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Rwanda tops World Bank governance ratings for Africa

19 July 2016 Comments (0) Africa, Business, Featured

Life in Rwanda

The African nation, along with Cabo Verde, Kenya and Senegal receive the continent’s highest rankings for efforts to support growth and reduce poverty.

Rwanda, Cabo Verde, Kenya and Senegal lead the continent in the quality of their governance and institutions that support economic growth and reduce poverty, according to a new report by the World Bank.

The Evaluation Policy and Institution Investment for Africa 2015 gave Rwanda a rating of 4 of 6 possible points while the three other countries each scored 3.8. The average score for the continent was 3.2, the same as the year before. South Sudan and Eritrea had the lowest scores, 1.9.

Of the 38 countries evaluated, seven improved their ratings – Ghana, Zimbabwe, Central African Republic, Chad, Comoros, Guinea and Niger. Twelve countries saw their ratings decline, with large drops in Burundi and Gambia.

The report attributed the lack of greater progress on the continent to economic challenges in 2015.

The report ranks national governance based on 16 indicators including economic management, social inclusion policies, public sector management, and structural policies.

Significant progress cited in Rwanda

According to the World Bank, Rwanda has made significant progress in transforming from a low-income agricultural economy to one that is service-based.

The government’s “Vision 2020” plan seeks to speed growth and reduce poverty with a focus on economic transformation, youth employment productivity, rural development and government accountability. The plan seeks to increase gross domestic product per capita to $1,000 by 2018 and reduce poverty so that less than a third of the population lives below the poverty line.

Rwandan youth learning to til

“These goals build on remarkable development successes over the last decade, which include high growth, rapid poverty reduction and reduced inequality,” the World Bank said.

Rwanda, which emerged from a dark period of civil strife and genocide 20 years ago, has seen growth of its gross domestic product averaging 8 percent annually since 2001. The economy grew by 7 percent in 2014 and 2015.

However, the World Bank said poor infrastructure and lack of access to electricity are drags on private investment in the East African nation, which has a population of about 11 million people.

Cabo Verde tourism flourishes

Cabo Verde, an archipelago of islands off the west coast of Africa, has developed rapidly in recent years, thanks largely to a growing tourism industry. The government is also working to make the islands a trade and transport hub, the World Bank said.

The bank described Cabo Verde’s politics as “consensus-oriented,” with established respect for majority rule and civil liberties. It noted that since it gained independence from Portugal in 1975, Cabo Verde has not had a single coup, a distinction shared only with Senegal in West Africa.

Still, economic growth slowed to 1% in 2015 as direct foreign investment fell.

Like Cabo Verde, Senegal is considered one of the most stable countries in Africa, with strong democratic institutions dating from the country’s independence from France in 1960, according to the World Bank. The Senegalese recently approved changes in the nation’s constitution that created a new assembly and will allow independent candidates to run in elections.

Senegal’s economy grew by West Africa behind Ivory Coast. High demand, stimulated by lower energy and transportation costs, as well as a government investment program, drove growth in an economy dominated by agriculture and services.

Kenya reforms economy

With assistance from the World Bank, Kenya has implemented major structural and economic reforms that have sustained economic growth for the past 10 years. While poverty and inequality persist, the bank said the country’s 2010 constitution ushered in a new political and economic governance system that has transformed and strengthened accountability and delivery of services locally.

At the bottom of the scale in the new World Bank governance ratings, South Sudan and Eritrea struggle.

One of the least developed nations in Africa, Eritrea has seen thousands of citizens fleeing the country for the European Union via Sudan and Ethiopia to escape what they describe as forced labor and other human rights violations.

In South Sudan, meanwhile, fighting between the government and rebel forces have sent refugees pouring into neighboring Ethiopia and Sudan as well.

 

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1.1 Billion Wallets: Preparing to Meet African Demand

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

Consumer Affluence in Africa

By 2020, the African continent will have two times as many affluent consumers as the United Kingdom and companies should be preparing to market to this enormous group.

According to Boston Consulting Group (BCG), Africa will have twice as many affluent consumers as the United Kingdom by 2020. BCG predicts that Africa will have at least 1.1 billion consumers by 2020 (the current population of the continent is approximately 1.1 billion), more than the population of Europe and North America combined. Their latest report, “African Consumer Sentiment 2016: The Promise of New Markets,” provides marketing firms and corporations with the data they need to capitalize upon the increasing quantities of disposable income across the African continent.

The Numbers Game

Africa is home to nearly 15% of the world’s population–more than 1.1 billion individuals spread across more than 50 nations–while the United Kingdom has fewer than 65 million citizens, so this numerical growth in affluence should not come as a surprise. BCG defines a consumer as an individual between 18-75 years of age with a monthly income between $50 and $7,000 per month. The data for this report was compiled during 2015, when BCG polled more than 11,127 consumers across 11 African countries. Persons with no stated income, with no purchasing freedom (i.e. those who do not make purchasing decisions for their families) or those outside of the age brackets were not included in these face-to-face surveys. While this is likely the most complete data on consumers ever compiled, it should be noted it was created using data from less than one quarter of the continent’s countries.

Key Findings

During their study, BCG found that 88% of African consumers were optimistic about the future which “bodes well for the continent, because optimistic consumers are more inclined to buy.” BCG surveyed citizens in Algeria, Angola, Cote d’Ivoire, the Democratic Republic of the Congo (DRC), Egypt, Ethiopia, Ghana, Kenya, Morocco, Nigeria and South Africa and found that in the most affluent countries with the highest proportions of disposable income (Egypt and Morocco), citizens are more interested in spending on “luxury” items such as bath and beauty products, large appliances, vehicles, clothing and electronics, while those in countries with the lowest financial security (Angola, South Africa, the DRC, and Cote d’Ivoire) are less able to purchase big ticket and luxury items.

BCG helpfully noted that even in financially insecure markets, “certain products–like mobile phones–are a greater priority than food,” highlighting the potential for a wide range of multinational corporations to profit from the growing consumer population.

South African youth on mobile internet

South African youth on mobile internet

The vast majority of Africans access the internet through their phones (as opposed to through laptops or desktops), meaning that mobile phone producers stand a good chance to make a name in this market. BCG found that Africans have a strong sense of what can be considered brand loyalty: brand names play an important role in African society, and “social approval of a brand is an increasingly strong influence on purchasing decisions,” although this has decreased slightly from a similar study done in 2013. Brands are most important in electronic purchases (such as mobile phones or mobile music players) and less important in clothing and shoe purchases.

Following the Flock

Perhaps predictably, younger consumers are more influenced by the opinions of their peers while older consumers are more influenced by their spouses or partners: 59% of Moroccans ages 35-44 said their purchases are influenced by spouses while 31% of Moroccan adults 25-34 agreed (this should not be considered surprising, as those in a higher age bracket are more likely to be partnered or married) while conversely, in South Africa, just 13% of adults 35-44 said their purchases are influenced by friends while 33% of 18-24 year old South Africans agreed.

As well as mapping consumer habits, BCG also researched the most effective ways to attract consumers through advertising. Television was the most influential advertising channel overall (as opposed to radio, newspaper ads, the internet or social media), but other forms were significantly successful in various countries. In Ghana, consumers reported being influenced by radio ads, in Nigeria by online advertising and Egyptians by newspaper ads and billboards. These differing results suggest that advertisers need to know their markets in order to attract the maximum number of consumers. One size certainly does not fit all, particularly when discussing a 1.1 billion people in more than 50 countries.

The Time is Now

As optimism and disposable income increase across Africa, citizens are more likely to become major players in the global consumer culture. Corporations should pay attention to their markets and create specific, targeted advertising schemes if they wish to profit off of this growing market.

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Beninese doctor honored for “green” anti-malaria drug

15 July 2016 Comments (0) Africa, Featured, Leaders

Valentin Agon

Valentin Agon wins $100,000 innovation prize for an effective and inexpensive treatment made from a plant extract.

A Beninese doctor has won a top innovation prize of $100,000 for an anti-malaria drug he developed from a natural plant extract.

Valentin Agon received the Innovation Prize of Africa in June for his creation of the drug, Api-Palu, which is already being marketed in Benin, Burkina Faso, Chad and Central African Republic.

The drug is significantly less expensive to produce than other anti-malarial drugs and is more effective.

“Api-Palu is a remarkable product that (has) affordability, a good safety profile, and a fast rate of malaria parasite clearance from the blood following short-term treatment at relatively lower doses,’’ innovation prize officials said.

Nearly 1,000 contestants

Agon won first place in the competition among 10 finalists chosen from nearly 1,000 applicants.

Imogen Wright of South Africa took 2nd place for Exatype, software that helps health care workers determine whether HIV patients are responding to drug treatments. Eddy Agbo of Nigeria received the Special Prize for Social Impact for Urine Test for Malaria, a medical device that can diagnose malaria in less than a half hour. Wright and Agbo each received $25,000.

Innovation Prize for Africa 2016

Innovation Prize for Africa 2016

The awards program, a project of the Africa Innovation Fund, rewards healthcare solutions that address Africa’s malaria and HIV/AIDS problems.

Jean Claude Bastos de Morais, founder of the innovation competition, said the project had amassed a database of more than 6,000 innovators and made cash investments of $1 million since it began five years ago.

He said the award to Agon for his anti-malaria drug was particularly gratifying.

“A product for malaria coming from Africa for Africans, this is my dream. My dream comes true. Finding a solution based on a natural product is what I have dreamed about,” de Morais said.

Green medicine researchers

Educated in Canada and Cuba, Agon has researched green medicines for 25 years and has spent 16 years developing the drug. He plans to use the prize money to increase production and hopes to distribute the drug in every country in Africa by 2017.

His discovery is cheaper because it is extracted from a plant that is abundantly available on the continent. It is also more effective than other anti-malarial drugs because it inhibits 3D7 strains of Plasmodium falciparum, which cause malaria, and can act against the disease within a few hours, the innovation judges said in awarding him the top prize. It is available in the form of tablets, capsules or syrup.

An estimated three billion people are at risk for malaria worldwide. The World Health Organization estimates that sub-Saharan Africa accounts for 88% of all cases of malaria and 90% of reported deaths.

Costly treatment

“Some African governments spend up to 40% of their public health budgets treating malaria,” the innovation contest said. “In this context, Api-Palu, can be considered a significant contribution in the fight against malaria.”

According to the Centers for Disease Control and Prevention, Africa is highly vulnerable to malaria because the predominant species, Plasmodium falciparum, is most likely to cause death, and the climate allows transmission to occur year round.

In other areas of the world, such South Asia and Latin America, malaria is less likely to cause death but can still result in severe illness and incapacitation, according to the CDC.

The disease continues to be a serious problem, but eradication efforts are showing results.

Since 2000, malaria death rates globally have fallen by 60%, and new cases have dropped by more than a third, according to the World Health Organization. In Africa, death rates dropped by more than two-thirds.

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After two decades, Gabon returns to OPEC

14 July 2016 Comments (0) Africa, Business, Featured

Tullow Oil in Gabon

The West African nation becomes the smallest producer of oil in the cartel, producing only 200,000 barrels a day.

More than 20 years after Gabon left OPEC in a dispute over its budget contribution, the West African nation has rejoined the oil cartel.

Gabon returns to the Organization of Petroleum Exporting Countries amid a two-year oil glut that has reduced the cartel’s power to prop up global oil prices.

Gabon was the second former member to rejoin OPEC this year, following Indonesia, which quit in 2008 then returned in January.

Gabon is the smallest producer among OPEC’s 14 member countries. It produces 200,000 barrels of oil per day, but according to the International Energy Agency, the nation’s output is declining.

Gabon, which joined OPEC in 1975, left in 1995 after the cartel refused its request to reduce its financial contribution to the organization, making it more proportionate with its production. At the time, Gabon produced about 340,000 barrels of oil per day, about one percent of total OPEC production.

Struggling with oil slump

Like other OPEC members, Gabon is struggling with the slump in global oil prices, and rejoining the cartel enables the country to strengthen its ties with countries that share similar challenges.

In response to the slump, Gabon is also working to shift more of its economy to agriculture. The nation, with a population of less than 2 million, currently imports nearly all of its food.

Working with Olam International Ltd., the Gabonese are trying to persuade young people to take up farming.

Farming in Gabon

Farming in Gabon

“We need to foster development of an agro-industry here,” Gagan Gupta, country head at the Singapore-based company’s Gabon unit, told Bloomberg. “It’s about creating human capital.”

As part of the effort, about 2,500 Gabonese will observe cocoa farming in Ivory Coast, learn techniques at a palm-oil plantation in Asia, or train as bulldozer operators in Morocco, Gupta said.

Unemployment high, despite growth

Olam also will work with Gabon to develop nearly 250,000 acres of oil-palm plantations.

According to the World Bank, Gabon is an upper-middle-income country that experienced strong economic growth during the last 10 years, mostly from oil and manganese production.

In 2015, oil accounted for 70% of Gabon’s exports, and 20% of the nation’s gross domestic product. Economic growth weakened to 4% in 2015 because of the drop in oil prices, forcing the government to cut investments designed to promote economic diversity.

Even though Gabon’s economy has been growing, it has failed to create enough jobs, the World Bank said. Unemployment in 2010 was more than 20%.

Nations seek production freeze

OPEC, meanwhile, has seen its global clout diminished. The cartel has attempted to negotiate a deal with Russia to freeze production levels in order to prop up prices. However, OPEC disunity has stalled the effort so far.

In June, Venezuela oil minister Eulogio del Pino said talks might revive in September, when Iran reaches pre-sanction output levels. Iran, freed last year of international sanctions that limited production, has sought to boost output and has resisted limits.

Del Pino said he also would propose that OPEC adopt “production ranges” that would allow production to fluctuate, rather than talking about an unpopular production ceiling.

Venezuela has suffered badly from the oil price collapse production declines. Del Pino said recent rains that helped power production have prompted a recovery.

In 2014, OPEC abandoned its policy of limiting oil production to shore up prices.  Steep price declines followed. Oil, which sold for $110 a barrel in 2014, slumped to a low of $26 per barrel earlier this year. It recovered somewhat this spring with prices mostly in the range of $45-$50 in recent months.

OPEC nations, led by Saudi Arabia, have been willing to absorb the financial impact of plummeting oil prices in order to preserve market share and hurt competitors with higher productions costs, such as U.S. shale producers.

OPEC also accounts for a smaller share of global production that in the past, when the cartel dominated the marketplace. Total OPEC production is nearly 37 million barrels a day while non-OPEC production is nearly 57 million barrels daily, according to Global Risk Insights.

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Chinese demand for peanuts boosts Senegal’s economy

13 July 2016 Comments (0) Africa, Business, Featured

Peanuts

The West African nation, the seventh largest exporter in the world, reached a record yield of one million metric tons in 2015.

Fueled by Chinese demand for peanuts, the price of the groundnut is on the rise in much of the world to the benefit of major exporters such as Senegal.

China, a major peanut producer itself, imports Senegalese peanuts to make oil, which is becoming increasing popular among Chinese consumers.

The West African nation, the world’s seventh largest exporter of peanut, has steadily increased its crop. Peanut production reached a record one million metric tons in 2015 and even greater yields are expected this year if rains are good.

Growth in peanut yields, along with targeted growth in rice production, could make the country self-sufficient by 2017, Senegalese President Macky Sall said. Rice production has doubled to 900,000 tons in the past four years and is on track to again double in the next two years, Sall said.

The country’s farmers have adopted genetically modified seed to improve yields, and improvements in transportation and energy supplies have helped drive growth.

Senegal plans bond issue

Doubling down on crop exports, Senegal plans to issue a bond of $500 million to $1 billion this year to fund infrastructure development to spur more growth in the agricultural sector, Sall said.

Senegal’s economic ambitions are benefitting from a surge in peanut prices, driven by an increase in Chinese demand and weather disruptions in key growing regions.

According to the Financial Times, health-conscious Chinese consumers are snacking more on peanuts and using peanut oil for cooking.

Women sorting peanuts in central Senegalese village

Women sorting peanuts in central Senegalese village

As a result, China is going from being a leading exporter of peanuts to a major importer. Chinese exports have declined by about half to about 500,000 tons during the past 10 years while imports have increased by 50%.

According to the National Peanut Board, China remains the largest producer of peanuts in the world, with yields of more than 16 million tons per year, followed by India and the United States. Global production totals about 29 million metric tons a year with about 1.25 million tons making up exports. India, the United States, and Argentina are the largest exporters of peanuts.

Prices raise 20-30 percent

Chinese demand has pushed the price of peanuts up by 20-30% this year. “They are just hoovering everything up,” one London trader said.

While the weather looks promising for peanut yields in Senegal, other major producers have see disruptions because of bad weather. India has suffered poor harvest for two years because of weak monsoons.

Argentina, a leading supplier of Europe, is expected to suffer crop losses of 20-40% because of rain damage. Poor weather also may limit this year’s crop in South Africa.

Ironically, the United States, which produces about 10% of global supplies, is experiencing a peanut glut and lower prices. As a result, farmers are turning their crops over to the federal government as a form of repayment of annual loans. The U.S. government, in turn, plans to send 500 metric tons of peanuts to Haiti as humanitarian aid.

China helps increase yields

In 2014, China and Senegal completed a cooperative agreement designed to boost the African nation’s production of peanuts as well as its exports to China. Under the deal, China helped establish an agricultural technology demonstration center in Senegal in order to increase the capacity of farmers to adopt more efficient and competitive methods such as those employed by Chinese farmers.

In addition to assistance from China, the Islamic Development Bank has committed $220 million to finance water and other infrastructure projects related to groundnut production in Senegal. The World Bank has approved $20 million in financing to help boost crop yields.

Senegal’s bond issue later this year will also spur growth.

“The money will be used totally for infrastructure, roads and power. A little bit may be for health facilities and education,” Sall, the nation’s president, said. The government is targeting a yield of 6% or less for the new bond.

Economic success story

Sall, a geological engineer who won the presidency in 2012, has overseen steady expansion of the Senegalese economy as the country has improved transport connections and power supplies. Since 2012, economic growth has averaged 4.7% in Senegal – one of the highest rates in sub-Saharan Africa – and the economy is expected to grow by 6.6% this year.

Senegal is also counting on energy to boost its economy. Gas production from two offshore fields is scheduled to start in 2020. A year or two later, Senegal expects to start producing oil from a deep-water well.

Senegalese production also has plenty of room to grow. Yields are approximately 950 kilos per hectare in Senegal, less than a third of the 3,500 kilos per hectare that the Chinese produce and slightly more than half of the average global yield of 1,674 kilos.

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Africa fails to benefit from global investment surge

11 July 2016 Comments (0) Africa, Business, Featured

Chemical Industry

Direct investment to Africa declined by 7% to $54 billion, giving the continent only 3% of the total worldwide investment, according to a new United Nations report.

Direct foreign investment soared in 2015 to its highest levels since the 2008 financial crisis, but Africa did not share in the wealth.

Globally, direct investment flows increased by 40% to $1.8 trillion, according to World Investment Report 2016 (pdf) by the United Nations Commission on Trade and Development.

At the same time, direct investment to Africa declined by 7% to $54 billion, giving the continent only 3% of the total worldwide investment.

While investment in North African nations, notably Egypt, increased, sub-Saharan Africa saw declines as resource-based commodities faltered and economies weakened, led by a decline of more than 60% in South Africa.

Egypt, Sudan see growth

Investment flows to North Africa increased by 9% to $12.6 billion, an increase largely driven by a boost in Egypt of 49% to $6.9 billion. The increase in Egypt reflected expansion of foreign investment in banking and pharmaceuticals as well as large investments in telecommunications.

Investment in Sudan increased 39% to $1.7 billion, thanks largely to continuing Chinese investment in oil production.

In sub-Saharan Africa, Angola reported investment more than tripled to a record $8.7 billion in investment in 2015 after years of declines. The UN report said the increase reflected loans to local institutions by foreign parent organizations.

Elsewhere on the southern continent, weak commodity prices stifled investment.

Investment in West Africa decreased by nearly 20% to less than $10 billion, in large part because of a slump in investment in Nigeria, Africa’s largest economy. Investment fell to $3.1 billion last year largely because of lower commodity prices, a faltering currency, and delays in major developments such as multi-billion dollar offshore oil operations.

Investment in Central Africa declines

In Central Africa, investment inflows dropped by more than a third to $5.8 billion. The Democratic Republic of the Congo and the Congo reported declines as commodities operations suspended operations.

Factory Workers in Kayonza, Africa

Factory Workers in Kayonza, Africa

East African investment was steady at $7.8 billion.

The European Union and the United States invested more than $2 million in Ethiopia. Investment in Kenya reached a record $1.5 billion as a result of investor confidence in the business environment and growing domestic consumption.

Southern African investment also held steady at just under $18 billion, driven primarily by the large increase in investment in Angola.

South Africa posts steep drop

Other nations saw steep declines. Investment in South Africa fell by 69% to $1.8 billion, its lowest level in a decade. The UN report said weak economic performance, lower commodity and higher power costs were to blame.

After years of record growth, Mozambique saw a 24% decline to $3.7 billion. The report blamed uncertainty about the 2015 elections and lower gas prices as well as the cancellation of major mining operations.

Meanwhile, investment outflows from Africa also declined by 25% to $11 billion because of weaker export demand and falling commodity prices. The continent’s largest foreign investor, South Africa, cut its investments by 30% to $5.3 billion. Angola investors reduced their investment abroad to $1.9 billion, less than half the 2014 amount.

U.S., U.K. lead in African investments

The top investor economies to Africa in 2015 were the United States ($66 billion), the United Kingdom ($64 billion), and France ($52 billion). As China seeks to increase ties to the continent, direct investment from the Asian nation more than tripled from $9 billion to $32 billion. South Africa was the fifth largest investor to the continent at $26 billion.

The report said the global investment surge was unlikely to continue at 2015 levels. It attributed the 2015 increase to a spate of cross-border acquisitions and  mergers.

The United Nations said investment to Africa could grow this year to as much as $60 billion. New projects valued at nearly $30 billion were announced in the first quarter of the year, up 25% from the same period a year earlier.

The report predicted the largest increases in Egypt and North Africa. “But a more optimistic scenario also prevails more widely, for example in Ethiopia, Mozambique,  Rwanda and the United Republic of Tanzania,” the report said.

However, depressed prices for oil and mining commodities will continue to be a drag on investment in other parts of Africa.

“The world economy continues to face major headwinds, which are unlikely to ease in the near term,” the report said.

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GoMyWay – the Nigerian company reinventing hitch-hiking for the 21st century

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

Traffic in Nigeria

Nigeria’s GoMyWay looks to reduce travel costs and pollution, with its ridesharing service.

Hitch-hiking may seem like a quite outdated and unsafe idea, but one Nigerian startup is revolutionizing the practice, by bridging the gap between a free ride with a stranger and a paid taxi cab. “Ridesharing” itself is not a new concept, as people have shared journey costs or hitchhiked for as long as cars have been widespread. However, GoMyWay aims to make a safe, organized network of road users who can all benefit from sharing journeys with strangers.

Reducing more than one cost

The costs of travelling by car are more diverse than simply the cost of the fuel. The driver has to consider fees for parking at their destination, car insurance, and toll roads. Therefore, any driver who could regularly charge a percentage of their costs to a passenger would clearly benefit. Likewise, while taxi cabs are expensive for any long journey, paying a driver only a percentage of their fuel cost would clearly save the non-driver money.

This is the crux of GoMyWay’s business model. Drivers can offer to take as many passengers as they have spare seats for, and potential passengers agree to a fee that covers their proportion of the journey’s cost. Users put their planned journey into the system, GoMyWay works out the suggested fee, and drivers are put into contact with people wishing to share a ride. The result is a democratized taxi service that saves all those concerned money, and reduces the number of cars on the roads too.

Damilola Teidi, of GoMyWay, said there were “too many cars on the road and lots of them with one person driving and empty seats,” adding, “It is ecological and economical nonsense. Ride-sharing is the perfect solution for these problems.”

Building a safe network

For many people, the prospect of getting into a car with a stranger, or having a stranger get into their car, might be unnerving. However, GoMyWay has worked to create a sense of security about those registered to use the service, and allows a community of users to self-govern through reviews and feedback.

GoMyWay ad

GoMyWay ad

Users have 4 levels of verification to go through, including their Facebook profile, cell-phone number, email address and a valid form of ID. Both the driver and the passenger can write a review of their experience, and users can customize their profiles to reflect certain preferences, such as no smoking in their car.

GoMyWay’s verification system ensures that the more stages a person has completed, the more likely they are to be chosen for a journey share.

Moreover, Teidi points out that ridesharing in Nigeria already occurs, but with none of the security in place that GoMyWay provides. Teidi explained, “Ride sharing happens offline with no safety measures in place. You pass by certain roads in Lagos or at the tollgate, and you see people offering and joining rides. No verification done at all. Same thing when you flag a regular taxi on the road, no one verifies the driver.”

Driving Forwards

GoMyWay is a service on the move. Within a year of its launch, there were more than 4,000 registered members, offering 30,000 seats across 20 Nigerian states. The organization has financial backing from successful business figures, including Konga founder & CEO Sim Shagaya and former Amazon executive Bill Paladino.

GoMyWay has plans to launch its service in Kenya, South Africa and Ghana. Unlike taxi services such as Uber, GoMyWay is simply connecting people – with the same planned journey – in order to reduce financial and environmental costs.

Currently any journey arranged via GoMyWay results in the fee being paid (in cash) by the passenger to the driver. However, as the business expands, the company plans to charge a percentage fee to registered drivers for each transaction. This system will ensure that GoMyWay generates its own profits, while the service still reduces costs for its users.

GoMyWay is proving to be an affordable, convenient choice for many people, but the company has grander hopes. With a focus on city-to-city journeys, and expansion into other countries planned, Teidi states that GoMyWay can grow to such an extent that it changes the face of transport in Africa: “We are building the new African rail network…except we are doing it on roads.”

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Renewable Africa: The future is clean

7 July 2016 Comments (0) Africa, Business, Featured

Renewable Energy

Why groups like Access Power are vital to unlocking Africa’s vast clean energy potential.

The developed world has spent over a century thoroughly addicted to fossil fuels and such entrenched habits are proving hard to kick. On the other hand, Africa is bubbling with the promise of a renewable energy explosion.

Access Power, an organization which owns and operates renewable energy projects in developing nations, is leading the charge. Earlier this month, Access announced the winners of its $7 million competition: Access Co-Development Facility 2016 (ACF). Designed to kick-start promising African renewable energy projects, the competition was hotly contested.

Fierce competition

Reda El Chaar, Executive Chairman of Access Power, highlighted the scope of the African renewable revolution: “This year’s ACF competition introduced us to almost 100 projects, demonstrating the scale of entrepreneurialism and ambition across the African continent to meet the electrification challenge.”

Three companies were recognized as winners after a grueling three stage process: AGES, a solar project from Sierra Leone, Mentach Energy, a wind power development from Nigeria, and Stucky Ltd, a combined Hydro & Solar project from Madagascar. Together these schemes are expected to deliver over 100 megawatts to countless homes in their respective countries.

The revolution is coming; this year the ACF competition received a 75% increase in applications from budding renewable start-ups. What’s more, applications poured in from across the continent with a 40% increase in the number of nations involved in the competition. Africa is beginning to realize that it has massive clean-energy potential.

Energy Africa

The scope of this potential cannot be understated. Looking to the future, Africa has everything required to become the clean energy dynamo for the planet, in a new world where renewable energy is predominantly used.

African Energy Windtower

African Energy Windtower

The continent possesses huge stretches of land where solar power could generate enormous returns, particularly in the Sahara where the sun shines relentlessly. Some studies have suggested that a solar facility covering 0.3% of the Sahara could generate enough electricity for the whole of continental Europe. Particularly in West Africa, where strong winds sweep costal and elevated regions, wind farms could be utilized to harvest significant amounts of clean energy. Hydroelectric power can also be used to far greater effect as the continent is rich in powerful rivers and vast lakes. According to the UN’s Environment Programme, East Africa’s Great Rift Valley region could produce over 4,000 MW of geothermal energy. What’s more, Africa has a huge coastline waiting to be exploited by tidal power projects.

The path ahead

Africa is truly an untapped gold mine when it comes to renewable energy, which is why organizations like Access Power are so important in driving forward the expansion of renewable energy usage. The region is lagging behind the rest of the world when it comes to energy availability. Over 70% of sub-Saharan Africa is without access to reliable power, with many rural areas almost entirely off the grid. The problem is compounded by population growth as Africa’s population is set to increase by 1.3 billion between now and 2050.

Renewable energy is the obvious answer. Renewables like wind and solar can provide rural populations with accessible, closed-loop power, while large scale projects have greater long term promise than fossil fuels for improving net availability. As Africa rushes to improve its energy infrastructure, it needs to embrace clean power, not dirty.

Currently, renewable energy accounts for only 7% of Africa’s current energy production. As the region becomes more energy hungry, a continuation of this trend would be a hammer blow to climate change goals, and a huge missed opportunity given the continent’s potential. However, Africa is also home to abundant traditional energy options such as coal and gas. For developing nations, the temptation to lean on such resources is strong, especially as they remain the easier option in the absence of foreign investment.

The Africa EU Energy Partnership (AEEP) has a crucial role to play at this juncture. Dr. Michael J. Saulo, of the Technical University of Mombasa explained, “Africa needs Europe and Europe needs Africa. Europe has the know-how and the private investment, Africa has a vast potential for renewables. All factors converge together.”

Increased Euro-African cooperation is removing many historical deterrents to investment, such as political uncertainty and cumbersome government regulation. Another obstacle, the perception of poor returns on investments, has also melted away now that the start-up costs for wind and solar projects have plummeted to very attractive levels.

For the future of renewables in Africa, the signs are promising. However it is not just Africa that stands to gain. The continent is about to become a pivotal battleground in the fight against climate change. More foreign investors like Access Power are sorely needed if Africa is to realize its clean energy potential.

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Paul Ballen looks to make ice-cream a South African passion

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

Paul Ballen Ice Cream

Paul Ballen’s ice-cream startup is making waves with its unique flavors and fresh approach.

Ice-Cream is pretty big business across much of the world, but South Africa is not a name that most would connect with the frozen treat. Paul Ballen is a man intent on changing this, and on creating a brand of ice-cream that is known for its quality and innovative flavors.

Ballen’s company, the eponymous Paul’s Homemade Ice-Cream, has been creating a stir in his hometown Johannesburg with its bold varieties and focus on high quality ingredients.

As the Paul’s Homemade Ice-Cream range expands and grows in popularity, ice-cream lovers will be hoping it spreads outside of its home country.

It started with a gift

The beginning to Ballen’s company began only 6 years ago, when his mother bought him an ice-cream maker for his 21st birthday. Something that was initially just a bit of fun in his parents’ kitchen, turned into a passion and a small source of income. Bellen said, “I started playing with different flavors and textures. I shared it with my friends and…ran it as a side business throughout my university studies and began supplying delis and cafés.”

Paul's ice cream flavors

Paul’s ice cream flavors

This small project slowly grew, as Ballen used social media to show people his latest flavor creations. One machine in his parents’ kitchen became three machines in the garage, as Ballen began to take orders from friends and local people. At this stage the business had grown, but it was still a very small operation. However, Paul Ballen decided to team up with a University friend, Josh Amoils, and as business partners the duo decided to make Ballen’s passion a full time enterprise.

Amoils said, “I was excited about new ventures and new opportunities and we decided to give it a go in March 2014. We moved from the garage at Paul’s parents’ house to a workshop…we simultaneously had to get on the road and visit distributing outlets to try get our ice cream out there. Things just developed from there. We just constantly kept moving forward.”

Innovative flavors lead the way

A consistent factor with Paul’s Ice-Cream, whether from his early experiments in 2010 to his latest releases, is the focus on unusual flavors and fresh ingredients.

While the range includes classic ice-cream flavors, Ballen is constantly trying new combinations and ideas to ensure that the range excites consumers.

To get an idea of their range, consider that as well as offering the ubiquitous strawberry flavor, there is also a Strawberry & Pink Peppercorn. How many other brands of ice-cream offer flavors such as, White Russian, Oatmeal & Raison and Spiced Pumpkin & Marshmallow?

Paul's Homemade Ice-Cream

Paul’s Homemade Ice-Cream

While many of these flavors remain as permanent fixtures in their range, what really differentiates Paul’s Homemade Ice-Cream is that, as an artisanal product it can constantly offer limited edition flavors to keep interest high.

Ballen says, “We create really innovative flavors. Each month we run a campaign where we create a buzz around a topic or theme and then develop an ice cream flavor based on the theme, which is then available for that month.

These flavors are also highly focused on fresh ingredients with no artificial flavorings, and no automated machinery involved in creating each batch. Amoils explains that, “We only use natural ingredients, no preservatives, no additives. We don’t compromise on the quality of the ingredients, they are as good as you can get. We feel our stuff is made with love.”

The future of Paul’s Homemade Ice-Cream

Several cafes and restaurants around Johannesburg now stock Paul’s Homemade Ice-Cream, and the company has had international media interest. Despite growing interest, the company’s ice-creams remain a true craft product, as opposed to a mass-produced product that simply uses the fashionable label of “craft” for marketing.

Bullen and Amoils currently employ a workforce of 20 people, and like any successful business it is bound to grow, but neither of the two entrepreneurs wishes to alter the ethos of what has made the company so popular with its customers. Amoils explained, “We would rather maintain our current process of training up craftsmen, as opposed to investing millions in machinery to scale up production.”

While it is an admirable approach, it means that it could be a while before dessert lovers outside of South Africa get to enjoy White Rabbit or Apple Pie flavor ice-cream.

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Brexit: Challenges ahead for Africa

1 July 2016 Comments (0) Africa, Business, Featured

British Prime Minister David Cameron visits South Africa

The United Kingdom’s departure from the European Union could slow trade and investment in the continent.

Brexit could not be happening at a worse time for Africa.

The economy of the continent is already struggling with falling commodity prices and the economic slowdown in China. The decision by British voters to withdraw from the European Union could trigger decreases in trade with Africa as well as aid and direct investment from the United Kingdom.

The vote, which followed a bitter campaign that centered on immigration, may signal that Britain will increasingly turn away from its support for world development, according to the Brookings Institution.

“Perhaps the biggest impact of the Brexit on Africa would be the end of British ‘outwardness’ – the country’s concern with and responsiveness to global development issues,” Amadou Sy, a senior fellow and director of the Africa Growth Initiative at Brookings, said.

Britain contributes significant aid

The United Kingdom is one of the largest contributors to the European Union’s development assistance fund for low-income economies. The nation contributes $585 million, nearly 15 percent of the total fund, second only to Germany (20 percent) and France (18 percent).

While the U.K. might provide aid directly, new mechanisms and policies would first have to be put in place, a potentially complicated and lengthy process.

Sy said Brexit also is expected to weaken trade ties between the U.K. and Africa.

Britain is one of Africa’s largest trading partners within the EU, accounting for more than 12 percent of all European Union trade with the continent (down from a peak of nearly 18 percent in 2012).

Dozens of trade pacts must be negotiated

According to General Robert Azevedo, director-general of the World Trade Organization, Brexit would require the United Kingdom to renegotiate trade agreements with the organization’s 161 member nations, a complex and time-consuming effort that could slow down trade with African and other nations. With Britain’s exit, the European Union also would have to renegotiate dozens of bilateral trade agreements, Sy said.

For example, a recent agreement between the EU and the Southern Africa Development Community allows free access to the EU market for Botswana, Lesotho, Mozambique, Swaziland and Namibia. However, with Brexit, the value of that access would be significantly diminished as it would not include the U.K. market and a separate agreement might have to be negotiated.

African agriculture may also be affected. According to Sy, the United Kingdom has been a strong opponent against agricultural subsidies the EU provides within the Eurozone because they put African agricultural imports at a disadvantage. With Britain’s departure, Africa would lose a strong voice in the EU for its farmers.

Nigeria, South Africa will feel impact

money nigeriaAfrica’s largest economies may be hard hit.

The U.K. is the fourth largest destination for exports from South Africa. That nation’s battered economy took a further hit as the rand fell by 7 percent the day after the British vote.

Economists at South Africa’s North-West University estimated that Brexit could shave 0.1 percent off South Africa’s annual economic growth, which already declined by more than 1 percent in the first quarter of 2016.

“With current growth in South Africa in 2016 expected to be close to zero, [Brexit threatens] a loss in growth South Africa can ill-afford,” Raymond Parsons and Wilma Viviers, professors at North-West, said.

Nigeria’s market reforms may be delayed

Trade between Nigeria and the United Kingdom is estimated at more than $8 billion and had been expected to more than triple by 2020. However, those advances also are likely to be interrupted as new trade deals are negotiated.

Nigeria, on the brink of recession, has been liberalizing market controls in order to spur the economy. But fallout from Brexit may also slow that effort.

Razia Khan, chief economist for Standard Chartered Bank said risk aversion world wide as well as soft oil prices could slow investment and delay normal operations on the newly liberalized market.

Africa is not alone in feeling the impact of Brexit, and stabilizing markets is the first step to blunting the economic impact, Kahn said.

As emerging markets come under pressure globally, “much will depend on how quickly financial market stability can be restored.”

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