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Akon Switches On: Turning Fame into Light for Africans

4 February 2016 Comments (0) Africa, Featured, Leaders

Akon Solar Academy

American-Senegalese rap star Akon is putting his fame to use: providing electricity for the millions of people who need it in 15 sub-Saharan African countries.

Rappers may be famous for many things, but philanthropy is not one of them. Akon, the Senegalese-American rapper famous for dance hits like “Smack That” and “I wanna love you”, is changing that perception through his latest business endeavor. Unlike his peers, Akon’s newest business is not a clothing line or new cologne, but the creation of a solar power company. In February 2014, Akon announced that he would be changing the public face of rap by launching his company to invest in capital development for millions of sub-Saharan Africans.

Lighting the Way

In September of 2013, Akon and his friend and soon-to-be-business partner Thione Niang, were discussing how they could improve their hometown of Kaolack, Senegal. Both had been born and raised in this West African country, in a town without electricity. They decided that infrastructure was a key priority in Senegal’s development, and that electricity was a fundamental key to promoting employment, education and positive change in Senegal and other sub-Saharan African countries. In regions without access to electricity, life slows after dark, and in equatorial countries, darkness falls around 6pm, year round. Light is a fundamental aspect of human activity, and without electricity, families are forced to resort to what can be dangerous alternatives: approximately 3.5 million people die per year from respiratory illnesses related to indoor burning.

Akon and Niang joined forces with Malian entrepreneur Samba Bathily to bring an end to energy poverty in sub-Saharan Africa. They decided that creating a company, Solektra International, would provide a clear path to Akon and Niang’s dreams. Through Solektra International, the three co-founders created Akon Lighting Africa, a for-profit company working to create jobs and stimulate economic growth through sustainable, low-cost electricity.

Going Against the Grain: A For-Profit Company in a Non-Profit Sector

When we think of “helping Africans”, images of smiling do-gooders and the logos of non-profit agencies like the United Nations Development Programme come to mind. Not often do corporate giants like Huawei enter the conversation, but this is exactly the conversation Akon is changing. Akon is working with companies like Huawei, Solektra and Sumec to implement his projects because he “doesn’t believe in aid in Africa.” By using their expertise, Akon Lighting Africa is able to access their enormous network of partnerships to provide low-cost electricity to thousands of Africans. Their projects are provided free-of-charge to the communities they work in from a US$1billion credit line established with various international banks. According to the Akon Lighting Africa website, the average cost of lighting a village is approximately US$75,000, which includes micro-solar grids, personal solar packs for homes, street lights, lights and wiring for educational and health institutions, and the elements needed to connect each light to the grid.

Changing the Rap Game

Not satisfied with the status quo that has left billions of humans in the dark, Akon took matters into his own hands when he co-created Akon Lighting Africa. This company “aims to develop an innovative solar-powered solution” for the 600 million Africans without electricity. Akon Lighting Africa works to enable school children to study so they can pass their exams; to increase economic opportunity for small business owners; make roads safer and improve the quality of services available at existing institutions, like health centers and schools; and to ensure better access to information, all while creating jobs for the young people of Africa.

In just twelve months, Akon Lighting Africa has brought solar powered electricity to 480 villages across 15 different African nations, including 100,000 solar street lamps and 1,200 solar micro grids. Through public-private partnership, Akon’s company has installed solar powered lights into schools, community centers, health institutions, streets and private homes in rural communities. Not only has this project provided villages with electricity for the first time, but the physical construction and maintenance of these solar power grids has indirectly created jobs for a reported 5,500 young people. Unemployment, especially among the under-35 population, is endemic across sub-Saharan Africa. Lack of infrastructure, such as electricity, is just one symptom of poverty; joblessness is another. Akon’s approach is tackling both.

A Bright Future

Akon’s vision is that Solektra and Akon for Africa will be the dominant provider of renewable energy in Africa within the next decade. In 2016, Akon Lighting Africa plans to expand to 10 additional countries including the Democratic Republic of the Congo, Angola and Chad. Both Akon Lighting Africa and Solektra International are emerging as key players in the future of solar power for unlit African communities–Solektra International has been invited to attend the Powering Africa Summit for 2016, showing their increasing importance in the development conversation.

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Record 48 candidates to enter presidential elections in Benin

1 February 2016 Comments (0) Africa, Featured, Politics

Benin Presidential Candidates

An unprecedented 48 candidates have applied to compete for the presidency in Benin’s upcoming February elections.

In a record turnout, 48 candidates have applied to run for presidency in the West African country of Benin in February this year. According to their electoral agency, although 52 nomination papers were received, only 48 forms were correctly completed and accepted.

Political analyst Agapit Napoleon reported this is the highest turn out Benin has ever witnessed in a presidential election since military rule ended in 1990 and multi-party politics commenced.

President Thomas Boni Yayi has held office since 2006 but is barred under the constitution from running for a third term. Thus the elections are wide open to new leadership and the nominations have been flooding in.

“I dream of a Benin that smiles and that’s why I invite us to turn resolutely toward a clear future,” said president Yayi to a crowd of 35,000 at Mathieu Kerekou stadium after he assured the nation he would not change the constitution to run again.

Current Prime Minister strong contender

A front runner is expected to be current Prime Minister Lionel Zinsou who has been selected as the ruling party FCBE (Cowrie Forces for an Emerging Benin) main candidate. Zinsou announced at a business conference in London that he was committed to the electoral race and honored that his party had ratified his candidacy.

Zinsou said his manifesto will concentrate on helping informal workers gain full employment and financial support for agriculture. He argued agriculture needs to be made a priority as it accounts for 23% of Benin’s gross domestic product but only 2% of the banking industry’s profits.

Should he be voted in, he claimed a priority policy would be to finance agriculture in Benin, making sure that families don’t have to carry the burden of borrowing money to finance agricultural activities. Zinsou highlighted the poverty trap farmers often got stuck in when only having access to high-interest loans within Benin, a small cotton-producing nation.

Zinsou’s agricultural policies will particularly focus on developing agricultural banks with an emphasis on ensuring credit is available for farmers. In his policy announcement Zinsou stated that building agricultural credit was the cornerstone of building economic success for the vast proportion of farmers in the country.

Critics accuse Zinsou of colonial collaboration

Speculation from critics claim Zinsou, a French-Beninese investment banker has been implanted by the former colonial power France to safeguard economic benefits for the current president Bony Yayi.

However, Zinsou insists he has the backing of other major political parties including Adrien Houngbedji, a PRD lawyer and current head of Benin’s parliament, who came second in the 2011 election. The government has also publically defended Zinsou, emphasizing his full citizenship and criticizing his opponents for utilizing racist tactics to undermine his candidacy.

Big business in the race

Sebastien Ajavon

Sebastien Ajavon

 

 

 

 

 

 

Two of the most influential and wealthy businessmen in Benin have also announced their candidacy to run against each other. Sebastien Ajavon, who acquired a significant fortune in the food industry, is set to run against fellow tycoon Patrice Talon, a cotton mogul. Talon is regarded as the main opponent to President Boni Yayi’s FCBE party.

Ajavon announced to a large crowd of supporters at Mathieu Kerekou stadium on Sunday, January 3rd that he would run as a candidate for all Beninese. He made particular mention that regardless of religion, gender, geographical region or political preferences he would stand for all citizens.

In the past Ajavon has stayed in the background of politics, funding various political parties. In a similar vein Talon has previously offered financial support to president Yayi’s ruling party before switching allegiance to the opposition.

Political analyst Francois Alladji stated that with Ajavon announcing his candidacy it, “pits the two most powerful traders” in Benin directly running against each other.

Opposition coalition split

The opposition coalition named “Unity Makes the Nation” remained split and could not reach a consensus as to their choice of a main candidate. Subsequently Eric Houndele, who acts as vice president in parliament, also dropped his nomination as an independent candidate.

Despite the strong candidacy of Prime Minister Zinsou, seven other members of the current ruling FCBE party have also applied to run against each other.

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Cargo drones, an economic revolution for Africa?

29 January 2016 Comments (0) Africa, Business, Featured

Africa drone

Cargo drones come to Africa and it could mean an economic revolution for the continent

Drones are now part of our modern consciousness, our everyday reality. Having had a sinister reputation from the association with warfare, their potential is now being harnessed for good.

The development of cargo drones is currently underway across the globe, sparking interest from pioneering technological heavyweights like Google and Amazon, as the revolutionary form of delivery transport.

Cargo drones are essentially un-piloted flying robots that carry medium sized goods. There are different styles to fit different purposes and sizes vary between 3-6 meters in length.

Top internet retailer, Amazon, said on their website that soon viewing cargo drones will be, “as normal as seeing mail trucks on the road today.”

For Africa this could mean far more than how a parcel is delivered. Their use has been put forward as a possible boost for the continent’s economy.

Leapfrogging the problem of infrastructure in Africa

With Africa’s rapid economic growth comes the need to build and improve infrastructure. It is estimated that Africa’s shortfall is a much-needed $50 billion per year in this sector. There simply is not enough money to build the roads and lay the new train lines required to keep up with increasing trade.

John Ledgard, the director of Afrotech and long-time Africa correspondent of the Economist has a plan. The futurist thinker sees a way to combat the gridlock that African trade is otherwise unquestionably going to face, failing spending $93 billion a year on financing infrastructure. He hopes to unlock the sky by eventually linking east to west.

Afrotech plans to fill the gap in Africa’s transportation by using cargo drones and their very own aerial highway. Starting by setting up routes in Rwanda, Tanzania and Uganda, eventually all parts of Africa will be connected. The initiative from Ecole polytechnique fédérale de Lausanne (EPFL) in Switzerland, is working with architects Foster + Partners to create the drone-ports for the routes which hope to be set up by the end of 2016.

“The Droneport project is about doing ‘more with less,’ capitalizing on the recent advancements in drone technology,” said Lord Foster, chairman and founder of Foster + Partners.

The biggest to the smallest airport in the world

Foster + Partners, responsible for the creation of the world’s largest airport in Beijing, China, will now create what could be considered in effect, the world’s smallest airport. Three dome shaped buildings will comprise the Droneport that will rest on Rwanda’s red earth. Designed to run on clean energy, it will eventually provide employment for the surrounding community.

Rwanda was chosen for the trial because the terrain is difficult to travel through and very little air traffic flies over. From here half the country will be reachable via the cargo drone routes. Prioritizing medical and time sensitive cargo initially, Ledgard has a clear vision of how the project will mature. Phase 1: mainly hospitals and humanitarian emergencies. Phase 2: industries that provide spare parts and building equipment.

“Phase 1 and 2 would be enough to make the drones useful contributors. But the real reason for the technology,” says Ledgard “is Phase 3, when the drones will better connect businesses with customers across Africa.”

 

Jonathan Ledgard

Jonathan Ledgard

Turbulence expected

All going to plan, this could be the making of the developing Africa. Inevitably there are valid causes for concern and tangible doubts, but no one is more aware of them than Ledgard himself. He openly cites the areas that may be of concern but says most risks are small or can be overcome and that it is an improvement on current affairs.

Important for Africa is whether it can adopt this new technology quickly enough to make it beneficial. It will need several aspects to come together: the army to ensure security, government leaders of regional economic groupings to put free trade into practice and laws to be passed allowing fully independent drone flight. With Africa united, this could truly be an economic revolution for the future.

“Cargo drones can affordably and precisely collapse time and space….in a city environment you want to collapse time and in a rural environment you want to collapse space,” said Jonathan Ledgard.

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First International Business Forum in the Democratic Republic of the Congo

25 January 2016 Comments (0) Africa, Business, Featured

Kinshasa International Forum

The first Kinshasa International Forum, #KINFOR16, at the Hotel Beatrice in Kinshasa on the 26 and 27th of January, 2016, is bringing together seven hundred entrepreneurs from Africa, America, Asia and Europe to meet with Congolese innovators and the large companies which operate within the country, aiming to foster new relationships and opportunities through business to business meetings, informal sessions and thematic workshops. The forum is organized jointly by a Belgian organization called Africa Rise and the Democratic Republic of Congo Conseil Economique et Social – C.E.S.

Africa Rise is dedicated to the social and economic development of the Democratic Republic of the Congo, and they are already known for their ABBW, Africa Belgium Business Week. They firmly believe that the emergence of a stronger, more capable nation is to be reached through business networking and the sharing of ideas and expertise.

The Conseil Economique et Social is a think tank. They are built up from players within the Congolese society such as employers, workers, NGOs, religious leaders, scientists and bankers. Their role is to advise upon issues chosen for them by the presidency and the state.

The spirit of African Business

Africa in general, and the Democratic Republic of Congo in particular, is no stranger to entrepreneurial spirit and business innovation. The country however has had many years of struggle and while things are improving there are still significant challenges to be met.

Here the entrepreneurial spirit is not something reserved for business people or the creative industries; here the basics of business innovation and entrepreneurship are the very stuff of survival. From Benedict Mundele, the twenty one year old woman from Kinshasa who is aiming to provide a healthy and sustainable lifestyle through Surprise Tropical which she founded at the tender age of sixteen, to Abraham Kazadi, who sells fermented tea in Goma in the troubled east of the country to people in his local community, the spirit of business innovation runs high.

A helping hand where most needed

A forum for these innovators may help to enable the Democratic Republic of Congo to emerge both economically and socially from the troubled haze which has for so long hampered the development of the country. A chance to meet and exchange ideas and experiences with business people from all over the world will be an invaluable asset to the youth of the DRC, where seventy percent of the population is under twenty five.

“It is our strong commitment and a will to contribute to the emergence of a dynamic entrepreneurial scene in Democratic Republic of Congo” said Binta Sagna, Communication Director of Africa Rise.

An interesting idea aimed at just these young innovators is a project called #Kinpitch. As the name suggests this project allows entrepreneurs to pitch their idea, dragon’s den style, to a worldwide panel of business leaders and idea shapers. The seven finalists will be invited to the international forum and be given a year-long mentorship to realize the potential of their ideas.

The First International Forum is a platform for enablement for a troubled but resource-rich nation and hopefully the first of many.

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Rwanda tops the UN Human Development Index

24 January 2016 Comments (0) Africa, Featured, Politics

rwanda

The Human Development Index, or HDI, celebrates its 25th anniversary since its induction into economic thought with its report published last month by the United Nations. And notably, this year’s report included a section that evaluated the progress economies have made since 1990- reporting that Rwanda has made the most progress out of all countries in the last 25 years.

This fact is all the more impressive given that its level of development fell during the genocide of 1994. Rwandans can now expect to live almost 32 years longer than in 1990, and spend twice as long at school.

China, the frequently lauded growth powerhouse of the world, comes in at number two.

Kagame’s Rwanda

Rwanda’s ability to move from the recovery of genocide towards a service-dominated economy in one generation highlights the impact proper governance can achieve in lower income economies. Rwanda has one of the lowest corruption rates in the region, and is currently still led by Paul Kagame, the man who led the Rwandan Patriotic Front when the armed wing of the party ended the Rwandan genocide in 1994.

Currently, Kagame’s presidency is attracting local and international debate as the Parliament recently passed a nation-wide referendum concerning limits on Presidential terms. With the new constitutional amendment and overwhelming popularity Kagame holds, it seems that the President is set to lead the country through at least 7 more years of economic development.

Despite his popularity and demonstrated effectiveness as President, the referendum has attracted global criticism from other world powers. Both the U.S. State Department and the European Union have condemned the results of the referendum, calling Kagame to step down and “foster a new generation of leaders in Rwanda.”

The international community largely fears another life-long leader in central Africa, a region that has witnessed many saviors-turned-tyrants in the post-colonial era. Many neighboring nations are still ruled by dictators such as Angola’s José Eduardo dos Santos, Zimbabwe’s Robert Mugabe, or Cameroon’s Paul Biya, men who have held power over these territories for decades.

However, Kagame has expressed disinterest towards becoming a life-long president. At 58 years old, he said, “I don’t think that what we need is an eternal leader.” The results of the referendum coincide with other leaders in the region seeking constitutional term extensions as well (in the Republic of Congo and the Democratic Republic of Congo), and foreign critics’ fears may be largely attributed to what precedent Rwanda’s referendum may set in the region. In neighboring Burundi, President Pierre Nkurunziza’s decision to seek a third term sparked violent protests resulting in over 100 deaths since the announcement.

How does one measure progress?

Most markers of economic progression deal with money: such as gross domestic product or national debt. The HDI paradigm acknowledges something we all know: it’s not all about money. The health of an economy is also expressed in the welfare of its people and how able they are to contribute to this economy.

The index takes into account measures for household income, life expectancy and education into a single development score, which gives a holistic sense of how an economy is doing on a human basis. The report’s philosophy on progress is explained in its introduction, “development is about enlarging people’s choices—focusing broadly on the richness of human lives rather than narrowly on the richness of economies.”

And for once, it’s mostly good news: the fastest progress was seen among low human development countries. Progress on the HDI has been considerable at the country level. For example, Ethiopia increased its HDI value by more than half; Rwanda by nearly half; five countries, including Angola and Zambia, by more than a third; and 23 countries, including Bangladesh, the Democratic Republic of the Congo and Nepal, by more than a fifth.

The five fastest developing countries in the world are Rwanda, China, Iran, Singapore, and Mozambique.

Rwanda’s reforms serve the bottom 50%

Rwanda’s success can be attributed to conscious economic reform geared towards strengthening the ability of the bottom 50% to engage with business and finance. Last year’s reforms boast an astounding reduction in the number of days required to transfer property from 370 to a mere 32, and jumping from a score of 2 to 19 out of 20 on an index that rates the ease and efficiency of obtaining credit according to a World Bank report published in 2015.

In Africa, Asia and Latin America over 30% of surveyed firms reported access to credit as a major constraint to growth. Rwanda’s new credit guarantee scheme enabled the country to become a major exporter of specialty coffee in one year alone. By creating a financial system inclusive to lower-income households, policy makers have allowed for structural transformation and the creation of work among the bottom 50%.

Rwanda sets the bar for highly developed countries

And Rwanda’s structural transformations that allow for creation does not limit itself to expressions of finance. Their Gender Development Index score is almost perfect at 0.957 out of a maximum score of 1. Rwanda, despite being #163 on the HDI Index, in terms of gender equality scores higher than even highly developed countries such as the Republic of Korea, Greece, and the Netherlands.

Even Switzerland, considered as one of the most developed and egalitarian countries in the world, comes in at only 0.950 in comparison to Rwanda’s 0.957. Rwanda is one of only two countries in the world with a female majority in the national parliament.

And put in perspective, Rwanda’s ability to surpass China is more incredible than it seems. As one of the smallest countries in Africa’s mainland, the country is mired by a lack of natural resources. The growth witnessed over the last 25 years is mostly attributed to a surge in the service industry.

Rather that fear the impacts Kagame’s track record may set in Africa, the foreign community would be amiss to ignore the major successes and beneficial precedents he has set as well, demonstrated in the hard numbers published by the UN’s HDI report in December 2015.

In the same month, an overwhelming 98% of Rwandan voters lifted constitutional bans that would allow Kagame to preside over another 3 mandates, meaning that Kagame could be president until 2034. “What is happening is people’s choice,” said Kagame, adding that Rwandans are a people that “have their future in their own hands. Ask people why they want me.” Given the progress highlighted by the UN Report, the answer seems pretty clear.

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Magreb Bank launches to drive regional economic integration

19 January 2016 Comments (0) Featured, Middle East, Politics

Maghreb

The new Maghreb Bank for Investment and Foreign Trade is a significant step in efforts to create a regional economy.

The economic integration of five countries of the Maghreb region of Northern Africa took a step forward with the launch of the Maghreb Bank for Investment and Foreign Trade.

The bank will finance joint projects of the five member nations of the Arab Maghreb Union – Algeria, Libya, Mauritania, Morocco and Tunisia. It launched with $150 million in capital contributed by the member countries.

The bank will invest in projects including infrastructure, transportation, telecommunications and electrical power. It will also work to strengthen intra-Maghreb trade.

The bank, based in Tunis, was launched December 21. Nouerddine Zekri, former Tunisian Secretary of State for Development and International Cooperation, was named Senior General Manager of the bank.

A step towards integrating regional economies

The launch marks a significant step in the long-delayed effort to boost trade within the region by integrating the economies of the five countries, which together represent a market of about 100 million consumers.

Despite decades of regional political tensions, the economic appeal of the integration effort has remained strong.

Exports from and to countries within the region are extremely low and the integration promises to increase those. At the same time, most of the countries are highly dependent on trade with the European Union and more intra-region trade will reduce that vulnerability.

Integration promises to grow GDP

Economic integration would increase growth in GDP by an estimated 2-3 percent and increase job creation, according to one study, which called it a potential “game changer’’ for a region that is the least integrated in the world. On average, trade between the five countries represents only three percent of their global trade.

“The benefits would be significant. It could increase intra-regional commerce by 5-12% and stimulate job growth and help anchor stability,” the report from the Tunis Conference on Regional Economic Integration said.

Nouerddine Zekri

Nouerddine Zekri, the first General Manager of the new Maghreb Bank

Boosting trade within the region

The report said trade within the region could grow by 5 to 12 percent with integration.

“This growth could in turn translate to significant job creation particularly if enhanced trade encompasses both goods and services,” the report said, noting that a consumer market of about 100 million would attract greater foreign and local investment and offer smaller businesses opportunities to expand.

National economies struggle

The growth would help economies that have struggled.

Since 2011, growth of GDP in the region has averaged only 2 percent, compared to 5 percent during the six years prior to the financial crisis of 2008. Economic growth has failed to keep pace with population growth. Unemployment is high, averaging 12 percent in Algeria, Morocco and Tunisia, according to the European Commission.

At the same time, the Maghreb countries are highly dependent on trade with the European Union, which proved to be vulnerability during the euro crisis.

Algeria, Libya, Morocco and Tunisia export as much as 70 percent of their products to the EU and those exports represent 20 to 30 percent of their GDP. Morocco and Tunisia also depend heavily on European tourists, which make up about 40 percent of their arrivals.

While one goal is to reduce dependence on exports to Europe, an integrated regional economy might create a more effective bargaining bloc to negotiate in with the European Union.

Political tensions, unrest stall progress

The five countries first signed the Treaty of Marrakesh agreeing to integrate in 1989. The framework for forming a bank was signed in 1991 but the actual bank was not approved until 2006.

Political tensions stalled the economic integration effort for more than two decades. Initially, disagreements between Morocco and Algeria over territory in the Western Sahara contributed to delays. More recently, political disruption and war created uncertainty about economic stability in the region.

The differing economic structures of the countries have also posed a challenge to integration. Morocco and Tunisia have relatively liberal market economies while Algeria and Libya economies were more tightly controlled. Mauritania’s economy is largely based on subsistence agriculture.

Among the five countries, Algeria and Morocco have the largest economies with $552 billion and $250 billion GDP respectively. The GDP of Mauritania, totals an estimated $8 billion.

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Middle Eastern investment in global real estate surges

14 January 2016 Comments (0) Business, Featured, Middle East

London real estate

Investment in real estate can be a fickle mistress. The ebb and flow of the cyclical patterns of real estate values can be hard to read at times, and investments, particularly in residential real estate, can lead to decreases or stagnation of your original investment. But some sectors are relatively safe, especially for experienced players who look at the patterns established over many years. Foremost of these ‘safer investments’ are the areas of commercial and hospitality real estate which can both offer big returns when the correct choices of properties are made. And of course, the old adage of any investment in real estate is ‘location, location, location’ and that is especially true when you are looking at the higher end of the market, be it commercial or residential.

Record spending on commercial real estate

Recent research by CBRE, the world’s leading commercial real estate company, highlights rising levels of outward investment in commercial real estate from Middle Eastern countries, and showed that in the first half of 2015 around US$11.5 billion was spent on commercial property worldwide. This far surpasses the previous high of US$9.6 billion recorded in the first half of 2007. Much of this investment comes from sovereign wealth funds (SWFs), particularly those of the United Arab Emirates and Qatar. Of the US $11.5 billion coming out of the area, US$8.3 billion (or 72%) of that came from SWFs.

From a macroeconomic perspective this increase in real estate spending by Middle Eastern investors is not surprising. Oil prices sit at seven year lows and investment bank Goldman Sachs predicts that this situation will not improve any time soon, especially with increases in supply and reductions in demand an ongoing issue. So, with potential revenue decreasing at a steady rate, the fund managers of the Middle East are looking at the best options to invest and receive a high level of return.

The real estate industry will continue to grow

The real estate industry globally has generally managed to weather the recent recessions better than some other sectors. This is partly due to increased activity in Asia which has offset any declines in other areas. Higher disposable incomes and relatively low rates of unemployment in many economies has also been a factor that has protected the real estate industry. Forecasts of the 10 year period from 2010 to 2020 predict that industry value added may increase by 4.5% per annum – well ahead of predicted global GDP growth in the same period. With annual revenue of over US$3 trillion and a global workforce of over 11 million, this is a sector that will continue to grow and adapt to the cyclical patterns of individual markets and economies.

Location, location, location

New York real estateAs mentioned, location is a crucial factor, and it comes as no surprise that some of the world’s major conurbations are the primary beneficiaries of this surge in spending. London leads the field, with US$2.8 billion spent on commercial property in the first 6 months of 2015, with Hong Kong (2.4 billion) and New York (1.1 billion) following in its wake. It is worth noting however that if we examine total real estate investment rather than just that originating in the Middle East, New York is leagues ahead of its English rival with a staggering US$40.1 billion of investment in real estate over the first half of 2015 compared to London’s 19.4 billion and Los Angeles’ 19.3 billion.

Change in focus to hotel properties

As well as the dramatic increase in total investment from the region, there is another distinctive factor in Middle Eastern spending on real estate. In every year from 2007 to 2014, the bulk of investment has been aimed at the office market. As this has reached saturation point in many cities, characterized by empty units, falling rents and an increase in incentive packages to attract tenants, the fund managers and individual investors have shifted their focus to the hospitality sector and to hotels in particular, which offer attractive long-term revenue streams. Of the US$11.5 billion spent in the first six months of 2015, $6.8 billion was invested in the hotel industry, with $2.5 billion being spent on hotels in London and $2.4 billion in Hong Kong. Given that this sector only attracted $1.8 billion for the whole of 2014, this is a significant increase and emphasises the increasing diversity of investment strategies by Middle East based investors.

Middle Eastern money looks for new opportunities

This increase in real estate spending, and indeed the change in focus, does not look like it will abate in the near future. Investment in the Americas looks like it will continue to increase into 2016 as Middle Eastern money looks for new opportunities outside the energy industry and outside its traditional comfort zone of Europe. While Asia appears to be a market that has so far eluded investment from the Middle East – mainly due to the dominance of China in many of the developing economies – one cannot rule out astute investors continuing to cast their net over a wider geographical area.

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How have crises become endemic in Northern Nigeria?

8 January 2016 Comments (0) Africa, Politics

flood nigeria

“This is how the world ends. Not with a bang, but with a whimper.” The famous lines from T.S Elliot’s poem The Hollow Men was written concerning post-World War I Europe and the Treaty of Versailles five years after the Nazi Party became active in Germany. Elliot despised the Treaty of Versailles, and realized over a decade before World War II that the suffering and whimpers brought about by the Treaty of Versailles set the stage for a sequential buildup of events that would lead to disaster if unattended.

Setting the Stage for Disaster

In Northern Nigeria, this whimper has become endemic as vulnerability is worsened through each drought, food crisis, mass-displacement, and flooding. More often than not, local and international authorities only provide band-aid solutions: temporary measures that soothe the symptom without treating the infection. As a result, almost half of Africa’s most-populated nation has been trapped in a silent cycle of disaster, more vulnerability, and thus more disaster.

The link between disaster and vulnerability has been emphasized in recent decades as academics began to understand the significance of “the whimper.” In disaster literature, one of the most common analogies used to explain this link is that if there were no humans, it would not be a disaster: if a hurricane hit the South Pole no one would call it a crisis. And in terms of raw data, when disasters do occur the burden is disproportionately carried by the poorest. Since natural disasters lack the autonomy to pick their victims, vulnerability becomes the deciding factor in who gets hurt and who doesn’t. Critically, disasters are not a bang, or a freak accident. It takes years to form the necessary intervening conditions for disaster to occur.

Disasters depend on the social order, its everyday relations to the environment, and the larger historical matters that shape or frustrate these matters. In the north of Nigeria, power has historically been centralized in the Sokoto Caliphate, where political unity was designed to cleanse paganism from Islamic beliefs and discourage ethnic tensions. Kano was an economic hub even during Prophet Muhammad’s lifetime, and for centuries involved in slave trade, so in the 1600s when Europeans began arriving they partook in the pre-­existing West African slave trade by purchasing slaves from African merchants, eventually leading to the Atlantic slave trade. In 1850 it was estimated that 50% of the residents in Kano where slaves. Northern Nigeria was so invested in this trade that slavery was not made illegal in Nigeria until 1936. The grandchildren of these slaves now live in poverty in the North.

There are obvious trends moving south to north in Nigeria. The North has nearly double the poverty rate of the south, the judicial use of Sharia law, and a predominantly Muslim community. Life expectancy at 2001 was about 52 years with a total fertility rate of about 6.2 children per woman of childbearing age. A 2002 Core Welfare Indicator Questionnaire reveals that only 37% are literate, only 63% have access to quality drinking water, and about 40% have access to medical services. Within the demographics, we can see that the current residents are burdened with legacies of vulnerability in terms of access, income, education, and quality of life.

north nigeria

The Moment of Crisis

These whimpers of hazard, vulnerability, and intervening conditions set the stage for disaster since the 1600s, but also ultimately make up daily life for Nigerians. Before a crisis of extreme flooding in 2014, northern villages were in the grip of a food crisis, over 70% in poverty, many of whom were internally displaced due to 2013’s flooding. When the extreme event of moderate flooding is first superimposed, it acts as a catalytic agent, causing a chance encounter of all factors, and a failure of intervening conditions. This causes a deviation from the social norm, that moment of crisis that appears on televised news and captures the general public’s definition of “disaster.” And the carnage was dramatic: entire villages were literally washed away since houses of the poor were usually made of mud.

The International Red Cross was only able to offer short term relief (blankets, mosquito nets, water) to 3000 families and long term relief (gardening tools and seeds) to 800 families, which is helpful but on a small scale considering that over two million people in Nigeria alone were displaced from the flooding. The Nigerian government was unwilling to devote many of its resources towards recovery, citing the prioritization of other demanding issues.

Largely on their own, these rural communities rebuilt their houses out of the same mud, even poorer than before. Though the fluctuations in the natural/physical system are gone, their re­adaptation to nature is not buffered with intervening conditions to prevent a flood from happening again. The new norm that is established is even more vulnerable due to the failure of containment in the post­disaster response.

The Emergence of Disastrous Policy

There is an urgent need for a collaborative effort of both government and stakeholders to support town planning, engineering and other professional agencies to combat flooding in Nigeria to avoid its long ­range consequences. The tasks ahead are immense as these solutions must be implemented in the face of a multitude of problems, such as economic corruption, lack of infrastructure, and poverty.

But because these affected communities via disaster agents have become even more vulnerable, eventually the local and international authorities will grow impatient of always bailing out those who live at risk, thus their post-disaster response will become increasingly indifferent and ineffective, furthering the vulnerability conditions of the affected communities. Short-sighted solutions to whimpers are embroiled in good intent and disastrous consequences. Much like the Treaty of Versailles, there is a willing ignorance of how policies are paving a path to disaster: “this is how the world ends, not with a bang, but with a whimper.”

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Hydrogen Power in Mali

2 January 2016 Comments (1) Africa, Business, Featured

Aliou_Boubacar_Diallo

Green power in Mali from hydrogen gas wells could power the future.

Hydrogen power refers to the use of hydrogen fuel as a zero emission fuel, since burning hydrogen with oxygen emits no carbon dioxide (only water). It sounds a bit futuristic perhaps, but the physics behind it are valid, though up until recently there have been very few practical examples. This is due to hydrogen power relying on either some kind of hydrogen fuel cell or on hydrogen gas, which until recent times, wasn’t believed to be in the earth’s crust in great quantities, nor in the earth’s atmosphere in clean or usable form.

In a new book about natural hydrogen entitled Natural Hydrogen: The Next Energy Revolution?, the the authors assert that natural hydrogen seeps or wells are abundant almost everywhere on earth and are a real viable alternative to fossil fuels. The book is written by acclaimed geologists Alain Prinzhofer and Eric Deville. With this new book it is clear that hydrogen power is no longer the technology of the future, but rather the technology of today.

In July 2015, three years after their first successful test, the Petroma Company demonstrated how hydrogen gas can be used to generate power, by lighting up part of the village of Bourakebougou not far from the capital Bamako in Mali, the eighth largest country in Africa. This has created almost 100% clean electricity in a poor rural area that did not have any access to electricity, something that would have hardly seemed plausible only a decade ago. In doing so, Petroma is not only reigniting the debate about alternative energy, it is also showing the world that even a poor African country can be innovative and turn to renewable fuels and prevent the massive pollution that comes with the fossil fuels used today.

The man behind this new venture into the field of hydrogen power is 56-year-old Aliou Boubacar Diallo, who is the president of Petroma Inc and also the leader of the Democratic Alliance for Peace. Aliou Boubacar Diallo is the driving force behind the new push for green energy in Mali, where he is a well-known player in not just politics and the energy sector, but also within gold mining and peace brokering.

HEC Feasibility Study

In the field of hydrogen engines, Petroma turned to well-known experts from the Hydrogen Energy Center in the US to perform a feasibility study. HEC is on the forefront when it comes to hydrogen energy and hydrogen power generators.

The study conducted by HEC was to check if it would be possible to harvest the hydrogen gas and use it in generators and generate at least 100 megawatts of power. Furthermore the study was to determine whether it would be better to have many small plants or one larger plant. The power would be used by local villages as well as the capital Bamako and its surrounding industries.

This study was the basis which Aliou Boubacar Diallo used to start the hydrogen power revolution in Mali. The first generator was built and demonstrated in July 2015 and will be followed by many more, as ten wells are on the way. Once those ten have been successfully installed, another almost 300 are planned in the first major phase of the project, quite possibly with more to come.

mali

Power in Mali

While Mali is a large country in terms of land size, it is a poor country with around 15 million people, of which half live below the poverty line. More than ten years ago Mali was already quite green by most standards, as half the country’s power came from the use of hydroelectricity, though only about half of the citizens could be reached by the network.

Today these numbers are not much higher, as expanding the hydroelectric capacity of the country beyond the current level is expensive and many locals are still not connected with the grid.

It was pure luck when Petroma found the hydrogen well at Bourakebougou, as they were in fact drilling to get water to the village. Instead of clean water they found almost pure hydrogen, which will continuously power the generator for as long as it lives, without exhausting the hydrogen gas. In fact, while scientists don’t fully understand this seeping hydrogen gas phenomenon, some believe it could be stable enough to last for thousands of years.

With the numerous massive and almost pure hydrogen wells already found in the country, it will perhaps be feasible to convert the country to almost exclusively to renewable green sources within a foreseeable future. This has proven almost impossible for much richer and more technologically advanced nations, as their power needs are much higher.

Time will tell if this adventure into alternative energy can deliver as much as it promises.

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Phuti Mahanyele: an inspirational black business woman

30 December 2015 Comments (0) Africa, Featured, Leaders

Phuti Mahanyele

Phuti Mahanyele – an inspirational black business woman who believes that the poor representation of women in the boardroom of major businesses in the private sector is “not just a social injustice but an economic and business imperative”.

Phuti was born in Dobsonville, Soweto, South Africa on March 15th, 1971, however she largely grew up in the Claremont township outside Durban. Her mother died at the age of 42 in 1989 when Phuti was 17. Phuti has since acknowledged that this was a major turning point in her life as it made her for the first time realize how short life can be and why it is therefore so important to never take it for granted.

Throughout her life her parents continuously advocated the importance of education, never differentiating between their sons and Phuti and her two sisters.

Her father: a pioneer for the improvement of black education

Her father, Professor Mohale Mahanyele, was a successful business man and pioneer for the improvement of black education. Whilst the Chairman of the National Economic Education trust, he ensured that thousands of young people progressed into tertiary education. Throughout his life he refused to accept the fact that just because a child came from a home with insufficient funds to afford expensive higher education fees, they were not entitled to it. During his life he could have become one of South Africa’s richest men however he was never interested in making easy money, and instead believed in reinvesting both his money and time back into the people and places he loved.

Phuti was educated in Johannesburg until she was 17, at which point she moved to the United States where she attended Douglass College in New Brunswick, New Jersey. In 1993 she graduated with a degree in Economics and then went to De Montfort University in the United Kingdom where she obtained an MBA on “The Impact of International Trade on Black Economic Empowerment.” Her education didn’t end here because in 2008 she completed a course called “Global Leadership & Public Policy in the 21st century” at Harvard University.

Early career

Phuti’s first job was at her father’s company, National Sorghum Breweries, however whilst she admits to being very happy at this time of her life, she also confesses to feeling unfulfilled. After two failed applications she finally won an internship at Fieldstone – an investment banking firm in New York. After a difficult start, she flourished and achieved the position of Vice President before leaving 7 years later, at which time she moved back to South Africa.

Her next job, running the Project Finance Unit for the Development Bank of Southern Africa proved to be less successful and she left after only a few months. Looking back, she admits that it was a bad fit for her and not an environment she could continue to work in.

Whilst looking for other work she received a telephone call from Cyril Ramaphosa, the Chairman of a then relatively small company called “New Africa Investments” which became the Shanduka Group.

Shanduka Group

Phuti originally joined as the managing director of Shanduka Energy in 2004 and eventually went on to become the CEO of the Shanduka Group. It was whilst working there that she truly found her passion.

She has since admitted to finding Cyril so inspirational on their first meeting that she agreed to work with him even before she knew what the job and salary was.

Phuti speaks of the amazing culture and work ethic at the Shanduka group, admitting that Cyril’s astonishing humility and ability to inspire was fundamental to this. She has always felt hugely responsible and accountable to her community and working at the Shanduka Group allowed her for the first time to give something back, as the company, unlike so many others, didn’t just focus on the profit for shareholders.

 

Business pillars and key successes

Phuti adheres to 3 business pillars: understanding herself including her spiritually; understanding any issues affecting her staff, personal and professional; and ensuring she has all the information she needs at all times in order to be able to drive the business forward

When appointed CEO, her key priority was to ensure that the business moved some of its investments into areas that were less market sensitive, as she saw this as a way of ensuring the growth and security of the company’s investments in years to come. During her time at Shanduka she helped increase the company’s net asset value to approximately R8billion. Major deals driven by Phuti with Coca-Cola and McDonald’s were key to this success.

After 10 years at the Shanduka Group, Phuti has achieved a lifelong ambition and with the support of her business partner Jeremy Katzen, a highly experience banker from Johannesburg, has launched her own investment company called Sigma Capital.

Major influences on her life

Phuti often cites her family, notably her father as a major influence in her life, however she also frequently talks about the huge impact Cyril Ramaphosa has had on both her business and professional life.

Her parents taught her how to see beyond problems and challenges and to remain positive at all times. Phuti believes that every single person on earth has a purpose and that they are obligated to discover what it is and then achieve it.

Life changing experience

Whilst attending a meeting in London, in 2013 Phuti was experiencing severe headaches, however she assumed it was just due to tiredness and tension. Whilst out shopping after the meeting she fainted, it was at this time she first sought medical attention. She was told to rest and returned to South Africa the following day, however on arrival she ignored the advice and went back to work where she then fainted again. When she woke up in hospital she was surrounded by friends and family, all of whom she didn’t recognize. It was at this time that she was told that she’d actually suffered from a stroke, hence her loss of memory.

Although she has now made a full recovery, the experience has changed her. Whilst she still has her incredibly high work ethic and puts in long hours, she is now also committed to finding a better work/life balance by valuing the importance of friends and family and not just achievements. She is in fact now engaged again (having already been divorced twice), and is learning to cook and play the piano. She admits to being excited and is looking forward to being a better wife and stepmother. “I feel ready to be a wife now”, she said.

When Phuti was asked what she would most want to be remembered for she said, “for having given as much of myself as I possibly could”.

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