Africa
Category

Dr. Bouamatou: breaking down the gender barriers in banking

Comments (0) Africa, Business

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

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

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

Dr. Leila Bouamatou : An Impressive Credentials 

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

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

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

To Break Down the Disparity Barriers in Africa

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

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

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

A Statement against Discrimination against African Women 

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

Read more

7th Single Window Conference Looks to Boost Trade Links

Comments (0) Africa

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

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

A single market with a billion consumers

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

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

450 million African mobile users and 300 million more expected

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

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

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

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

Read more

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

Comments (0) Africa, Economy, Politics

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

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

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

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

54 countries, US$12.5 billion in deals signed

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

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

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

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

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

Andrey Bokarev, President of Transmashholding

Africa determines the future of the world’s agenda

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

Read more

Is The 4IR the Way Forward for Africa?

Comments (0) Africa, Economy

To be able to look at Africa’s place in the fourth industrial revolution (4IR) we need to first consider what 4IR actually means. The third industrial revolution, or digital revolution, was the development of computers and information technology. 4IR, while seen by some as merely an extension of 3IR, is better separated into its own cycle, mainly because of the rapidity of progress in some areas and the wider repercussions and effects resulting from these new developments and technologies. 

A simple definition of 4IR would be: “The fourth industrial revolution is the current and developing environment in which disruptive technologies and trends such as the Internet of Things (IoT), robotics, virtual reality (VR) and artificial intelligence (AI) are changing the way we live and work.” (1) 

Is Africa ready to accept and embrace 4IR? Or is it, as some have suggested, even ready to lead it? Africa has almost half of the world’s fastest-growing and developing nations. It also has the youngest population of any continent. But the other side of that coin is the fact that 27 of the world’s 28 poorest countries are in sub-Saharan Africa and the average poverty rate is just over 40%. The World Bank also estimates that if current patterns continue, then by 2030, 87% of the planet’s extreme poor will be in Africa. 

“To provide digital skills to those that do not have them”

Could 4IR play a major role in reducing those figures? South Africa certainly thinks so. While many think that 4IR could take jobs away from people, South Africa sees it as an opportunity to revolutionize the jobs sector across the continent and to train a new generation in the necessary skills to boost African economies. 

South Africa’s Communications and Digital Technologies Minister, Stella Ndabeni-Abrahams, said: “We have to provide digital skills to those that do not have them. We have to make sure that we invest in different resources that we are going to need but most important is to identify what must be Africa’s niche in the fourth industrial revolution.”

A lack of internet penetration across Africa

One major barrier to Africa’s participation in 4IR is the fact that the majority of their available workforce is low-skilled or unskilled. Another, and perhaps more crucial, barrier is the current lack of internet penetration across the continent. Estimates from 2001 state that less than 14% of the population have access to the internet. For access to broadband services, that drops to 1% or lower. In 2015, the number of Africans using the internet varies greatly, from 1% in Eritrea to 57$ in Morocco. 

A declaration of willingness to fully participate in 4IR is not enough. And the idea of being the leader of 4IR will require more than optimistic words at a conference. There is a real need for urgent action, development, and investment in the following areas: heavy infrastructure such as railways, roads, energy supplies, light infrastructure such as ISPs and internet connections, training and education to transform that low-skilled/unskilled workforce into a computer literate, digital-savvy one. 

A monumental investment to create a 4IR economy in Africa

The investment to achieve all of this and to create a foundation on which Africa can create a 4IR economy of any type is monumental. Governmental funds could not hope to cover the amounts needed, so governments need to also create an atmosphere and conditions which will attract inward investment. There is also the option of loans, a very real possibility given the ongoing economic war of attrition in Africa between the three global superpowers. Going the loan route could be a double-edged sword though. On one hand, the current competitiveness between the superpowers means that for once, the country seeking the loan has some advantage in negotiating terms. But as with any loan, the downside is the repercussions should the country default on loans, repercussions which could be dire for decades after. 

To achieve any progress in this area, the lead has to be taken by the African Economic Community (AEC). A major part of even beginning on that path to progress is the African Continental Free Trade Area which fully came into force earlier in 2019. But with so much economic disparity across the continent, can the AEC or the Free Trade Area manage to achieve the balance between the nations or will the economic powerhouses such as South Africa be the only countries who can really take their place in the 4IR marketplace?

(1) https://whatis.techtarget.com/definition/fourth-industrial-revolution

Read more

Russia and Uganda Sign Major Nuclear Energy Deal

Comments (0) Africa

For several years now, Africa has been the new battleground of the world’s superpowers. But this has not been a war fought with guns, tanks, or fighter jets, but rather one fought with loans, supply contracts, and doing anything to be one up on your competitors. 

The latest salvo in this ongoing economic war has been fired by Russia, or to be more exact by Rosatom, the Russian state corporation founded by Vladimir Putin in 2007 and which specialises in nuclear energy. A quick look at some of their statistics show just how big a player this corporation has become in 12 short years: largest electricity generator in Russia, producing almost 20% of the country’s electricity in 2017, ranks first in regards to foreign projects; 33 nuclear plants in 12 countries, leading provider of global uranium enrichment services with 1/3 of the world market, $300 billion of portfolio orders as of January 2017.

Energy and mining are the two sectors where Russia is particularly active in Africa, with Rosatom, Alrosa (mining), and Gazprom (natural gas extraction) leading the way. 

3 African countries in the top 10 list of global uranium producers

With the formal signing of an agreement on September 18th of this year for Rosatom to build a nuclear reactor in Uganda (the Memorandum of Understanding having been signed in 2017), Russia and Rosatom have cemented their position on energy production even further. 

It’s no surprise that nuclear energy is spreading across Africa. Three African countries (Namibia, South Africa, and Niger) are in the top 10 list of global uranium producers. Surveys by the Ugandan Ministry of Energy and Mineral Development estimate some 52,000 square kilometres of deposits across the country. 

Rosatom are slowly spreading their reach across the continent. They are currently building a $29 billion nuclear reactor in Egypt, though 85% of that cost is covered by loans from Russia, a fact that has some commentators worried about what possible defaults could mean. Rosatom have also signed a deal to build a reactor in Nigeria, as well as signing MOUs with Republic of the Congo, Sudan, and Ethiopia. As well as infrastructure and supply contracts, Russia and Rosatom are also investing in human resources. They already have a scholarship programme running in Kenya and are training locals to work in the nuclear industry in several African countries with a view to establishing close and long term relationships. 

With only one nuclear reactor, in South Africa, currently operating on the continent, it is still early days for the industry. And while Russia and China may be the current leaders in signing nuclear deals, don’t count out the USA just yet. While their once mighty 90% share of the global market has dramatically shrunk to around 20%, there is a renewed interest from the US State, Energy, and Commerce departments who are seeking to establish early relationships with countries who have long term plans to build a nuclear reactor in the future. 

Nuclear the best option for Africa?

But for now, it is Russia and China leading the way, with Russia looking to have the edge across Africa. This new deal, while it may take many years to come to fruition, illustrates future paths for other African countries. And though there are currently no financial details available for the Ugandan deal, it would be no surprise if there were loans in place similar to the deal with Egypt. And with constant developments in the field of nuclear energy, deals and MOUs agreed now may see different technology being applied when the reactor plants actually come to be constructed. Rosatom has the RITM-200 series reactor, a small modular reactor which is currently installed on some ice-breaking ships and which are expected to be installed in land-based plants around 2027, the same approximate timeframe as when there will be a proper framework, both infrastructure and regulatory, in the sub-Saharan region. 

Russia and Rosatom are playing a long game here, but with an eye of the growth of Africa’s population and industry which will demand cheap energy sources. If any regulatory framework can guarantee safety levels, then nuclear seems the best option for the rapidly growing continent.

Read more

Making a Mark in Africa: Global Brands Dominate

Comments (0) Africa, Business

With Africa being one of the fastest growing markets for consumer goods worldwide, global brands have increasingly focused their efforts on the continent’s vibrant economies. Two major factors are worth noting here; Household consumption in Africa has outpaced GDP growth, and GDP growth across Africa is consistently outperforming global averages.

Consumer expenditure in Africa has been growing at a compound rate of 3.9% since 2010, reaching a total of $1.4 trillion in 2015, with that figure expected to reach $2.5 trillion by 2030. (1)

The planned Continental Free Trade Area (CFTA) is also due to be implemented by 2030, and if successful, will offer a single continental market for consumer goods and services as well as free movement of investments and businesspeople. This opens the doors to a potential 1.7 billion customers (based on projected population by 2030). 

African consumers tend to be loyal

With such ambitious plans and rapid growth, cementing a place as a major brand across the continent is a priority, not only for global corporations but also for African brands. 

Research has shown (2) that African consumers tend to be loyal to their chosen brands but also discerning in their choice of brand. While currently most consumer activity in Africa tends to still happen in informal market settings, there is, and will continue to be, a shift towards more modern shopping settings, including shopping malls and e-commerce, two sectors which will offer good growth potential at several levels. 

African brands have been declining year on year

However, the latest Brand Africa 100 ratings in May – published every year by African Business Magazine – show a continuing worrying trend, at least as far as African businesses are concerned. From a high of 25% of the list in 2013/14, African brands have been declining year on year and are now at a low of 14% from 17% in 2017/18. Asian brands have also suffered, falling 10% from the previous year. US brands saw the largest growth, up 17% to 28%, while the dominant European brands rose 2.5% to 41%. 

As you would perhaps expect, the leading brands are global household names, with Nike, Adidas, Samsung, and Coca Cola all retaining positions in the top 4 from 2017/18. The highest ranked African business is South Africa’s MTN Telecoms at 8th (down 2 positions from last year). The company operate in 21 African countries so far with more expansion planned, so their top 10 position should not only be safe but may improve again in future lists. 

Anbessa Shoe Share Company: the most impressive African performer

Ethiopia’s Anbessa Shoe Share Company, originally founded in the 1930s by an Italian expat, was the most impressive African performer. In the 2019 chart, it moved up 11 places to #12. As well as having around 65-70% of the Ethiopian shoe market, the company also exports to USA, EU, Middle East, Asia, and Africa.

There were only two new African names on this year’s list, South African retailer, Pick n Pay, who re-entered at #84, and Africa’s largest e-commerce firm. Jumia, who debuted at 74 after a successful launch on the New York Stock Market in April. 

With continued economic growth forecast as far ahead as 2030, African companies must now look at how they can compete with the global giants. 

(1) https://www.brookings.edu/wp-content/uploads/2018/12/Africas-consumer-market-potential.pdf

(2) Spivey L. et al. (2013) “Ten Things to Know About African Consumers: Capturing the Emerging Consumer Class,” Bcg.perspectives.

Read more

Adamant, the new african digital adventure

Comments (0) Africa, Entertainment and Lifestyle

Adamant is a new digital medium aimed at connected African youth. The media promotes continental ambitions through a network of creative and offbeat influencers. Meeting with its founder Denis Cantin and its program manager Angélique Amougou.

  • Denis Cantin, you are the founder of Adamant Media, before talking about your new digital media, let’s talk about you and what led you to create Adamant?

Denis: I was heading the content sales over Europe-Middle East- Africa for A+E Networks (Disney / Hearst) for 5 years in London and I thought there was still a place in Africa for high level Entertainment media , gathering Africans and Diaspora, offering the best of comedy Series, sketches, Beauty, Sports and news. And that media should be digital, free and on mobile to reach everyone. I left my job last summer and we have launched Adamant on the 1st of April 2019.

  • Can you explain how Adamant works? 

Denis: We are settled like a proper Media group and we control the whole chain from Creation and Production to Broadcast and Advertising: 

First, adamant is the media of Continental Entertainment. Millions of people watch us and enjoy fresh high quality African content on a daily basis. 

adamant is also a studio, aggregating and supporting the best producers and talents from every corner of West and central Africa. 

Last but not least, adamant is an unique expertise in digital communication and marketing over the the whole Continent. Africa is experiencing massive growth you could compare it to a startup for that matter. Africa is as digital as you can get. We are in our element. Our logline is indeed “ Digital, Continental, adamant”. 

  • Angélique Amougou you are in charge of influencer relations at adamant, what drives the talents and influencers to join Adamant, according to you? 

Angélique: Quite honestly, there’s no better home than adamant for talented influencers. Our business model has been set up to allow comedy influencers, our A-Producers,  to grow without losing their soul and their business. We encourage creation, we finance the best talents. Not only, we are also sharing our experience in terms of storytelling , post editing, promotion and access to sponsors. 

Some influencers are already big in their own country like the super popular duo the Pakgne (Murielle Blanche and Marcelle Kuetche) in Cameroon with already 1 million followers.  With us, they have become continental stars. Some are less known, and when the adamant team feels they’re good, we offer them an A class treatment and after a few weeks, it looks like they have always been famous.

“babatché à tout prix” was watched by a few thousands people before we got involved, it was promising but still limited. Now with adamant, each of their episodes is followed by between 300 000 and 2 million people! They are some genuinely International stars now. We did the same for the couple Thakai and many others. We have now the biggest team of influcencers in this part of the World. And we can tell you: each and every of them count. 

African talents are amazing and we are glad to share this with the rest of the world.

Les gos Babatche – adamant
  • What kind of audience Adamant is targeting ? 

Denis: Our audience is mostly between 18 and 44 years old. They are adults and parents. Social networks in Africa are usually male skewing but we are very balanced between male and female at 50/50. Our audience is connected and engaged. Our engagement rate is just tremendous: 34%!  Our audience is urban and strongly connected. Our first cities are Abidjan, Dakar, Douala and Paris but we do not only reach the big cities; adamant is followed in every corner of Francophone Africa and the world. You can’t imagine how global we are.

  • What new programs are you trying to put in place? 

Denis: adamant will remain pure entertainment and close to our audience’s everyday life. So we won’t explore genres like crime, sci-fi …Unless there is a twist, a good idea and lots of fun! 

 I will tell you that the quality will only go in one direction: up. And more and more content will be original and never seen on line. Stay tuned!

Angelique: Talent wise, we have wonderful talents in the key territories Senegal, Côte d’Ivoire, Cameroon now. We are about to contract with influencers in Burkina Faso, we are digging in Mali, Madagascar, Guinée. Be sure we won’t forget any territory.

  • So you are producing branded content, what do you bring to advertisers that is unique to adamant?

Denis: The affinity. adamant is close to our audience thanks to a very dedicated team and our influencers. We make people laugh on a daily basis. There is no better communication than a smile.

And with this smile, we provide the top notch values services of a digital agency with reflection, strategy, tactics, ads and even more important, high value video production. We invent formats and new series on demand. We clearly do our best to spoil our clients ad we are committed on our targets and KPIs.

  • What are your ambitions, your future plans or projects for Adamant?

Denis: adamant is fast and furious (smile). We are launching this week our free VOD site with all our videos. We will announce soon a business partnership with a leading Film production and talent agency in the heart of Nollywood. This allows us to produce both in French and English original with top influencers. We are post producing our first animation for pre-school children with our talent’s voices. We will of course expand out of the Francophone area soon, but first thing first, we have to make sure our clients are spoiled and that we remain the leaders.

Ah yes, maybe a last one;  the Studio veteran is now talking, my sincere dream would be to produce the Pan African comedy feature Film starring all our great influencers. And this will come true sooner than later!

Read more

Russia’s Return to Africa

Comments (0) Africa, Business, Featured

Once an important player on the African continent, Russia has renewed its aspirations for economic, military, and trade ties with several African nations. From Algeria to Zimbabwe, Russia is investing in energy and resource projects, lending military and diplomatic support to embattled African leaders, and once again positioning itself as an influential presence in the region.

Historical ties with Africa and shifting interests

During the height of the Soviet Union, newly independent African countries such as Mozambique, Egypt, the Democratic Republic of Congo, Somalia, Ethiopia, Angola, Benin and Uganda all received valuable materials and ideological support from the Russian superpower, including training and education to many of these country’s leaders. The Soviet Union’s influence across African states was widespread until the fall of the Berlin Wall and the dissolution of the regime in 1991.

Fast-forward to 2018, and Russia appears set to return to its influential position over the continent – yet with a very different approach and goal in mind. As African nations are opening up to being courted by new strategic partners, the time is ripe for new foreign entrants to make their mark on the continent. Russia is thus in a good place to re-establish itself across the region – and indeed appears to be doing so – via strategic investments in energy and raw materials.

Investment in Energy and Minerals – new opportunities arise

According to ISS Africa, trade and investment between Russia and Africa grew by 185% from 2005 to 2015. Whilst in 2017 alone, Russia’s trade with Africa rose by 26% to $17.4 billion. Senior fellow at the Carnegie Endowment for International Peace, Paul Stronski says there are many advantages for Russia engaging with resource laden countries on the African continent. With a shortage of minerals such as chromium, bauxite, and manganese, all of which are important to industry, Russia is looking for rights to extract minerals, oil, and gas in less complicated or costly places than Siberia and the Arctic, Stronski says. With a strong presence on the national soil and a proven expertise in raw material extraction, no doubt that CEOs such as UMMC’s Iskander Makhmudov will be setting their eye on the continent sooner or later.

Economically, the focus of Russian investment is on energy. Russian power companies, such as Lukoil (oil), Gazprom (gas), and Rosatom (nuclear energy) are already active across the continent, with most activity being in Uganda, Nigeria, Egypt, Angola and Algeria. Others, such as Kuzbassrazrezugol (a coal mining organization, and also a company Iskander Makhmudov has stakes in), are already global exporters and could very well aim to penetrate the African market in the future. Others, such as Transmashholding (also a company Iskander Makhmudov has interests in), already trade with Egypt and South Africa – admittedly some of the most developed markets on the continent.

According to energy news site Power Technology, a deal between Rosatom and Egypt’s Ministry of Electricity to create the country’s first nuclear power plant has already been finalized. As most large Russian corporations are fully or partially state-owned, Russian interest takes the form of public/private partnerships.

Indeed, although Russia’s main arms exports are to Asia, according to the BBC, sales to Africa continue to rise, strengthening Russia’s position on the continent.

A growing geopolitical influence…

Another reason Russia may wish to gain a foothold on the continent is that diplomatically, Africa is a geopolitical strategic landmark. African states comprise of the largest voting bloc across diplomatic, security and economic institutions, such as the UN Security Council. Therefore, holding influence over Africa could have a global reach. Other emerging economies, such as China and India, have also expanded trade significantly across the African region. According to US research group the Brookings Institute, China provided some $60 billion in financial support to Africa in 2018.  

Although Russia lacks the financial muscle of China, through strategic investments, military might and soft power, the country will see a gradual increase in influence across the African continent, according to ISS Africa research analyst Stephanie Wolters. She believes that, amid a new ‘scramble for Africa,’ it will be up to African leaders to exploit the renewed attention from Russia by brokering favorable deals on good terms, rather than fall victim to previous exploitation by Europe and the West.

Read more

Kilamba, a chance for the Angolans

Comments (0) Africa

Kilamba

During the post-war reconstruction process in Angola, China and some European businesses have been actively working to bring about a number of important building projects. Of these, the star project is the city of Kilamba, where efforts have transformed a rural zone into a undeniably modern city. Kilamba is the fruit of a collaboration between two companies: The Chinese company CITIC Construction, led by Chen Xiaojia, and the investment fund Pierson Capital, led by Pierre Falcone.

Improvement of the Quality of Life

The new residents are particularly satisfied by their new life in Kilamba. They confide to Meng Qingshang, journalist for a Chinese television channel: “The conditions in we were living before were not good. It was a house which did not belong to us, and it was far from the city. With the improvement of our revenues, we were able to move into this new city. We live much better.” Indeed, their apartment is more than 120 square meters, and is a spacious residence for a family of five.

The Santos family makes up some of the thousands whose prospects have improved thanks to the huge building project by CITIC Construction and Pierson Capital. For the children of this family, it is also the chance to meet new people, and to interact with their neighbors. The cadet, Eduane Santos, confided to the journalist that “My life here is very different. Here, it is modern. I have made many new friends here. Before this, I often played alone.”

Kilamba is ideally situated a few kilometers from Luanda. A portion of the city’s buildings have been reserved as social housing. Thanks to this project these Angolans live a better life, and indeed for many residents, it is the first time that they live in their own apartment. The group of apartments consist of residencies which represent a large split from their old homes. The apartments have running water and electricity 24 hours a day, which was formerly difficult to find due to the ravages of the war in Angola.

A four-year-old Construction Site

The buildings of Kilamba comprise one of the largest residential sectors in the world. The city consists of over 100,000 residents. But the construction has not been without its issues, when the project started in 2008, the artisans had  difficulty in finding quality building material on the local markets. They were then compelled to send more than 2 million tons of material directly from China. In total, it has took four years to complete the project.

A City-Sized Development

Today, the post-war construction continues to go forward, leaving in place new ambitions more important still. The Angolans continue to believe that the development of the city will continue, and will continue to bring them new professional and commercial opportunities.

Chen Xiaojia, president of CITIC Construction, has declared that “the project has improved local employment opportunities as well as the quality of life. […] The residencies are well equipped, and the city offers a large range of public infrastructure. We have built schools, sewer systems, as well as electric and water systems. I have learned that the residents of Luanda are proud to live in Kilamba New City. It’s because of this that we are proud.”

Read more

Digital Finance needs to be a top priority for African Growth in 2018

Comments (0) Africa

digital finance

In an annual report released by the Africa Growth Initiative, there is a call for African nations to embrace digital technology as one of the major priorities for 2018. The report, entitled “Foresight Africa: Top priorities for the continent in 2018”, identified six priorities for the continent to capitalize on new technologies that would have the potential to bring more economic prosperity at every level of civil society. Technology-based solutions to long-entrenched problems are believed to be the catalyst the continent needs in order to strengthen its institutions and improve its standing on the global stage.

The Africa Growth Initiative was created in 2011 by the American think-tank The Brookings Institution. The Foresight Africa project is a series of reports, commentaries and events that aim to help policymakers and Africa watchers stay ahead of the trends and developments impacting the continent. Since 2011, the Brookings Africa Growth Initiative has used the occasion of the new year to assess Africa’s top priorities for the year.

Education and agriculture could develop more innovative solutions

This year, a particular focus was placed on “harnessing Africa’s digital potential.” By focusing on technology and digitization, countries are better able to shift their economic structures and transform both the labor market and public services. Entrepreneurs with sustainable business models would benefit from opportunities for financial inclusion, easier retail payments, and improvements in administrative services. Other sectors such as education and agriculture could develop more innovative solutions as a result of improved access to key information such as market feasibility.

One of the biggest areas of opportunity is in mobile payment technology. Given that an estimated 50% of the world’s population is considered “underbanked” or “unbanked”, the development of such technology in the early 2000s gave thousands of people access to a formal banking system in societies that were to-date highly cash-based. On the African continent, the success of the mobile phone-based money transfer system M-Pesa has helped African economies save billions of dollars. M-Pesa made it easy for its users to deposit, withdraw, and transfer money without needing to visit a bank or carry a large amount of cash. For low-income people, especially women, it became easier to borrow and save money.

Public and private investors attracted

Mobile payment technology in development has attracted both public and private investors who see its potential to improve the efficiency of government institutions and private operations, saving money while increasing the volume of business. It has allowed for innovation in other areas: M-Akiba allows for people to invest in bonds issued by the Kenyan government; M-KOPA makes it easy for people to acquire solar power; M-TIBA helps people set money aside for health expenses; and the One Acre Fund invests in small farmers and facilitates the acquisition of seed and fertilizer, training, and loans.

By moving towards digitization, some of Africa’s most intractable problems could be addressed, including corruption, administrative break-downs, and the diversion of public money that has choked the public sector. Rather, the Africa Growth Initiative pushes the public to move towards democratizing access to public services (taxes, commerce, transportation) by shifting the operations online.

Read more