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The African body SABER looks to revolutionize energy in Africa

8 June 2016 Comments (0) Africa, Business, Featured

SABER

Since 2009, SABER has been working to change the nature of energy within Africa.

Energy is at the very core of how economies and societies develop, and yet the sources of energy have become huge issues in recent years. Every developed nation in the world fueled its economic growth off the back of fossil fuels, but as finite resources dwindle, nations are looking for more sustainable means of energy.

In developing regions of the world this is an issue that relates to more than just growth, but also to the well-being of its citizens. The pollution caused by traditional fuels often affects the poorest people the most, and as urban centers become the financial heart of emerging markets, the need for greener energy has become increasingly stark.

The African group SABER is a prime example of people taking the initiative to change the face of energy within their markets.

What is SABER?

The African Society of BioFuels and Renewable Energies (ABREC/SABER) was established in 2009, to work towards creating cleaner and more sustainable sources of energy in Africa. The body is a public-private partnership (PPP) which is funded by 15 African nations in conjunction with various private enterprises.

SABER CEO Thierno Bocar oversees the organization’s work from its central office in the Togolese capital, Lomé.

Saber CEO Thierno Bocar

Saber CEO Thierno Bocar

SABER’s mission statement outlines how significant sustainable forms of energy will be for the emerging markets of Africa, saying, “Transitioning to clean energy is all the more demanding because energy needs are foreseen to expand considerably in Africa over the coming decades with new investment of about two thirds of existing capacity needed to keep pace with Africa’s growth.”

Although the organization is only 7 years old, it has already established a number of strong collaborative partnerships, and has turned ideas into realities. SABER was self-funded by 2012, which meant it had met its goal of being an independent advisory body to the public. In 2013, the group signed an agreement with the Committee on Economic and Monetary Union of West Africa (UEMOA), in which additional funding was allocated to move forward with several SABER projects.

Ideas turned into actions

The most notable of these projects has been the construction of solar powered street lighting across 3 African nations. Togo and Sierra Leone have both had 13,000 solar powered street lamps built, while a further 15,000 have been constructed in Benin. These developments alone are worth around $175 million of investment.

Solar energy features prominently in SABER proposals, alongside hydro-electricity and geothermal energy. These forms of energy are not only clean, but access the continent’s own resources intelligently.

CEO Thierno Bocar stated that within West Africa there were currently three areas that “have been selected: solar street lighting, rural electrification using solar kits or small-scale plants and the installation.”

However, SABER’s work is already expanding as it aims to address renewable energy needs across the continent.

Courtesy of SABER projects, there are currently solar power plants in 8 African nations, geothermal power stations in Kenya and Ethiopia, and a hydro-electric power plant in Uganda.

Continued growth

SABER has established relationships with The African Development Bank and USAID, but 2016 has seen further developments in their cooperative efforts. SABER recently announced a partnership with Oragroup that will provide further revenue for the growing number of energy projects across Africa. Oragroup wants to be known as the leading bank in Africa for fighting climate change, and Mr. Bocar described the $233 million platform as enabling “project arrangement with high added value.”

SABER’s continued growth constitutes more than its own ventures, as Bocar wants to foster environments in which local people drive change and grassroots initiatives can flourish. The plans to help build such a foundation are already in place, as SABER offers expert advice to governments, and is also striving to fund the Seeded Green African Development Fund. This structure will enable private equity to fund small-scale projects across the continent, with an initial goal of a $150 million fund over the next 10 years.

Of course, if SABER’s successes catch the imagination of others, and governments make the most of the support the organization offers, then organic growth within sustainable energy projects could well eclipse such targets. If it does then it will benefit not only Africa, but the world.

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Herman Heunis: the tech entrepreneur who stepped away from the limelight

7 June 2016 Comments (0) Africa, Featured, Leaders

Herman Heunis

What’s next for Herman Heunis, the man who created “Africa’s Facebook”?

Herman Heunis is the man who created MXit, which was at one point Africa’s most subscribed to social media platform. Born in Namibia, Heunis grew up in a rural community where his parents ran a sheep farm, but Heunis was drawn to technology as a young man. Having moved to South Africa, Heunis attended Stellenbosch University in 1977 and 3 years later began his career in computer programming.

It was not until 1990 that Heunis launched the first of his own businesses, when he created an ICT consultancy firm. This was followed in 1998 by the launch of Swist Group Technologies, an information and communication technology company which specialized in software development. This entrepreneurial spirit would eventually lead to the formation of MXit.

The MXit explosion

MXit was launched in 2005 as an instant messaging service in Stellenbosch, and it took a rapid hold within the youth of South Africa. By 2013, MXit had a larger user base in South Africa than Facebook, with 45 million registered users in the country. This user base was growing by 60,000 new registered members per day, and 750 million daily messages were being sent across the MXit network.

MXit had originally been created as a mobile game, but it struggled to find sponsors, and the gaming angle was eventually removed. Heunis explained the evolution of the MXit service saying, “An integral part of the game was communication between players. After several metamorphoses we dropped the game idea and focused only on the communication part – that worked extremely well.”

The MXit application on iPhone

The MXit application on iPhone

When MXit was launched the entire team consisted of Heunis and 7 employees, but the rapid growth of the service attracted attention and further investment. Only 2 years into its existence, MXit received major investment from the Internet giant Naspers. What had been an 8 person company grew to employing 150 people as MXit looked to expand its reach far beyond the confines of South Africa.

Through innovative viral marketing, Heunis secured 500,000 users in Indonesia, and while the core of MXit’s users was still in South Africa, the platform was being used in more than 120 countries by 2011. The speed of MXit’s success and growth was impressive, but Heunis does not like to take all the credit, saying, “Timing was perfect and I had a fantastic team. The word ‘failure’ was never an option.”

Selling up and moving on

At the height of MXit’s popularity, Heunis made a shock decision, and decided to sell the company. Stepping down from his CEO position at the end of 2011, Heunis completed the sale of his company in 2012 to Alan Knott-Craig Jr. The decision was evidently a difficult one to make as Heunis said, “Selling a company that you have started is traumatic. Fact of the matter was, I was extremely tired and burned out, and staying on as CEO was not in the interest of the company.”

Knott-Craig Jr’s company, World of Avatar, did not grow MXit as Heunis might have hoped to see. In fact, in 2015 MXit was closed down, and Heunis expressed his disappointment on Twitter. Heunis tweeted that he regretted being too burnt out to continue at the helm in 2011, but that he truly believes that MXit had “all the ingredients to become a major success story.”

Heunis has said that his motto is “You are the captain of your ship,” and it appears that without its captain, MXit experienced a rapid decline after its sale to World of Avatar. As numbers dwindled the reversal of the company’s fortunes could not be stopped, and what had been Africa’s largest social media network ceased to exist.

Since departing from MXit, Heunis has stayed away from the limelight, and thrown himself into various hobbies including endurance bike races such as the Absa Cape Epic.

While MXit’s sale has ensured that Heunis need never work again, it was never money that motivated him anyway. Heunis has said, “For a true entrepreneur, the satisfaction of creating outweighs the money rewards.”

With that in mind, it would be too soon to say that we have seen the last of Heunis as an entrepreneur, but he says he has no immediate plans to return to the world of technology.

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Sub-Saharan Africa’s most debt-laden nations

4 June 2016 Comments (0) Africa, Business, Featured

african-currencies

Sub-Saharan Africa’s most indebted countries are revealed in the latest figures from the World Bank and the IMF.

Recent figures from the World Bank and the IMF provide a clear picture of which of Africa’s sub-Saharan nations have the highest levels of debt. The figures illustrate national debt as a percentage of the nation’s GDP, as opposed to ranking nations on absolute debt. This is an important distinction, as it accounts for how significant the effect of a government’s debt could be to its economic future.

For example, South Africa has the largest overall debt in absolute terms – with a huge 158 billion euros worth – but it also has a much larger GDP then most African states. This larger economic base ensures that South Africa is not even in the top ten of the most indebted nations.

From the highest debt to the lowest

The ten most debt laden countries of sub-Saharan Africa (with the percentage of their GDP that debt represents in parentheses) are Eritrea (126%), Cape Verde (122%), Gambia (97%), São Tomé and Príncipe (92%), Congo (79%), Ghana (74%), Malawi (73%), Angola (70% ) and Seychelles (65%).

In contrast, the ten nations with the lowest percentage of their GDP represented as debt were Nigeria (13%), Botswana (16%), DR Congo and Swaziland (20%), Equatorial Guinea (25 %) and the Comoros (29.2%), Namibia (31%), The Ivory Coast and Burkina Faso (33%) and finally Mali (35%).

Across the entire sub-Saharan region this averaged out at a 52% debt to GDP ratio, which actually compares favorably with Europe, in which the average is 92%.

What is clearly of significance is the degree to which an economy is likely to grow, and thus manage its debt without it becoming crippling. Moreover, what is sustainable for a developing nation is markedly less than it is for a developed market. While 40% is generally seen as manageable for emerging economies it can be significantly higher for large, more established markets.

The good news for Africa as a whole is that average GDP growth is second only to South Asia. A more cautionary view would note that borrowing is also growing quickly, and unforeseen humanitarian disasters, such as the 2014 Ebola outbreak, can have huge economic fallout in developing markets.

Changes to old debt and shaping the future

The single largest impact on the once debilitating debt levels in Africa occurred with the 1996 Heavily Indebted Poor Countries Initiative (HIPC). The internationally developed program was managed by the World Bank, in conjunction with the IMF and the African Development Bank. The initiative was further bolstered by 2005’s Multilateral Debt Relief Initiative, which was managed by the same trio, and led to 35 sub-Saharan nations eradicating over $100 billion of external debt.

While this allowed many nations to invest in social infrastructure, for others it simply meant writing off overdue debt, but did not create new streams of revenue for investment. Whether a nation wrote off old debt, or managed to put new resources into development, all of the affected nations profited in one key area.

According to Marcelo Guigale, a World Bank director, this universal benefit was that governments learnt “discipline” in spending, and had to have clear plans on reducing poverty. As such, Guigale stated African governments had “more money to spend and new offers to borrow—this time from private bankers.”

The concern in some quarters is that borrowing in some nations is outpacing growth, and this could lead to a return to pre HIPC levels of financial burden. An article in The Economist warned that, although Africa’s economies were growing quickly, “growing fastest of all is debt—personal, corporate and government.”

However, a trio of The World Bank’s own economists feel confident that “overall, governments have been borrowing responsibly”, and the IMF have ensured that guidance is being provided to help nations manage their debt constructively.

It is important for nations to be prudent with their borrowing, but even with some worries over rising debt, most experts feel genuine progress has been made.

Todd Moss, a senior fellow at the Washington-based Center for Global Development summarized the nature of Africa’s debt situation, saying, “Despite misgivings about certain countries, Africa is still in a fundamentally different place than it was 20 or 30 years ago when old debts were taken on.”

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Will Kenya’s ambitious Konza City project prove doubters wrong?

1 June 2016 Comments (1) Africa, Business, Featured

konza city

The construction of Kenya’s Konza City has begun, but will the city of the future fulfill its designers’ grand dreams?

When Kenya announced the hugely ambitious Konza City project in 2008, it was seen by most as a statement of intent by the President Mwai Kibaki. While the president is no longer in power, his dream of creating a tech-based city of the future, which would create a wealth of jobs, has remained at the forefront of Kenya’s Vision 2030 project.

The project aims to develop a strong, adaptive economy that turns Kenya into the leading tech nation within Africa. Konza City is to be the jewel in the crown of the project, and a city quite unlike anything seen on the continent before.

A grand vision

The main goal of the Konza City project is to revolutionize Kenya’s economy in terms of how it is structured, and how it develops throughout the 21st century. Kenya is one of Africa’s largest economies, with a GDP of $65.89 billion in 2015, yet up until 2013 75% of national assets were still in agriculture. As economies evolve, it is common for a shift into less production based means, and for a nation with Kenya’s climate it makes sense to redirect assets into areas that do not rely on uncontrollable forces of nature.

With Nairobi already a blossoming tech hub, the Kenyan government wants to create a designer city that both entices foreign investment and fosters local talent. Konza is to house 1,500 students and have an additional 35,000 homes for people working across its offices and research centers. The “Silicon Savannah,” as it has been dubbed, aims to be a hotspot of tech startups, and a regional base for global giants such as Google, Samsung and IBM.

What made the Konza City idea so bold was that this was not to be a glorified office space, but a genuine city with homes, schools and families being raised there. A bustling metropolis, built from scratch, is unprecedented as a feat of engineering and marketing, so unsurprisingly there have been obstacles.

The site of the future city

The site of the future city

Concerns over infrastructure and timing

The biggest worry for potential investors has been whether this new city can guarantee the everyday essentials that allow a place to run. The utilities that most of us take for granted – water, electricity and transport – are vital for a city to function.

Hamish Govani, Chairman of Kenya Association of Property Developers, voiced his concerns over power reliability earlier this year, saying, “By the time we come in to begin developments, we want to have guarantee of world-class infrastructure. We have big multinationals looking to set foot at Konza, we need proof that we will not be let down.”

The very same concerns were expressed by a project assistant for the Delegation of German Industry and Commerce in Kenya, Mr Thilo Gabriel Vogeler, who is interested in investing but said, “Since frequent power blackouts are a common occurrence in Nairobi, I would like to know how they will ensure reliability and constant supply 60km away.”

Other doubters have felt that construction would not begin in the time delineated under the plan, and it would therefore become an economic burden. However, the government has moved to silence such concerns by beginning the ground breaking for the first plots of land last month.

Moving forward

It appears that the Konza City project is truly beginning to move.

Konza Technology City Development Authority (KoTDA) CEO Eng John Tanui told reporters earlier this year that the first parcels of land are ready for investment now and that “we are completing the design for the provision of utilities including waste water management, street lighting, water, power and Internet systems to ensure that these are laid out in the right way.”

The project has interest from Blackberry, IBM, Google and many other multinational companies, but it is also ensuring that locals have an opportunity to invest and become part of something unique. ICT Cabinet Secretary Fred Matiang’i spoke at a news conference in October last year saying, “Together with the National Treasury, I am working on a Public Private Partnership framework that will see government source for funds to support local investors.”

If the project is a success, then 200,000 jobs could be created by 2030, and by 2018 the city aims to account for 2% of Kenyan GDP. With groundbreaking for construction already underway, investors from far and wide will be watching with interest, to see if the Konza City dream becomes a prosperous reality.

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Private equity investments grow across Africa

31 May 2016 Comments (1) Africa, Business, Featured

africa private equity

Africa’s burgeoning economies increase their growth, as private equity investor’s step up their interests.

Private equity investments look set to transform Africa, as the continent’s economies continue to grow and adapt. Emerging markets have long been of interest to private equity firms, and in the space of a few years Africa has transformed its image among investors.

One of the most important factors, for attracting foreign investment, has been a general decline in the armed conflicts that have mired much of Africa’s recent history. While there are ongoing issues, every region of Africa has seen nations emerge with increased stability, and thus increased potential.

Interest at an all-time high

The emergence of a well-developed private equity industry in Africa is not entirely new, but it is only in the last 15 years that things have taken off. This growth has continued year on year, with last year’s fundraising, transactions and exits hitting exciting highs, with impressive levels of upturn. A 2015 EY appraisal of private equity developments in Africa, found that fundraising had risen by 24% on the previous year, and transactions by 90%.

Africa has begun to shape a new image for itself in the eyes of foreign investors, and one of the clearest signs of this change is that foreign direct investments (FDI) are increasingly targeted at consumer facing businesses. Previous investments (in many African markets) would look to commodities that could be extracted and exported. In contrast, many investors are now allocating funds to enterprises, which provide immediate services to local people.

Additional good news for Africa is that the second largest source of FDI across the continent as a whole is intra-African business. African nations are investing in private equity inside the economies of their neighbors, which helps create a cycle of growth within the continent.

The raw figures provide a good picture of just how strong private equity is within Africa and how much it is likely to grow. According to African Private Equity and Venture Capital Association, fundraising in 2015 was the highest it had been in years, with a total of nearly $1.9 billion.

Bloomberg reported that through the course of last year, private equity firms amassed an investment pot of $4.3 billion for ventures within African business, and the range of these investments continues to broaden.

Exits also hit a 9 year high, and while financial services remained the largest sector at 24%, exits in goods and services, industrials and healthcare were significant in number.

Graham Stokoe, EY’s Africa Private Equity Leader, stated that, “The last two years have seen an increase in the number of PE firms making exits in the African markets. PE firms clearly are focused on adding value to their portfolio companies and are diversifying their approaches to help achieve this.”

The future looks promising

Given the growth across fundraising, transactions and exits, private equity in Africa is patently in strong health. What promises to help build upon this strong base is the sheer scale of new investment packages that have already been raised and designated for Africa.

KKR & Co are one of the world’s largest private equity firms, and they have allocated $100 million for Africa in 2016. Senior advisor, Dominique Lafont, told Reuters, “We want to use Nigeria as regional base and springboard for West Africa…we are not limited to one sector.”

Such funds are impressive, and yet they are dwarfed by other revenue streams that are set to find their way into the African markets. The Dubai based Abraaj Group, has raised $375 million for private equity investments in North Africa for the coming year. The exciting aspect to Abraaj’s presence is that they have already raised a huge sum, for Sub-Saharan Africa, which when combined with their latest fundraising, will total $1.4 billion of African investments.

A rival to Abraaj, the Helios Group, have already assigned $1 billion for Africa, taking the continent’s private equity industry onto a new, unprecedented level of investment.

Across the industry, there seems to be a climate of positivity, and an appetite to capitalize on the continent’s new, developing markets.

Michael Rogers, EY’s global deputy private equity leader, summed up the optimistic feelings, saying, “I think increased investment from local and foreign investors across (a) wide range of industries… is really driving the story, and PE is becoming an important part of that narrative.”

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Christo Wiese, 74 year old billionaire, as driven as ever

30 May 2016 Comments (0) Africa, Featured, Leaders

Christo Wiese

The South African billionaire, Christo Wiese, continues to grow his business, with a commitment to long held principles.

Christo Wiese is one of the richest men in Africa, with a fortune valued at $6.5 billion, but despite being 74 years old, he is working as hard as ever.

In the summer of 2015, Wiese bought the British gym chain, Virgin Active, for $1 billion from Richard Branson’s Virgin group. Not finished with his British spending spree, Wiese also snapped up the high street fashion giant New Look Clothes for $1.23 billion. While evidently eager to expand, what is the business ethos of Mr. Wiese, and how did he become such a prosperous figure?

A family of entrepreneurs

Christo Wiese was born in a small town called Upington to parents who had nothing like the resources he enjoys today, but who did have the entrepreneurial spirit which has governed his life. Wiese’s parents were a huge influence on his attitude to business, and he is on record as saying, “I’ve had mentors in business, people from whom I have learnt a lot, but at the end of the day, my greatest inspiration came from my parents.”

These parents bought a share in a small retail outlet called Pep Stores in 1965, and although Christo had trained as a lawyer, he decided to join the family business. As the business grew, Wiese had brief forays into politics and the diamond industry, but returned to the original Pep Stores Company as its executive chairman in 1981. The following year, he changed the name to Pepkor, and the company began its rapid, extensive growth.

Ethics and necessity

Two of the key areas that have helped Wiese grow his brands (while finding widespread support in his home country) are the ethics behind his companies, and his focus on providing affordable products. In a nation where the ugly memory of Apartheid casts its shadow over much of recent history, Wiese’s business ethics are quite telling.

During the height of the Apartheid regime, Wiese broke the law by refusing to have racially segregated bathrooms at his offices and factories. His policies of inclusion rather than segregation have continued to be a hallmark of his employment record.

In 2013, he spoke to South African media saying, “We employ over 150,000 people who are very representative of the demographics of South Africa. We have people from different backgrounds, religious affiliations, race groups and countries, and they all work together to make the business work.”

Perhaps the key to his success has come from investing in products that people need, such as affordable clothing. This tied in with his ethical stance on Apartheid, as in the early days of Pepkor, low priced clothing was sold in poor rural areas, where most black people were able to buy new clothes for their families for the first time.

Continuing to expand

Alongside his recent British acquisitions, Wiese is the major shareholder in African retail giant Shoprite, has a 20% holding of the huge furniture company Steinhoff, and is the majority shareholder in private equity firm Brait. However, Wiese is focused on developing his trade across Africa, as he continues to promote trade and opportunities in his home continent.

As well as providing extensive training programs for potential entrepreneurs, Wiese is determined to open up more markets for African producers, and to make his homeland a greater part of his company’s trade. Wiese said, “Today, 80% of the fresh produce we sell in Zambia comes from Zambian farmers, because we created a market for them…Our African business is still only 15% of our overall business. In the next 10 or 20 years we believe that it will be more than 50% of our businesses.”

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The World Bank names Mauritius as Africa’s top business destination

28 May 2016 Comments (0) Africa, Business, Featured

business mauritius

An annual report from the World Bank has picked out Mauritius as the best place to conduct business in Africa, so just how has the island nation achieved this?

Mauritius has been named as Africa’s most business friendly country by the annual “Doing Business” report from the World Bank. The report seeks to help potential investors (and governments) identify how easy it is to create startups and investment opportunities across the globe. While Africa as a continent does not fare particularly well, Mauritius came in at number 32 on the global list, which made it the comfortable winner in Africa.

The top 5 African nations showed a diverse geographic spread, with Rwanda, Botswana, South Africa and Tunisia following, in that order, on the heels of Mauritius. A quick glance at Africa’s worst performing nations would provide no surprises, as Eritrea propped up a bottom 5 of the DRC, Central African Republic, South Sudan and Libya.

Any nation struggling with armed conflicts and political unrest is not going to provide the ideal base for creating new business opportunities, so while the bottom of the table comes as no surprise, what is it about Mauritius that has seen it take the top position?

Stability, simplicity and low taxes

Mauritius is first and foremost a fairly safe country. Not only does it not suffer from the unrest of many African nations, but it has low crime rates, and a small population which is governed by what the Economist Intelligence Unit called Africa’s only “full democracy” back in 2011. While this may no longer be fair to other nations, it is clear that Mauritius is a society with low levels of corruption and good personal safety.

Prime Minister's Office in Mauritius

Prime Minister’s Office in Mauritius

In addition to this, the Mauritian government has gone out of its way to reduce the amount of red tape involved in starting up a business. This ongoing strive to create a business-conducive atmosphere is highlighted by the 2014/15 changes to building permit rules, in which the process was streamlined to allow new ventures to start running as quickly as possible.

It now only takes 14 days to register a property, and 3-6 days to start up a new business. To help ensure the wheels on each sector of the economy run smoothly, the government has also invested heavily in education. The net result of this focus is that Mauritius has the highest rate of literacy in Africa, at 86%.

South Africa’s high commissioner to Mauritius, Nomvuyo Nokwe, told South African media that not only had Mauritius made it simple to register new businesses but that its development of education was also key. Nokwe stated, “It has highly skilled professional people…it’s made doing business easy, because you have [educated] people to work for you.”

Perhaps one of the most significant aspects to Mauritius’ burgeoning business growth, and yet one with some controversy, is its low taxation. The Africa 2016 Wealth Report referred to the huge growth in millionaires in Mauritius, but this included many from other nations who had moved there. The report found that “Mauritius was the top performing African country for millionaires during this period, with growth of 160 per cent…company and personal income tax rates are only 15 per cent, with no inheritance or capital gains tax.”The controversy around this is that some feel the nation is just a tax haven for the wealthy, and moreover that much of the money coming into the country is simply passing through. There are concerns around the rich, from nations like Kenya, using Mauritius for tax purposes, as its income tax rate is an attractive 15%.

Does the economy match the reputation?

Dipolelo Moime, chief executive of business risk consultancy Legato Services, believes it is more innovation that has attracted outsiders, saying, “Mauritius is continually reinventing and reforming itself massively to ensure the country is as business-friendly as possible, in order to attract multi-national corporations.”

Despite this, the issues around money just passing through cannot be ignored. There is an entire business strategy known as “The Mauritius Route”, which describes how investors in India use the island nation as a conduit to connect them to Indian markets. In fact, 39.6% of foreign direct investment to India, between 2001 and 2011, made its way via Mauritius.

However, this money does not pass through Mauritius in a vacuum, and the banking and legal processes it utilizes are legitimate businesses which create revenue streams for the host nation.

As things stand, Mauritius is not one of Africa’s largest economies, but the World Bank report did not base its findings on GDP, it based them on how easy it was to set up a new business in a nation, how well developed infrastructure was, and how attractive a destination was for new investment. In these measures, Mauritius must warrant its ranking.

As of 2016, Mauritius can boast the highest per capita GDP in Africa, with a 2016/17 predicted GDP growth of 5.7%. In addition, the nation’s stock exchange is widely regarded as one of the best in Africa and is worth over $7 billion. These figures are for a nation of only 1.2 million inhabitants.

Most significantly, the government is not resting on its laurels. The Mauritian government has drawn up a blueprint to diversify the economy, and invest in new industries, while continuing to develop existing ones. “Green growth” is at the forefront of plans to maximize the nation’s coastlines, with a goal of 8-9% economic growth per annum, which will ultimately lead to Mauritius being a high income status nation by 2025. The plans have worked thus far, so investors from far and near will be watching with interest.

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Muhammadu Buhari rebukes Cameron for corruption remarks

27 May 2016 Comments (2) Africa, Featured, Politics

Nigerian President Muhammadu Buhari

Muhammadu Buhari, the Nigerian President, aimed a subtle attack on David Cameron’s hypocrisy after the British PM’s comments on Nigerian corruption.

Muhammadu Buhari, the Nigerian President, was in London this month for a multinational conference on tackling corruption. The summit was being held at the Commonwealth Secretariat, in the UK’s capital city, and played host to numerous world leaders as well as the US Secretary of State, John Kerry.

While the event was a positive move by different nations to discuss strategies for breaking down corruption, it was preceded by an embarrassing leak regarding the British Prime Minister.

Only days before the scheduled meeting, Cameron was overheard talking to the British Queen and saying, “We’ve got some leaders of some fantastically corrupt countries coming to Britain … Nigeria and Afghanistan, possibly the two most corrupt countries in the world.”

Buhari’s balanced retort

As Mr. Cameron’s comments were widely reported, President Buhari’s office released a statement to say that the President was “deeply shocked and embarrassed” by the Prime Minister’s remarks.

However, there was a much more subtle retort about to come. A retort in which Buhari accepted the issues that his country faces with corruption, but also shone a light on the vein of hypocrisy, that some might see, within Cameron’s words.

When asked by the BBC whether Nigeria was indeed “fantastically corrupt,” Mr Buhari responded “yes,” and then elaborated on Cameron’s remarks by saying, “He was telling the truth. He was talking about what he knew.”

But the real riposte came when Mr Buhari explained that he was not demanding “any apology from anybody,” adding, “I am demanding a return of assets. What would I do with an apology? I need something tangible.”

This was a reference to the billions of dollars of money stolen from Nigeria by corrupt officials, who then took their ill-gotten gains to the UK. The most recent example of this involves former Nigerian state governor Diepreye Alamieyeseigha, who fled Nigeria as he faced corruption charges, and arrived in Britain with $1.8 million in cash. While Alamieyeseigha was arrested in the UK, and charged with money laundering. £1 million of this money was eventually returned to Nigeria through the Metropolitan Police.

Moreover, this was not an isolated case, or even close to being the largest amount. Funds stolen from Nigeria and siphoned to the UK are nothing new. Almost 20 years ago, the former military head of state, Sani Abacha, was shown to have stolen approximately $5 billion from Nigeria’s coffers, and half of this is estimated to have been laundered in the UK. None of this money was ever recovered by Nigeria, and the incumbent President wonders just where it is and when it will be returned.

The former governor of Nigeria’s Delta State, James Onanefe Ibori, is also estimated to have stolen $250 million from his homeland. Ibori is serving jail time in the UK, but his multitude of British properties has not been processed in order to ensure that the laundered money is sent back to its rightful home.

The reality for both nations

It is of course clear that Nigeria’s corruption problem outweighs Britain’s. However, perhaps one of the largest issues is that Nigeria’s corruption adversely affects its own people, while Britain’s corruption often allows a small number to benefit from theft outside its own shores.

Transparency International’s Corruption Index ranked Nigeria 136th out of 168 nations, and the UK was ranked 10th. However, Transparency International criticized Prime Minister Cameron’s comments, saying that the UK was a key part of the global corruption problem by “providing a safe haven for corrupt assets” and being “by far the most important part of the global offshore system of tax havens and secrecy jurisdictions.”

The recent scandal around the Panama Papers, and the naming of Mr. Cameron’s father in them, is a timely reminder that corruption is not simply a problem in the developing world.

The presence of the various world leaders in London is a positive step, but Nigeria could justifiably argue it is doing more than most to address its problems.

The Nigerian Economic and Financial Crimes Commission has only been operating since 2003, and yet by 2013 it had thousands of convictions. Nigeria appears to be taking corruption seriously, and “embarrassing” comments put to the side, it must be hoped that all the nations at the anti-corruption talks can work together for sustained progress.

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Smartphone opens up new possibilities for Morocco

23 May 2016 Comments (0) Business, Featured, Middle East

morocco smartphone

Mobile and internet penetration in Morocco continues to grow and crossover, as the country embraces technology.

Technology, and in particular smartphone technology, is changing the way Moroccans live their daily lives. More significantly, the nation’s nascent love affair with smartphones and web apps offers great opportunities for economic growth.

The National Authority of Morocco’s telecoms regulator (ANRT) released a report, earlier this year, that assessed the growth of the telecoms market from 2010-2015. The report found huge growth in mobile phone use, both in terms of penetration and the average time spent using a phone per customer. At the forefront of this expansion, the report highlighted falling costs, especially in areas such as 4G, which has helped bring the use of mobile phones and the Internet more inline. This expansion has seen a 146% increase in the average monthly usage of mobile owners in the past 5 years.

Embracing new ways of living

It would be foolish to dismiss the impact that smartphone technology can have within a country. The Arab Spring movement was, in part, driven forward by the use of social media platforms such as Twitter, which allowed on the spot reports and information from everyday people. While Morocco is a stable country, without much of the political unrest found elsewhere in North Africa, the impact of smartphones and online activity has the potential to bring about an economic revolution.

Online shopping has exploded in Morocco, and the use of mobile phones for web purchases has grown at an astonishing rate. This not only benefits online giants, but encourages local companies and outlets to take advantage of the new trend. Research carried out by MasterCard illustrates just how rapidly the use of smartphones for shopping has increased. In 2013, MasterCard reported that only 9% of users had made an online purchase via their phone in the previous few months. When this survey of 4,000 people was repeated in 2014, the figure had soared to 66%!

Aaron Oliver, head of emerging payments for MasterCard Middle East & Africa, said, “With rapidly increasing internet penetration rates and availability of secure online payment options, the country’s e-commerce industry is well placed to achieve significant growth.”

E-commerce could provide Morocco with a source of revenue that shows no sign of diminishing on a global level, never mind in an emerging market – where the scope for increasing penetration is even larger.

Are social media and apps the second wave of growth?

The ANRT report on mobile expansion showed that in 2012, only 16% of mobile phone owners in Morocco owned a smart phone. By 2014, this figure had risen to 38.2%, which indicates just how quickly the mobile landscape has changed. However, social media has not yet reached anything like the ubiquitous nature of its standing in Europe and North America. This is, like most areas involving the Internet, changing and it is changing at pace.

The Arab Social Media Report found that by 2014, Facebook penetration in Morocco was at 16% of the population, and had a growth rate of 13%, which was the second highest in North Africa.

With social media come apps, social media games and the proliferation of advertising. All of these things open up doors for startup companies, and a wider customer base for existing businesses.

It is therefore no surprise that Moroccan game designers and entrepreneurs have already begun to drive the second wave of Moroccan internet and mobile growth. The private telecom group Inwi now hosts an event called Inwi Days, in which game designers have 24 hours to create a new web game, and pitch it to a panel of judges in order to win a $12,000 prize.

Méditel Telecoms have launched a similar competition for app designers, and while this development of technology is fairly new, the majority of winners have maintained clear roots to Moroccan culture and traditions.

Inwi Days gave two games, Trombia and Runner Roul, the shared first prize, and both games were inspired by Moroccan culture.

Méditel’s app challenge was won by the app Maroc Culture, which is a trivia game that tests the player’s knowledge of Moroccan culture and traditions.

As mobile phones become even more popular, and the Internet plays a greater role in the lives of people across Morocco, such markets will continue to grow. A young generation of innovators is now taking advantage of these openings to create new businesses and trends, but ones that remain quintessentially Moroccan.

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Takunda Chingonzo: Zimbabwe’s Youngest Entrepreneur

22 May 2016 Comments (0) Africa, Featured, Leaders

Takunda Chingonzo

Takunda Chingonzo is one of Africa’s youngest entrepreneurs. Can his technology company and his growing international exposure help to pull Zimbabwe out of the shadow of its government and penalizing trade sanctions?

Takunda Chingonzo is a remarkable person, achieving more in his 22 years than many in their entire lives. He is best known as a start-up entrepreneur, creating three innovative businesses since graduating from high school, but his talents have social enterprise at their core, working to better the future of Zimbabwe through the freedom of technology and information.

After completing his degree in quantity surveying in 2014, he went on to obtain a CISCO certification in network security. Although he does not have a traditional background in business or technical design, it is his entrepreneurial spirit that has been the driving force in his companies and in instigating social change. He has been recognized for his efforts with the Swell Award for Innovation at DEMO Africa, and was one of 100 young people selected to take part in an 8-week internship in the USA following the Mandela-Washington Fellowship program in 2014.

Trouble in Zimbabwe

Zimbabwe suffers from a series of trade sanctions and embargoes, designed to restrict governmental trade after a long history of violations of democratic processes and human rights abuses. Everything within the financial trade industry is restricted, from imports and exports to export insurance and credit. Because much of the equipment, services and finances necessary for young African entrepreneurs come from outside the continent, this only works to restrict growth in this sector.

In 2015, Chingonzo was selected to hold an exclusive on-stage Q&A with President Obama at the US-Africa leaders’ summit, which aims to increase the US’s engagement with Africa. He spoke candidly about how trade sanctions are detrimentally affecting businesses and entrepreneurs in Zimbabwe, as well as the political leaders they were supposed to be targeting. He discussed the interest that he received for his projects for importing goods and investment from American companies, which were withdrawn after they found out he was from Zimbabwe. This effectively means the people of Zimbabwe are oppressed twice, once from their government, and again from the punishment designed to penalize the leadership of the country.

Tech Start-ups

Despite this opposition, he has successfully set up Neolab Technology, a multi award-winning startup. Its biggest achievement to date is Saisai, a public Wi-Fi network, designed to bring free internet access to all by installing wireless mesh networks in public spaces and public transportation in Zimbabwe. Chingonzo has described this task as “liberating the internet.” He understands that the internet is the key to progression in Zimbabwe, with free access to information and communication being central factors for people to free themselves from oppression. From a business perspective, he believes that “the internet is the one tool that lowers the cost of doing any form of business,” also showing his commitment to business progress within the country. He went on to say “It provides access to information that people and communities can use to improve and magnify the work that they are already doing. An informed community engages more, innovates more, and, from a business perspective, makes more and spends more.”

Alongside Neolab, he is also the co-founder of NeoEffect, a social start-up working towards empowering underprivileged youths through IT literacy, and is involved with both the MX project and BOOT Africa which promote student start-ups in tertiary institutions.

The Future

Chingonzo’s business acumen and commitment to social change seem to be a winning combination. He was featured in the Huffington Post as one of four African innovators you should know about. Last year, he graced the cover of Forbes Africa after making it on to the Forbes “30 under 30” list as part of the continent’s “next generation of billionaires.” The exposure he has received from his interview with President Obama has generated a buzz around his projects, and the burgeoning tech industry in Zimbabwe, while exposing the inequalities in the international relationship with Zimbabwe and its people. Chingonzo doesn’t just represent technology and innovation, but the will of the people of Zimbabwe and their indomitable spirit.

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