an active government, such as Ethiopia’s, which has been one of the most strident in its rejection of Bretton Woods laissezfaire doctrine. “I think that there is great potential in sub-Saharan Africa when it comes to production,” H&M chief executive Karl-Johan Persson told Swedish newspaper Dagens Industri in January. “We have started producing on a small scale in Ethiopia and we will see how it goes.” Morocco has attracted a Renault production line to the Tanger Med site (see TAR 51, June 2013). The government’s attention to the needs of car producers – in particular the presence of a dense network of secondary and tertiary suppliers – the creation of a bespoke skills

Petterik Wiggers/PANOs-reA


agrarian economies. These firms turned out to be not viable,” he explains. Some of Ghana’s ill-fated companies spring to mind. And Nigeria created an auto sector industrial policy in 1971 to assemble knock-down car kits. Crony capitalism is a key danger for any government, even those historically recent converts to the free market such as the US, as regular bust-ups surrounding lobbyists in Washington DC show. Congressman Frank Lucas, chair of the House of Representatives Agriculture Committee, received more than $744,000 in campaign donations from agribusiness giants for the 2012 US elections. A clear African example was President Zine el-Abidine Ben Ali’s Tunisia (see page 29), and there are countless others. Economists such as South Korea’s HaJoon Chang suggest that it is not ‘state’ or ‘market’ that is the issue. After all, Japan and South Korea both created







Helen Hai, CEO of Huajian shoe factory, employs 2,000 people, 1,670 of whom are Ethiopian

fierce domestic competition between companies for access to export credit, establishing ‘export discipline’. Rather, the key is in the management of the transition from initial state protection to an open liberal market – a subject on which there is little research. factories first, roads after

Justin Lin dismisses another of the commonly held preconceptions against the drive to boost manufacturing in Africa: the lack of infrastructure. “I remember driving around the new factories in Shenzhen in the 1980s”, says Lin, referring to the launch site of China’s manufacturing miracle around the Pearl River Delta. “The roads were nowhere near what you have in Ethiopia.” And even in chronic laggards like Nigeria, new port projects are seeing the light of day. GDP





EGYPT $262.8bn

ALGERIA $205.8bn


TUNISIA $45.7bn







ANGOLA $114.1bn

NIGERIA $263bn


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institute and a world-class port were critical in attracting the French company. Rabat has take the industrial baton from Tunis in recent years, and the government runs an effective export promotion agency, called Maroc Export. “We are very jealous about what the Moroccans have, the help and assistance from their government,” says Loukil. “In fact, that’s what pushed us to buy a company in Morocco – similar to MIG – to get an industrial base in Morocco and take advantage of what it is giving to its industrial units.” the technopole model

Loukil says that by focusing on skills and education African countries might be able to avoid Mexico’s problems and help to foster local companies that grow up to be serious contenders. “The technopoles built in Sousse and elsewhere are what the Moroccans have copied today. And it was done with the help

of the French. If you go to Toulouse, around the Airbus industry, there are three technopoles, which is what Tunisia itself tried to copy.” Harnessing the diaspora and those educated abroad was important for China’s stratospheric rise and is also bringing similar strength back into Africa. Kola Karim, chief executive of Shoreline Natural Resources, a Nigerian oil company (see page 56), says the global financial crisis actually helped in this regard: “A lot of these guys in banking and engineering who lost their jobs were despondent. But at that moment, opportunity started rearing its head here, and they thought, ‘Hey, the salaries are not that bad, and we are at home.’ That created a wave of talented people heading home to the continent. We have sucked up that expertise and paired them with the local boys to transfer those talents.” Likewise, MIG Engineering, an affiliate of MIG, helps

to bring new ideas and technology into the company and employs graduates from foreign engineering schools. And as the private sector adds skills, governments will need to do the same. For Helen Hai, who set up the Huajian shoe factory in Ethiopia, the rigours of industrial policy require waking up early in the morning. Even if you have enlightened ministers who want to drive industrialisation, it is important to have support at all levels. “You need people at the operational level too,” says Hai. “It’s not going to be the minister sitting at the port clearing the goods.” Ultimately, it in is these practical realities that proactive governments will live and die in their efforts to rekindle Africa’s manufacturing sector. But a careful combination of slowly phased-out protection, support for local products and an effort to promote upskilling throughout the economy may just help African countries get rich. ●

Bassem Loukil Tunisia’s MiG produces parTs for The enerGy and TelecoMs infrasTrucTure secTors and is expandinG WiThin africa

Mediterranean Industrial Group (MIG) operates 28,000m² of factory space that sits on 14ha of land in Sfax and first started operations in 1981. Trading company Loukil Entreprise, set up by Bassem Loukil’s father Mohamed, went into a joint venture with its key supplier of agricultural equipment, Huard France. “Because of the import duties on these ploughs and tractors, it made good sense for both companies to have a local assembly and manufacturing plant,” says Loukil. Tunisia had a quite sophisticated industrial policy for a time. The government helped MIG with tax exemptions for new investments and tax breaks for the africa report

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setting up in remote areas, alongside the tariff barriers used to protect new industries for around 15 years. But in a textbook case of crony capitalism first boosting then throttling a country, corruption started to gain a grip on Tunisian public life. President Zine el-Abidine Ben Ali began to favour an inner circle of companies and to exclude others from “the advantage you can give to locally manufactured goods in government tenders,” argues Loukil. Ben Ali also failed to encourage companies to move into exports. “When you see how Turkey helps its companies set up shop and open markets in Africa, you can compare this to Ben Ali’s time, when you had a limited

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“Because of import duties [...] it made good sense for both companies to have a local manufacturing plant”

group of 10-12 people who always cornered these opportunities. They, in turn of course, helped finance the party, helped finance Ben Ali’s extravagances, his family and so on.” This has got worse, not better, under the transitional regime of the Islamist Ennahda party, Loukil says. “The corruption today is maybe three to four times what we saw under Ben Ali,” he complains. “You have

a new breed of purchasing manager who has been locked away in prison for the past 30 years, and they just want to fill up their accounts very quickly”. As a result, MIG is looking to set up production units in Algeria, Burkina Faso and Côte d’Ivoire. “We have plans that we have shelved for the moment to build a pottery unit in Kasserine while we wait to see how this new government is going to treat business,” says Loukil. ●




France’s transport technology has brought sleek trams to Casablanca

companies & markets


Romance back on track Faced with flagging opinion polls, limp economic growth and stubbornly high unemployment, President François Hollande is seeking to turn around his country’s fortunes through trade with African countries

By Sébastien Dumoulin and Charlie Hamilton

Guillaume mollé for Ja


t’s been a tough winter for France’s President François Hollande. In November ratings agency Standard & Poor’s downgraded the country’s sovereign credit rating from AA+ to AA. In December, unemployment hit a record high with 11.1% of the population out of work, while gross domestic product growth trundled along barely above zero. Though France has heavyweight economic interests in Africa such as oil giant Total, port operator Bolloré and construction company Bouygues, in recent years French companies have faced difficulties on the continent. Areva, France’s premier nuclear power generator, is renegotiating its contract with the government of Niger. The strong engagement of China and India has weakened France’s positions in countries that have long main-

55% Growth of France’s exports to Africa from 2004 to 2012

tained strong ties with Paris and French companies. The French finance minister Pierre Moscovici (see interview) argues that France and China are approaching Africa with different goals: “Our strategy differs from China’s in that it is more disinterested and we pay more attention to development objectives.” Françafrique networks – those personal ties created between French and African political, economic and security elites – have been an important foundation for Franco-African ties since the colonial period. Several French governments have promised to normalise relations and put an end to such networks, but there has been little appreciable impact. Moscovici says that Paris “must strive for transparency and good governance”. He told The Africa Report: “At the last general assembly of the World Bank ● ● ●


business | companies & markets

The shift in France’s trade balance with Africa





French diplomacy begins at school



The 171 French schools in Africa include: 37








11 10

€46bn 2012


● ● ● I signed a financial facility in the domain of the extractive industries in order to stop the stealing of these rents and to fight against opacity and corruption.” The economic strategy of looking to Africa to bolster French growth was in part behind the December summit in Paris in which around 40 African leaders were wined and dined as diplo-



mats sought to restore damaged relationships. The second half of 2013 brought the signing of a spate of lucrative contracts, providing a much-needed fillip to French industry. Defence contractor Thales penned three agreements worth several hundred million euros in South Africa and Egypt. In June, construction firm Eiffage won a €26m ($35m)

French multinationals have left an indelible stamp on Africa’s business world, cornering key markets across several lucrative industrial sectors Energy

France’s principal power firms all have stakes in African markets. Areva, EDF, Total and GDF SUEZ all operate on the continent. Smaller firms such as Vergnet, which provided 84 wind turbines to Africa’s largest wind farm at Ashegoda in Ethiopia in 2013, are also entering the market.

While Air France is wrestling to maintain its market share in an increasingly competitive environment, French rail firms are refusing to be shunted aside. Key projects include Alstom’s Sétif tramway in Algeria, Bolloré’s Kagbélen rail

line in Guinea, RATP Group’s Algiers metro and Casablanca tram, plus the SNCF’s high-speed railway project in Morocco.


In a market that is now the most dynamic in the world, Orange has a solid foothold. Already present in 18 countries on the continent, it will soon launch in South Africa. Eutelsat and Canal+ also have strong positions.


The sector is dominated by big brands, from brewer Castel to sugar giant SOMDIAA, cotton manufacturer Geocoton and edible oil producer Sofiprotéol, which owns

Gabon, Egypt Tunisia

Côte d’Ivoire

contract for building work at the container terminal in Lomé, Togo. September brought news of a €200m deal for the Mozambican government to buy 200 fishing trawlers and six patrol boats from Cherbourg-based shipbuilder Constructions Mécaniques de Normandie. In October, Hollande ended a visit to South Africa by announcing the “deal of the century” – the signing of a €3.8bn agreement for French rollingstock manufacturer Alstom to provide 600 trains and 3,600 wagons to the Passenger Rail Agency of South Africa between 2015 and 2025. No sooner had the ink dried on this contract than the champagne was brought out again to toast a €1.5bn deal agreed between the South African government and French energy giant GDF SUEZ to build a €1.5bn thermal power plant.

Corporate conquests in Africa




Lesieur. Meanwhile, dairy producer Danone bought 49% of Fan Milk – a leading manufacturer and distributor of frozen dairy products and fruit juices in West Africa – in October 2013.

Information technology


Safran Group subsidiary Morpho won the contract to provide Mauritania’s citizens with electronic identity documents in 2010, while Franco-Dutch firm Gemalto is working on biometric records for people in Gabon and Burkina Faso. The company is also creating a new generation of Moroccan passports and South African identity cards.

France’s economic strategy is not without a price. In order to achieve France’s goal of doubling trade with Africa from its current level of around €90bn, it has also pledged to increase its aid to the continent, which ran at around €10bn between 2008-2013, to €20bn during the next five years. Also helping to support France’s soft power are the 171 French schools throughout the region. Teaching a French curriculum, they are a popular choice for Africa’s business and polit- ● ● ●

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GENEVA, 16-17 MAY 2014


w w w. a f r i c a h e a l t h fo r u m . co m

business | companies & markets


Pierre Moscovici



Finance minister, France

Africa and France’s common future


n December, France hosted the Elysée Summit for Peace and Security in Africa. Apart from seeking to combat violence in the region, the conference revealed France’s clear pivot towards Africa, as the cabinet minister explained to The Africa Report.

TAR: François Hollande is holding his first AfricaFrance summit. What do you expect from it? PieRRe Moscovici: This is a major political event – a landmark – and it comes at a time when relations between Africa and France have reached a high standard. France has shown its commitment to the continent, and François Hollande has shown particular courage in Mali intervening to defend the principle of peoples’ freedom. One of the major issues of this summit will be to extend

the security dimension. France and Africa share a common destiny. The economic element of the conference is an important one. There is an awareness of the enormous economic potential of Africa. This is certainly a heterogeneous continent. However, it is converging with the BRICS [Brazil, Russia, India, China and South Africa], meaning a growing number of African countries are now emerging, with a growing middle class. The job of [the finance ministry] is to promote the development of a truly mutually beneficial partnership that extends the value chain to both our respective territories, what we call ‘co-localisation’. We need to be very ambitious, which is why I propose that we set the goal of doubling trade between the continent and France.

ical elite. There are 110,000 students in the institutions’ classrooms. French exports are moving in the right direction. Between 2004 and 2012 exports to Africa jumped 55% (compared to a worldwide average of 28%), making it the second-largest growth area for French exports after Asia, which grew by 109%. But these figures can be misleading because trade levels reflect a relatively low base. French export revenue from Africa was worth €44.3bn in 2012, meaning the continent comprises only 11% off French firms’ international sales.


is France not a little slow to take advantage of African growth? I do not intend to […] question how things operated in the past. We must look to the future. […] I asked five people with connections to Africa – diplomat Hubert Védrine, financier Lionel Zinsou, economist Hakim El Karoui, former Agence Française de Développement president Jean-Michel Severino and insurer Tidjane Thiam – to give me a report examining the fact that Africa’s and France’s growth are inextricably linked. The economic agenda of African leaders is also our agenda. From my discussion with the report’s authors, it appears there are undeniable advantages for us: Africans will comprise 85% of the world’s French speakers by 2050.● Julien clémençot and Frédéric Maury

French officials argue that the financial benefits outweigh the costs. The finance ministry calculates that doubling exports to Africa over the next five years could translate into the creation of 200,000 new jobs in France. However, the news is not all good. Analysis of trade patterns reveals that of the list of the eight largest recipient countries for French exports – which account for about three-quarters of exports to the continent – includes little or no significant change in trade levels in recent years. Algeria – France’s 14thlargest trading partner, leads the list of African importers of French

goods, well ahead of Morocco, Tunisia, South Africa, Egypt, Nigeria, Côte d’Ivoire and Senegal. The difficulty for France is that it has been complacent and has lost a significant proportion of its market share to up-and-coming emerging economies. According to a study in May 2012 carried out by the French customs agency, the direction générale des douanes et droits indirects, France has seen its market share on the continent collapse from 16.2% in 2000 to 8.9% in 2010. The number of French small and medium-sized enterprises (SMEs) operating in Algeria dropped 40% between 2005 and 2011, according to France’s foreign trade ministry. bRiCs sCOOP MARKeTs

China is the main reason for this loss of the commercial foothold. It has seen its market share rise from 3.4% to 12.5% between 2000 and 2010. Companies from India, Russia and Brazil have played their role in weakening France’s position, too. “The French had virtual monopolies and this was not sustainable. Given the level of growth in this area, it is to be expected that this has led to a decrease in our market share. However, it is essential that this turnover increases,” explains Alexandre Vilgrain, president of the Conseil Français des Investisseurs en Afrique and chief executive of agro-industrial group SoMdIAA. Faced with competition from other countries, “French companies have to make a particular effort to make their prices competitive, particularly in the construction industry,” he added during an interview at the Club d’Entreprises Bordeaux Afrique. If some mid-level technology export sectors – such as electrical equipment or computer manufacturers – will suffer, others – energy, telecoms, agribusiness, for example – could do well in the competitive environment. other companies will gain footholds in African markets, as digital security firm Gemalto has done. Lafarge, Schneider Electric and Aegys are interested in ● ● ● the africa report

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● ● ● working on sustainable urbanisation projects. Focusing on these areas of expertise, French companies are now seeking to leave their traditional spheres of influence and capture a share of the growth of large English- and Portuguese-speaking countries including South Africa, Angola, Nigeria, Mozambique, Tanzania and Kenya.


This has spurred Ubifrance, France’s export promotion agency, to open five new offices around Africa, most recently in September 2013 in Nairobi. “These new markets can even attract well-established SMEs,” adds a spokesman from the Club d’Entreprises Bordeaux Afrique, which has already accompanied around 40 companies to Ghana, Nigeria, South Africa, Ethiopia and Angola. The club is on track to add another four countries to the list next year. France has undoubtedly redoubled its efforts to court African contracts. Analysts are optimistic the country can boost its export revenue in the coming years, pointing to the pro-Africa business strategies of firms such as advertising giant JCDecaux and software developer Dassault Systèmes. “Ten years ago it was difficult to recruit for Africa. Today, there are very good people who are interested,” continues Vilgrain, who says that the boost in air transport links by firms such as Royal Air Maroc, Air France and Emirates will facilitate trade. “Finance is also much easier to find through pan-African players such as Ecobank or Attijariwafa Bank, which charge competitive rates,” adds Guillem Batlle, head of the Sub-Saharan Africa and Indian Ocean division of employers’ union MEDEF International. Today, the organisation provides support to some 5,000 French companies in Africa. Small though this number may be, it is five times the number of firms it helped 10 years ago and gives a clear indication of France’s plans for the future. ●

hannibal Videocon boss celebrates a happy hunch You have to speculate to accumulate, says hannibal, or rather people close to hannibal, who have actually accumulated. the Indian billionaire venugopal Dhoot is among that happy number. his hefty $75m bet in offshore Mozambique oil fields back in 2008 is looking smart today. his company, videocon Industries, is hoping to raise $2bn from the auction of its 10% in the Rovuma Field. petrochina, India’s oil & Natural Gas corp and exxon Mobil corp are expected to be among the suitors when the stake comes to market.

Opaque dealings at the Kenyan central bank IN a Move that pRoMpteD more than a few tongues to start wagging on Kenyatta avenue, the Kenyan public prosecutor has ordered the arrest of the central bank governor Njuguna Ndung’u. the matter relates to alleged abuse of office, which is reported to be linked to a security-software tender. Kenya’s anti-corruption agency recommended action against the bank’s staff in a report last month. Ndung’u has been at the helm of the central bank since 2007.

Elumelu’s double standards toNY eluMelu Does Not MIss a trick when it comes to sitting at the topmost of top tables. First out of the blocks when it came to Barack obama’s rallying cry to fund the power africa scheme, elumelu pledged a jaw-dropping $2bn. When the african union came calling to help africa fund its own institutions, elumelu was rather less forthcoming. stumping up only $150,000 to help with the start-up costs associated with the new african union Foundation, whose blurb is, “to mobilise resources in support of the african union’s vision of an integrated, people-centred and prosperous africa, at peace with itself and taking its rightful place in the world.”

Mbeki heads to New York to claw back Africa’s billions FoRMeR south aFRIcaN leaDeR thabo Mbeki presided over the exit of some of south africa’s largest companies and the accompanying capital flight in the 1990s. angloamerican, south african Breweries, old Mutual, liberty life and Billiton, among others, moved their primary listing outside of south africa when the aNc took power. But is Mbeki trying to bring the money back to africa now? Instead of pontificating at the Mining Indaba in February, Mbeki could be found in New York, the public face of the high level panel on Illicit Financial Flows, fighting the tax avoidance schemes of multinational corporations. “africa is deprived of $50 billion a year that it needs for economic challenges,” said Mbeki. ● the africa report

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business | companies & markets


The sparks of a clean energy revolution International and local investors are lining up a series of projects in the clean energy sector as electricity demand continues to rise

Antony njugunA/ReuteRs


espite Africa’s rich oil and gas reserves, environmental concerns and the high cost of the infrastructure needed to extract and refine hydrocarbons are driving a push towards renewable energy, particularly solar power. With the continent’s population estimated to double by 2050, analysts expect that electricity demand will treble in Southern Africa and quadruple in East Africa in the next 25 years. However, meeting this demand will require costly upgrades to infrastructure. “The biggest challenge facing renewable energy projects in Africa is access to finance,” says African Renewable Energy Alliance secretary general Ansgar Kiene. “It is a huge problem, partly because the financial institutions that are offering loans do so only at prohibitively high interest rates. It’s easier for international developers to move ahead with some renewable energy projects [than for local firms] because they can more easily tap into international funding.”

Thenew$100minvestmentfund launched in February by the Togobased African Biofuel and Renewable Energy Company is seeking to channel African investment into green power projects. In addition tosettinguptheAfricanRenewable Energy Fund, which chief executive Thierno Bocar Tall hopes will hit €200m ($270m) before the end of the year, the organisation also provides technical and logistical support to groups seeking to develop clean energy projects. The company has already completed the roll-out of 10,000 solar-powered streetlights across

Olkaria KenGen geothermal plant in the Great Rift Valley, part of Kenya’s commitment to renewable energy

source: IAeA 2012

Installed capacity (mw) 761

Hydro 49.7%


Thermal 34.2%


Geothermal 12.9%

The current power supply in Kenya capacity share (%)

ticker tape PaPer South Africa’s Sappi to route Asian exports via Maputo

Cogeneration 2.4%


Isolated grid 1.15%


Wind 0.36%


Gold Randgold to buy cash-poor junior rivals after the gold price fall

11 towns and villages in Sierra Leone, plus a smaller-scale project in Togo and the installation of photovoltaic cells to bring electricity to 26 villages in Burundi. solar street lights

It has also helped to complete landfill and compost projects in GhanaandCameroon.Ithasahost of new projects in Côte d’Ivoire, Mali, Burkina Faso and Niger scheduled for 2014. The following year will see the start of work on a $600m plan to erect 10,000 solar-powered street lights in Chad and launch a 40MW wind farm outside N’Djamena. “Renewable energy represents a huge opportunity for Africa,” says Tall.“Africahasalltheingredientsto allowrenewableenergytobecomea crucialpartofourenergyportfolio.” According to projections by the International Renewable Energy Agency, if sufficient investment is found the proportion of electricity provided by renewables

TransPorT Mali, Mauritania and Niger are launching a regional airline to reduce fares the africa report

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companies & markets | business

rift valley plant

The Kenyan government is also investing heavily in geothermal plants and is already installing turbines for a 350MW plant in the Rift Valley, with plans for a 400MW plant and 800MW facility in the Menengai Crater. This is part of the country’s plan to generate 26% of itsenergyfromgeothermalsources



across Africa could rise from its 2009 level of 17% to 50% by 2030 and 75% in 2050. Under this ambitious plan, renewables, which contributed around 28GW in 2010, would increase to 800GW by 2050, withsolarenergycomprisingsome 245GW and wind power 242GW. Although this level may prove unattainable in that timeframe, a hostofnewrenewableenergydeals testifytothesupportforgreentechnology. In January, a consortium of companies in Ethiopia signed a contract to construct a biomass energy facility in Addis Ababa, while further plants in Djibouti, Senegal, Uganda and Kenya are already under discussion. Meanwhile, a new study by the Middle East Economic Digest estimates that the Middle East and North Africa could receive more than $50bn of investment in solar power by 2020. The report says that a host of solar, wind and hydroelectric projects are set to be commissioned within the next six years that would generate an extra 37,000MW of electricity. North African countries in particular are planning a push into solar projects with Egypt’s solar projects expected to generate around 1,800MW, while Algeria is hoping to generate some 3,000MW through photovoltaic cells. Morocco, meanwhile, announced in 2009 a range of wind farms and solar plants in the Western Sahara to generate 4GW of energy by 2020, although these have run into legal problems due to a dispute over ownership of the sites where the facilities are to be built.

ethiopia’s ashegoda wind farm is the largest in sub-saharan africa

by 2030. If achieved, this would make clean energy the largest source of energy in Kenya. According to estimates from the World Bank, geothermal electricity production from east Africa’s Rift Valley could provide power to 150m homes. Meanwhile, Ormat Technologies announced at the beginning of February that its Number 3 plant, part of the Olkaria III geothermal complex in Naivasha, Kenya, had now launched commercial operations. This comes three months ahead of schedule and means that the complex has boosted its energy generation capacity by 110MW. If local investors and banks are to profit from this push into green energy, they must be persuaded that such projects can bring good returns, explains Kiene. “Part of the issue here is to make people understand that investing in renewables in Africa is not like giving to charity,” he added. “There are chief financial officers who are choosing to invest. There is a huge under-provision of electricity among African citizens. People have the money and are prepared to pay for good and reliable electricity services, but still they cannot get them. This is a huge untapped market and that means there is real potential here too.” ●

Piracy January recorded the first seizure of a ship by Somali pirates since 2012 the africa report

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$270m 2014 fund­ raising target for the African Biofuel and Renew­ able Energy Company

17% The contri­ bution of renewable energy sources to electri­ city pro­ duction in Africa in 2009

800GW Target for renewable energy produc­ tion in 2050, up from 28GW in 2010

charlie Hamilton

PrivaTisaTion Fresh attempt to sell off Nigeria’s NITEL and MTEL

Africa sidesteps EM crisis

Eurobonds and economic discipline will counter investors’ move away from emerging markets


merging markets (EM) are struggling to finance their economies now that globalcapitalisheadingbacktothe United States, where the gradual ending of cheap money from the US Federal Reserve has brought up interest rates. The sharp suits of Sandton, Johannesburg’s banking district, are feeling the pinch, with the rand hit hard. South African ReserveBankgovernorGillMarcus announced a hike in the repo rate to fight inflation. Even though the rate rose half a percent to 5.5%, the currency still fell more than 3% the day the measure was announced. But South Africa will feel most of the pain and the rest of the continentshouldprosper,accordingto a new report from Standard Bank. This is partly because investors are moving away from debt into equities and into developed (DM) markets. “Africa’s equity markets traded much more closely with DMmarketsthanEMmarketsduring 2013,” says the report. There is also a rebound expected in emerging market currencies towards the end of 2014. The macroeconomic discipline of many African countries is expected to keep inflation under control. Fiscal policy will continue to be expansive to fund infrastructure projects and will increasingly be met by the eurobond market. ● Nicholas Norbrook

Telecoms Neotel upgrades infrastructure between South Africa and BRICS countries


business | leaders

casE study

and plunged the country into a nearly five-year political crisis put paid to these ambitions. That year, Guanomad sold just 1,000tn. With farmers struggling to afford fertiliser, Rajaonary decided to turn his attention to exports. His early efforts focused on North America because the European Union banned the importation of products of animal origin from Madagascar. The ban was eventually lifted in 2011 and exports to Europe rapidly took off: 40% of its business is now export-driven, with sales to Africa, Europe and North America.

Guanomad turns bat excrement into big profits The Malagasy company has won over the local market with its organic fertilisers and expanded its reach to Europe, other African countries and North America

certified organic




uano – a mixture of bat or bird excrement, organic waste and minerals – is not an obvious choice for an accountant starting his own business. Until, that is, you look at the figures. “I wasn’t a specialist in agriculture or agribusiness,” says Erick Rajaonary, founder and chief executive of Guanomad. “But after a friend told me about bat guano, we went to visit a cave. In that cave alone, there were 3,000tn of guano. At $350 per tonne, I thought it was worth a shot,” he says. Many samples, tests and sales later, Guanomad now produces 11,000tn of bat guano fertiliser a year and is valued at $10m, having started with capital of just €80,000 ($109,000) in 2006. Guano-based fertilisers can be twice as cheap as chemical fertilisers, so they are ideally suited to the local market. Yet Rajaonary says it took a lot of convincing to get farmers to switch from their tried-and-tested chemical products. “Farmers in Madagascar are well used to chemical

fertilisers, and their yields are higher than [those you get with guano]: for rice, we’re at 4-5tn/ ha, whereas they are at 7-8tn/ ha,” he says. Guanomad invested heavily in marketing and communication. Rajaonary and his teams took part in trade shows, promotional tours and educational events. Their efforts paid off. In 2006, Guanomad sold just 300tn of fertiliser; by 2008, it had reached 13,000tn. “We explained to farmers that our organic fertilisers didn’t deplete the soil, unlike chemical products,” says Rajaonary. “We had to educate them little by little.” coup d’etat

By then, President Marc Ravalomanana and international donors had identified Guanomad as an instrumental part of Madagascar’s green revolution, and the company was on track to sell 20,000tn in 2009. But the coup d’état that toppled Ravalomanana in March 2009

Guanomad used trade shows to spread its message


13 000tn produced in 2008

25000tn targeted for 2019

Guanomad has diversified its range of products, introducing enriched and crop-specific fertilisers to meet farmers’ needs. It developed a pellet formula to accommodate mechanised spreading and obtained organic certification from independent label Ecocert. After the trials of 2009 and 2010, the company is looking forward to a promising future. The year 2013 was a landmark: Guanomad won the Outstanding Small and Growing Business Award at the Africa Awards for Entrepreneurship. The AAF SME Fund, a private equity group, also invested in the business. As well as the investment to modernise production facilities, Rajaonary says that the fund brings valuable knowledge of the African market, which it sees as key for its expansion. “We’ve always wanted to work on the continent, but we don’t know it well,” says the entrepreneur. “We want to promote the use of organic products in Africa, and we think that Guanomad is ideally suited to improve food security.” Guanomad recently received a large order from Tanzania, and it already predicts that exports in 2014 will account for 50% of its production. As for the future, Rajaonary hopes to break into the organic fruit and vegetable market in Madagascar and to reach an annual production of 25,000tn of fertiliser within the next five years. ● Emilie Filou in Antananarivo

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leaders | business




Hendrik Jordaan

President and chief executive, One Thousand & One Voices

Lucy Mbugua

wealthy families have set up a new private equity fund with patient capital to invest in African companies


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Yaw Nsarkoh Ghana’s Yaw Nsarkoh took over as managing director of Unilever Nigeria in January. A welltravelled member of the Unilever executive staff, Nsarkoh hopes to use his Asian experience to help grow the Nigerian market.

“Our capital is evergreenesque: we can hold an investment for up to 20 years if need be”

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are around 50 deals in the pipeline, with three at the top of the list for a close in the first quarter of 2014. “We won’t do a deal unless we have a family in that industry,” explains Jordaan, who adds they will also avoid big-ticket infrastructure andextractiveindustrycompanies. While it is not the fund’s “driving interest” to sell its investments onto the conglomerates owned by its investor families when the time comes to make an exit, “it’s possible”, admits Jordaan. ● Interview by Gemma Ware


newfamily-focusedAfrican private equity venture – One Thousand & One Voices – was born out of frustration. “This wasn’t a bunch of investment bankers who sat in a room and came up with an idea of making money,” says Hendrik Jordaan, the fund’s president and chief executive. A group of wealthy and mainly American families, led by John Coors of the Coors brewing family, had grown fed up with putting their money into philanthropic ventures and not seeing any economic impact on poverty. Instead, they decided to set up a private equity firm with a twist: instead of institutional investors, the capital would come from the world’s richest families. Jordaan, who is based in Denver, Colorado, is now sitting down to tea with billionaire families the world over. Born and raised in South Africa, he was a successful mergers and acquisitions lawyer prior to joining One Thousand & One Voices before its launch in May 2013 at the World Economic Forum on Africa. The fund is registered in the Cayman Islands and has structures in Mauritius and South Africa. So far, somewhere

between 15 and 20 families have signed up, most of them from the United States. The fund is asking each to invest $10m-$25m. The target for the first fund is $300m, which will be invested initially in sub-Saharan Africa. Jordaan says the fund’s approach is antithetical to a typical private equity fund. “They have to return capital in 10 years. That doesn’t work, in our view, for optimal returns in Africa. Our capital is evergreenesque, meaning we can hold an investment for up to 20 years if need be,” he explains. “We’ll be looking to put out equity cheques of between $10m and $30m per deal, that’s our sweet spot,” Jordaan says. There



Scions plant seeds for African fruit

Lucy Mbugua became the managing director of Kenya Airports Authority for a three-year term in January. She will be responsible for the passenger terminal expansion at Jomo Kenyatta International Airport, the scene last year of a huge fire.

Yang Kaisheng President from 2005 to 2013 of the Industrial and Commercial Bank of China (ICBC), Yang Kaisheng became deputy chairman of Africa’s largest financial institution, Standard Bank, in January. In 2008, ICBC bought a 20% stake in Standard Bank.


business | finance


Capitec spreads its net in South Africa The bank’s business model – based on unsecured loans and low-cost transactions – has proved successful as it seeks to attract the unbanked population


xploded would be the only way to describe the way Capitec Bank has appeared ontheSouthAfricanbankingscene since it was established on 1 March 2001. In the space of 12 years, the bank has established a franchise thatnowspans589branches,9,000 staff and 4.7 million clients. The business was the brainchild of Riaan Stassen – who stepped down as chief executive in December last year – and chairman Michiel le Roux, who identified the opportunity to provide cheap and easilyaccessiblebankingproducts. The bank secured its initial funding from PSG Group, a financial services conglomerate founded by Jannie Mouton, which still owns 28.5% of Capitec. The business began life as a micro-lender, essentially making 30-day loans. The introduction of the National Credit Act in June 2007 greatly assisted the bank’s ambitions, as the previously murky world of micro-lending came out of the shadows with the introduction of regulations that legitimised the industry and provided explicit guidelines on how and at what cost unsecured loans could be extended. INSTANT DECISIONS

With the benefit of being a brand new company, Capitec’s architects were able to build a state-of-theart information management system. Capitec branches are paperless, and decisions regarding the duration and price of loans can be made in seconds. The bank began moving into areas where the ‘big four’ – South Africa’s four largest retail banks: Absa, Standard Bank, Nedbank and First National Bank – were not represented or were poorly represented. While the surge in the bank’s profitability came on the back of a 30-40% growth in advances over the last few years, the health of the

Sipho Maluka/Sunday Sun/Gallo iMaGeS/Getty iMaGeS


Slowing growth in the unsecured lending market 29



25.9 25

22 22.5 20

2012 Q3

2012 Q4

2013 Q1

consumer in South Africa has been the subject of intense debate. The latest figures released from the National Credit Regulator indicated a decline in unsecured credit extended between the second and third quarters of 2013. At the same time, economic growth has been tepid, and competitors like African Bank have had nasty surprises in their collection rates. So what are analysts saying about the state of the unsecured lending market? Macquarie Group banking analyst Charles Russell says: “We are quite concerned about the situation. Non-performing [unsecured] loans are at their highest level since 2009. The environment in which to collect loans is not getting any easier either. With specific reference to Capitec, we have questions on the amount

2013 Q2

20.8 2013 Q3

4.7m clients make up the 12-yearold bank’s customer base

necessary to adequately provision for restructured loans, but on the whole their banking platform and their aggressive provisioning of non-performing loans makes their model more robust than [that of] some of their competitors.” CAuTIOuS ACCOuNTINg

Capitec has been especially cautious in the provisioning of bad debts, choosing to write off loans after the first missed payment. At the same time, the success of its low-cost bank accounts means that fee-based income is rising. Whenaskedwhetherhethought Capitec’s stratospheric growth rates could be sustained, incoming chief executive Gerrie Fourie explained: “Our focus is to offer a banking product that resonates with people of all income levels. It appears that we have managed to offer a simple, transparent, easily accessible product that increasingly gains market acceptance. We do not expect this to change in the year to come.” So while lower growth rates can be expected in the extension of credit, the bank plans to power ahead with the roll-out of its banking products, like the Global One account,whichhasafixedmonthly fee of R4.50 ($0.40). With many South African banks expanding into the continent to find growth, is this the next step for Capitec? Fourie says: “The bank’s intention from day one was to take the model internationally, but this will only be done once we have a strongfootholdinourlocalmarket. [So] we do not foresee that we will expandbeyondourbordersduring the next financial year.” But before it does so, Capitec and the broader lending industry will seek to convince the market that the phenomenal growth rates enjoyed prior to 2012 do not hide the weakness of the unsecured loan sector. ● Warren Dick in Johannesburg

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dossier transport

Riding the rails Ethiopia and Kenya are in a race to complete ambitious railway projects, but while Addis Ababa is in a frenzy of construction its East African neighbour may have hit the buffers

By Elissa Jobson in Addis Ababa and Marshall Van Valen


t Meskel Square, in the heart of Addis Ababa, traffic is even more chaotic than usual as cars, buses and pedestrians weave around the 5.5m-high pillars now straddling an eight-lane highway. Confusion reigns too at Mexico Square to the west and Megenagna roundabout to the east – evidence that work on the city’s light rail transit (LRT) system is progressing at a phenomenal pace. East Africa is home to a series of promising rail projects, from

Kenya’s standard gauge line to the railroad linking the Ethiopian capital to the port of Djibouti. Ethiopia’s projects are far more advanced – they benefit from the wholesale support of the government – while Kenya’s are lagging behind. The railway to link South Sudan to the port at Lamu lacks investment, and the development of the new standard gauge line is bogged down in debates about how the contract was awarded. In Ethiopia, two twin-track lines will bisect Addis Ababa north to south and east to west, diving un-

5,000 km

Planned length of Ethiopia’s national railway network

derground along certain sections and, as in Meskel Square, rising up high on elevated tracks. Trains will run for up to 18 hours per day at intervals of three to six minutes at peak times and will be able to carry a maximum of 60,000 passengers per hour. With journey times from theperipheryslashedbyuptotwothirds, the LRT has the potential to revolutionise transportation in this fast-growing city. “Groundwas broken on31January 2012 and the first trains are expected to start running on 1 January 2015,” says project manager

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Carl de Souza/afp


Behailu Sintayehu, adding that 52% of the construction has been completed so far. More than 3,000 Ethiopianlabourersandengineers, overseen by the main contractor China Railway Engineering Corporation (CREC), are working in shifts around the clock to meet the ambitious deadline. networking the country

This first phase of the LRT scheme is expected to cost $475m, with 85% of the financing in the form of a loan from China Export-Import Bank. The Ethiopian government the africa report

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is funding the remainder. A second phase,whichwilldoublethelength of the track and reach further into the city’s suburbs, is also planned. Aside from the Addis Ababa mass transit system, the Ethiopian Railways Corporation (ERC) – the body charged with realising the government’s bold rail strategy – has also begun construction of a 5,000km network that will crisscross the country, stretching into almost every area of Ethiopia. “The main purpose of the national network is to connect Ethiopia economically and

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Addis Ababa’s light rail transit system takes giant steps across the cityscape

increase access for imports and exports,” explains Abebe Miheretu, head of information and public relations at the ERC. The routes will link the country’s main productive centres, allowing for the swifter transport of commodities such as sugar, charcoal, potash and coffee, he continues. They will also extend to the borders with Djibouti, Sudan, South Sudan and Kenya. Henok Assefa, managing partner of Precise Consult International in Addis Ababa, is convinced of the economic benefits of the rail network. “Part of the poverty


dossier | transport




SOUTH SUDAN Mombasa to Bujumbura (Burundi) and Kisangani (DRC) Lamu port to Juba UGANDA (South Sudan) Nairobi to Addis Ababa (Ethiopia) D.R.C.


Lokichogio Turkana Lake







china controversy



Victoria Lake





Lamu Indian Ocean


Tanganyika Lake

that we have in Ethiopia is a direct consequence of the unintegrated nature of the country,” he says. “Bringing in the resources from the rural areas for processing is a problem. Part of that is transportation costs being high.” The majority of goods entering and leaving this landlocked country travel by road to and from Djibouti. It is an expensive and time-consuming journey that, according to some manufacturers, can cost up to $4,000 per container. “For a country that is looking to grow richer by light manufacturing, where margins are very low, you need to be doing volumes and railways become a very handy instrument,” says Henok. ethiopia thinks ahead

As a result, the ERC’s priority is the linefromAddisAbabatotheportof Djibouti.Thegovernmentawarded this contract to CREC and China Civil Engineering Construction Company, and so far around 25% of the project has been completed. The government is using the first phase of construction of both the LRT and the national rail network to build capacity for domestic industries. Contractors conduct training for local staff and the Institute of Technology has opened at Addis Ababa University specialising in engineering. The government is sending promising undergraduates to Russia, India

The Nairobi government says that the project will be beneficial because it will reduce freight costs from $0.20 per tn/km to $0.08 per tn/km. In late January, Kenyatta said “the standard-gauge railway must and will go ahead for us to achieve our development agenda,” and said that critics are sore losers who lost out on the contract.

and China to continue their education. The government hopes that the second phases of the LRT and rail network projects will be carried out entirely by Ethiopian enterprises, says Abebe. Amid two parliamentary investigations and a court case against the contract for the standard gauge line that will link Nairobi and Mombasa, Kenya’s rail projects have been slow to develop. In November 2013, President Uhuru Kenyatta laid the first stone for the new line, which will compete with the colonial-era narrow gauge line managed by Rift Valley Railways. The company is doubling its number of locomotives this year, but the long-term viability of its concession is now in doubt. China Export-Import Bank has agreed in principle to provide 85% of the finance for the standard gauge line, which estimates put at a cost of $5.3bn. However, transport principal secretary Nduva Muli told the Public Investments Committee in early February that the cost of the project had not been agreed and the finance deal had not been signed. The first phase will cover 500km, while the second phase would link the line to the Ugandan capital of Kampala. Work is expected to begin in July of this year and last four years. The government started the process of buying up land along the railway’s proposed path in February.

60,000 passengers per hour will be the capacity of Addis Ababa’s LRT system


Estimated cost of Kenya’s new standard gauge railway

The Chinese and Kenyan governments signed a state-to-state contract that includes a provision that China Road and Bridge Corporation (CRBC) will carry out the work. Groups opposed to the deal say that there are no provisions in the constitution for single-sourced deals like this one and point to the fact that the World Bank banned the company from participating in its bids due to corruption involved with a contract in the Philippines. Critics also argue that the deal allows CRBC to conduct the feasibility studies, so there is no independent oversight on costs, which they say are inflated and more expensive per kilometre than its Ethiopian counterpart. The authorities say the deal is structured like this because the previous government under President Mwai Kibaki had shopped around for financiers and found Beijing to be the only party interested. With China Merchants Holdings having signed a deal with the Tanzanian government in May 2013 to build a port, special economic zone and railroad network at Bagamoyo, competition in East Africa’s transportation and other sectors is heating up. The Ugandan government has now agreed to buildapipelinethroughKenyathat could terminate at the new port under construction at Lamu, in northern Kenya. Both the Kenyan and Ethiopian governments would like to serve as South Sudan’s access route to the coast, so being the first across the finishing line is crucial for wooing the Juba government. The ports at Bagamoyo and Mombasa can both attract trade from Rwanda and the Democratic Republic of Congo, providing East Africa with some of the continent’s densest rail networks. ●

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dossier | transport

Abidjan port’s upgrade will give it the largest capacity in West Africa

nabil zorkot



Abidjan aims for regional supremacy

monopoly row

Côte d’Ivoire has launched massive upgrades to its ports to support the growth of the natural resource sector and to attract more of the regional transit trade


uoyed by the economic recovery of the past two years and rising traffic levels, the Côte d’Ivoire government is implementing large-scale investments to upgrade its two international harbours, Abidjan and San Pedro. The Abidjan harbour is the site of a $2.5bn expansion project, due to be completed in 2020. The vast project comprises the construction of a second container terminal, the expansion of a minerals terminal and the enlargement of the Vridi Canal. The plans will enable the port to handle 2.25m twenty-foot equivalent units (TEUs), which would make it the port with the largest capacity in West Africa (see page 84). The Port Autonome d’Abidjan, the country’s largest port, recorded a traffic increase of 7% in 2013, which is a provisional figure that does not include oil shipments. In 2012, it handled 21.7m tn, a 31% rise from the 16.6m tn recorded in 2011. Container traffic

also expanded 16% over the same period to 633,917 TEUs. These figures are expected to rise even more. As the economy of the world’s largest cocoa producer is bouncing back following the end of a decade-long political and social crisis in 2011, gross domestic product growth reached 9% in 2013. Abidjan port director Yacouba Hien Sie says that the port plans not only depend on Côte d’Ivoire’s growth. He says the goal is to “reposition our port and give it the opportunity to fully play its role to the benefit of the national and regional economy”.

picto/graph 2.25m TEUs

disputed tender

In December 2013, the Ivorian authorities and Bolloré Africa Logistics signed a public-private partnership deal, paving the way for the construction of a second container terminal. According to the

government, investment in that project will amount to as much as 403bn CFA francs ($825m), including 243bn from the government. The new terminal will have a 1,100m long and 18m deep dock. Work is due to last four years. The deal was signed despite a disputed bidding process. Bolloré – which already runs the first container terminal – and its partners beat bids from two groups led by Geneva-based Mediterranean Shipping Company and Marseille-based CMA CGM. The competition department of the Union Economique et Monétaire Ouest-Africaine is still investigating the tender won in March 2013 by Bolloré’s consortium, which includes France’s Bouygues and APM Terminals.

Expected capacity of Abidjan’s two container terminals from 2018

In May, CMA CGM’s consortium called for an annulment of the bid and made an appeal to Côte d’Ivoire’s public procurement authority. After the regulator dismissed the appeal, the group brought the case to the West African economic body, citing irregularities in the pre-selection procedure, non-compliance with competition laws and an arbitrary award process. Commerce minister Jean-Louis Billon also denounced the monopoly created by the deal, saying Bolloré should not have been allowed to bid because it controls the first terminal.CMACGM decided to drop the challenge in July, but its partners have not withdrawn their complaint. Despite criticism from many economic operators, who are worried about high costs due to the lack of competition, the government said in January the new terminal will improve the harbour’s competitiveness and lower the prices by as much as 40%. Among the other projects included in the upgrade of the ● ● ●

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dossier | transport

● ● ● Abidjan port, the minerals terminal will be expanded to meet demand from the booming min­ ing sectors in Burkina Faso, Côte d’Ivoire and Mali. The port author­ ities aim to handle 3m tn of miner­ als,includingmanganeseandzinc, by 2020 – up from 300,000tn cur­ rently. China Harbour Engineering will also enlarge the Vridi Canal to enable larger ships to dock. The works, due to last three years, are supposed to start this year. In the meantime, the western port of San Pedro, the country’s

cashews to 17,000tn from 2,000tn recorded in 2012. The port au­ thorities target a goal of 4.5­5m tn of goods in 2014, and as much as 10m tn in 2015. San Pedro too will be upgraded. Officialsarebankingonthemining potential in the west of the country to build a minerals terminal. The new terminal project, estimated by transport minister Gaoussou Touré to cost $2bn, includes a 500km rail line linking the port to nickel and iron­ore mines. ●

main port for cocoa exports, also aims to expand and boost its traffic by increasing trans­ shipments and attracting cotton and cashew exports away from the port of Abidjan. The port has forecast that its traffic will rise 31% in 2013 to 4.2m tn from 3.2m tn a year earlier. Transshipments were set to in­ crease to 2.8m tn from 1.9m tn in 2012. The harbour has begun to ship cotton from Mali and handled 21,000tn of the commodity last year while boosting exports of

Olivier Monnier in Abidjan

Ghana’s oil industry drives port growth Upgrades at Tema mean that a rig services industry can develop, while the port at Takoradi will grow to compete for regional trade

goods across the country and to serve as a more efficient transit point for neighbouring countries. The China Development Bank is providing $450m for the Takoradi expansion. Another €197m ($267m) facility comes from Belgium’s KBC Groep. Bel­ gian company Jan De Nul Group is doing the construction work.



he Ghana Ports and Har­ bours Authority (GPHA) has plans to turn Tema into one of West Africa’s highest­capa­ city ports and to set up an oil ser­ vices yard, but shippers maintain that high fees are holding back the port’s development. A $2.5bn expansion at Tema and Takoradi is underway. Due to reach completion in 2018, Tema harbour should be able to handle 2m TEUs per year, rivalling the expanded port of Abidjan. Most recent available statistics from the GPHA show that 822,131 TEUs passed through Tema, Ghana’s main port, in 2012 whilst last year Lagos handled 1.4m. With two new cranes inaugurated in Janu­ ary, turnaround time for ships at Tema is expected to fall from six days in 2013 to four days this year. Bidding for the Tema expan­ sion ended in late January. The planned upgrade includes five phases, and contractors will build eight berths. One of the final stages includes rig repair facil­ ities and an oil services terminal

All rights reserved


Takoradi port’s expansion is part of a wider infrastructure programme for Western Region

for the country’s growing oil and gas industry. While Tema is yet to begin its second phase of expansion, work at Takoradi started in December 2013. Growth at the Western Re­ gion port is already rising, with transit traffic up from 6,000tn in 2012 to 39,000tn in 2013. Total traffic at Takoradi went from 5.3m tn in 2012 to 5.5m tn in 2013. Works at Takoradi are expected to be finished by 2016 and are part of a wider infrastructure pro­ gramme in the Western Region, the base for many oil companies operating in Ghana’s offshore. Roads and railways are being con­ structed to ease the transport of

Traders are not satisfied with the management of the port. In January, a group of shippers from Burkina Faso, Mali and Niger peti­ tioned the GPHA to drop a transit fee that it charged on some goods. Paul Asare Ansah, GPHA pub­ lic affairs manager, says there has not been any official increase in transit tariffs: “There was a new customs officer who had just been posted to the transit yard and was trying to re­introduce physical es­ cort at a fee for selected products like textiles and cooking oil. Ac­ cording to him, these goods were prone to diversion. The issue was reported to the commissioner of customs who has since ordered them to stop the physical escort.” Ghana Shippers Authority has received complaints about costs as well as members of state agencies trying to extort money. In Decem­ ber, Daniel McKorley of McDan Shipping Company said Ghana is losing out to Côte d’Ivoire and Togo because of high fees and management problems. ● Billie Adwoa McTernan in Accra

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dossier | transport


Struggling SAA begs for bailout Fighting a low rand and high fuel costs with its ninth turnaround plan in 13 years, South African Airways urgently needs a cash injection


outh African Airways’ (SAA) executives are caught between their continental ambition and lack of cash. Technically insolvent, SAA is reliant on a R5bn ($443m) government guarantee to operate while discussions about a cash injection continue with the treasury. The size of the bailout required has not been disclosed, but an announcement is expected at the end of March. Monwabisi Kalawe, who took over as chief executive in June 2013 following a purge of board members and executives in the latter half of 2012, says the board is investigating several countries in West Africa as a potential host as it tries to compete with Middle Eastern carriers. “They have been successful in absorbing air traffic to the Middle East and then distributing it. This is a risk for an airline situated at the bottom of Africa. Setting up a hub in West Africa is our attempt to mitigate that risk,” Kalawe says. SAA has shortlisted Nigeria, Ghana and Senegal for its hub. It expects it will take a year or longer to finalise negotiations, but this will require an additional capital injection from the treasury. smoother transit

SAA is also lobbying to scrap transit visas, which would make Johannesburg more attractive to passengers travelling toother parts of the continent. “What we want to

2010 FIFA World Cup orgAnIsIng CommIttee south AFrICA vIA getty ImAges


SAA’s West African hub would allow it to compete with Middle Eastern carriers

35% Fuel cost’s contribution to SAA’s operating expenses. Bosses want new widebody and fuel-efficient planes

see is SAA being the flight of choice on the continent,” Kalawe says. Most pressing, however, is stabilising SAA’s finances. Its results for the financial year ended March 2013 were delayed by five months as talks continued over the bailout. Despite passenger numbers growing by 8% and the savings realised as a result of its ‘Gaining Altitude’ turnaround strategy, a 13% decline in the rand against the United States dollar contributed about R700m to its after-tax loss of R1.2bn. The rand has declined by more than 30% since then, raising fears about the losses it will suffer in the current financial year. “The impact of the weakening rand is severe,” says Wolf Meyer, SAA’s chief financial officer. Increasing its technical operations on the continent will grow dollar-based revenue and act as a natural hedge, Meyer explains. Even without the challenge of a weakening rand, turning around the airline and reaching the breakeven point by 2017/2018, as envisionedbytheturnaroundplan,will be no easy feat. Gaining Altitude is the ninth turnaround plan in 13

years. The company has not made detailed targets from the latest plan public, so it is impossible to gauge whether the plan is working. fuel cost imperative

Political interference has been rife. Crucial to the plan is upgrading the fleet to more fuel-efficient planes, yet public enterprises minister Malusi Gigaba forced the board to withdraw a July 2013 request for proposals for 23 new wide-body, long-haul planes saying it lacked “crucial elements of industrialisation and localisation, which are vital to South Africa’s policies”. New planes will cut SAA’s fuel costs, which are currently 35% of operating expenses. Considering not a single SAA long-haul route is profitable and that plane purchases typically have a lead time of five years, finalising the contract speedily is of great importance. There is no date for finalising the new request. “We are grappling with this new requirement for industrialisation and benefiting South Africa,” Kalawe explains. Gigaba also instructed the board that no job cuts will be allowed as part of SAA’s plans, as the “social and political cost is very high”. ● Jana Marais in Johannesburg

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day in the life Extraordinary storiEs of ordinary pEoplE

SHIFTING GEAR Alice Nana is a motorbike taxi driver in Cameroon’s economic capital, Douala. She braves the insults of her male counterparts to put her kids through school


see it each and every day: the prying stares of surprise. But I don’t care, and who are they to judge me? All I have at the back of my mind is how to feed and cater for my three kids. I was born to a family of 13 girls in the West Region of Cameroon, and I lost my dad at a very tender age. I dropped out of primary school like most of my other sisters. Only three of them made it to university. Living with a jobless mother, we all knew from early on that we had to struggle to survive, and so I followed my boyfriend to Douala a couple of years ago. He ended up losing his job and finally travelled to Europe, abandoning me with the kids. I did not hear from him for six long years. In fact, I’ve still not heard from him, and I can neither tell if he’s alive or dead. So two years ago, I decided to get into the motorbike taxi business, and I don’t regret a thing. Where did I get the money from? I must be frank with you. I am still a beautiful girl, so I have had several boyfriends since David left me. Some have been kind enough to support me in bringing up the kids, and I saved enough to buy this bike. That’s close to 400,000 CFA francs ($825). I am still saving, and I can beat my chest and say that today I am the proud owner of two bikes.

A ruthless jungle

Of course, it’s a man’s world and the challenges keep swelling on a daily basis. In Douala today, you can easily count 300,000 motorbike taxi drivers and even more. It is a ruthless jungle where disrespect for the highway

Ntaryike DiviNe Jr


code is the norm. I witness fatal accidents every day, and look at my leg! I’ve been a victim of four accidents, but I survived. Every day, I am served the most abominable curses by some of my male contemporaries who think I should be in the kitchen cooking for my family and bearing children. But that’s life, and I know I must be courageous and bear it. And the police officers are not making life any easier. They will go any length to squeeze a bribe out of your pockets, even if your documents are all in order. My passengers are mostly men. I criss-cross both urban and rural Douala on a daily basis, covering at least 200 kilometres every day and penetrating some the city’s furthest enclaves. Some of the men I transport seek me out of curiosity, while others come to try and seduce me. Others have tried to seize my bike by taking me to a bar to get me drunk. But I know what I want and that’s making as much money as possible for my kids and it takes tons of courage. I can boast of a day-to-day profit of about 7,000 CFA francs. I’m not sure what the kids think, but I guess all they know is that their mum is a hard worker. They hardly go hungry, and their school fees are paid on time. They dress well for an average woman like me and are all working hard at school. I’ll not encourage any of them to engage in the motorbike business in future. I want all of them to get the best education possible, and that’s why I’ll keep saving as much as I can. How much I have in the bank? No. I cannot tell you that, it’s like showing you my pants. I can’t. ● Ntaryike Divine Jr in Douala the africa report

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