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How Africa is getting educated

October 2017


A story of feast and famine


South African banks




FOREWORD WELCOME TO OCTOBER’S edition of African Business Review. A packed issue this month kicks off with our story on UNICAF CEO Nicos Nicolaou, who discusses how low-cost qualifications from the UK are helping to provide vital expertise to African students. These qualifications are proving a crucial source of skills for African companies, and UNICAF is at the forefront of this movement. China is also investing heavily in the region, not least in the tourism sector, where numerous large airport projects are helping to bring more visitors to African destinations. Jackie Cosh explores how investment is impacting Ethiopia in particular. From Ethiopia to Kenya, and a special mining focus involving the country’s Chamber of Mines and Ministry of Mines. Both contribute insightful forewords before an exclusive look at the operations of Base Titanium and Hummingbird Resources. Other exclusive insights this month span the energy, technology and supply chain domains, featuring interviews with Woolworths and Econet Wireless’s Vinod Sharma. Enjoy the read, and as always, tweet your feedback @AfricaBizReview

Enjoy the issue!

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ETHIOPIA A story of feast and famine


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Kenya Chamber of Mines MINING ASSOCIATION


November 2017


Vinod Sharma Econet Wireless Zimbabwe TECHNOLOGY


The Ministry of Mines, Kenya MINING ASSOCIATION


Base Titanium MINING


Hummingbird Resource MINING



HOW AFRICA IS GETTING EDUCATED Online educational platform UNICAF is broadening the reach of higher education opportunities across subSaharan Africa with its innovative online distance learning systems. We spoke with CEO Dr Nicos Nicolaou about the organisation’s plans for expansion and the challenges it is geared to overcome to bring education to all… Written by: DA N BR IG HTMOR E

INTERVIEW AFRICAN COUNTRIES CANNOT keep up with the demand for higher education places. With increasing numbers of students unable to enroll in their home countries, and facing difficulties obtaining visas to study in Europe, distance learning is experiencing a boom on the continent. At the forefront of a new kind of ‘blended learning’ experience, which marries both online and on-ground approaches and online educational platform UNICAF is seizing the initiative to offer Africa’s students alternative pathways to achieve their career goals. UNICAF’s CEO Dr Nicos Nicolaou believes the spectre of Brexit has had an effect on the opportunities available to African students. “Students in Africa are looking for quality,” he says. “This is why so many of them were aiming to study overseas but, in the last couple of years, and with Brexit, visa issues have become increasingly tough and costs have become prohibitive. It means we can provide a great alternative for them: high quality degrees with international recognition at a very low cost. European universities and educational institutions are facing 9

INTERVIEW huge problems with this and that’s why what we do is a solution for them to take the education to the student.” The issue of access is a very real problem for African students. At UNICAF’s recent conference in London, 250 students applied for visas to attend but only 70 were successful and able to take part. There are also barriers to entry in their home countries. So how does UNICAF meet the needs of its students from a diverse range of backgrounds and locations across a continent that can still struggle to provide even a reliable electricity supply, let alone a consistent internet connection? “We have a VLE (Virtual Learning Environment) designed by our in-house software development team,” explains Nicolaou. “It’s configured in a way that’s easy to navigate using one button and accessible by mobile devices, because 75% of our students are accessing our systems this way. We also allow them to download the content so they can get what they need for their off-line studies. This is crucial in Africa where we’ve also designed our VLE to work with a low bandwidth connection.” 10

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REACHING OUT Nicloaou believes that UNICAF’s blended e-learning approach is what sets it apart from its competitors on the continent. Students have the opportunity to back up their virtual learning at on-ground facilities where they can access computer centres and digital libraries at generator-driven sites where electricity is available 24/7 to help them with their downloading. “Blended learning relates mostly to undergraduate studies,” he explains. “Initially, we targeted post-graduate students - working professionals with little time to attend locations. Undergraduates require some face-to-face tuition so we have incorporated material into our online portal where a local tutor can assist

UNICAF video: Study online and graduate on campus

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UNICAF’s VLE (Virtual Learning Environment) the student at our on-ground facilities. These face-to-face sessions are complementary to the online material and tutoring. It’s a new development. We’re now in nine countries and expanding our local operations rapidly across the continent.” So what partnerships with educational institutions is UNICAF leveraging worldwide to deliver its educational programs? “Currently, we have students in partnership with Marymount California University, the

University of Nicosia in Cyrpus, the University of South Wales in the UK and we have the UNICAF University in Malawi,” says Nicolaou. “We are also getting a lot of requests from other institutions, mainly in the UK and US, that are interested in the African market. We are examining if some of these are able to offer their courses through our platform in Africa so we can increase the choices available for students.” UNICAF is a part of EdX 11


“So many of them [Students] were aiming to study overseas but, in the last couple of years, and with Brexit, visa issues have become increasingly tough and costs have become prohibitive. It means we can provide a great alternative for them: high quality degrees with international recognition at a very low cost” UNICAF’s CEO Dr Nicos Nicolaou 12

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U N I V E R S I T- E : H O W A F R I C A I S G E T T I N G E D U C A T E D

80% The average cost saving for course fees by sub-Saharan students attending the UNICAF’s scholarship program


The number of students that UNICAF plans to enrol by 2020

(established in 1980) and offers a diverse range of courses with its MBA program the most popular and longest running. “We also have a number of postgraduate programs such as MSCs in psychology and education,” adds Nicolaou. “Then we have programs in computer science and are also offering new courses in the project management field. There is no limit to what you can do online, within reason. We have to look at costs and service to find out what is needed in terms of new programs for students. If there is a demand we can target that.” UNICAF’s Vice-Chancellor Dr Kevin Andrews echoes this sentiment and is excited about the potential for growth on the platform. “It sounds like science fiction but if eye surgeons can perform an operation in one country while the patient is in another, clearly the portfolio of what can be taught online is limitless,” he says. “Technology is speeding up education, which begs the question: should it take three years to gain a degree? This is where UNICAF can offer a flexible and timely alternative.”

INVESTING IN THE FUTURE To achieve its goals, UNICAF works with several investors including CDC Group, a development finance institution which is part of the UK government. “This alliance allows us to offer scholarships to students so they can pay a fraction of the fees,” says Nicolaou proudly. “An MBA in the UK would cost a minimum of £12,000 for an interational student plus accommodation, travel and living costs. We can offer this for just £3,000; a huge saving and 13

INTERVIEW students don’t have to leave their country, their jobs and their families. £35m has been invested so far.” Starting with just 15 students in 2012, UNICAF now helps educate over 11,000. “I’ve worked in education for over 30 years,” says Nicolaou. “At the University of Nicosia, traditionally we used to recruit international students from all over the world, which gave us the opportunity to visit Africa many times to give presentations, speak to governments, institutions and The VLE tech allows UNICAF to offer online education to students through its public universities


October 2017

students. As it became increasingly difficult for students to enrol overseas we saw there was an opportunity to take this level of education to them.” With plans to enrol 60,000 students by the year 2020, UNICAF’s scholarship program has helped to cut the cost of attending university for thousands of sub-Saharan students by up to 80%. Transforming higher education, it makes something that was out of reach for so many a viable option on a continent which boasts the fastest-growing

U N I V E R S I T- E : H O W A F R I C A I S G E T T I N G E D U C A T E D

middle-class in the world and accounts for nine of the 15 fastest-growing global economies. “If Africa is to maintain its lead, it’s imperative higher education becomes a more affordable option,” maintains Nicolaou. “We can enable the continent to create a strong, qualified workforce to meet the needs of a growing economy.”

DEMAND IS INCREASING The current state of higher education in Africa is falling short. For example,

are discussing an arrangement with the government in Rwanda,” says Nicolaou. “We are also offering the same type of collaboration with other countries such as Kenya, Uganda and Ghana. They have good infrastructure to deliver what we offer and there are large numbers of students who can benefit from our programs.” “We have the experience, the know-how, the technology and the marketing capability,” asserts Nicolaou. “A lot of universities that

“It sounds like science fiction but if eye surgeons can perform an operation in one country while the patient is in another, clearly the portfolio of what can be taught online is limitless” UNICAF’s Vice-Chancellor Dr Kevin Andrews in Nigeria there are 1.7mn high school graduates, yet only 500,000 university places available to them. It’s a real problem, but UNICAF is well placed to solve it with its plans for expansion. It doesn’t just offer its own programs, it also helps institutions and governments use its VLE tech to offer online education to students through its public universities. “We

want to recruit international students and go online find it hard to put together the resources to achieve this and to design the learning systems needed. Primarily this is something that has only been offered in the US at scale. But obviously systems designed for the US market are not designed to work in Africa. We are maybe the only ones to have done so successfully.” 15


A story of feast and famine Ethiopia, a country wounded by struggles, is experiencing something of a boom. Its travel industry is burgeoning and with massive Chinese investment, the east African country is starting to turn a corner… Written by JACKIE COSH

MOVED BY THE plight of the Ethiopian people struggling with famine in 1984, Sir Bob Geldof launched Band Aid and raised millions of pounds in doing so, inspiring many other countries to do the same. More than 30 years on and the lyrics of “Feed the World” have 16

October 2017

not been forgotten and nor has that picture that was broadcast around the globe; starving, malnourished children staring meekly from our television screens. But while it may have traditionally lagged behind other nations on the continent, the east African country is keen to shake off its negative


Timkat festival in Gondar

image. In fact, the government plans to make Ethiopia a middleincome country by 2025. Average economic growth has been 10% for the last decade, due in part to a change in government policy that engages private business and encourages investment. The new ‘African Lion’ is close to meeting several important Millennium Development Goals of the United Nations, according to the World Bank. The main generator of foreign exchange, which for many years was coffee, is now Ethiopian Airlines, the country’s national airline. A

report by British accounting firm PwC found that tourism arrivals are expected to reach 918,010 in 2017, a rise of 5.7% in the past year. Intrepid Travel offers 11 different itineraries to Ethiopia, with trips largely designed around local events and festivals such as Timket, Meskell, Mariam Tsion, and Palm Sunday. It has seen significant growth in the numbers of people wanting to travel to the country, and is launching a new itinerary in 2018 to keep up with demand. “Ethiopia has recently become a much safer place to visit, meaning 17

INSIGHT ‘Addis Ababa Bole airport, which has seen several developments over recent years, is currently undergoing a US$345mn expansion project, funded with a loan from China’s Exim Bank’

Church of St. George, a UNESCO World heritage in Lalibela

Erta Ale volcano in the Afar Region of northeastern Ethiopia 18

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that more and more people are becoming less hesitant to visit this fascinating destination,” says Jenny Gray, regional product manager for Africa at Intrepid. Andrew McLachlan, Carlson Rezidor Hotel Group’s Senior Vice President, Africa & Indian Ocean, cites its strong economic growth rates as a key reason for the company investing in Ethiopia. “The Carlson Rezidor Hotel Group identified Ethiopia as one of the countries in Africa where we could have scaled growth across our brands in a number of market segments where we can offer 5-star Radisson Blu hotels to 3-star Park Inns by Radisson,” he adds. “Ethiopia is the second-most populous nation on the African continent after Nigeria, currently home to over 100mn people. It is also the most populous landlocked country with the third largest diplomatic community in the world.” Ethiopian Airlines, which currently operates 1,681 weekly flights and 240 daily flights to the country, plans to increase annual revenue from $2.71bn in 2016/17 to $25bn by 2025. In order to do that, it announced in August that it will be adding 59 aircraft to its fleet of 92 over the next eight years. Addis Ababa Bole airport, which has seen several developments over recent years, is currently undergoing a US$345mn expansion project, funded with a loan from China’s Exim Bank and is being constructed by China Communications Construction Company Ltd. When complete, the airport’s passenger handling will increase from seven to 27mn. Girma Moges, founder and director of Tadele Travel, says that the country is unique in combining 19

INSIGHT ancient culture and history with extraordinary dramatic landscapes. “The Rift Valley mountain ranges in Ethiopia are numerous – with the Simiens perhaps being the best known,” she explains. “The country is also rich in endemic wildlife, particularly birdlife. Ethiopia also has a wonderful culture of hospitality – its people are welcoming and warm – and the fact that the country has never been colonised gives it a unique experience in the region.” Low labour costs and the close proximity to Europe has resulted in a recent boost to the leather and textiles industry in the country. Pittards, the UK leather products Male malachite Sunbird on protea bush


October 2017

manufacturer, which acquired the Ethiopian Tannery Share Company in 2009, opened a new factory in Addis Ababa in 2011. Chinese footwear manufacturer, The Haijian Group, which has been manufacturing in the country since 2012, has, alongside the China-Africa Development Fund, committed to investing $2bn over the next 10 years. This is expected to lead to employment for approximately 100,000 Ethiopians. Chinese investment in Ethiopia, and in fact in Africa as a whole, has increased exponentially since 1995 when the former Ethiopian Prime Minister Meles Zenawi signed an economic cooperation agreement with China. A series of forums on China-Africa co-operation followed, with the 2003 forum being held in Addis Ababa. In 2006, it was announced that a China-Africa Development fund would be set up to invest in agricultural, industrial, natural resources and infrastructure projects across the continent. A port has been built in Nigeria, cotton farms have opened in Malawi and a power plant has been built in Ghana, amongst many other projects.


With Chinese investment, cities like Addis Ababa benefit

In 2011, China was both the largest importer and exporter in Ethiopia, with the Ethiopian government keen to learn from a nation which, over the last 30 years, has seen its economy expand to become one of the world’s largest. The impact of this partnership and the resulting investment can be seen country-wide. Addis Ababa has experienced a construction boom, with new roads and buildings, as

well as the $475mn Addis Ababa rail project, which opened in 2015. But the shanty towns, so much a feature of Ethiopia, are still there. Electricity cuts still occur and the internet speed is notoriously slow. Residents of the Gambelle region have voiced complaints that they were forced off their ancestral land in order to make way for building work. Travel companies such as Intrepid are keen to stress the importance 21

INSIGHT ‘The country has so much to offer both for business as well as the leisure traveller. Addis is also home to Africa’s largest airline, and the seat of the African Union. As such, it is strategically important and a key hotel market’ Alex Kyriakidis, President and Managing Director Middle East and Africa, Marriott International


October 2017

African Union’s headquarters building in Addis Ababa


of considering local people and supporting locals when travelling. “As the country opens up we encourage travellers to be mindful of the choices they make when travelling, to respect and benefit local people,” says Gray. Ethiopia is certainly a country to keep a watchful eye on, especially for the opportunities it offers international businesses. Marriott Hotels International has two locations in the country and is happy with the growth in business it is seeing. “Ethiopia is one of Africa’s fastest growing economies and is culturally very rich,” says

Alex Kyriakidis, President and Managing Director Middle East and Africa, Marriott International. “The country has so much to offer both for business as well as the leisure traveller. Addis is also home to Africa’s largest airline, and the seat of the African Union. As such, it is strategically important and a key hotel market.” Ethiopia has a long way to go before its past is ever truly behind it, but there is certainly a lot more hope surrounding this extraordinary country, as it begins, what appears to be, an exciting transformation. 23



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Sasfin Holdings Ltd provides specialist business banking and private client financial services. Its divisions include business, capital, wealth, transaction and treasury, commercial solutions and corporate services. The bank became incorporated in 1987 and it currently employs 823 people. Its headquarters is in Johannesburg and last year it reported a revenue of $80mn.



Grindrod Ltd is a much larger company with a financial services group included in its divisions. It provides investment, asset management, property finance and retail services through Grindrod Bank and Grindrod Asset Management. Its revenue in 2016 was $720mn and it employs 5,880 people. However, last year it made total losses of $66.43mn.


October 2017



Capitec Bank Holdings Ltd has a revenue of $1.134bn. The company’s retail banking business sells a product called Global One that enables clients to transact, save and borrow. It provides business services such as card machines, workplace banking and salary transfers. The bank became incorporated in 1999 and currently has 13,070 employees. Capitec is based in Cape Town.



Investec Plc has a revenue of $2.940bn and is a specialist bank and asset manager providing a range of financial products and services around asset management, wealth and investment, and specialist banking. The company was incorporated in 1998 and currently employs 9,720 people. It has a global client base, but its South African head office is in Sandton. 27

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Bidvest Group Ltd reported a revenue last year of $5.314bn. It provides financial services among other services such as travel and consumer products. The group was incorporated in 1946 and currently has its head office in Johannesburg. It currently employs 114,000 people.



FirstRand Ltd contains the divisions First National, Rand Merchant, RMB and Wesbank among other franchises – the group became incorporated in 1966 – and through these it provides banking, insurance and investment services to retail, commercial, corporate and publicsector customers in South Africa and across the wider continent. As a whole, the group has a revenue of $3.419bn and employs over 45,490 people. Its head office is in Sandton. 28

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As well as Nedbank Limited banking, the Nedbank group also contains Go Banking and BoE Private Clients. As a whole, the group has revenue of $5.317bn and employs over 32,000 people. Some of the services it provides include a range of transactional, corporate, investment banking and market solutions. Founded in 1966, the corporation’s current headquarters is in Sandton.



Absa Bank Ltd is based in Johannesburg and employs 30,630 people. The company became incorporated in 1986 and its recent revenue was reported as $5.320bn. Absa provides retail, business, corporate and investment baking as well as wealth management. Its retail banking division provides home loans, vehicle and asset finance, personal loans and other services. 29

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Barclays Africa Group

With a revenue of $6.490bn, Barclays Africa Group Ltd offers products and services across personal and business banking, credit cards, corporate and investment banking, wealth management and insurance. The company includes, among other segments, Retail Banking South Africa and Business Banking South Africa. The company became incorporated in 1986 and its head office is in Johannesburg. It employs over 41,700 people. 30

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Standard Bank is one of the most recognised and acclaimed banking institutions in South Africa, if not the entire continent. Therefore, it’s not surprising that the bank topped the leaderboard to be crowned the most valuable banking brand in South Africa, and the third most valuable brand, in the country in general. By assets, Standard Bank is the largest banking group in Africa and with nearly 12 million customers it has firmly cemented itself as a key player in the ‘big four’ that dominate South Africa’s banking industry.


CREATING A LASTING LEGACY IN S.A. Written by: Laura Mullan Produced by: Justin Brand



Offering high-quality products and an attentive shopping experience, Woolworths dominates the South African retail market. Head of Non-Trade Procurement, Yogan Naidu, explains how the company is embracing its corporate responsibility to grow sustainably and transform the country


oolworths is a household name in South Africa; a retail giant that has managed to maintain customer loyalty generation after generation. However, for Woolworths, being a market leader is about more than just their fiscal success: it’s about creating meaningful socioeconomic transformation in South Africa. Founded over 86 years ago, Woolworths has a deep history in South Africa, garnering long-lasting support from customers who have remained loyal to the brand for decades. Yogan Naidu, Head of NonTrade Procurement, cites the company’s rich heritage as the reason why it remains a market leader today. “At Woolworths, we really pride ourselves on our rich history. I think the South African market really identifies with that because it is quite a historic and emotional market. Our core values give us a competitive edge because you can really see the impact we have made in the country. So, for instance, we were among the first local retailers to provide our


October 2017


“Our core values give us a competitive edge because you can really see the impact we have made in the country” YOGAN NAIDU, HEAD OF NONTRADE PROCUREMENT


31k employees with benefits that weren’t offered by some of our competitors at the time such as a pension fund, medical aid and maternity leave. I think our customers really identify with that.” A shopping experience like no other Customer experience can make or break a brand, and it is a core value which is ingrained into the ethos of Woolworths. When designing a store, every minute


October 2017

The total number of staff in Woolworths’ SA workforce

detail is meticulously considered to ensure that it offers customers the ultimate shopping experience. “If you look at the way that our stores are designed you can see that it’s a really comfortable place to shop,” reflects Naidu. “In my opinion, it’s the little touches and the customer service which makes Woolworths a market


leader. So, for instance, something as simple as a grocery trolleys in one of our stores will be of a superior quality to that of our competitors. “Not only do we pride ourselves on our hygiene standards and highquality products, but we also make sure that we take care of you as a customer when you walk into one of our stores. We invest heavily in research and development and the renovation of our stores to ensure that the shopping experience is

enjoyable for the customer.” A visual brand Visual merchandising and design is a vital tool that is embedded into Woolworths’ DNA. Over the decades, the company has worked alongside leading suppliers to source innovative, market-leading displays which connect with their customers on an emotional and visual level. “At Woolworths, we really try to communicate with our customers,”

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“Not only do we pride ourselves on our hygiene standards and high-quality products, but we also make sure that we take care of you as a customer when you walk into one of our stores” YOGAN NAIDU, HEAD OF NON-TRADE PROCUREMENT says Naidu. “If you walk around one of our stores you’ll notice that with our packaging, store design, and visual merchandising, we really speak to our customers and inform them about issues that matter to us. So, for instance, when we talk about sustainability, we talk to customers about how much electricity we currently use and how this is provided by green energy. We make information publicly available in our store environment. “Our suppliers, such as Global Display, are integrated into the business and that’s how we capture the customer’s imagination and deliver the ultimate customer experience. For example, if you walk into a Woolworths store during Christmas season you’ll see that our stores really embrace the festivities.”

Attracting only the best expertise A smile at the checkout goes a long way in the world of retail and no one is more aware of this than market leader Woolworths. Naidu says that the company has a workforce of over 31,000 employees and that the pioneering leadership of the company is crucial to nurturing growth and inspiring productivity. “Zyda Rylands, CEO of Woolworths South Africa, is such an inspirational leader. This year she won the global Woman of the Year award at the World Retail Congress retail awards in Dubai and our employees really look up to this. She drives us to better ourselves in terms of sales, social responsibility and customer experience. “Similarly, in my career, a number of the people who have worked with me

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SPECIALISTS IN PRINTING ALL UNDER ONE ROOF FOR OVER THREE DECADES NEON PRINTERS HAS PLACED ONE COLOURFUL BLOCK AFTER ANOTHER IN IT’S FOUNDATION TO BECOME A TOWERING GIANT IN THE PRINTING INDUSTRY. Our innovative quest for the optimum solution has placed us in the forefront of leading-edge technologies. Despite very humble beginnings, the company did not compromise on design, quality or delivery of service. In fact, meeting the needs of our dynamic customer base enabled us to develop quality solutions for a rapidly changing market place.

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want to work with me again in the future and I think that’s what being a great leader is about - it’s about creating an impression on an individual’s life that stays with them forever. “Our CEO Zyda has a passion to help others in the country. She shares her knowledge when visiting schools and encourages young girls to pursue careers in business. I don’t think we do that enough as leaders of corporate entities, especially in South Africa.”

A greater responsibility Corporate responsibility is a pressing issue in the business world and it is a value which Naidu is fiercely passionate about. “As a company, we have such a responsibility to stimulate the local economy so we’ve got to get out there, encouraging students, encouraging young entrepreneurs to look beyond the challenges or difficulties that present themselves on paper. I’m very passionate about it and that’s what we

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“We are really keen to engage with black-owned business and black, woman-owned businesses. We want to explore opportunities with suppliers in the market and significantly improve how we support small business, create jobs, and transform the country” YOGAN NAIDU, HEAD OF NON-TRADE PROCUREMENT


for life.

For us at Toyota Forklift, it’s about partnerships for life – where everyone wins. We value our business relationship with Woolworths and look forward to building the future together. Contact us for the complete solution in materials handling equipment


October 2017

need we to help elevate the country.” The challenge to be more responsible and sustainable is one which Woolworths embraces wholeheartedly with its proactive ‘Good Business Journey’. Launched over a decade ago, the bold plan hopes to make a difference in eight key areas: energy, water, waste, sustainable farming, ethical sourcing, transformation, social development and health and wellness. Achieving sustainability in a supply chain can’t be done overnight, but Naidu feels that the company is making significant strives to better South Africa as a country. Whether it’s saving 500bn litres of water or halving their energy impact by 2020, Naidu is confident that Woolworth’s is

leaving a lasting, positive impact in the country. “We feel a higher responsibility in the retail sector. We want to be ethical and sustainable whilst being a market leader,” notes Naidu. “We’ve even relocated sweets and chocolate away from the tills in a bid to tackle childhood obesity in the country.” Continually innovating Dominating the retail market for decades is an impressive feat, but for Naidu, the work doesn’t stop there. Innovation and continual growth are necessary for the retail giant to deliver its high-quality products and the ultimate customer experience. “I think Woolworths isn’t afraid to take leaps and to push boundaries

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1931 The year that Woolworths Holdings Limited (WHL) was established in the company,” explains Naidu. “That’s another characteristic of the business, we’re not afraid to challenge ourselves. We don’t just accept that we’re a market leader; we’re constantly researching and reinventing how we can optimise it and make it better.” An early adopter of technology, Woolworths was already using a computerised merchandising system by the early 1970s, and to this day the company continues to innovate in the sector and drive transformation. “I think people who are afraid of technology or don’t see the value of technology in business don’t understand where the world is going,” Naidu says. “If companies don’t keep reinventing themselves from a technology perspective somebody else is going to come along and


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Zyda Rylands, CEO


do it for them. Similarly, for a lot of companies nowadays, the supply base that you will have in 10 years’ time hasn’t even been invented yet. We embrace it as an organisation because not only does it create efficiency, it also gives you a global market reach that you never had before.” The road ahead As a retail giant, Woolworths has captured the hearts of the South African market. But with such visible successes, what is the company’s next move? For Naidu, the company

is determined to work to help grow, transform and develop their employees and suppliers in the belief that people are at the heart and foundation of their business. “We are really keen to engage with black-owned business and black, woman-owned businesses in particular,” concludes Naidu. “We want to explore opportunities with suppliers in the market and significantly improve how we support small business, create jobs, and transform the country. That’s our vision for Woolworths and that’s what I am really passionate about.”

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FINANCIAL WORLD Written by: Dale Benton Produced by: Vince Kielty


Vinod Sharma, CTO at Econet Wireless Zimbabwe, takes us through the ever-changing digital landscape of the global financial services industry African Business Review: Tell me a little about your role with Econet Wireless Zimbabwe. Vinod Sharma: You can find everything on my blog, but here’s a brief word or two about where I am right now. I have extensive experience in IT networks, telecom services, and the financial technology space, now exploring artificial intelligence to add value to myself and add to my skills, as machine learning is the future of every business and technology of today. I sit in a very key position to oversee the entire changing landscape of the financial IT i.e. fintech services sector. ABR:In our previous issue of African Business Review, you discussed the challenge


October 2017

that banking and financial organisations face in trying to keep costs low while ensuring the same high quality of services - is this still the case? VS: Unfortunately it’s the same case and I believe fintech will settle its score in the next couple of years. Keeping costs low is the prime idea, as this is a low margin business for low value transactions, if the cost at any time starts looking north, customers immediately start running south. ABR: With the continued growth of mobile payments, how has this impacted the industry? VS: The continued growth has made a positive impact to the industry


and will only continue to do so. As mentioned before, fintech will be settling down in the next couple of years and will rest for good in order to look at what it has got and how to make best out the tools in its pocket. One of the biggest tools is the data it has collected and continues to collect. It’s a time for data science and to explore every bit to see how cost, revenue, sales, growth, usage etc. can be optimised. In Africa, my belief is that this has gone up many folds. Zimbabwe is a unique case where growth

is at its highest level. Artificial intelligence will guide and work as navigator for this industry. ABR: What are the challenges that come with mobile payments? VS: There are some challenges like cost of transaction, ease of performing the transaction, acceptance by merchants, should it be close or open loop? The question on customers mind and at heart is “How secure is my transaction?” and time

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T�A�S���MI��� WITH

digital payments

Srinivas Nidugondi

SVP and Head, Mobile Financial Solutions, at Mahindra Comviva shares his views with African Business Review on mobile money evolution in Africa

1 How is Africa leading the world in mobile payments? In�Africa,�where�financial�inclusion�is�limited,�it�is�increasingly� becoming�clear�that�mobile�money�services,�such�as�EcoCash,� Airtel�Money,��range�Money,�MobiCash,�and�E-�ahab� promise�a�convenient,�affordable�and�more�scalable�alternative� to�traditional�banking.��y�leveraging�the�ubiquity�of�mobile� phones,�mobile�money�services�are�banking�the�unbanked� population,�meeting�financial�needs�of�millions�of�Africans� and�making�the�economies�cash-light.� �or�e�ample,�EcoCash,�largest�mobile�money�service�in� �imbabwe,�is�used�by��.7�million�subscribers.�EcoCash�has� helped�to�mitigate�the�cash-crisis�in�the�country�by�enabling�people� to�make�bill�and�merchant�payments,�transfer�money,�receive� salaries,�save�money�and�get�loans�digitally.�In����2�1��-17,� EcoCash�processed�transactions�valuing�US$�7.1�billion,�forming� a�significant�portion�of��imbabwe’s���P.�EcoCash�is� powered�by�Mahindra�Comviva’s�mobiquity®�Money�platform

2 How do you see mobile money evolving in Africa? Until�recently,�mobile�money�in�Africa�was�dominated�by�P2P� transfers,�given�the�migrant�population�and�informal�network� of�family�and�friends,�who�are�the�primary�source�of�financing.� �ut,�as�the�mobile�money�economy�matures�in�the�region,� we�see�a�diverse�set�of�use�cases�picking�up.�

�ot��ust�individuals,�government�and�enterprises�are�also� e�tending�the�use�of�mobile�money�by�making�salary� payments,�government�to�person�payments,�and�business� payments�digitally.� Another�important�area�worth�mentioning�is�interoperability� between�mobile�money�services.�Tan�ania,�Egypt,�and� Madagascar�are�some�of�the�countries�that�have�already� enabled�direct�fund�transfer�between�mobile�wallets� belonging�to�different�mobile�money�services.�This�has�set� the�path�for�other�countries�to�adopt�interoperability.���

3 How do you see banks responding to the rise of mobile money in Africa? �anks�have�reali�ed�that�they�have�to�act�now�or�perish� in�the�wake�of�the�mobile�money�economy.�So�they�are� collaborating�with�mobile�money�operators�to�facilitate� transfer�between�bank�account�and�customer’s�mobile� wallet.��n�the�other�hand,�many�banks�are�also�launching� their�own�digital�wallets,�with�better�customer�e�perience�on� top�of�their�mind.��ot�only�this,�banks�are�equipping�their� merchants�with�an�unified�acceptance�interface�that�is� compatible�with�all�digital�payments�channels�such�as�debit� and�credit�cards,�mobile�wallets,�Masterpass����and�m�isa,� simplifying�digital�payment�acceptance.��y�focusing�on� better�user�e�perience�for�both�consumers�and�merchants,� banks�are�creating�a�comprehensive�digital�banking�and� payments�ecosystem

4 How has Mahindra Comviva contributed? Mahindra�Comviva�is�a�global�leader�in�mobile�financial� solutions.�Its�solutions�are�deployed�by�over�1���telecom� companies�and�banks�in�more�than����countries,�enriching� the�lives�of�over�a�billion�people�across�the�world.�It�caters� to�both�the�issuing�side�as�well�as�the�acquiring�side�of�the� payments�business.�

The�region�is�also�showing�a�steady�uptake�of�mobile�money� merchant�payments�through�physical�and�virtual�companion� cards,���C�payments,�and�USS��based�mobile�payments.�

�n�the�issuing�side,�Mahindra�Comviva�provides�mobiquity®� platform,�for�mobile�operators�as�well�as�banks,�helping� them�to�transition�seamlessly�into�the�folds�of�the�digital� payments�economy.�mobiquity®�processes�more�than� ��billion�transaction�valuing�over�US$����billion�annually.� It�powers���of�the�top�1��mobile�money�services�globally.� In�Africa,�mobiquity®�powers����mobile�money�services�in� ���countries�transforming�the�way�Africans�save,�borrow,� transfer�and�spend�money.��

When�digital�payments�take�hold,�it�is�the�consumers�who�benefit� the�most.�The�cost�of�remitting�money�has�halved�in�many� countries,�with�mobile�money�based�international�remittance� making�it�safer,�faster,�and�more�affordable�to�send�&�receive� money�across�borders.

�n�the�acquiring�side,�Mahindra�Comviva�provides�payPLUS,� which�is�a�unified�payments�acceptance�solution�for�merchants� and�acquiring�entities.�payPLUS�enables�the�acceptance�of� multiple�digital�payment�instruments�through�a�single�interface,� facilitating�quick�and�seamless�payments�at�merchant�P�S.�

Micro-financial�services�such�as�savings,�loans,�insurance� and�savings�clubs�are�bringing�people�into�formal�economy.� People�who�used�to�stash�money�in�mattresses�are�saving� on�mobile�phones.�People�with�no�credit�history�are�getting� loans�instantly�based�on�airtime�usage.�


it takes to perform the transaction etc. For service providers, the biggest challenge is how much capacity needs to be designed and bought and how best to secure it. Companies have started managing their data as they manage their money. ABR: What is the financial industry doing to overcome these challenges? VS: There has been a lot of work in the form of innovations and technological advancement but still, there is a long way to go. To see a fully successful and useful industry there needs to be the implementation of technology in large financial services firms. Despite $480bn spent globally in 2016 on financial services IT, the pace of financial innovation from incumbent’s still lags behind fintech which received a smaller $17bn investment in 2016.   Big banks’ organisational structures block digital innovation due to their old mindset and refusal to acknowledge the truth that BaaS (Banking as a Service) is more efficient with a combination of BaaP (Banking as a Platform), which demands a complete change in value chain compared to traditional closed core platforms Functionally, a typical banking organisation sees IT as a cost centre and every one working in IT and technology as a cost rather than an asset.

“Functionally, a typical banking organisation sees IT as a cost centre and every one working in IT and technology as a cost rather than an asset” VINOD SHARMA

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Is there a notable risk of adopting this technology? VS: In every industry, risk is a friend which is present at all times. Its purpose is to help, guide, drive and navigate organisations out of problems. Interestingly, Africa is blessed with the best, most advanced technologies, and adoptability is extremely good in the area of mobile money, mobile payments and other mobile driven financial services. Previously, you spoke of an industry that creates too many products for problems that don’t exist, is this still true? VS: This is where my argument still holds. Out of everything going on around the world in the mobile payments space, I must say we ‘should avoid creating creative mess’; stop innovating for some time and start improving. Let’s measure success and repeat with variation what works well (the process of innovation


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does not stop entirely). Developing something new on top of old systems/designs/philosophy is not always the answer. Sometimes its ok and good for everyone to un-develop something existing to uncover the hidden gems. Maybe we should un-develop to innovate? How important is financial inclusion? VS: Financial Inclusion or “Finclusion”, is very important. It is like a train that needs to be steered on a proper route & track, at the correct time and should know exactly where to stop, when to stop, for how long and when to take off again. Finclusion makes sure that every segment, group, or individual is covered and have been given access to secured financial services. To build the banking culture and banking services, Finclusion needs to be included in the book of ‘Basic Human Rights” and should be enforced on all institutions. Finclusion as a “Basic Human Right” does not


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“Sometimes its ok and good for everyone to un-develop something existing to uncover the hidden gems. Maybe we should undevelop to innovate?” VINOD SHARMA


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require change but requires enforcement and control. I recommend my post on Finclusion, which details how Finclusion can balance the gender gap. As well as my blog which poses the question, Financial inclusion: Need or opportunity? Is there a banks vs fintech industry, or have the lines begun to blur? VS: This industry still has algorithmic thinking. But every industry has its business cycle and fintech is not excluded from this. Fintech will settle its score and there after you’ll see some mergers coming out between these two entities who don’t want be together but can’t survive without each other.


There is talk of merging the boundaries between e-commerce, banks and financial organisations - do you agree? VS: In Africa, we have witnessed backend mergers of retailer, e-commerce service providers, mobile money or mobile payments companies along with banking support from banks. At the end of the day these industries are inter dependent on each other and have many common business interests.

An interesting point you made previously was the idea that fintechs are responsible for innovation; “finnovation”, is this still true? VS: Looking at where banks sit and where banking (my argument is bank and banking are two separate items) service providers sit, banks rely big time on fintech for “finnovation” and they always will. Banks are nourishing “finnovation” and have slowly started learning the space of the digital world and the advantages it brings.

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October 2017


What examples have you seen over the last year? VS: I’ve seen a lot coming in i.e. bots, machine learning to make scientific predictions for Fintech and AI started ruling over fintech to guide customers. You can read more in my blog post that looks at the data science of payments as well as my attempt at demystifying machine learning in fintech. You predicted a future where customers will still require banking, but without the physical bank itself – is this still a possibility VS: This is no longer a future, it’s happening now, particularly over the last seven months. I cannot remember visiting any bank for my financial needs, it has all been cashless through my phone. What are banks doing in response to this? VS: Banks, in their terms, are doing a lot but on a wider scale of the industry, these efforts are not enough, so competition to fintechs is almost nil. Almost every player in the fintech space came out of a financial industry with an attitude towards growth; you grow, I grow. A bank’s mind set is; to do business with us you need to be matured and stable.

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How has the pace of innovation impacted the financial industry? VS: With the advancement of technology, our computers start simulating our actions, interactions, perception and will be equipped with cognition abilities very soon. Intelligent machines are no longer science fiction with experts divided


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as to whether artificial intelligence should be feared or welcomed. AI is going to cover all industries like banking, fintech, payments and almost every single business domain. Financial services websites provide tips as a site banner or blog posts for its customers, but the content that comes out is dependent on customer’s activities,


including their spending/saving/investment habits and how they interact with the apps. Descriptive analytics is all about using cutting edge tools meant for data science to understand what has happened in the past and how this will predict the future. What are some of the current trends? VS: The future is more scientific. Rather than simple analytics, AI will help fintech market as it’s all about descriptive analytics, predictive analytics and prescriptive analytics. These will guide fintech businesses on where, when, and how to invest. What’s important though, is that cost is king of controlling these trends. What do you think the future African financial space will look like? VS: The African financial space is still very new and bears so much potential. Advancement of technology, financial services, machine learning for business excellence and customer centric solutions will allow services providers to penetrate the segment. Other factors like financial inclusion, financial innovation and financial technology will allow service providers to serve customers with more and more solutions at a lower cost.

“Descriptive analytics is all about using cutting edge tools meant for data science to understand what has happened in the past and how this will predict the future.” VINOD SHARMA

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Inside the Kenya Chamber of Mines Edited by Tom Wadlow Produced by Richard Deane

An exclusive interview with Moses Njiru Njeru, Chief Executive Officer, Kenya Chamber of Mines. The Chamber is an industry partner of the upcoming Kenya Mining Forum and Mr Njeru will deliver a guest keynote in the session on “Perspective of the mining sector. Is the sector for the young population?�. Give us a brief introduction to the Kenya Chamber of Mines The Kenya Chamber of Mines, a business member organisation, was formed in the year 2000 to represent the interests of players in the development of the mineral sector of Kenya. The players may include: miners; explorers; prospectors; mineral processors; manufacturers of mineral based products; mineral traders; mineral transporters; equipment and machinery suppliers; legal service and financial service providers and professional service Providers within the mineral development value chain. The Kenya Chamber of Mines seeks to associate the interests of its members with national and local


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community interests, and to engage other stakeholders in order to promote business within the mineral sector while ensuring safeguards to the environment and human beings are factored in all business models. Why, despite having a diversity of mineral wealth, has Kenya’s mining sector remained largely underexploited? Kenya is blessed with good arable land and suitable climate for agriculture. It also has a diversity of wildlife and well managed national parks and other interesting sites for tourism. Therefore, these being the low hanging fruits, the country embarked on developing these opportunities for its economic support. Other ventures of economic


value have also been developed in the sector of ICT and Technology. However, the ever-increasing population, joined with the changing climatic conditions, threaten the country’s economic survival on agricultural economy. Again, the global insecurity challenge affects the tourism sector. This necessitates a shift from agriculture based economy to other sectors of economic importance; a mineral-based economy. The country is now shifting to development of its mineral wealth for economic support. The Kenyan geology is very lucrative and is encouraging investors to invest in mineral exploration. This is why, in the year 2016, Kenya put in place a Mining Act through a very consultative process. Through the Ministry of Mining and in co-operation with Kenya Chamber of Mines and other stakeholders, several mining

regulations have also been developed and published. The second Kenya Mining Forum, planned for November 2017, is meant to market Kenya’s mineral sector to investors and other stakeholders so that the sector could increase its contribution to the economy of this beloved country. What is your relationship with the Ministry of Mining? I have worked for the Ministry of Mining since August 1998 when I joined the public sector from the private sector, as an Assistant Inspector of Mines. I worked up the ladder to an

“The country is now shifting to development of its mineral wealth for economic support. The Kenyan geology is very lucrative and is encouraging investors to invest in mineral exploration” MOSES NJIRU NJERU, CEO

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Acting Commissioner of Mines and Geology, after which I exited the public sector back to private sector, Kenya Chamber of Mines in April 2016. Within this period I worked in the Department of Mines and Geology, in the Ministry of Mining, we identified various issues in the then Mining Act Cap. 306 of the Laws of Kenya, put in place in the 1940s. These did not offer clear guidance on various aspects of mineral development value chain. Key among them was discretionary powers to Commissioner

of Mines and Geology in matters of granting mineral rights, the duration of an exploration project, aspects of reporting on findings and announcements, granting of mineral rights to artisanal miners, and mineral processing. The discretionary powers provided for then through the Mining Act were subject to abuse and did not offer any sustainable stability to investment in the mineral sector. This was the realisation that informed the repealing of the Mining Law. Currently the country

BENEFITS ENJOYED BY KENYA CHAMBER MEMBERS • Access to KCM database of members for member’s business projection and/ or benchmarking • Participation in networking forums and seminars attended by likeminded participants, a boost to member’s venture; • Listing on KCM website, which help to market member to a wider range of clientele; • Being a member of KCM, a business member organization, helps to offer members


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the industry good will; • Participation in meetings and opportunities to make presentations and therefore catch wider attention; • Participation at discounted rate in any minerals and mining forums organised by KCM; • Participation in forums and activities, organised by other business member organisations, providing greater networking support opportunity for members business.


has a Mining Act, 2016 in place and fourteen Mining Regulations have been finalised and published. Seven more are under way. How does the Chamber work with communities at the same time as protecting the interests of members? It is now in the law that before a mining license is granted, a proof on environmental protection and conservation has to be provided to the regulator by the investor. In Kenya, there is an established National

Environmental and Management Authority which looks at, among other issues, the environmental and human safeguards, through the requirement that social and environmental impact assessment has to be undertaken and reports prepared and submitted to the Authority before mining ventures could be allowed within a particular area. As an industry, we welcome this requirement. Our members have been guided to always ensure that they operate in accordance to the law and where the law is found not to be supportive and

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“The mining sector’s potential to drive the national economic growth, create employment and improve living standards for the people of Kenya, is huge� MOSES NJIRU NJERU CEO encouraging to the investment, then we take up the matter for engagement to ensure that the environment for business continues to improve. On CSR, the mining laws in Kenya require a Community Development Agreement before a mining license is granted. There is sufficient guidance on how engagement in the process of formulating the Community Agreement should be done. Our members, noting that the community is an important


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stakeholder in their investments, are keen to ensure that relationships between the communities around the investment sites are strengthened and maintained. This way, sustained social license to operate is achieved. What are your personal views on the industry generally? Kenya has a good geology, which favors presence of minerals. Looking at the mining activities being carried out by the six main


producing mining companies and the exploration activities going on, one gets to understand the potential the sector holds. The mining sector’s potential to drive the national economic growth, create employment and improve living standards for the people of Kenya, is huge. The main challenge to realising this is having a well-managed sector, aided by favorable regulatory framework, accommodating the need-based incentives, realistic to the characteristics specific to a mineral deposit as discovered and investigated during exploration. A well-managed and sustainable mineral sector would deliver significant multiplier benefits to other sectors through the supply of goods and services, especially in areas of logistics, energy, and a variety of other services. This, if sustained, could lead to the mining sector becoming another economic frontier.

denotes potential for mineable mineral deposits. This potential has to be investigated through exploration to reveal the probable opportunities within the mineral sector. The opportunities, when exploited will then provide the needed economic benefits for the country. The mineral sector will only be of benefit to the community, government, investor and any other stakeholder only if we focus and encourage the following activities; • Studying, analysing and understanding the GEOLOGY of our country; • Understanding and identifying the OPPORTUNITIES presented by the GEOLOGY • Securing and sustaining a stable and favorable environment for exploiting the OPPORTUNITIES to realise the envisaged ECONOMIC BENEFIT for the country.

What is your key message going to be at the Kenya Mining Forum? The geological setting in Kenya

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AN INTRODUCTION FROM THE KENYA MINISTRY OF MINES Written by: Dale Benton Produced by: Richard Deane


Dan Kazungu, Cabinet Secretary, Ministry of Mining, Republic of Kenya, introduces our special focus on the growing mining sector in Kenya CAN YOU GIVE US A BRIEF





Traditionally, mining was not the primary focus for Environment and natural resources management - mining was largely ignored. Its therefore no wonder that Kenya never realized the full potential of mining until 2013 after President Uhuru Kenyatta’s administration whose transformation agenda included bringing mining to the forefront. With that, Kenya’s mining journey began in earnest and the country

The ministry of mining was established in 2013 through a decision by president Uhuru Kenyatta to create a new ministry mandated solely to grow the mining sector after having been given prominence by vision 2030 pillar seven, which identified mining or the extractives sector as a key contributor to a diversified economy with the potential for jobs and wealth creation for Kenya.


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kicked off on a reform agenda to transform mining to be more inclusive, modern, ensure the sector attracts responsible investors and to legitimize artisanal and small-scale miners while having community (Kenyans) benefits taken care of. WHAT IS THE ROLE AND THE VISION OF THE MINISTRY IN TODAY’S INDUSTRY?

The goal of the ministry is to transform mining to become a key contributor to the economic growth and transformation of the country. The aim is to see growth and GDP in the mining sector hit double digits. We see Kenya as a hub for mineral trading and value addition for east and central Africa, leading in technical expertise, logistics, funding for mineral projects and services. We have plans to consolidate leadership through the set-up of a regional mineral and metals exchange. To achieve this, the ministry is tasked to promote Kenya as a minerals hub for players across the board by carrying out the right reforms and creating an environment that ensures that mining

investments thrive based on a win-win formula, i.e. for the investor, national government, county government and the communities. The ministry is making deliberate efforts in the spirit of inclusivity to Kenyans who have been excluded from the mining eco-system to now be a part of it. In addition, efforts are being made to attract large-scale mining in the country to bring in investment, technology transfer, technical expertise and highly specialised jobs and opportunities. CAN YOU TELL US ABOUT THE CHANGING FACE OF KENYA’S MINING INDUSTRY?

As a country Kenya is proud to state that in the first year of its reform, efforts to create a robust mining climate have started to bear fruit. According to the global mining investment attractiveness index by the Fraser institute, Kenya has jumped 16 places up to position 86 in 2016 from position 102 in 2015 in a global mining attractiveness survey. Today, Kenyans are more aware of the opportunities in the mining sector (especially artisanal miners) that are

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now claiming their space encouraged by the progressive mining law in place. Small and Medium Scale miners are showing increased interest too. Exploration and mining companies are in Kenya carrying out exploration leading to the announcement of what is considered the biggest gold discovery on the continent - 1.3mn ounces of inferred gold along the Liranda corridor in Ikolomani in Western Kenya. Large-scale mining investments are coming to Kenya for example Base Resources (Base Titanium) that is the single largest mining company in the country, Acacia Mining, Gold Plat, Tata (Magadi soda), Lafarge limestone project. WHY HAS IT TAKEN SO LONG, IN YOUR OPINION, FOR KENYA TO REALISE THE ENORMOUS ECONOMIC POTENTIAL OF ITS NATURAL RESOURCES?

It all comes down to leadership and vision. Over the years industry players have been talking about mining opportunities. It takes leadership to transform this, to real worth. This


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is what formed the vision to grow Kenya’s into a medium sized economy. The other reason is socio-economic socialisation as over the years, Kenya was presumed to be an agricultural economy and so little attention was paid to mineral exploitation. YOUR MINISTRY’S WORK, LEGISLATION AND COLLABORATIVE APPROACH HAS BEEN PRAISED BY SOME OF THE MAJOR MINING OPERATIONS IN THE COUNTRY. HOW IMPORTANT IS TO MAINTAIN GOOD RELATIONSHIPS?

As a country, we believe strongly that to create a robust investment environment, relationships are extremely key and not about shortterm gains. Mining projects are by nature long-term and therefore the relationships built should be longterm. This is the natural habit to adopt, not just to please investors but also to create a “win-win-win-win” in the sector. This is the only sustainable way; – win for the investor who takes the risk (sometimes massive risks) and creates jobs, win for the


“As a country, we believe strongly that to create a robust investment environment, relationships are extremely key and not about short-term gains” DAN KAZUNGU Cabinet Secretary Ministry of Mining, Republic of Kenya

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national government that creates the enabling environment for investments to flourish and prosper, win county governments as that is where all mining projects are established and last win for the local community as Kenyans are the core beneficiaries of the mining activities in the country. WHAT OTHER WORK IS THE MINISTRY DOING TO SEEK OUT NEW POTENTIAL AREAS

is encouraged practice. The country has put in effort to do a comprehensive nationwide airborne geophysical mapping survey in order to identify new potential areas for mineral discovery. Both investors and government have been keen to have the latest data on minerals in the country. The finalisation of this survey will be a key milestone for Kenya’s mineral development, as it will drive key interest and attractiveness to Kenya as a modern mining jurisdiction.


Private companies such as Base Titanium carry out geological surveys that share data with the ministry, which


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Kenya has also learned lessons from her peers in mining that if the basics are not in place, things can go wrong.



Kenya’s 20-year strategy is part of what we call the 6-pack initiative that was a realization that in order to promote an attractive and robust proper mining environment, six key components have to be achieved; the strategy itself that outlines how Kenya will leapfrog this mining journey to become a key player in the region and in the world, mining policy that aims at creating the right environment for reform, repealing old laws and building institutions while looking at issues of inclusivity and environmental concerns, Mining Act 2016, the most progressive mining law in Africa, the mining regulations to enable the implementation of the mining law, a fiscal Policy framework to ensure Kenya has both an attractive and competitive tax and royalty regime and finally availability of the latest data. The idea here has been that for the country to get its basic right by laying the foundation for a successful sector.


The Kenya Mining Forum and other such like events are designed to bring investors into the country and the entire region for them to experience first-hand Kenya’s mining sector. The first edition of the KMF in 2016, attracted close to 400 investors from 15 nationalities. The second edition is expected to be even bigger than the first. TELL US HOW IMPORTANT YOU THINK THE UPCOMING MINING FORUM IS IN NOVEMBER.

I welcome you all to Nairobi for the second edition of the Kenya Mining Forum in November. We are ready to network, share thoughts and experiences and above all we want to do business because Kenya is open for Mining Business.

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KENYAN MINING ON THE RISE Written by: Dale Benton Produced by: Richard Deane




he Kenyan mining industry is on the rise. Historically, the country focused on agriculture, tourism, services and manufacturing as its main economic pillars, but in recent years, that focus has begun to shift towards extractives – both oil and mining. “In the past mining was not seen as a significant sector of the economy – that is until Base Titanium’s Kwale Mine entered into production in early 2014,” says Joe Schwarz, General Manager – External Affairs and Development, Base Titanium. “The industry is now contributing around 1% to the GDP, but with increased interest in extractives and a friendly investment climate that will increase.”

FLYING THE FLAG FOR KENYA In 2013 the Government of Kenya created, for the first time, the stand-alone Ministry of Mining in recognition of the emergence of mining, led by Base Titanium, as an increasingly important sector of the economy with real growth potential. “Establishing the Ministry of Mining has really given the mining industry in Kenya a new focus and impetus,” Schwarz says. “With the Ministry and Base Titanium working collaboratively to promote further


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An aerial view of dozer mining in the Central Dune at Base Titanium’s Kwale Mine.

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“It’s absolutely vital that we play our part, we are guests in the community and must obtain a social license to ensure a harmonious and mutually beneficial operating environment” – Joe Schwarz, General Manager – External Affairs and Development

Magaoni Secondary school built by Base Titanium. The company is investing heavily in local education.


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Sorghum – one of the crops supported under the livelihood programme.

investor interest in the sector, we stand as a benchmark for others to emulate.” This relationship with the Ministry of Mining is important, not only for Base Titanium, but for any future mining projects in Kenya that will contribute to the achievement of country’s Vision 2030 objectives of establishing Kenya as a middle-income country by 2030. For Schwarz, that relationship with the Ministry is crucial in jointly driving the mining agenda by attracting serious investment into exploration and development in

a mutually beneficial manner. Collaboration is key and this has also allowed Base Titanium, through the Kenya Chamber of Mines, to work closely with the Ministry of Mining on formulating the Mining Regulations after the Mining Act 2016 took effect in May last year. “We provided significant input to the public review process. With this positive relationship we are able to exchange views in a constructive manner to achieve a balanced outcome,” Schwarz says.

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“As Kenya’s leading mining company, working with the Ministry, we have also had opportunities to jointly promote Kenya as an investment destination.” “Being the preeminent mining company in the country, we shall again be playing a leading role in supporting the November 2017 edition of the Kenya Mining Forum as its main sponsor,” Schwarz adds. “We fully support Mining Cabinet Secretary Dan Kazungu’s philosophy

Building skills in mineral processing.


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of making Kenya a predictable, stable and attractive investment destination and work with the government to showcase the country at events such as this.” This forum is the premium annual mining investment event, showcasing Kenya’s potential and ‘open for business’ stance.

LEADING FROM THE FRONT Construction of the Kwale Mine was completed in 2013 and the first shipment of ilmenite left its port facility in February 2014. Since then a number of process optimisations have been successfully completed to improve efficiencies and debottleneck the plant. Hydraulic mining has been successfully introduced and will ultimately replace dozer mining and the wet concentrator will soon be uprated to fully utilise the minerals separation plant capacity as mining moves to lower grade areas. In the fourth year of its 11-year mine life, 2017 proved to be a highly successful year for the project. Over 10mn tonnes of ore were mined leading to a combined 671,000 tonnes of ilmenite, rutile and zircon


being exported as the market for all three products showed signs of significant improvement. The importance of Kwale to the Kenyan mining industry is amply illustrated by the fact that it now contributes close to 60% of the total value of Kenya’s minerals output. Regional exploration to extend the life of the mine is one of the company’s key future growth strategies. The initial phase has been successfully completed and plans are in hand for further exploration in the coming year. But for Schwarz, the success of the Kwale Mine and Base Titanium extends well beyond its core mining operations. He also measures the success of the company through its role in building the mining economy and giving back to its host communities by improving their livelihoods in a sustainable manner. “The cornerstone of our philosophy is the flow of mutual benefits,” he says. “It has to be win-win for everyone, all the stakeholders must share in the benefits – Government, investors and the local communities.” During the construction phase of

Spirals in the wet concentrator.

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the project Base Titanium spent one third of the $320mn capital cost with Kenyan suppliers and contractors.

THE COMMITMENT TO MAXIMISING LOCAL CONTENT DIDN’T END THERE In operation, the company continually aims to maximise local procurement, spending $37mn annually (or 84% of the total) on spares, consumables and services purchased from local suppliers. In all, Base Titanium expects to contribute close to $1bn to Kenya’s 84

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GDP through the period of 2015-2025. “Viewing direct revenues from a mining operation of this scale in isolation is to see only a quarter of the picture” he says. “The indirect and induced economic stimulus generated beyond this through wider employment creation, the supply chain, consumer spending and taxation is enormous in comparison.”

ENHANCING A COMMUNITY For any mining operation, the role of the local community can never be


Ship loading at the dedicated port facility. In 2016 the Kwale Mine accounted for close to 60% of Kenya’s mineral output.

underestimated. Base Titanium has proven that it is a key contributor to the Kenyan economy, but how is the local community benefitting? To date, the company has invested $10mn in four pillars of community development; social infrastructure, livelihood enhancement, health programmes and education. “It’s absolutely vital that we play our part, we are guests in the community and must obtain a social license to ensure a harmonious and mutually beneficial operating environment,”

Schwarz says. “Such benefits need to be tangible and sustainable.” Base Titanium has built a number of schools and health facilities, sunk community boreholes and supports various medical campaigns such as immunisations and training community health workers. Provision of secondary and tertiary scholarships has so far benefitted close to 1,000 students from needy families. “The centre piece of our community programmes right now is creating and supporting

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opportunities for sustainable livelihood enhancement,” Schwarz says. This has seen the company work on multiple agricultural programmes, taking farmers, groups and communities from just subsistence towards sustainable commercial agriculture in cotton, potato and sorghum production. Base Titanium is working with governmental and non-governmental organisations, including international partners, to enhance these programmes and to connect the farmers with markets for their products.

programmes to address competency gaps and enhance skill levels of our existing employees; also, a range of external programmes are run, including apprenticeships, student attachments, a graduate training scheme and imparting artisan skills to neighbouring community members.” Currently 970 people, including outsourced service contractors, are employed at the Kwale Mine. Reflecting the company’s commitment to prioritise job opportunities for

THESE, SCHWARZ SAYS, ARE EXAMPLES OF THOSE REAL AND TANGIBLE BENEFITS Earlier this year, a report from the Zambia Chamber of Mines revealed that the global mining industry is facing its most significant skills shortage in decades, and Base Titanium is all too aware of the importance of providing employment and training opportunities. “One of our key programmes is training and skills development,” he says. “This includes internal training


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Cotton harvesting in full swing


locals, 65% of these employees are drawn from Kwale County. A clear barometer as to the effectiveness of its training programmes is the reduction by 50% of its expatriate complement over the last three and a half years. “All this feeds into our succession planning. By empowering people with the right skills and experience, Kenyans are progressively taking over most technical and management roles from expats,” Schwarz says. “It’s a clear illustration of the success

of our investment in training to empower the local community and Kenyans in general.” Mining needs to be at the forefront of economic growth if Kenya is to achieve its Vision 2030 goal of becoming a middle-income country in the next 13 years. Schwarz says. “We fully support the endeavours of the government to transform the mining sector into an increasingly significant contributor to employment, exports and the socioeconomic growth of the country.”

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Singing to the tune of success Written by: Dale Benton Produced by: Richard Deane


With the acquisition of the high grade, low cost Yanfolila Gold project, Hummingbird has set its sights on becoming a major player in the Malian gold market


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Mali has had a gold mining industry for hundreds of years, but in terms of commercial gold mining, the country has really come along way predominantly through the development of Randgold Resources over the last two decades,” says Robert Monro, Head of Business Development, Hummingbird Resources. Hummingbird Resources is another West African gold explorer that was founded in late 2005, listed on the London Stock Exchange (AIM) in 2010, and entered the Malian gold exploration space in 2014 through the acquisition of the Yanfolila Gold Project. The Yanfolila Gold Project, a high grade open pit gold operation, predates Hummingbird Resources and was brought to a significantly advanced stage through the investment and previous ownership of Gold Fields, one of the largest gold producers on the global stage. It was this advanced development, coupled with the geographical significance of Mali as the third largest

gold producing country in Africa, that attracted Hummingbird to Yanfolila and the company acquired the project for $20m of stock back in 2014. “What attracted us to it was the ability to finance and get into production, a very high margined low-risk gold project in a proven gold jurisdiction,” says Monro. Hummingbird will continue the development and construction of Yanfolila and bring forward a 1.2 MTPA gold project, which upon completion will produce an average of 110,000 ounces a year. Advanced project For any exploration company, a significant hurdle that must often be overcome very early on in the process of developing an operation like this is financing the project and raising the necessary equity. For Monro, Yanfolila’s reputation as a significant low-cost high-grade operation played a key role on this front. “The biggest initial challenge was definitely the

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“What attracted us to it was the ability to finance and get into production a very high-margined, low-risk gold project in a proven gold jurisdiction” – Robert Monro, Head of Business Development

CIS: your remote site solutions provider Present in Africa for over 20 years, and 5 years in Mali. Serving more than 6 million meals per year, including half a million meals in Mali. CIS is specialised in the management of remote sites in extreme environments for mining and Oil & Gas operators. In addition to its core business of catering and living accommodation services, the Group has developed a comprehensive service offering in facilities and utilities management and in support services to provide its customers with turnkey solutions. Our philosophy at CIS is to be fully involved in the local economy through local content projects.

From day one, CIS has provided a full range of services to Hummingbird and its 500 employees on the Komana mine. On top of core services, CIS has been providing catering equipment over a long-term leasing contract, as well as full camp maintenance.

Visit – Ph: +33.(0)


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financing and fundraising,” he says. But the company overcame this challenge, raising around $75 million in 2016, the largest fundraising on AIM in the last four years in the mining space. “We acquired a very well run project and the fundraising is a testament to the quality of it,” Monro adds. “We have a world class asset and are extremely proud to have come through and make some real inroads with the construction.” Hummingbird has earmarked a Q4 2017 production date, with the pre-production mining of the ore commencing in Q3 and stockpiling until the official production date. Hummingbird did not acquire the project to simply sit on it and rely on the work already done to get to where it is today. Through two feasibility studies, Hummingbird has optimised the project and has set the all-in cost at $700 per ounce. In the current market, this will generate a significant amount of profit and be further proof as to that low-cost high-grade reputation. “We are due to make around $75 million of free cashflow in the first full year of production,” says Monro. With commodity prices continuously fluctuating, Hummingbird has accounted for any sudden price drop and will remain resilient. “If the gold price was to retreat we’d still have security and the ability to operate because we are such a low-cost producer,” he adds.

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African expansion For Hummingbird, Yanfolila is not the company’s first foray into Africa. The company also has exploration and development projects in Liberia and Ghana. “We are an acquisitive company,” says Monro. “We bought Yanfolila, we have a huge asset in Liberia [4.2 million oz. of Gold] and we have the ability for organic growth as well as looking for any further acquisitions.” With an eye on the future of the company, Monro stresses that right now 100 percent of the company’s focus is centred on bringing Yanfolila to production over a mine life of seven and a half years. That life of mine, however, is subject to


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change, and with further exploration and investment Hummingbird will look to move the goalposts beyond those initial seven years. “We have well over a million ounces of resources at Yanfolila not in the mine plan and we are looking to convert those resources to reserves and increase that life of mine well into the teens,� says Monro. Licence to drill For any mining company, a key goal is to earn a social licence and the right to mine. This is a barrier

that can play a significant role in the path to achieving success: lose the social licence and the mine may never see the light of day. Hummingbird has community engagement engraved right into the core nature of the company. Inheriting a mine from Gold Fields, which had made some major community investments over the years, Monro was keen to ensure that Hummingbird built upon such a strong foundation of social responsibility. “We exist within a community and want to be a part of that community.


“We bought Yanfolila, we have a huge asset in Liberia [4.2 million oz. of Gold] and we have the ability for organic growth as well as looking for any further acquisitions” – Robert Monro, Head of Business Development

There are no big barriers where we operate,” he says. “We run our own clinic as well as help other clinics in the local community, and we’ve just completed a major malnourishment programme across the local area.” But the company’s social licence does not stop at providing infrastructure and healthcare support for the local community, as Hummingbird works to provide opportunities for Malian people


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to obtain work and develop their skills and career paths. “It’s a Malian mine, so we work as a Malian company,” says Monro. “There are certain skills that you have to bring in from the outside, but the hope is that you are training a Malian employee as their number two, providing them with the skills in order to one day replace that outsourced expertise.” Throughout the construction of the Yanfolila Project, Hummingbird


can stand tall against other mining operations throughout Africa and the world due to a company-wide commitment to the health, safety and wellbeing of its employees. A commitment that has seen the company reach a very significant milestone. “We are well over 50 percent complete on the construction of Yanfolila and we have had zero Lost Time Injury (LTI),” Monro reveals. “We remain on time and on budget and that speaks volumes to our approach – we are running Yanfolila extremely well and we are not pressuring people to work overtime or create a difficult environment that could put their lives at risk.” A premier producer Looking beyond Yanfolila, Monro believes the company can become a much bigger player in the global gold industry and Yanfolila will be the very foundation on which this reputation can be built on. “The vision and strategy is to become a multi mine producer with a suite of assets from production development and exploration and that will be largely driven by the gold prices,” he says. “The goal is to become a significant gold company with multiple mines. 100 percent of our effort is on delivering Yanfolila on time and on budget, without delivering that, it’s all irrelevant.”

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business review  

I dont own the publication

business review  

I dont own the publication