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StartUps Flourish Across the Middle East

Comments (0) Economy, Technology

middle-east-startup

The Middle East is overcoming cultural barriers, and political and financial challenges, to become a paradise for potential investors. Emerging local technology companies are flourishing and giants from the US, Europe and Asia are taking notice. From the arrival of business angels, to the sale of Souq.com to Amazon, the region is showing greater creditability for investment projects and successful business ventures.

Growing Markets

Although there are huge obstacles facing the business markets of some countries across the region, the six Gulf Cooperation Council countries (UAE, Qatar, Oman, Saudi Arabia, Bahrain and Kuwait) plus Egypt, Lebanon and Jordan are emerging as an economic hub. According to venture capital site Beco Capital, there are over 160 million people in the region, 85 million who are online, and 50 million who are adult digital consumers with disposable income. These countries have the highest value consumers, enterprises and entrepreneurs, as well as, the youngest populations and high smartphone and broadband usage. This largely untapped market, is becoming the breeding ground for local technology startups, and big players from abroad, who wish to tap into it.

So far, only 8% of businesses in the Middle East and North Africa (MENA) have digital presence (as opposed to 80% in the United States) and only 1.5% of the region’s retail sales are digitally transacted, meaning there is still plenty of growth to come. According to Beco Capital, each digital job is estimated to create two to three more jobs in the economy, meaning the digital market could add up to $95 billion in annual gross domestic product by 2020. The business landscape of the region therefore, shows a lot of promise to foreign investment.

Emerging Startups

According to research house MAGNiTT, there are now over 3,000 startups across the region, with $870 million spent in startup investment last year. The top 100 startups raised over $1.42 billion in funding and each startup has raised over $500,000 individually. Some 68% of startup founders come from the Middle East, although many hold dual citizenship, 12% of successful startup founders are female, and the UAE hosts 50% of the most funded startups in the region. These figures have attracted foreign investment from abroad.  

According to Bloomberg, Amazon’s recent acquisition of Dubai based, online market retailer Souq.com, shows that e-commerce in the Middle East is set to take off. Out-bidding Emaar Malls PJSC, which owns the world’s largest shopping center, at $800 million, Amazon is actively looking for new areas of growth, and seems to have found it in the Middle East. According to Bloomberg, Souq.com has 23 million online visits a month, employs over 3,000 people and sells more than 400,000 products, from electronic goods to household products and clothes.    

Business Angels

An angel investor is usually an affluent individual or professional investor who provides startup capital for a new venture in return for shares in the business. In a report drafted by Harvard Business School experts, angels increase creditability to projects and increase possibilities for success. The report found possibilities for success increased by 10 to 17% when initial investment was done outside the US. According to the National back in 2012, enthusiasm for angel investment was growing across the Middle East. High speed internet connections enable the regions businesses to reach a global audience, meaning companies can grow without need for crippling overheads previously associated with foreign investment.

Executive chairman of Oasis500, a Jordan based investment program, Usama Fayyad said the Middle East was a unique opportunity for investors to participate in companies who could easily grow in value two to ten times over in a matter of months. Business angels may also have valuable knowledge and experience to help struggling startups. Serial entrepreneurs, who have started their own business can mentor local companies to ensure successful management strategies.

Startup Ecosystem

Despite the war and poverty stories emanating from across the region on the nightly news, the Middle East is well on its way to becoming a global hub for investment. Even with numerous challenges, this has not stopped the region, as a whole, from overcoming the first phases of business development to build a promising startup ecosystem.  

Sources: (1), (2), (3), (4).

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Foloker Folarin-Coker wants to take her Nigerian label global

Comments (0) Africa

Foloker Folarin-Coker is not a name that is as famous as some within the world of fashion, but she has created an African fashion label that has not only proved hugely popular within the continent, but has begun to attract attention from further afield. Folarin-Coker has already achieved many firsts for an African fashion designer, and is determined to build her label into something even greater.

Self-taught Success

Foloker Folarin-Coker was born in Lagos, Nigeria in 1974, and at a young age she went to Switzerland and the UK in order to further her education. Folarin-Coker eventually graduated with a master’s degree in petroleum law, and returned to Nigeria in 1996. While her education seemed to be leading to a career in law, her real passion was in fashion, and despite having no background in the competitive industry, she created a small collection of her own designs upon her return home.

By 1998, Folarin-Coker had launched her label, Tiffany Amber, and the label has gone on to become one of Nigeria’s most popular fashion brands. The label’s domestic success led to 4 stand-alone stores in Lagos and Abuja, and Folarin-Coker became the first winner of the “Designer of the Year” award at African Fashion Week in 2009.

However, it is not just in the domestic market in which the Tiffany Amber line has proved popular, as Folarin-Coker was invited to showcase her designs at the New York Fashion Week in 2008. Her collection was met with such praise that she was invited back the following week, becoming the first ever African designer to present a range twice at the prestigious event.

Continued Expansion

Folarin-Coker continued to innovate after her breakthrough into international recognition, and in 2008 she launched two new ranges within her company. TAN by Tiffany Amber is a diffusion line that was launched alongside Folake Folarin, which is a couture line

In 2013, Forbes magazine listed Folake-Folarin as one of Africa’s 20 Young Power Women, and by 2014, the self-taught designer had staged more than 60 fashion shows at home and abroad.

Another line, Tiffany Amber Living, was added to her burgeoning portfolio, and Folarin-Coker says that her success was based on the principle of reinvention without changing the core of the brand. The designer explained, “Continuously reinvent yourself but don’t change the DNA of the brand’ –that’s what I believe, everyone knowing what the Tiffany Amber look is, is what has kept us.”

As the designs continue to prove popular and her range continues to grow, Folarin-Coker is determined to create a brand that remains iconic long after she is no longer around. She has said that her ethos is to work for the future as opposed to the present, and she has a firm belief in the talent within the Nigerian fashion industry.

As she continues to look forwards, Folarin-Coker says that her goal is to “have a presence all over Africa and ultimately every major city of the world.” Only time will tell whether these grand designs for the future are achieved, but thus far her goals have certainly been met with success.

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Nigeria’s President continues to divide opinions

Comments (0) Africa, Politics

Muhammadu Buhari

When Muhammadu Buhari was elected as Nigerian President in March 2015; it was the culmination of a long and controversial involvement in Nigerian politics. While many have criticized his record on human rights, others have praised his seemingly incorruptible nature, and efforts to battle domestic terrorism. As recent health concerns have yet to be fully abated, the future of the President remains uncertain.

A history of political struggle

Muhammadu Buhari was born on December 17th 1942, in Daura, Katsina State, to a large family in which he was the 23rd child. By the age of 19, Buhari had joined the military, and within one year he had been sent to the UK for officer training. Buhari returned to Nigeria in 1963 and from here, until his election in 2015, he was rarely away from the political struggles within the country.

After serving the government in the Nigerian Civil War, Buhari was involved in the 1966 Counter Coup, before supporting the 1975 Coup that briefly led to him taking on nonmilitary roles within the new government.

But it is the 1983 Coup, that he led, which threw him into the limelight. Buhari took power from January 1984 until August 1985, in which time he led a fierce stamp down on political corruption, indiscipline and rising crime. While the measures were seen by many as necessary for economic reform, widespread human rights abuses were reported, and press freedom was severely curtailed.

Buhari’s brief stint in power came to an end in 1985, when he was overthrown and put into detention for 3 years. However, his ambitions as a leader saw him return to politics with a failed Presidential bid in 2003, followed by two more attempts at gaining democratic election in 2007 and 2011.

Legitimacy and the Future

Buhari finally succeeded in becoming the democratically elected President in March 2015, when Nigeria elected him to replace incumbent leader, Goodluck Jonathon. Buhari’s commitment to breaking the cycle of corruption within Nigerian politics was almost immediately displayed when he had former national security advisor, Sambo Dasuki, arrested for embezzling $2 billion worth of funds that were assigned for the battle with Boko Haram.

Several other senior government figures have also found themselves in jail, as Buhari looks to cut out the rot that he feels has hampered Nigerian progress for too long. However, this has echoes of similar moves that he made in his brief run of power in the 1980’s, and the world’s leaders are unlikely to be supportive of the other measures that Buhari employed at the time, including executions for drug users, and public floggings for people who did not line up at bus stops in an orderly fashion.

Thus far, none of the obvious abuses of the past have manifested themselves under Buhari’s new leadership, and there has been marked improvement in the security in Nigeria’s north-eastern region, which has borne the brunt of much of the nation’s Islamic extremism.

However, a recession hit Nigeria soon after Buhari’s electoral triumph, and Islamist forces pushed out of the north-east have begun to increase attacks within the nation’s oil rich, Niger Delta region. Buhari has also faced criticism over his recognition of women in government, as his cabinet is only 16% female, compared with the previous regime’s 31%.

Major concerns over Buhari’s health

Most recently, there have been major concerns over Buhari’s health, and whether he would be capable of continuing in power. In January of this year, Buhari traveled to the UK for treatment on an unspecified condition, and remained there for 7 weeks, before returning to Nigeria in March. Buhari then returned to London for more treatment on May 7th, and thus far has not gone back to his nation.

Although his wife has assured concerned Nigerians that he is recovering well, there is a growing demand in Nigeria for him to be declared unfit, and while vice president, Yemi Osinbajo, has been in control during Buhari’s absence, there are several other potential leaders looking for their chance to take the top post.

Buhari is a man who has fought in wars, coups and survived an assassination attempt in 2014; so regardless of ones opinion on his policies, it cannot be said that he is easily broken. The future of his leadership looks uncertain, but if he is physically capable, then we can be assured he is likely to do his utmost to retain his position.

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Jonathan Gray: shaping investment opportunities for the Middle East

Comments (0) Leaders

Jonathan Gray

Jonathan Gray is currently heading several businesses within various industries through ventures such as Beauchamp Estates France, JG Events and First Idea Ltd.

A bona fide entrepreneur

Jonathan Gray’s business life started early in 1997 at the age of 16 after a chance encounter with a Buena Vista International executive during the Cannes Film festival. A few years on he would create several companies within various industries. Most notably in his early career stands JG events, a successful international event company specialising in luxury private and corporate events in the South of France.

A few years later, in 2004, he participated to the launch of the exclusive global concierge company Quintessentially, which he spearheaded from 2005 and sold in 2009.

Simultaneously, he launched his own estate agency in 2005 and then closed a business opportunity in 2007 with powerhouse London broker Beauchamp Estates, a main player in the premium property market focusing on a select range of exclusive quality properties. Together they launched the exclusive French branch of Beauchamp Estates in Cannes. Within six years, Beauchamp Estates France multiplied its turnover fivefold.

First Idea, a firm specialized in the Middle East region

With his track record and after having developed a strong and influent network of ultra high net worth individuals, Jonathan Gray decided to transition towards more personal passions such as strategic and investment consultancy.

Thus was born the strategic consulting firm First Idea Ltd. First Idea was the opportunity for Jonathan to develop the concept he had in mind. First Idea selects investment opportunities aligned with the principles of the positive economy by focusing efforts in identifying corporate or institutional entities willing to address societal and economic change.

Far from being a run of the mill investment boutique, First Idea strives to be both a laboratory of positive ideas for clients and an aggregator of talents, aiming to design new levers of economic, social, societal and cultural developments and respond to the challenges of tomorrow’s world through creative, innovative and bespoke solutions.

More concretely, First Idea is a firm specialized in the Middle East region. It assists its clients in reshaping the economy for a post-oil order through the deployment and implementation of hallmark Vision 2030 programs developed in most Gulf countries. Within this frame, First Idea raises awareness about the giant and numerous investment opportunities such national plans offer to worldwide business leaders & companies, with a special focus on French business circles.

First idea’s efforts focus on positive sectors. Indeed, Jonathan Gray is an idea man, devising solutions (ideas, innovation or policies) to positively impact the Gulf’s economy and society as a whole by creating sustainable foundations for flourishing and innovative ecosystems.

Therefore, First Idea aims at facilitating Vision 2030’s successes, at helping answer Middle East’s most critical challenges, with a strong focus on Food security & safety (Agritech), Water security (Watertech), Green construction, Carbon sinks, Carbon valuation, EcoTourism.

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Africa gets its first smartphone manufacturing facility in Nigeria

Comments (0) Featured

While mobile phone penetration has been rapidly increasing throughout Africa for several years, until now, all the smartphones sold on the continent were imported from overseas. However, as AfriOne opens up its first smartphone production factory on the continent, the hope is that the flourishing technology can provide greater employment opportunities for the next generation.

The First in Africa

Mobile phones have become an integral part of life for many people, and the proliferation across Africa has increased rapidly in recent years. In Nigeria, the market penetration has surged and investments in the telecoms sector skyrocketed by 6400% in the past 4 years. With such growth, it is no surprise that Africa’s first smartphone production unit has found its home in Nigeria.

The company AfriOne has established the factory in Nigeria’s Lagos Free Zone with an initial investment of $10 million. The plant will begin producing 120,000 units per month; however the company is confident that the facility will eventually produce as many as 300,000 products per month.

The new range of smartphones will cost between $92 and $108 and are aimed at Nigeria’s middle income consumers. AfriOne’s parent company, Contec Global, intends to open up a second production unit as it continues its expansion.

The investment seeks to capitalize on the huge expansion in e-commerce within the region. E-commerce is predicted to account for 10% of all retail sales in Nigeria by 2025, and consultant group McKinsey estimates it could be producing $75 billion in annual revenue by this time.

The 20,000 square foot production facility includes a Research & Development (R&D) department and testing laboratories. Mr. Sahih Berry, AfriOne’s Founder and CEO, said that the company has a goal to “democratize technology, by offering affordable innovations through our product offerings and removing barriers deterring the large scale adoption of advanced technology in Nigeria.”

By Nigerians, For Nigerians

The unveiling of a facility such as AfriOne’s new smartphone production unit offers immediate job opportunities as well as the obvious increase in options for the Nigerian consumer. AfriOne’s Chief Operating Officer, Mr. Sandeep Natu, told the press that the factory will initially employ around 500 people. Both the company and government officials are hopeful that the long term benefits of the operation will be more far-reaching.

Contec Global’s Managing Director, Mr. Roheen Berry, said that the company is dedicated to increasing opportunities for young Nigerians through a policy of Corporate Social Responsibility.

Mr. Berry explained that the facility will have various training programs for young men and women working at AfriOne, and added, “We are tangibly investing in Nigeria’s future through AfriOne, while providing a valuable skill set to its workforce that will facilitate continued innovation in Nigeria’s emerging, dynamic and robust market.”

The Nigerian government believes that the venture will not only create immediate employment opportunities, but will help foster a culture of innovation and technology within Lagos that could lead to greater long term growth. Lagos State Governor, Akinwumi Ambode, announced the plant’s opening at a press conference in which he expressed hope that this would lead to the city of Lagos create a 24-hour economy.

Mr. Ambode also discussed AfriOne’s commitment to working with a local college, Lagos State Polytechnic, for the maintenance and repair of mobile devices. He said, “The collaboration with Afrione will be of immense benefits to these students and the State.”

The factory promises to offer these students practical experience within the field of telecommunications and mobile technology, thus spreading the potential impact on future job creation far beyond the direct employment within the plant.

Lagos State Government already had a youth training initiative in place, known as the Empowerment Trust Fund, and Mr. Ambode believes that, “AfriOne’s collaboration will complement efforts by the Lagos State government in ensuring that these youths are empowered.”

Nigeria currently has around 154 million mobile phone users, and e-commerce and mobile banking are both rapidly growing sectors within the West African nation. As these markets continue to grow and attract investment, a domestic center for the production of the medium needed to access these fields may seem long overdue. AfriOne assured press that the phones would use cutting edge technology and would come with popular African apps for banking and farming already installed.

AfriOne will be looking to expand its production base quickly, and the local government hopes that further development provides an ongoing boost to economic growth and employment.

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First Female Head of UN Economic Commission for Africa: Vera Songwe

Comments (0) Featured, Leaders

Announced in April by UN Secretary General, Antonio Guterres, Dr. Vera Songwe has become the first woman ever to head the United Nations Economic Commission for Africa (UNECA). Headquartered in Addis Ababa, Ethiopia, UNECA is one of the UN’s five regional commissions, and was established in 1958 to encourage economic cooperation among the nations of the African continent. A prestigious position by itself, Songwe has also acquired the rank of Deputy Secretary General of the United Nations.  

Beating more than 70 candidates for the role, Songwe, aged 48, takes over the reins of the organization at a critical time, following the departure of Dr. Carlos Lopes of Guinea-Bissau, who stepped down from the organization in September, last year. Labelled as one of 25 African’s ‘to follow,’ by the Financial Times in 2015, the UN reported that her longstanding track record of policy advice and results orientated implementation in the region, as well as, her demonstrated strong and clear strategic vision for the continent, is what lead to the decision.

Track Record in Economics

Before her appointment, Songwe was serving as the International Finance Corporation’s Regional Director, covering West and Central Africa. Between 2012 and 2015 she was the World Bank’s Country Director for Senegal, Cape Verde, Gambia, Guinea-Bissau and Mauritania. Before that, she held the post of Advisor to the Managing Director of the World Bank for Africa, Europe and Central Asia, and South Asia. She is also currently a non-resident Senior Fellow at the Brookings Institution’s Global Development African Growth Initiative, since 2011.

Starting her professional journey as a Young Professional at the World Bank in 1998, Songwe worked in the Middle East and North Africa region covering Morocco and Tunisia in the Poverty Reduction and Economic Management unit (PREM). Later she joined the East Asia and Pacific region PREM unit where she held several roles, such as, Regional PRSP Coordinator, Country Sector Coordinator and Senior Economist for the Philippines. She has also worked in Mongolia and Cambodia for the World Bank.

Born in 1968, Songwe earned a PhD in Mathematical Economics at the Center for Operations Research and Econometrics, as well as a Master of Arts in Law and Economics, and a Diploma of Profound Studies in Economic Sciences and Politics, from the Catholic University of Louvain-la-Neuve, in Belgium. She also has a Bachelor of Arts in Economics and Political Science from the University of Michigan in the United States. Songwe has also published several papers on governance, fiscal policy, agriculture and commodity price volatility, and trade and new financial infrastructure.

In the Shadow of Lopes

With the departure of the charismatic, and sometimes combative, Carlos Lopes, Songwe arrives in an institution where her predecessor has left a large imprint. Joining the organization in 2012, Lopes has been credited with reshaping UNECA and raising it out of obscurity on the continent. According to The East African news outlet, Lopes championed the need for improved data and statistics for informed decision making. He was the first to call for debt cancellation for the Ebola-effected countries in Africa, and led a team to demonstrate the economic impact projections on Africa were highly exaggerated and part of a negative narrative. During his resignation, Lopes was also praised by colleagues for taking the relationship between the organization, its partners and member states, to a higher level, for beautifying the UNECA compound, leading UNECA to host big conferences impacting on Africa’s development and empowering employees and ensuring gender parity in the organization.

Songwe’s Vision

However, Songwe is not without her own talents and tenacity. With some 20 years at the World Bank, Songwe’s new duties of advising African governments on their development projects will be well within her grasp. Described by her colleagues as a hardworking and competent leader, she is on the selection committee for the Tony Elumelu Foundation, an annual program of training, funding and mentoring for the next generation of African entrepreneurs and the influential African Leadership Network. According to RFI, as the new Executive Secretary for UNECA, Songwe will give priority to innovative financing, agriculture, energy, and economic governance.

 

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South Sudan says oil production at 130,000 bpd

Comments (0) Latest Updates from Reuters

CAPE TOWN (Reuters) – South Sudan is producing around 130,000 barrels of oil a day and wants to increase its refinery capacity to supply fuel to neighbouring countries, the petroleum minister said on Monday.

“We are focusing on four or five refineries so we can finally be able to sell to Ethiopia, Sudan, Kenya and Uganda,” Minister Ezekiel Lol Gatkuoth told an African oil conference in Cape Town.

East Africa’s only mature oil producer, South Sudan is aiming to double oil output to 290,000 bpd in 2017/18 the finance minister said in January.

 

(Reporting by Wendell Roelf; Editing by Joe Brock)

 

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Kenyan shilling inclined toward depreciation as oil demand weighs

Comments (0) Latest Updates from Reuters

NAIROBI (Reuters) – The Kenyan shilling was broadly stable against the dollar on Monday, but some demand from oil and merchandise importers was seen giving the local currency a depreciation bias, traders said.

At 0757 GMT, commercial banks quoted the shilling 103.30/40 per dollar, compared with 103.25/45 at

 

(Reporting by John Ndiso; editing by Elias Biryabarema)

 

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South Africa’s private-sector activity little changed in May, PMI shows

Comments (0) Latest Updates from Reuters

JOHANNESBURG, June 5 (Reuters) – Private-sector activity in South Africa was little changed in May from April, remaining in positive territory, as new orders and output failed to register significant gains.

The Standard Bank Purchasing Managers’ Index (PMI), compiled by Markit, was at 50.2 in May compared with 50.3 in April, still above the 50 mark that separates growth from contraction.

“PMI remained above 50 for the ninth month running in May, signalling the longest sequence of overall improvement in operating conditions in five years,” Markit said in a statement.

The sub-index for new orders fell to 50.1 in May from 50.4 previously. Output rose slightly to 49.9 from 49.6.

South Africa’s economic outlook has been clouded by credit rating downgrades to “junk” by two of the three major rating agencies after President Jacob Zuma fired Finance Minister Pravin Gordhan in late March.

A fall below investment-grade typically constricts funding and sharply raises borrowing costs.

 

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Egypt’s foreign reserves rise to $31.126 billion at end-May

Comments (0) Latest Updates from Reuters

CAIRO (Reuters) – Egypt’s foreign reserves jumped to $31.126 billion at the end of May from $28.641 billion at the end of April, boosted by last month’s Eurobond sale, the central bank said on Sunday.

Egypt, which has been struggling to revive its economy since a 2011 uprising, sold $3 billion of Eurobonds in May, twice as much as targeted.

That confirmed growing foreign appetite for the country’s debt as it follows through with economic reforms aimed at cutting a budget deficit and luring back investors.

In November Egypt abandoned its currency peg of 8.8 per dollar and floated the pound, which then halved in value. It also raised its key interest rates by 300 basis points, helping Egypt to clinch a $12 billion International Monetary Fund programme.

Last month, the central bank raised its key interest rates by another 200 basis points after inflation reached a three-decade high.

The moves helped the country lure back foreign investors to its treasury sales. Foreign investors in Egyptian government securities rose to 136 billion Egyptian pounds ($7.52 billion) in May from 120 billion pounds a week earlier.

Last month’s Eurobond sale, which reached Egypt’s central bank on May 31, was the second such sale this year. Egypt had earlier raised $4 billion at a Eurobond sale in January that also exceeded expectations.

The steady climb in Egypt’s foreign reserves since it floated the pound brings them closer to pre-2011 levels of around $36 billion.

 

($1 = 18.0800 Egyptian pounds)

 

(Reporting by Eric Knecht and Arwa Gaballa; Editing by Catherine Evans)

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