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Tourist numbers to Dubai continue to grow in 2019

4 March 2020 Comments (0) Business, Featured

When you look at most cities in the world that serves as major tourist destinations, they tend to have long and illustrious histories. London and Hong Kong both have histories dating back 2,000 years or more, Luxor dates back over 5,000, and Athens some 3,500 years. But Dubai is very much a modern city in every way with little in the way of history, so it was very much a sandy tabula rasa for the rulers to write their ideas and dreams on. 

Although Dubai has brief mentions in the annals of travellers and traders as far back as the 11th century, it was little more than a waypoint though the general area was popular for pearl fishers. The Al Abu Falasa dynasty founded Dubai proper in the early years of the 19th century and one early historical footnote of interest is the signing of the “General Maritime Peace Treaty” between several of the regions sheikhs and the British government which was the first formal denunciation of slavery in history. 

In 1892, Dubai became a British protectorate, with tax exemption granted to foreign traders in 1894. By the early years of the 20th century, the Sheikh of Dubai had convinced a British steamship company to make Dubai a port of call, perhaps the first real hint of the city’s future. The merchant class gained strength with Dubai cementing its position as the main – and busiest – port in the Gulf, and they continue to be at the heart of the city’s political and power structures.

Dubai had a lean period between 1920 and the late 1960s with economic blows from the collapse of the pearl industry, the Great Depression, and World War II. This period was marked not only by poverty but by political unrest and instability. 

Sheikh Rashid bin Saeed Al Maktoum : the Modernisation and Revitalisation of Dubai

Sheikh Rashid bin Saeed Al Maktoum became ruler of Dubai in 1958 and it was he who was the driving force behind the modernisation and revitalisation of the city. The United Kingdom’s announcement in the late 1960s that they were withdrawing protection led to the foundation of the United Arab Emirates in 1971 in order for the small kingdoms to work together in defence and economically. 

But it was oil that was the real game-changer for the area but for Dubai in particular. With the discovery of oil in 1966 and the first shipment in 1969, the ruling family now had the funds to start realising their visions for the city.

Emirates Airlines has played a big part in the growth of Dubai. It operates over 3,600 flights a week from Dubai and the geographical location of Dubai has helped it become the major hub for many long-haul flights. The government saw that people looking to break up 15-25 hour flights offered huge potential tourism wise and billions of dollars were pumped into that area. They also realised that as oil production slowed down in the early 1990s – not to mention the constantly fluctuating prices – they need to diversify in order to survive and grow. 

A New Record of 16.73 Million of Tourists

That diversification has seen Dubai become not only a major tourist destination but also a regional centre for finance and real estate. Its diversity is perhaps underlined by the fact that some 90% of its population are foreigners, with many seeing the rich emirate as an ideal hub for many types of businesses.

2019 was a record year, with visitor numbers rising 5.1% from the previous year to a new record of 16.73 million. India keeps its top spot of providing the most visitors, with just under two million tourists, and Saudi Arabia and the UK stay 2nd and 3rd respectively. Omani tourists saw the biggest jump with a 24.3% increase in visitors from 2019. 

So why do so many tourists continue to flock to Dubai? As mentioned, a major factor is the city’s location combined with the routes flown by Emirates Airline. Many people initially chose to just have a one-day layover in the city to break up their long haul flights and to reduce the effects of jet lag. But now, the average length of stay is 3.5 to 4 nights, giving visitors an opportunity to sample some of Dubai’s many attractions. 

The Magnificence of the Burj Khalifa and the Splendour of the Burj Al-Arab

And this is where Dubai excels. They have taken a hot and arid desert with average temperatures that range from 25 degrees Celsius to the low 40s and turned it into an air-conditioned paradise for tourists and expats. The magnificence of the Burj Khalifa and the splendour of the Burj al-Arab (the world’s tallest hotel) continues to wow visitors. The Dubai Mall offers a cornucopia of shopping and entertainment choices and the Dubai Aquarium attached to the mall is one of the city’s most popular tourist spots. 

But not all the attractions are modern. The beauty of the Jumeirah Mosque is a must-see and the souks of Deira give a glimpse into Dubai’s merchant past. Ras Al Khor Wildlife Sanctuary is perfect for nature lovers and Kite Beach is ideal for those looking to soak up some rays or watch the spectacular kite-surfing. 

Dubai is a destination that offers something for everyone – if you can afford it – and numbers will likely continue to grow throughout the coming decade. 

Photos : gulfnews.com/ arabianbusiness.com/ thenational.ae

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Moroccan-American Team Wins First African Solar Decathlon

4 February 2020 Comments (0) Business

In a time where climate change is a phrase on many people’s lips, it is heartening to see renewed efforts to find ways to use renewable energy in our daily lives. One such effort is The Solar Decathlon Africa, first held in Morocco in September, 2019. The principal idea behind the contest is for international collegiate teams to build a house – judged over 10 categories – that is solely powered by the sun. The contest is modelled on the original Solar Decathlon held every second year in the U.S. since 2002. 

The contest has expanded from America, with Solar Decathlons now held in Europe, China, Latin America and Caribbean, and the Middle East, as well as this new one in Africa. 

To Design and Construct a House That Uses Zero Net Energy

The inaugural African competition, held in Ben Guerir in Morocco’s central Rehamna Province, took place from September 13th to the 27th, 2019. With more than 1,200 entrants from 20 countries, the competition is not only international but is also underpinned by international cooperation as many of the teams comprised members from more than one country. 

The idea is to design and construct a house that uses zero net energy. That is to say, the whole house must be powered by renewable energy, in this case solar. Teams are judged over the following 10 categories, with each category offering 10 points to be won (architecture, engineering and construction, market appeal, comfort conditions, appliances, sustainability…).

There were two primary organisers of the competition in Morocco. The first was IRESEN; a research organisation and institute founded in 2011 by the Moroccan Ministry of Energy, Mining, Water and Environment, and which cooperates with several of Morocco’s key energy companies. The second organiser was Ben Guerir’s University Mohammed VI Polytechnic. The jury consisted of 27 members, chosen from a wide range of fields including education and business and representing several countries. 

One factor all teams were asked to incorporate into their designs was recognition of Africa’s cultural and architectural heritage. With harsh conditions across the continent, building design has often evolved to recognise this challenge and to include features which protects inhabitants against these climactic factors. A good example of this is the narrows streets and thick-walled houses found in Morocco’s Medina which keep the heat out at the height of summer and in when the winters get cold. 

The Inter House Winner of the First African Competition

The winners of this first African competition were the Inter House Team, a multidisciplinary cooperative effort between Colorado’s School of Mines, Marrakech’s National School of Architecture, and Cadi Ayyad University, also from Marrakech. They used CSEBs (Compressed Stabilised Earth Blocks) as their primary building material for the house walls, comprised of 95% local soil and 5% lime cement to stabilize the blocks. Not only do these CSEBs reflect the traditional brickwork of Morocco, but they also provide work for locals while offering a sustainable and energy efficient building material. 

One thing the team wanted to achieve was the marriage of modern and traditional values and styles. Taking inspiration from the famed courtyards which often form the heart of Moroccan homes, the team also made the courtyard the centre of their design. As well as offering a private outdoor space, the courtyard divided the home in two, with sleeping areas to the northwest and living and dining areas to the southeast.

But, of course, the main idea behind these designs was to be energy efficient, a real challenge in the local climate. The house’s CERV (conditioning energy recovery ventilator) utilised a highly efficient heat pump that exchanged energy between the incoming supply and the outgoing exhaust air. Combined with the CSEB walls used, this system not only keeps the house full of fresh air, but also monitors air quality throughout the house using special sensors. The system also allows occupants to monitor and set the home’s VOC (Volatile Organic Compounds) and CO2 levels as well as temperature and humidity levels. 

To Allow To Control Lighting, Window Shades

The home also features a state of the art HACS (Home Automated Control System) that allows the homeowners to not only monitor several environmental aspects of the home’s interior but also to control things such as lighting, window shades, etc. 

Power for the house comes from two types of solar panels. The first is a rooftop system that supplies most of the house and the second is a solar thermal system to supply renewable hot water. The way the system was designed using heat transfer eliminates any need for boilers or electric pumps. 

One of the most innovative features of the winning design was its constructed wetland, a specially designed and built black water filtration system. The water filters through rocks and plants where natural bacteria remove or breaks down any toxins or pathogens. This not only sustains the plants in the filtration system but also provides water to use for landscaping or irrigation. 

An Increasing Level of Cooperation across Borders and Between Diverse Organizations

With increasing worry over a changing climate, it is encouraging to see not only innovative ideas in creating energy efficient homes, but also the increasing level of cooperation across borders and between diverse organizations. While the homes in the competition, complete with all their technological gadgetry, are mainly aimed at middle class buyers, many of the ideas will be able to be incorporated into lower income homes in the future. 

Photos : insidearabia.com / iresen.org

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Danièle Sassou Nguesso : Breaking Down Gender Barriers

20 January 2020 Comments (0) Leaders

In a continent which has suffered from gender disparity for so many years, the recent spate of stories about strong African women gaining prominence at every level of society has been an encouraging and heartwarming trend. These women, more than any other factor, are what will inspire a new generation of African girls to stay in education and to pursue their dreams. One such woman is 43-year-old Danièle Sassou Nguesso. 

Born in Dakar, Senegal, in 1976, Nguesso had a privileged upbringing, something that made her even more aware of the many who were not so lucky. Her mother had a PhD in Pharmacy and her father was a doctor, and Nguesso studied in Paris, first gaining a Baccalaureate in science at 17, then later qualifying as an optician at the Ecole Supérieure des Opticiens de Paris. After some time working in France, Nguesso decided to return to Africa and she opened her first optician’s shop under the brand name, “Optical”, in Libreville, Gabon, in 2003, notably becoming Gabon’s first female optician at the same time. The brand is now well-established in five major African cities. 

Danièle Sassou Nguesso : to facilitate the empowerment of women

At that point, Nguesso could have continued on the standard pathway of many entrepreneurs, focusing purely on building a business empire. But her travels around Africa made her realise she wanted more than that. Everywhere she went, she saw gender disparity and institutionalised discrimination, which were leading to a continued marginalisation of women as well as physical and psychological abuse. She also saw how the poorest and most vulnerable children were denied access to education and she realised that among these children could be future doctors, future authors, or future leaders. 

In 2008, she set up Le Petit Samaritain to promote and support access to education. Then in 2015, she set up the SOUNGA Foundation in order to break down gender barriers and to facilitate the empowerment of Congolese women. As Nguesso says: “It is important for our girls to receive the same training like our boys; so that they can pursue the same jobs opportunities as their male peers.”

The foundation has set up several projects in order to support women towards those opportunities. “Sounga Nga” is an incubator project that offers training in skills such as accounting and marketing to women looking to set up businesses. The project also offers low-interest loans to help the women capitalise their business. 

The Sounga Gender Label partners with various Congolese Ministries as well as private organisations to encourage good corporate governance and to promote the employment of women across several sectors and levels. 

And the Sounga Focus Group is an annual study of what women at every level of Congolese society is thinking and feeling and a way of identifying socio-cultural needs. This allows the foundation to then feed their findings back to the government in an effort to facilitate change.

Her family connection as a major advantage

One difficulty Nguesso does not face is communications with the government. She is married to controversial Congolese politician, Denis-Christel Sassou Nguesso. He is the son of Denis Sassou Nguesso, who has been President of the Republic of the Congo since 1997. Her husband is also tipped to replace his father when he eventually retires. She sees her family connection as a major advantage as she does not have to navigate the mazes of bureaucracy in order to get her powerful and important message across. 

Despite her schedule with the foundation, and having four children to raise, Nguesso completed a Master’s in Politics and Development Management at Sciences Po in Paris in 2016. And in 2018, she was awarded the African Inspirational Female Leader of the Year award at the East African Business Summit & Awards. With plans to continue expanding the foundation across Congo and other countries, Nguesso is inspiring and supporting thousands of young African women and girls. 

Photos : elle.ci / Facebook / magazine.inafrik.com / griote.tv/

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John Dodelande, curator of contemporary art, launches a reference database for Chinese Contemporary Art

16 January 2020 Comments (0) Leaders

John Dodelande

John Dodelande has been active in the contemporary art market for more than ten years. He has more specifically focused his collection on Chinese contemporary art works and young artists of the new generation (Wang Yuyang, Wang Sishun, Wang Guangle among others…) who are moving away from both the aesthetics and the spirit of his elders (notably the cynical realists movement which became known to a large audience at the international level by artists such as Yue Minjun, Ai Wei Wei…).

Like all market players, he was led to question the tools available to him to carry out his day-to-day business, particularly in the digital environment.

Beyond the institutional websites and networks of the auction houses and the databases most used by practitioners (Artnet.com, ArtMarket.com, Artprice.com), he noted the monopoly of certain players on the one hand, and on the other hand, the fragmentation and splintering of information and the difficulty of sorting through dozens or even hundreds of sources, each of which obey their own logic and their own rules.

Thus, he most often felt that he had to define for himself the parameters and criteria that would enable him to guide his choices and actions.

With regard to the field that interests him more particularly that of contemporary art and Chinese art in particular, he noted the absence of a relevant, effective and pragmatic reference tool capable of identifying works and artists, of drawing up an inventory of the market and practices and finally of guiding the choices of market players.

John Dodelande confides to us: “Being myself a Digital Native, the world of social networks, digital tools are my usual environment. However, I very quickly had the feeling that I couldn’t find what I was looking for and that I was wasting a lot of time because I didn’t have a real database organized by type of market, category of works, which would take into account the geographical and economic dimension, which are fundamental factors in understanding the market as a whole”.

John Dodelande is thus developing with partners a new tool that is destined to become the reference database for Chinese Contemporary Art and, in the long term, for Asian Art in general. This database, accessible to the general public free of charge for its educational presentation component, will be available by subscription to professionals who will have access to valuable information on artists, works and transactions, providing an overview of this particular market and its evolution.

It goes without saying that John Dodelande’s vocation is to deploy this technology on other target art markets and even other sectors of activity.

John Dodelande is expected to announce the launch of this innovative platform in 2020.

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Anbessa: Best Foot Forward for This Ethiopian Shoemaker

6 January 2020 Comments (0) Business, Featured

When you think of an international shoe exporter, Ethiopia may not be the first country that springs to mind. Yet Anbessa Shoe Share Company, based in the Akaky Kaliti suburb of Addis Ababa, has been making its mark across Africa as well as several international export markets. 

Originally founded in the 1930s by an Italian expatriate living in Ethiopia, the company has had an at times turbulent past. Operating as DARMAR in the 1950s, it made shoes for men, women, and children. But in the 1970s, it was nationalised by the Derg Regime, the shortened name for the ‘Provisional Military Government of Socialist Ethiopia’, a Communist Marxist-Leninist military junta that ruled Ethiopia from 1974 to 1987. The fall of communism worldwide also affected Ethiopia and led to the formation of the People’s Democratic Republic of Ethiopia in February of 1987. 

The company remained under government control until 2011 when it was purchased by the current owner, Ato Tedla Yizengaw. Yizengaw, a serial entrepreneur who owns several thriving Ethiopian businesses, and who has guided Anbessa into a new era with the backing of a strong board of directors.

Anbessa exports to Africa, the USA, EU, Middle East, and Asia

With a staggering 65-70% of the domestic market, Anbessa also exports to the rest of Africa as well as the USA, EU, Middle East, and Asia. While its primary product is shoes, it also manufactures bags and belts, ensuring that no leather is wasted in the production process. 

Its growth and success has been recognised by the Brand Africa 100 ratings, with position #23 in 2018 followed by an impressive climb to #12 in 2019. It is the sole Ethiopian brand recognised in the Brand Africa charts. Export figures for 2017 exceeded $750,000, a figure they hope to grow steadily with a new factory looking to increase production levels.

In September 2017, the company moved into a new UD$15 million production plant in Akaky Kaliti. The primary aim of the new plant was to ramp up production from the previous 3500 pairs of shoes made daily to a new output of 10,000 pairs daily. But Yizengaw is an astute businessman and knows that it’s not just about quantity; he needs to improve and maintain quality to increase their export market. So the company has partnered with the Leather Industry Development Institute (LIDI), an Ethiopian organisations founded in 2010 to offer training to all areas of the leather industry and to improve skills at all levels of the workforce.

To increase their export volume from 10% to 70%

More recently, Anbessa bought the bankrupt Habesha Tannery in July of 2019 for just under 1 million US dollars. This will allow the company to not only produce their own leather but also to have a much more hands-on approach to quality control at every stage of the manufacturing process. Anbessa sees the acquisition of the tannery as a crucial part of their plan to vastly increase their volume of exports. The machinery in the tannery – which Anbessa plans to expand – was worth over US$1 million alone, so it was a clever bit of business. The Turkish company who had owned the tannery had become bogged down in default payments with the Development Bank of Ethiopia. Anbessa hopes that the new acquisition combined with their new factory will increase their export volume from 10% to 70%. 

As well as the quality of their footwear, many commentators point to Anbessa’s business practices as a major positive. All the material they use in production comes from sustainable sources, a major selling point when it comes to international markets. And their focus on fair treatment for all their workforce – up to 1,636 since moving to the new factory – also draws praise. The staff received discounted meals in the factory’s modern and clean cafeteria. Every staff member also receives free medical check-ups, and the factory itself meets stringent safety standards. The company also adheres to International Labor Organization (ILO) regulations, ensuring that all staff are of minimum working age and that no minors are ever employed. 

With experienced and forward-thinking management, a dedicated and well-treated workforce, and quality products that are being more and more recognised internationally, Anbessa is a success story that looks like it will keep on growing. 

Photos: resolution.studio / squarespace-cdn.com / twimg.com

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Transmashholding’s African Adventure

23 December 2019 Comments (0) Africa, Business, Transport

Andrey Bokarev’s railway machine manufacturing company, Transmashholding, acquires its First Factory in Africa as the Continent Seeks to Revitalise its Railway Systems and Trains

With Africa, the second-fastest-growing continent from an economic perspective, development of efficient and cost-effective transport and logistics infrastructure are of paramount importance. The continent is not only rich in resources but is also fast developing as a robust manufacturing centre. The challenge for these economies is to ensure swift transport of containers and goods to the various African ports and onto global markets. 

Rail transport is at the forefront of any logistics development and recent years have seen increased investment and new initiatives. And with the planned Africa Integrated High-Speed Network – part of the Agenda 2063 Continent Development Plan – gathering steam, almost every African country is now looking to invest, or seek investment, in improving their railway infrastructure and stock.

The Real Way Forward is the Railway

The main hurdle facing these plans is that existing railways systems, mainly dating from the colonial era, are often in poor states of repair or the routes are unsuitable for future plans. The latter of these factors is mainly due to colonial planners usually using the shortest or quickest routes rather than ones which brought benefits to the country as a whole. Another long-range hurdle to continental integration is the fact that there are at least six different gauges in use. 

The inauguration of Transmashholding’s (as TMH Africa here) first African factory in April of 2019 illustrates the Russia-based conglomerates’ commitment to expansion and investment across Africa and Company’s president Andrey Bokarev business talent (a few months after a €1bn five-year contract between Egyptian National Railways and Transmashholding-Hungary  were signed in 2018.) The 45,000m² plant, situated in Boksburg, Gauteng, has been producing rolling stock since 1911, thus allowing TMH Africa to hit the ground running with an existing facility and workforce. 

The South African factory marks stage one of TMH International’s planned investment in Africa of over $32 million, and initial plans at Boksburg include the upgrading of the factory and machinery as well as retraining and upskilling of current employees.

TMH Enters the South African Train Market

It is also worth noting that Gauteng Province is the location of the Tambo Springs Project, a greenfield transport hub comprising road, air, and rail, and valued at $15 billion. There is also the planned container terminal at Ekurhuleni, some 20km from the new TMH International facility. 

South Africa is now the leading country in Africa for rail freight – at 99.5Mt a kilometre – and the map below shows not only how intensive the African Union’s plans for developing transport infrastructure is, but also how central to that plan South Africa is. 

Jerome Boyet, CEO of TMH Africa, sees the company’s role in Africa as being a local partner with local and global manufacturing companies seeking to fulfil orders across Africa as well as producing their own rolling stock. As Boyet pointed out, a large part of their decision to choose this location was based on: “…our understanding that South Africa’s real potential to become a leader in rolling stock manufacturing for Africa remains untapped.”

With continued economic growth and inward investment to transport systems across the continent, most observers would agree that TMH Africa’s investment is one with long term promise.

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Dr. Bouamatou: breaking down the gender barriers in banking

29 November 2019 Comments (0) Africa, Leaders

While it would be fair to say that actual talent in the world of finance is distributed equally by gender, it would also be fair to note that this talent is not equally distributed among the top tiers of management. In fact, it was only in October 2019 when the Royal Bank of Scotland announced that Alison Rose would be its next chief executive that a woman finally reached the top position in a global bank. The same month, Citigroup named Jane Fraser as President, a move many commentators see as preparing her for the CEO position. IMF figures show that only 2% of banking CEOs globally are women. 

There is plenty of female talent within the finance industry, but generally, the glass ceiling tends to hold them back from the top positions. That glass ceiling often means salary disparity too. In January 2019, Citigroup revealed that its female employees receive on average 71% of their male counterparts. Given that they have over 200,000 employees, with more than half of them women, hopefully, this honesty will see the pay gap closing. 

In emerging economies, the appointment of women to top positions is doubly important. Not only does it address gender disparity, a major issue in many African and Latin American countries, but it also helps the institutions connect more readily with the 1.8 million unbanked women that the World Bank is targeting in Africa and Latin America as part of their 2020 financial inclusion goals. 

Dr. Leila Bouamatou : An Impressive Credentials 

One such woman who currently stands out is 35-year-old Dr. Leila Bouamatou, who is currently Managing Director and Board Member at Générale de Banque de Mauritanie (General Bank of Mauritania). Dr. Bouamatou holds a Master’s Degree in Finance from Barcelona’s EADA Business School, an Executive MBA in Business Administration from South Mediterranean University, and a Doctorate in Business Administration from Fox School of Business & Management. Impressive credentials quickly silenced any critics who say she gained her position through her father, Mohamed Ould Bouamatou, who founded GBM in 1995 as the first private bank in Mauritania. 

Dr. Bouamatou trained in Tunisia with Deloitte’s, with MediCapital Bank in London, and then with BMCE Bank International Plc – who specialize in African investments – also in London. She had just been offered a lucrative contract in London when her father asked her to return home and join the treasury department of GMB. She served as Head of the Treasury Department for 10 years, before being promoted to managing director and board member.

While Mauritania is one of the poorer African countries at the moment, economic development looks good, thanks mainly to a program of reforms which will hopefully be continued by the new president, Ould Ghazouani, who won the election of June 2019, taking over from retiring president, Mohamed Ould Abdel Aziz. On an optimistic note, it is worth remembering that this was the first peaceful change of ruler since the country gained independence from France in 1960. Those reforms have meant that Mauritania is ranked in the top 10 of global reformers. But it is also worth noting that the country continues to have a large foreign trade imbalance though GDP is forecast to rise by 5.2% in 2019 after two years’ steady at 3.5%.

To Break Down the Disparity Barriers in Africa

Dr. Bouamatou is a huge supporter, not only of financial inclusion for women but also of empowerment and breaking down the disparity barriers across the continent. Speaking to her alma mater, Fox School of Business & Management, she said:

“Women are getting more and more educated and becoming more and more ambitious. Fathers are more and more supportive of their daughters and more open-minded, compared to previous generations.”

Dr. Bouamatou is married to Tah Meouloud, a fellow graduate of Fox School of Business & Management, and an economist who was head of human resources at BSA subsidiary BSA Technologies. They have two children.

A Statement against Discrimination against African Women 

Dr. Bouamatou always wears an El-melhfa, a traditional piece of cloth which covers her from ankles to face. While many see El-melhfa as a Muslim tradition, it is more a Saharawi tradition, one which is worn by all religious and ethnic groups of the Saharawi. It is a symbol of Saharawi pride and resistance, especially in what these people view as ‘occupied territories’. Because of its visibility, wearing it can often lead to discrimination against women. By choosing to always wear it, Dr. Bouamatou not only acknowledges her heritage, but she also makes a statement against discrimination against women throughout Africa.

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7th Single Window Conference Looks to Boost Trade Links

25 November 2019 Comments (0) Africa, Business

Between the 17th and 19th of September 2019, the 7th annual International Conference on Single Window of the African Alliance for Electronic Commerce (AACE) was held in Yaoundé, the capital of Cameroon. Present were leading players in logistics and supply chains, and over 40 delegations for foreign countries including 18 African countries. 

The idea behind a single-window system is to improve the efficiency of international trade, in this case particularly the concept of intra-African trade across the region. In order to work properly, this would require a single entity or location where companies would submit all their documents such as customs declarations or permits for import and export. So, if a company in Kenya wished to export its goods to 12 other African countries, rather than going through 12 separate sets of regulations and multiple submission of documents, they would instead do it all through one single entity. 

A single market with a billion consumers

Africa has seen a lot of rapid economic development in recent years, much of that down to cooperation across the continent. Recent developments have included the African Continental Free Trade Area Agreement (AfCFTA) in March of 2018, which has committed to removing intra-regional tariffs on some 90% of goods. If this agreement is successful it will create a single market with in excess of a billion consumers and a total GDP of over US$3 trillion. It was an agreement that the continent needed badly; in 2017, African intra-region trade only accounted for 17% of exports. When compared to Asia (59%) and Europe (69%), it is clear that as a potential trade bloc, Africa was lagging behind and missing out on the many benefits that come with such high rates of ‘local’ trade. 

The September conference focused on two main aims; the growing potential of e-commerce across the continent, and optimizing the supply chains of landlocked countries with no port access. The latter of these is something that will need massive investment in infrastructure, particularly railways and roads. And we are seeing that investment already happening across Africa.

450 million African mobile users and 300 million more expected

But it is the e-commerce factor which is perhaps the most exciting as it needs a lot less in terms of total investment. In some ways, Africa has been able to leapfrog many developed nations in terms of developing e-commerce. With lower rates of banking and credit card use, there has been a need to develop innovative payment methods such as e-wallets which people can top up at local agents, giving them a balance on their mobile with which to purchase goods. And with generally widespread internet penetration across much of Africa, there are large numbers of new consumers coming online. With around 450 million mobile users currently and another 300 million expected to have access in the next 3 years or so, companies are recognizing the potential of this reservoir of consumers with disposable income. 

The concept of the single window is a natural step in the development of AfCFTA. These annual conferences aim to develop the single window concept following the guidelines already established by the World Trade Organisation (WTO) and the World Customs Organisation (WCO). While a continent-wide single window may be some years off, The African Alliance for e-Commerce hopes to establish national and regional ones as a stepping stone to a continental one. Many African countries are already cooperating on cross border trade already, with several trade zones already in operation. Of particular note is the East African Community (EAC) which comprises Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda. It has shown the best progress as far as moving towards a common trade area is concerned and could serve as a template for the continent as a whole. 

A single window to reduce tax and to optimize the African potential

Developing single window systems will reduce tax and tariff burdens and make the movement of goods across borders far easier than the present. But there are still many barriers to successful implementation. The continuing conflict in some areas, low-level corruption at borders and customs points, and even the motives of individual countries may hamper a quick solution. But with the massive potential for businesses, there will be a continued push to establish an Africa-wide single window in the near future.

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Can Russia be a major player in Africa? Outcomes from Sochi.

19 November 2019 Comments (0) Africa, Economy, Politics

With the ongoing competition between Russia and China trying to take the lead on African investment and partnerships and the United State’s revived interest over the continent, Russian President Vladimir Putin hosted a Russia-Africa summit in Sochi from the 23rd to the 24th of October.

National belts are tightening globally, and FDI (foreign direct investment) has been decreasing worldwide, yet Africa has been the one region to see the opposite, with FDI to the continent rising in 2018 to US$46 billion, a year on year rise of 11% from 2017. Yet while we may see China and Russia as the ‘main players’ in Africa, the two superpowers remain behind other nations in terms of total investment, with France leading the way followed by The Netherlands and the UK. In terms of development aid, the show continues to be run by the U.S., China, and Japan, with little in the way of ‘no strings’ aid coming from Russia.

Many considered investment in Africa to be like a modern second wave of colonialism, where nations and multinationals sought to reap the benefits of expanding economies and massive amounts of untapped resources. But this time, the African nations have a lot more power when it comes to accepting investment, and the huge amounts of money flowing inwards are being channelled into infrastructure, transport systems, and bringing some of the lagging economies into the 21st Century.

This summit was meant to be a rallying call, an announcement to the world that Russia was back in Africa, a statement of intent that Russia’s decreased influence in Africa was about to reverse. So, did anything actually happen at Sochi?

54 countries, US$12.5 billion in deals signed

All 54 countries in Africa responded favourably to Vladimir Putin’s invitation. And 43 of these nations were directly represented by their respective heads of state like the President of Congo, Denis Sassou-Nguesso, or the Egyptian President, Abdel Fattah al-Sissi, who co-chaired the Sochi summit alongside Putin,

“US$12.5 billion in deals signed” claimed the banner headlines out of Moscow. But it is worth taking a step back and realising that most of these deals were memorandums of understanding, and these MOUs do not always come to fruition, so it is far too early to declare Sochi a success or a failure.

Russia has been the main military partners of some African countries for many years and has consistently been the main source of African arms over the last decade. So during this summit, Russia has confirmed it is multiplying military cooperation and defence agreements with several African countries like Mali.

Other areas where Russia is already doing very well in Africa are in the energy and transport sectors:

The Russian state corporation specialised in nuclear energy, Rosatom, has signed an agreement with Rwanda for the upcoming construction of a Nuclear Science and Technology Centre. This Centre plans to organize the production of radioisotopes that could be used in industry, agriculture and medicine. It will also be equipped with a nuclear facility powered by a 10 MW pressurized water reactor.The Russian railway equipment manufacturer, Transmashholding, has signed a €1 billion with Egyptian National Railways for the delivery of 1300 passenger cars. The company chaired by Andrey Bokarev has also signed a memorandum of understanding with Nigeria for the delivery of rolling stock for the Nasarawa-Abuja railway section construction project.

Andrey Bokarev, President of Transmashholding

Africa determines the future of the world’s agenda

If Russia is to continue competing in Africa, it must play to its existing strengths. While Russia may not be able to compete with the U.S. and China in terms of consumer goods and electronics, it should value its expertise in heavy industry and energy. If they fall behind too much in this game, then their own economy may stagnate, something the country wants to avoid. Thanks to this kind of summit, investment from Russia may increase in the years to come.

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Transmashholding Signs Major Egyptian Deal

7 November 2019 Comments (0) Business, Transport

Summary: The deal between Egyptian National Railways and Transmashholding-Hungary Kft. looks like being the start of a long and fruitful relationship.

When Egypt’s first railway system was commissioned by the Regent of Egypt and Sudan, Abbas I, in 1851, he chose for it to be built by one of the 19th Century’s greatest engineers, Robert Stephenson. The vision was that Egypt’s transport system would rival the best transport systems globally.

Sadly, after many years of poor maintenance and management, Egypt’s rail system has in the last few decades become known as one of the world’s most dangerous. This has led to the Egyptian government making the decision to revitalise the entire infrastructure and rolling stock as well as investing in new routes. This was an important decision, not only in terms of improving safety but also in terms of economic development. Egypt’s rail network not only transports some 1.4 million passengers a day but is also a vital component in goods and container transport, especially when you consider that Egypt has the highest container traffic in Africa with almost 7 million units shipped annually. As most of this traffic passes through the Suez Canal, increasing rail capacity would help the country diversify its commercial transport networks.

1,300 passenger cars in 5 years with ENR Worth Over 1 Billion Euros

The announcement in September 2018 that Egyptian National Railways (ENR) had signed a contract with Transmashholding-Hungary Kft. (a Russian-Hungarian consortium) to produce and deliver 1,300 passenger cars represents a major part of the Egyptian government’s plans. Worth in excess of 1 billion Euros, the contract is for five years from the date of signing. Such a deal is also based on the close economic links between Egypt and Russia, and the choice of Transmashholding is no coincidence: the company led by an influential Russian businessman, Andrey Bokarev, is a world leader in railway manufacturing.

Transmashholding-Hungary Kft.’s production of the rolling stock represents a major part of Egypt’s planned investment in their railway systems, with over 3 billion Euros of total investment already announced. It is also the largest single contract ever agreed by Egyptian National Railways (ENR). Transmashholding-Hungary Kft. beat bids from companies from several other countries, including China, India, and Italy.

Production of the five different classes of passenger car will be split equally between the Hungarian side of the consortium, Dunakeszi Jarmujavito Kft., and the Tver Carriage Works in North-western Russia, which is owned by Transmashholding.Final assembly and fitting of the rolling stock will take place at a specially created plant in Egypt which will be a partnership between TMH International AG (part of JSC Transmashholding) and the National Organization for Military Production in the Arab Republic of Egypt. The plant will also enable maintenance of the new passenger cars.

A radical change for Egypt

Martin Vaujour, CEO of TMH International said: “This move could mean a radical change for the country because Egypt, despite being a very large country, has not really developed any railway industry at all.”

Even with such a massive project just signed, Transmashholding-Hungary Kft. is already looking to the future with plans to improve the connectivity of, and invest in, Cairo’s metro system which carries 4 million passengers per day. They are also looking at the potential of suburban trains for future projects.

With this initial contract signed at the beginning of Egypt’s redevelopment of their railway infrastructure and stock, future projects and involvement look promising for the Transmashholding-Hungary Kft. consortium.

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