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African tourism declines by 3 percent in 2015

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

The number of tourist visits to North Africa drops eight percent while sub-Saharan Africa sees a one percent decline.

International tourist arrivals in Africa declined by three percent in 2015 but experts predict a revival this year.

The overall decline of arrivals on the continent was fueled by a drop of eight percent in North Africa, which accounts for about one third of all arrivals, according to the United Nations World Tourism Organization (WTO).

In sub-Saharan Africa, the decline for the year was only one percent and travel began to increase in the second half of the year.

The tourism organization said there were a total of 53 million tourist arrivals on the continent in 2015.

Global travel increased

The decline contrasts with other regions of the world that saw increases in international arrivals, including Europe, Asia and the Americas, which each rose by five percent, and the Middle East, which saw a gain of three percent after experiencing declines for years prior to 2014.

The drop in travel to Africa ended more than a decade of increases in tourist travel to the continent.

WTO Secretary-General Taleb Rifai predicted the number of arrivals this year will increase by two to five percent, driven by a rise in tourism. He said experts expect tourism to more than double to about 130 million arrivals per year by 2030.

One reason for optimism is that more visitors are coming from emerging economies in Asia and in Central and Eastern Europe. At the same time, fewer travelers are coming from China as its economy struggles.

Continent offers diverse attractions

Popular African attractions include the wildlife of Masai Mara in Kenya, Victoria Falls in Zimbabwe and Zambia, the pyramids of Egypt, Cape Town in South Africa, Marrakech in Morocco, the Omo River region of Ethiopia, the gorillas of the Virunga Mountains in Uganda, Rwanda and the Democtratic Republic of Congo, and Mount Kilimanjaro in Tanzania.

According to the African Development Bank, Morocco, Egypt, South Africa, Tunisia and Zimbabwe were the African countries with the most international visitors in 2014. It predicted that Algeria, Mozambique and Kenya soon would join the ranks of the most visited nations.

The report (pdf) estimated that there were a total of 65 million international arrivals in 2014. About half came from Europe, a total of 582 million travelers. Another 24 percent come from the Asia-Pacific region (263 million); 11 percent from North America (120 million). Smaller percentages come from Latin America, Africa and the Middle East.

In Egypt, 1.3 million tourism jobs

Egypt has the most direct employment in tourism at 1.3 million jobs, followed by Ethiopia with 980 million, Nigeria with 884 million, Morocco with 775 million and South Africa with 680 million.

The countries with the largest share of employment devoted directly to tourism are: Seychelles (24 percent), Cabo Verde (14 percent), Mauritius (11 percent), and Morocco and Tunisia (7 percent each).

The World Travel and Tourism Council estimates that travel and tourism and travel represents more than 8 percent of the gross domestic product of Africa and contributed about three percent of employment in hotels, airlines and other passenger transportation, as well as travel agents, restaurants and leisure industries.

Tiny share of global market

Africa holds a small share of the global market. Africa had 65.3 million arrivals in 2014, just fewer than 6 percent of the 1.1 billion tourist arrivals reported worldwide, the tourism monitor report said. Africa received a total of $43.6 billion in tourism revenue, about 3.5 percent of the global total.

While tourism in Africa was rising steadily until 2015, myriad challenges including lack of high airline prices, convenient transport, security concerns, threats to wildlife and lack of cooperation between nations, may be holding it back from even greater growth.

In North Africa, terror and civil strife sharply reduced the flow of tourists, while violence and the Ebola crisis scared many tourists away from the southern continent.

Security fears undermine tourism

Among major destinations, Kenya, Nigeria, Tunisia and Egypt have seen their tourism industries battered by security fears.

South Africa, Nigeria, Ghana and Uganda also saw significant drops in travel, according to one estimate.

The tiny West African country Mali has seen its tourist business collapse amid ongoing terrorist attacks and anti-government unrest.

From a peak of 200,000 visitors a year in 2011, Mali’s tourist trade has slowed to a trickle of a few thousands as numerous governments, including the United States, Britain, France and Australia, have issued travel warnings.

High number of travel warnings

Travel warnings can be a deterrent to tourism and Africa has seen a large share issued by the U.S. State Department. A 2015 analysis by Skift of 261 travel alerts issued or updated since 1996, found that 30 of 82 countries that had notifications were in Africa.

Algeria, Burundi and Congo, along with Afghanistan, had the most frequent updates.

Meanwhile, the African Union’s commissioner for transport and infrastructure recently urged representatives of African nations to adopt a more collaborative approach to increasing tourism to the continent.

“We can complement each other as African countries. We should work together to develop our institutional capacity and human resources to take it on the international level. So this is one of the areas we need to work on,” Elham Mahmoud Ahmed Ibrahim said.

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Sugar Refining in the Middle East Faces a Squeeze

24 February 2016 Comments (0) Business, Featured, Middle East

Al Khaleej Sugar

Middle Eastern sugar refining faces a squeeze as global demand and prices drop, and production capacity across the region rises

The UAE’s Al Khaleej sugar refinery sells to ICE Futures Europe

The expansion of Middle Eastern sugar refining has pushed one of the region’s leading producers to sell through the London Investment exchange, the first time a company from the region has done so in a decade. In a deal worth around $200 million, UAE-based Al Khaleej Sugar Company delivered just over 200,000 metric tons of white sweetener to ICE Futures Europe, which was bought in full by ED&F Man Holdings. But the move signals a difficult time for sugar refining in the Middle East.

Al Khaleej, which refines, produces, and distributes refined and raw sugar and sugar syrup, was founded in 1992, and was one of the first home-grown sugar refineries to see success in the Middle East. Importing raw sugar from Brazil and India, it has an annual output of around 1.8 million tons, and is one of the world’s largest sugar refiners. Although it may seem odd that one of the world’s leading sugar refineries is based in a region without the correct weather to produce its own sugar, the World Trade Organization’s decision to cap exports from the European Union in 2006, formerly the largest exporter of white sugar to the MENA region, left a huge gap in the market.

However, a decade later sugar prices have dropped, and there is a global sugar surplus, while consumer demand is weak. Al Khaleej’s rare move to sell through the ICE – at a time when it is operating at 70% capacity, well below its production capacity of around 2.5 million tons per year – has only underscored these concerns. As analysts comment, the London exchange is seen as a last resort buyer, signaling that there is not much of a market. Al Khaleej has said that where last year’s weak demand was compensated by high sugar premiums, the company is looking to 2016 with some trepidation.

Sugar refining capacity expands in Middle East

The choice to sell outside of the MENA physical market also highlights the excess refining capacity of the region itself. Inspired in part by the success of Al Khaleej during the 2000s, a significant number of new refineries have come onstream in recent years, notably in Saudi Arabia, Iraq, Sudan, Yemen, and Bahrain (which has the $150 million Arabian Sugar Company which produces 600,000 metric tons per year). The MENA region’s refining production is around 8.5 million tons, although its total capacity stands at around 13.5 million tons, and consumption is around 12-15 million tons.

Between 2016 and 2018, that capacity is expected to increase by around 4.7 million tons thanks to a stream of projects which were planned and approved before demand dropped. A new Al Reef Sugar Refinery is due to start operations in Jizan, Saudi Arabia by the end of 2017, with a planned refining capacity of 1 million tons annually. It also has plans to acquire land in East Africa to grow its own cane sugar crop in the long term. A second refinery in Saudi Arabia, the Durrah refinery, is also under construction, with a planned refining capacity of 750,000 tons.

Further refineries are also in development across the Middle East, including in Oman, where work on the Sultanate’s first ever sugar refinery, the $250 million Oman Sugar Refinery Company, has commenced, and in Algeria, where production has just started at a new refinery with a capacity of 350,000 tons per year. That figure will increase to 700,000 tons annually over this year to serve the domestic Algerian market which consumes 1.2 million tons a year. Bahrain, Yemen, and Iraq have also expanded their sugar refining capabilities in recent years.

Production outstripping demand

However, it is feared that this significant expansion will create a production capacity far in excess of forecast consumption. Indeed, it is estimated that processing capacity in the region will be producing a 6.1 million ton surplus by 2018.

In Saudi Arabia white sugar consumption is around 1.2 million tons annually, a figure already matched by the Saudi refinery, United Sugar Company (a subsidiary of the Savola Group). The two further refineries currently under development in the Kingdom will push production capacity to saturation, especially considering that United is already operating at a loss and has plans to expand its annual capacity by 500,000 tons by 2017. Similarly in Oman, a new refinery with a planned annual capacity of 700,000 tons seems unnecessary in a country that consumes only 100,000 tons a year. Like Iraq, many countries across the Middle East are now self-sufficient. So as raw sugar futures drop to a three and a half year low, Middle Eastern sugar refining should be expecting a squeeze.

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Will Djibouti become the Singapore of Africa?

22 February 2016 Comments (0) Africa, Business, Featured

Ismail Omar Guelleh

The tiny country on the Horn of Africa hopes to use its strategic location to boost trade and diversify its economy.

The tiny nation of Djibouti has set its sights on becoming the Singapore of Africa, a trade hub that takes advantage of its location on one of the world’s busiest shipping routes.

China’s recently announced plans to build a naval base in the Horn of Africa country gave a boost to Djibouti’s ambitions. Other plans, with a price tag of $12.4 billion, include expansion of port facilities, two new airports, as well as a $4 billion rail link with Ethiopia, Djibouti’s land-locked neighbor.

“We want to follow the path of Singapore,” Dijbouti president Ismail Omar Guelleh said.

China provides significant assistance

China is playing a significant role in Djibouti’s development as the Asian nation seeks to expand its influence in the region and secure trade routes with its “One Belt, One Road” initiative. Chian is financing most of the $12.4 billion in improvements as well as the $4 billion rail link with Ethiopia.

Work is expected to start soon on the Chinese naval base, which will be located at the new multi-purpose port of Doraleh.

The two countries have agreed to a 10-year lease for the base with China paying rent of $100 million per year. The base will house about 10,000 Chinese troops and is expected to boost local employment and businesses.

The United States and France already maintain naval bases in Djibouti.

Djibouti’s plans call for development of a second port, also at Doraleh, designed to handle container shipments.

Two new airports will be built

China is also providing support for two new airports Djibouti is building at a cost of nearly $600 million. With these projects, Djibouti hopes to increase both cargo shipping and tourism, which makes up a small part of its economy.

One airport at Ali-Sabieh, south of the capital will be capable of serving 1.5 million passengers and moving 100,000 tons of air cargo annually. It is expected to begin operating in 2018.

A second, smaller airport will be built in northern Djibouti. Designed to handle more than 750,000 passengers a year, it is expecting to start operating in 2016.

Rail line to link Djibouti, Ethiopia

China also is building a $4 billion railway line that will link Djibouti with Ethiopia, one of the fastest growing economies globally, which gets about 90 percent of its imports through Djibouti. The rail line will give land-locked Ethiopia a link to the sea while Djibouti will gain access to a market of 95 million people.

Djibouti, one of the poorest countries on the continent, envisions becoming a middle-class country in two decades in its “Djibouti Vision 2035” blueprint drafted with the help of the World Bank.

Ports and trade are already at the center of Djibouti’s economy but the nation hopes to diversify.

More than two thirds of Djibouti’s gross domestic product comes from the services, primarily port and trade-related operations. The remainder is from manufacturing and agriculture. Poverty is prevalent and unemployment is 60 percent in urban areas. The literacy rate is 70 percent.

Seeking economic diversification

Djibouti seeks to further diversify its economy by becoming a regional financial hub for foreign investment, including Islamic banks. China and Djibouti also signed deals for banking and free trade zones.

“Nowadays we are shifting to a much more integrated development plan. We’re trying to diversify our economy,” Djibouti finance minister Ilyas Dawaleh said.

Dawaleh noted that his country has enjoyed strong economic growth in recent years – 6.5 percent of gross domestic product in 2015 and 5.7 percent in 2014.

He predicted Djibouti will achieve double-digit annual growth in the next three years. “This is our target with our diversification strategy we are undertaking now,” he said.

Dijbouti is one of four countries that make up the Horn of Africa and the only one that has been largely peaceful for the past two decades while its neighbors across the Gulf of Aden – Somalia, Eritrea, and Yemen, have endured conflicts. This has enabled Djibouti to emerge as the main military and maritime hub in the troubled region even though the country is largely undeveloped.

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Growth in African wealth brings more philanthropy

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

Mo Ibhrahim Foundation

As the number of millionaires and billionaires on the continent grow, many give back to programs promoting health, education and entrepreneurship.

As the wealth of the continent increases, African philanthropy is on the rise.

For example, Aliko Dangote of Nigeria, the richest person in Africa recently joined with the Bill and Melinda Gates Foundation to pledge $100 million to fight malnutrition in Nigeria.

Dangote has supported programs in education, youth empowerment and health as well as a program that offers micro grants to rural women and young people to help them start businesses.

Now he will help in the battle against malnutrition in his home country, where one in five children are malnourished and one in three suffers from stunted growth – the highest number in Africa.

With a fortune of $17 billion built in cement and sugar manufacturing, Dangote is considered the richest person in Africa.

Philanthropy increasing across Africa

Dangote is not alone in using some of his considerable wealth to help others.

A recent report by UBS and Trust Africa said philanthropy on the continent is on the increase, building on longstanding African traditions of giving back to family and community.

“Over the past ten to fifteen years, there has been phenomenal growth in philanthropic institutions across Africa,” according to the study, “Africa’s Wealthy Give Back” (pdf). “We have begun to see the emergence of more strategic philanthropy,” along with more formal infrastructure for giving, the report said.

The USB-Trust Africa study cited projections by McKinsey Global Institute that gross domestic product in sub-Saharan Africa will grow to $2.6 trillion by 2020. With that will come corresponding increases in the number of wealthy individuals.

Dangote with Bill Clinton

Dangote with Bill Clinton

Growing wealth fuels giving

It said there were nearly 150,000 wealthy people in African in 2013, and the number had increased 3.7 percent over the previous year. At the same time, the total wealth of this group increased by 7.3% to $1.3 trillion.

There are about 25 major foundations on the continent.

Patrice Motsepe, a South African mining tycoon, in 2010 was the first African to sign the Giving Pledge that was started by Bill Gates and Warren Buffet. In 2013, Motsepe donated half his fortune to his own foundation to help those in need. His net worth is estimated at $1.4 billion.

Sudanese billionaire Mohamed Ibrahim’s foundation produces an index of African governance and Ibrahim is known for fighting government corruption on the continent. His Mo Ibrahim foundation also offers scholarship aid to young African leaders. A pioneer of telecoms in Africa with Celtel International, his fortune is estimated at $1.1 billion.

Tony Elumelu, a Nigerian banker, whose foundation is funding 10,000 African startups at a cost of $100 million. The program provides entrepreneurs with $10,000 each, half for training and half to start the business. Elumelu’s goal is to create one million jobs and add up to $10 billion to Africa’s gross domestic product. Elumelu’s net worth is estimated at $700 million

Jim Ovia, the founder of Zenith Bank, one of the largest banks in Nigeria, and of the telecom Visafone, which has three million subscribers, supports technology startups. His wealth is estimated at $550 million.

With a fortune estimated at $450 million, Cyril Ramaphosa, vice president of South Africa, supports South African entrepreneurs through his Shanduka Foundation. His Adopt-a-School Foundation has already built 454 schools.

Philanthropy builds on African tradition

Halima Mahomed, a philanthropy advisor to Trust Africa, said the wealthy Africans are following deeply ingrained traditions of African culture. “Rich or poor, everyone gives in Africa” and the newly wealthy are following that trend, Mahomed said.

Gregorie Muhr, a philanthropy analyst at UBS, said the approach is changing, as the new philanthropists take a more business-like approach to their giving, having seen that millions of dollars previously donated in Africa have not always reached the intended objectives.

The advent of billionaire philanthropists is not unique to Africa. “The trend is global’’ in developing markets where a new class of super rich emerges, according to Jenny Hodgson, executive director of the Global Fund for Community Foundations.

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Egypt will launch the Middle East’s first commodities exchange

19 February 2016 Comments (0) Business, Featured, Middle East

egypt exchange

As the nation seeks to become a global trade center for grain, it will open an exchange focused on agricultural products this year.

Egypt plans to launch a commodities exchange focused on agricultural products, the first of its kind in the Middle East as part of the nation’s goal of developing a major trade and processing hub for grain on the Mediterranean coast.

According to Egyptian Minister of Supply Khaled Hanafy, the government plans to begin operating the commodities exchange by the end of this year.

Meanwhile, Hanafy has also been courting international investors for a $2 billion initiative to turn Egypt into a global grain-trading hub.

The Egyptian government wants to make the country a major center for processing and re-exporting wheat, maize, soy, and other commodities. Grain is a significant crop in Egypt but it is also the world’s largest wheat importer.

Development of Damietta as major port

The government is proposing a mega-development in the port of Damietta on the Mediterranean coast, including new piers that could receive giant tankers and ships.

The plan was approved by President Fattah al-Sisi in October and the project is to be finished in two years.

Hanafy cited Egypt’s strategic location with access to markets in Europe, Africa and the Middle East, with 1.6 billion consumers as well as its access to the Suez Canal, as key advantages of the initiative.

Currently, major trade routes for grain are across the Pacific and Atlantic oceans and the western Mediterranean. Major exporters, including Russia and the United States, have direct access to markets in Asia, Latin America and Europe.

Egypt’s proposed hub could also find competition in plans to develop nearby Suez Canal ports such as Djibouti into global trade hubs.

Damietta

Damietta

Egypt seeks investors

Hanafy has met with officials and investors from Russia, the United States of America, the United Arab Emirates, Sudan and Slovenia.

He said the Egyptian government is working in cooperation with the Egyptian Exchange market and the Egyptian Financial Supervisory Authority, the government regulating agency, to launch the commodities exchange.

The commodity exchange will include commodity producers, a spot market for buying and selling securities, and storage and grading hubs.

Farmers can use mobile application

Egyptian farmers will be offered a mobile application that will enable the market to track their output, electronically linking their crops to the exchange, according to Iman al Mutlaq, chief executive of Sigma Investments, which is working on the project.

Mutlaq said it would begin with six agricultural commodities plus oil and gold. She said a small number of commodities would help promote high volumes.

The government is working on guidelines for pricing and products, which will need to be in place before the exchange opens. It also will begin issuing certificates of origin.

Agricultural production needs to increase

The government believes the commodities exchange will boost development of Egypt’s highly fragmented agricultural lands, Hanafy said.

Egypt wants to reduce grain imports while improving domestic production that is approaching $100 million to supply a rapidly growing population.

Egypt increased agricultural production by 20 percent between 2004 and 2014. Sisi recently called for  increased production by 2030 through modernization and support for small farmers.

Lack of silos results in waste

The nation has struggled to make agricultural operations efficient. Lack of modern storage facilities is part of the problem. The country stores much of its wheat in open lots, causing an estimated loss of 30 percent. The United Arab Emirates recently agreed to provide funding to Egypt for two dozen silos.

Limited land available for agriculture is another challenge. Only about three percent of the land in the country is suitable for agriculture.

Agriculture experts say in the future, production in the Euphrates and Tigris river basins could increase enough to support a regional grain market in the Middle East. For now, however, war in Iraq and Syria has disrupted grain production.

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With new leadership, Ecobank Nigeria expands services

18 February 2016 Comments (0) Africa, Business, Featured

Charles Kie

One of the country’s largest banks targets support to grow small and medium-sized business sector.

One of Nigeria’s largest banks is expanding services for small and medium-sized business enterprises as it welcomes a new top executive. The Ivorian Charles Kie is the new managing director of Ecobank Nigeria, replacing Jibril Aku, whose five-year term ended December 31. Ecobank Nigeria, based in Lagos, has more than $9 billion in assets and operates more than 600 branches, making it one of the largest banks in the country.

New services for small, medium-sized businesses

The bank recently launched a number of initiatives designed to support the small and medium enterprise (SME) sector of the economy.

Calling small and medium-sized businesses the engine of economic growth for the nation, Sunkanmi Olowo, head of SME and Value Chain Banking at Ecobank Nigeria said the bank would increase funding and support to the sector.

Olowo said Ecobank Nigeria was launching SME Club, which will provide preferred business support and tailored products to small and medium-sized businesses.

SME Club will provide capacity development, technical assistance and business, accounting, tax and legal services building to small and medium-sized enterprises as well as information mining, networking and capacity, he said.

The bank is also launched MyMall, an online e-commerce platform on which businesses can market and sell their services and goods.

Olowo said Ecobank will also offer training and funding through a New Venture Initiative, he said.

New managing director named

Charles Kie, the Ecobank Nigeria’s new managing director, joined Ecobank Transnational in 2011 and served as chief operating officer of Ecobank Capital and then became head of Ecobank group’s corporate banking division.

Previously he was chief executive officer of Groupe Banque Atlantique, based in Togo and Ivory Coast with operations in nine West and Central African countries. He also worked for Citibank, serving as CEO of Citigroup West Africa.

A graduate of the Ecole supérieure de commerce d’Abidjan in Ivory Coast, Kie has Master’s degree in Business Administration from the London School of Economics and a Master of Science degree from the University Of Clermont-Ferrand (France). He also attended Harvard Business School’s Advanced Management Program.

Parent organization emerges from scandal

Ecobank Nigeria is a subsidiary of Ecobank Transnational, a pan-African banking group based in Togo with more than 1,250 branches and offices in 36 countries in sub-Saharan Africa. It has $24 billion in assets and 11 million customers.

The parent organization got new leadership last year after two years of scandals that saw the bank accused of poor governance and fraud.

The Nigerian Ade Ayeyemi was named group chief executive in September as the bank was poised to expand its footprint on the continent.

“This organization went through a near-death experience two years ago. And now we’ve recovered, we need to power through,” Ayeyemi said.

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Maha Al-Ghunaim, CEO, Global Investment House

16 February 2016 Comments (0) Featured, Leaders, Middle East

maha al ghunaim

Maha Al-Ghunaim, founder and CEO of Global Investment House, is a pioneer in the world of Arab finance

In the world of Arab banking and finance, Maha Al-Ghunaim is something of a pioneer as the founder and CEO of one of the Middle East’s largest investment companies, Global Investment House. As a women in a male-dominated industry, both in the Middle East and beyond, working in a country where only 15% of women are in the workforce, she is also something of a rarity.

Building Global Investment House

Al-Ghunaim trained in mathematics, graduating from the San Francisco State University in 1982, and has worked in asset management and investment banking for the over 30 years since. Straight out of university she joined the large government-owned investment company, the Kuwait Investment Authority. And she comments: “At that time they really took care of young Kuwaitis who were entering the workforce… I started from the bottom and learned how things are done and gradually moved my way up the ladder.”

She would work there for many years, before taking positions at the now dissolved Kuwait Foreign Trading Contracting & Investment Co. and the Kuwait Investment Company.

In 1998, Al-Ghunaim launched Global Investments House with four colleagues, having spotted a gap in the Middle Eastern market for integrated solutions in brokerage, asset management, and investment banking. She says: “We understood that the capital markets in Kuwait lacked certain products and services and we capitalized on that.” Focused specifically on opportunities in the Gulf Cooperation Council (GCC) and Middle East, the company chose to offer funds and investment products which were wholly new to the region, including bonds, index funds, fixed income funds, and private equity. The company also pushed research and development. “We widened the capital markets rather than everybody competing for the same slice – make the pie larger. We started to create very new funds and products,” comments Al-Ghunaim.

Global is now an investment bank with $3.7 billion under management, 210 employees, and offices in Kuwait, Bahrain, Egypt, Jordan, Saudi Arabia, Turkey, and the UAE. In 2008 the company became the first Kuwaiti firm to list on the London Stock Exchange, and was also listed on the Kuwait, Dubai and Bahrain bourses. “We started Global with a capital of $50 million in 1998 and, by mid-2008, we were trading at a $5 billion market cap,” comments Al-Ghunaim.

Regularly included in Forbes’ Top 100 Most Powerful Women, Al-Ghunaim is also a leading Arab businesswomen who chairs or sits on the boards of numerous companies and bodies including Kuwait’s National Industries Group, Kuwait University, Bank Muscat International, Bahrain, Baring Private Equity, Hong Kong, and Jehangir Siddiqui Capital Markets, Pakistan.

Steering Global through the financial crash

But the journey has not been easy. Having launched Global during the phenomenal Middle Eastern boom when oil prices were soaring, the company found itself significantly over-leveraged when the financial crisis hit in 2008. The company’s accumulated losses exceeded 75% of its capital in 2011, breaching Kuwaiti market rules, and the group’s shares were suspended from trading. One year later, it was forced to delist from the country’s stock exchange. “We found ourselves in the middle of liquidation disasters to pay off our debts and simultaneously organize Global International, regionally or locally. The financial crisis hit everyone around the globe… but also [there were] some mistakes that we encouraged in the way we do business,” she comments.

Al-Ghunaim successfully steered Global through this trying time, but needed to completely restructure the way the company did business. “We chose to be completely transparent with our clients, shareholders, and regulators throughout it all. This approach was unique in a culture that generally conceals problems, but we stuck to our commitment to being honest… Our earnings will be completely different from what we had before; it’s no longer about how much you make but about the quality of your earnings which provides sustainability and better valuation.” Now a risk-averse company, she reports that Global is well capitalized, debt-free, and profitable, and business is growing.

Committed to opportunities in the Middle East

Going forwards, her focus continues to lie in the Middle East, as committed as ever to the opportunities for Global in the region. “We create a strong bridge connecting buyers and sellers across the region. This is where we can really add value. Many investment houses offer similar expertise and experience in financial engineering and technical sides of the business, but our regional footprint, insight and placement power gives us an edge.”

Global is also continuing to pioneer in the region, adding new products to its range of billion dollar private equity funds. Two new products due to launch include a fund to invest in secondary private equity funds in the region, and a healthcare platform “which will allow investors to take advantage of the healthcare domain at the GCC-MENA-Turkey level”.

Al-Ghunaim also sees significant opportunities developing in education, consumer goods, and retail, “considering the demographics on the consumer-side, the strong inflow of expats, and the growing entrepreneurial spirit among SMEs”. And a spreading of bets across these sectors seems a particularly valuable strategy for Global considering the continued low oil prices in the region.

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Rail projects for Middle East, North Africa total $350 billion

15 February 2016 Comments (1) Africa, Business, Featured, Middle East

high speed rail saudi arabia

The region is experiencing a boom in development of railways to drive economic growth and benefit the environment. 

High-speed rail travel is on a fast track in the Middle East and Northern Africa. More than $350 billion in rail projects are under way in the region.

The estimate represents major rail projects in 16 countries, according to Terrapinn Middle East, which is organizing the 10th annual Middle East Rail conference in Dubai March 8 and 9.

Rail travel has become increasingly appealing in the region as a greener alternative to auto or air travel.

While the United Arab Emirates recently delayed work on a high-speed rail project, other governments that are facing budget deficits because of the oil glut prioritize rail projects as a way to improve trade and increase tourism to boost their economies.

Saudi Arabia builds high-speed line

One of these countries, Saudi Arabia accounts for about one third of the total spending with projects totaling $118.9 billion.

A major Saudi project is the $55 million Haramain high-speed rail project, which will connect the holy cities of Mecca and Medina with Jeddah, the country’s commercial capital and second largest city. Following delays, it is expected to begin operations in early 2017.

Kingdom wants to boost religious tourism

The Saudis see rail development as key to the nation’s ambitions to attract more tourists, especially to the holy sites.

The Saudi kingdom drew 16 million tourists in 2014 and wants to double that number by 2030, according Fadh Al Rasheed, group CEO of King Abdullah Economic City.

The Saudis also are building a $12 billion four-line commuter rail network in Jeddah as well as a $22 billion six-line network in the capital of Riyadh.

UAE project sees delays, staff reductions

While most projects are moving forward in spite of financial problems brought on by sharp reductions in oil prices, the United Arab Emirates in January suspended the bidding process for the second stage of its $11 billion Etihad Rail project and cut a third of its workforce. A project spokesman said the aim was to streamline operations before moving forward with bids.

Terrapinn said United Arab Emirates planned on spending $27 billion for metro rail, a tram and long-distance freight and passenger rail.

ethiad rail

Gulf States plan integrated network

Saudi Arabia and the UAE have agreed with four fellow states in the Gulf Cooperative Council to build an integrated high-speed rail network linking their countries by 2018 at a total estimated cost of $200 billion. The other partner nations are Bahrain, Kuwait, Oman and Qatar.

The goal is to create an efficient regional network of freight and passenger rail lines.

The railway network will yield environmental benefits for the region and create new jobs while reducing dependence on more expensive air or auto travel, according to Feras Shadid, a rail asset management consultant.

According to Terrapinn Bahrain has allocated $12.9 billion for rail; Kuwait, $17 billion, Oman, $16 billion, and Qatar, $46.7 billion.

China will help Iran build a high-speed line

With the lifting of sanctions, Iran is planning to develop a high-speed rail line linking the cities of Tehran, Qom and Isfahan. Terrapinn said Iran plans to spend $24.6 billion on rail projects.

China last month agreed to give Iran financial help with its high-speed rail line as part of an agreement to significantly increase trade to $600 billion in the next 10 years. China also wants to build a high-speed line linking the two countries.

Algeria, Egypt and Morocco plan rail development

Algeria, with a Terrapinn estimate of $34.4 billion, is developing light rail systems in Algiers, Oran and Constantine. While the projects have been delayed because of lost oil revenues, they are currently expected to be fully operational by 2020.

Egypt, with an estimate of $30.9 billion in spending, has projects including $1.5 billion to build a rail line linking 6th of October City to Cairo.

Morocco has an estimated $10 billion in projects, including a high-speed rail line that will connect Tangiers to Casablanca.

Farther south, Nigeria has $75 billion in rail projects, according to Terrapinn. High-speed rail service between Abuja and Kaduna is scheduled to begin operations in March. The line has nine stations.

Terrapinn also listed the following countries and their rail spending: Djibouti and Ethiopia ($4 billion shared), Iraq ($14 billion), Jordan ($3.8 billion), Lebanon ($500 million).

Major rail convention planned in March

Terrapinn released the estimates in advance of Middle East Rail 2016, the largest conference and expo devoted to rail projects in the region.

About 9,000 rail operators, government officials and contractors are expected to attend the March 8-9 event at the Dubai International Exhibition & Convention Centre. The expo will feature 300 exhibitors.

High-speed rails, or “bullet trains,” travel at significantly faster speeds than traditional trains. They can reach speeds of up to 350 kilometers per hour. They have been developed in Europe and East Asia.

Meanwhile, the boom in rail construction in the Middle East has caused worker shortages in other parts of the world.

For example, officials in Chennai, India said they have trained rail workers only to see them leave for higher paying jobs in the Middle East during the last two years, causing interruptions and delays.

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The woman leading UAE’s drive to become an entertainment hub

12 February 2016 Comments (0) Business, Featured, Middle East

noura al kaabi

Noura Al Kaabi has brought filming of movies including “Star Wars” and “Fast and Furious 7” to Abu Dhabi as head of the free zone twofour54.

Goodbye, Hollywood. Hello Abu Dhabi. Noura Al Kaabi is leading the United Arab Emirates’ ambitious effort to become a global media and entertainment hub.

As chief executive officer of the government-owned free zone twofour54, Al Kaabi brought the high-speed car chases of the action movie “Fast and Furious 7” to Abu Dhabi and transported the “Star Wars’’ storm troopers onto the nation’s vast desert.

Other productions in the country include “Sesame Street,” the well-known children’s television show; Top Gear, a highly popular motoring show in the United Kingdom; and “Bang Bang,” a Bollywood action movie.

Zone provides infrastructure and support

It’s all part of an effort Al Kaabi is spearheading at twofour54, which aims to provide the infrastructure and support to attract foreign productions and also to grow entrepreneurship in media and entertainment within the country.

The “Star Wars” movie and other high visibility projects have put twofour54 on the map with international film companies. The project offers incentives and logistical support to attract new projects.

Bollywood has been especially interested because Abu Dhabi is only a few hours away from India.

Tax-free environment attracts foreign investment

Duraï featured in Fast & Furious 7

CNN, Sky News Arabia, and the Cartoon Network also have set up projects in the twofour54 zone.

The twofour54 zone is one of a about three dozen free zones the United Arab Emirates government has established to promote economic development and attract foreign investment. The zones provide a tax-free environment and allow foreign ownership of companies operating within it.

The twofour54 zone also offers business support services, production facilities, funding for entrepreneurs and media training.

While development of international films and programming has grabbed headlines, fostering internal talent development in media and entertainment is a key goal.

“We are enabling young skilled media professionals to learn from the world’s best producers, directors, developers and other experts in the industry,” Al Kaabi said, emphasizing the importance of bringing “fresh faces” into the industry as a way of encouraging innovation.

UAE seeks to diversify revenue base

She noted that Abu Dhabi’s emergence as an entertainment hub is contributing to the United Arab Emirates effort to diversify its revenue sources and reduce its reliance on oil revenue.

The UAE has set a goal of reducing the proportion of gross domestic product from energy products from 30 percent to 20 percent in the next 10-15 years. Other important sectors include financial services, manufacturing and tourism.

Visibility in international films can boost tourism as well, she said. “Fast and Furious,” for example, featured a scene in which the characters drove a stolen car through the Etihad Towers. That is likely to attract people who want to visit and see the structure close up, she said.

A LinkedIn Global Influencer

Al Kaabi regularly appears on power lists in the region.

She was the first woman from the region to be chosen for LinkedIn’s Global Influencer Program, which designates leaders to share perspectives on the professional network. LinkedIn has selected about 500 influencers, including U.S. president Barak Obama and Dubai vice president Sheikh Mohammed bin Rashid, since the program began in 2013.

Al Kaabi sits on several boards including United Arab Emirates University, the National Media Council, Abu Dhabi Media, and Image. She chairs in the Emirates Media Measurement Company.

She was one of Forbes Middle East’s 30 Most Influential Women in Government in 2014 and was awarded Business Woman of the Year at the Gulf Business Industry Awards.

Technology, metrics pose challenges

In spite of the progress of twofour54, she sees challenges ahead, particularly on the technology and metrics fronts.

She said the entertainment and media industry in the region needs a technology update. Another important next step is to figure out how to measure reach of the content the project produces.

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Ethel Cofie builds a mobile platform to boost youth employment

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

Ethel Cofie

The Ghanaian entrepreneur is developing a micro work platform that will enable businesses and people to coordinate tasks that computers cannot perform.

Ghanaian entrepreneur Ethel Cofie sees technology as a key driver of business efficiency and revenue and she hopes to demonstrate that with her company’s latest project, M-Ablodé.

Cofie is the founder and CEO of Edel Technology Consulting. Her company is collaborating with the United States African Development Fund to create M-Ablodé, a mobile micro work platform that will enable businesses and people to coordinate the use of intelligence to perform tasks that computers cannot.

Edel said the platform would help create employment and wealth in developing economies, especially Africa. The name Ablodé means freedom or independence in the language of the Fon Ewe people who originated in Ghana, Benin and Togo.

Platform could help boost youth employment

The hope is that the platform will tap into Africans’ mushrooming access to mobile phones to help drive youth employment on the continent, which is expected to have a labor force of one billion by 2040.

Using technology to better the economy is at the center of Cofie’s experience in technology development.

“Years ago, I got tired of just building tech for tech’s sake,” Cofie said. “Instead I wanted to build tech that would clearly create something new for an organization or would make things more efficient, or something that would create more revenue.”

Global experience in technology

Cofie, who founded Edel in 2010, has more than 12 years of experience working in the United Kingdom, Nigeria, Sierra Leone and Ghana on projects including the Bill and Melinda Gates Mobile Technology for Health project, the Ford Foundation’s Nigeria election monitoring project and as an IT strategist for Vodaphone. In 2014, she was a Mandela Washington Fellow at Yale University.

Edel projects include the World Bank’s Negawatt global challenge, a competition that seeks to encourage innovation around energy issues through a process of meetups, brainstorming, prototyping and pitching.

Other Edel projects are Unilever’s Clean Team initiative to bring affordable sanitation to poor communities; an online leadership center for the Ghana Institute of Management and Public Administration, and micro-finance revenue growth for Dalex Finance.

M-Ablode

Founded Women in Tech Africa

In 2013, Cofie also founded Women in Tech Africa, a pan African organization with membership from 30 countries that has convened virtual meetings as well as conferences and training in Nigeria and Ghana.

She said she started the organization “out of my very personal need to start a ‘girls club,’ as an antidote to what had been a ‘boys club’ in the tech sector for so long.’’

The new M-Ablodé platform, due for release this summer, will tap into the proliferation of mobile phones in Africa.

Mobile subscriptions to reach 930 million

In 2002, only one in 10 in Tanzania, Ghana, Kenya and Uganda owned a mobile device, according to Pew Research Center. Today, ownership in many countries tops two-third. In South Africa 89 percent ownership is on part with the United States, Pew said.

Ericson, the telecoms giant, expects mobile subscriptions in sub-Saharan Africa to increase to 930 million by 2019.

In announcing the new platform, Edel said it would help address the growing problem of youth unemployment. Edel noted that Africa’s labor force would number one billion by 2040, surpassing China and India to make it the largest in the world. At the same time, “in Africa, youth unemployment occurs at a rate more than twice that for adults. Youth count for 60 percent of all African unemployed.”

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