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Prosperous brand new african car market 

7 October 2016 Comments (0) Africa, Featured, Transport

Second-hand cars have been winding their way to African markets for many years. A road trip from Europe West Africa to sell your used vehicle has long been synonimous with both adventure and profits. It has remained uite easyt to find major export-import enterprises that will whisk your used car away to Africa.

Motorization ripe to take off across Africa

In addition to European car makers both North America and the Far East send second-hand vehicles to the continent en masse. The market is thoroughly established today: according to the consulting cabinet Deloitte an overwhlming majority of the 42.5 million vehicles on use on African roads today come from second-hand exports. This trend is likely to increase. Africa is the least motorized region on the planet with only 44 registered vehicles per 1000 inhabitants. The global average on world scale stands at 180 vehicles per 1000 which paves the way for tremendous growth of African market in the future. Demand for used cars is soaring due to an emerging African middle class and an improving economic climate.

Nigeria takes the lead

Nigeria is the biggest car market in Africa, and is also one of the most affluent in the Sub-Saharan region. The country boasts a population of over 140 million with approximately 40 million currently belonging to the rapidly emerging middle class. While new car sales are slowly picking up across the country, used sales still best those of new vehicles by a ratio of 4:1. In Nigeria, car ownership is seen as aspirational, whereas in the western world only new, high end cars represent a genuine status symbol. However for the burgeoning Nigerian middle class, car ownership itself is a highly coveted distinction. While the highly affluent will choose to buy new cars, Nigeria’s used car market is expected to grow for the foreseeable future.

Grey market evolves in Benin to meet Nigerian demand

Benin has dramatically benefited from the of Nigeria car market when Nigeria places high tariffs on the importation of used vehicles far above that of Benin. However this loophole is soon likely to close given that both Benin and Nigeria are working on a single import tariff for the block. Similar to Nigeria, Kenya has a large population and an emerging middle class. Citizens have been readily buying used cars, aided by the country’s strong banking sector that offers attractive lines of credit. In 2015 used cars outsold new cars by a ratio of 5:1, and according to forecasts this ratio is expected to be maintained for many years.

Kenya, Uganda and Tanzania look towards Japan for quality used vehicles

Japan has a strong record of car export, driven by tight environmental regulations and high service costs that incentivise any citizens to sell their car merely after few years. Japanese models such as Toyota and Nissan are fanatically popular across Africa due to reliability, strong 4×4 models, fuel economy and comparatively cheap repairs.

Many of Kenya’s neighbors such as Uganda and Tanzania are also seeing a surge in the second-hand car market. Given that Kenya has the largest port in East Africa it is likely to become the main import hub for Japanese second-hand cars, creating jobs and businesses throughout the region. Ultimately, apart from South Africa and the North African countries the rest of the continent is going to fce with a major increase in demand for second-hand cars over the coming years as economic conditions keep improving. Some estimates suggest that by 2030 car ownership will more than double to reach a healthy number of 90 million registered vehicles.

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Zimbabwe’s optimistic growth forecasts as economy stumbles

5 October 2016 Comments (0) Africa, Agriculture, Economy, Featured

Despite an unstable economic context , the embattled government of Zimbabwe is putting on display ambitious growth targets for the next two years. The government recently projected an annual growth rate of 6.5 percent between 2016 and 2018.

That forecast contrasts with small economic growth rates in recent years jeopardising  President Robert Mugabe’s legitimacy. Mugabe, the world’s oldest state representative aged 92, has been in office for 36 years now. Finance minister Patrick Chinamasa had originally forecast an economic expansion of 2.7 percent in 2016. But Chinamasa was forced to cut the target by nearly half, to 1.4 percent, in the face of the negative impact of the drought and falling commodity prices worldwide.

Cash shortages plague nation

Zimbabwe’s economic challenges include cash shortages, its worst drought in decades, heavy reliance on imports, crippled agricultural and manufacturing sectors, a drop in tourism, and worker strikes that have paralyzed key sectors. “What you have are highly incendiary conditions in Zimbabwe,” said Charles Laurie of the political risk firm Verisk Maplecroft. The nation is “ripe for a power grab.” Mugabe has cracked down on opponents and the government in August increased its surveillance of social media and cellphone channels while the military went on high alert in the face of what it said were potential cyber-terrorist attempts to destabilize the government. But the government cash shortage is evident prompting a government decision to start issuing bond notes that some see as a shadow currency. For the past two months‚ the government has been late in paying the military‚ police and other public workers. Zimbabwean banks have restricted the amount of cash that can be withdrawn, sometimes allowing only $20 per day.

Financial crisis recalled

Some experts say the country may be headed into its worst financial crisis since 2008-2009, when Zimbabwe dropped its national currency in the face of hyperinflation that reached 500 billion percent. The United States dollar, South African Rand and recently the Chinese Yuan, have been introducedd by the government as acceptable currencies in Zimbabwe. However, the government plans to introduce bond notes has sparked fears that large government issues of the notes will effectivelynamount to printing more money – a move that could drive inflation.

Weak signs of recovery

Zimbabwe was on the road to recovery in 2010-12 after a disastrous land reform initiative, and annual economic growth topped 10 percent in 2012. However, since then, growth has trended downward – 4.5 percent in 2013, 3.1 percent in 2015 and only 1.5 percent in 2015. The government said agriculture, fishing, manufacturing, and construction, would help drive growth in the next two years. At the same time, the government forecast targeted annual inflation of less than 1 percent and a budget deficit of 1.2 percent of gross domestic product in 2017 and 2018. But a number of key Zimbabwean economic sectors are highly challenged. Agriculture, the backbone of Zimbabwe’s economy, lacks funding and farmers are straddled with strict loan requirements driven by banks’ concerns about security for 99-year leases of many farms. The government is counting on receiving $5 billion from China to revive the agricultural sector. The nation hopes that China will provide funds for farmers to grow tobacco, flowers, cotton, and soya beans and to breed beef cattle.

Food imports increase

In the aftermath of dramatic drought the government was forced to import more than 700,000 tons of maize adding to the country’s trade imbalance, which hit $3.3 billion in 2015. The manufacturing sector is currently hampered by obsolete equipment and power shortages as well as intensifying competition from cheaper imports. Currently, the sector has reduced production and is operating at about one-third of its capacity. A requirement that foreign investors sell controlling equity stakes in their companies to local residents has further dampened enthusiasm for investment. Direct foreign investment dropped by nearly a quarter in 2015 to $421 million. The decline was attributed to assessments showing high levels of corruption as well as bureaucratic red tape.

Tax costs tourism dollars

Tourism has also declined because of a ban on ivory imports and a 15 percent tax on accommodations and tourist services. A report by the Zimbabwe Council for Tourism report said the nation lost more than $100 million in tourism revenue last year because of the tax. Experts dispute the nation’s ability to meet the new economic growth targets. John Robertson, an independent Zimbabwean economist, said it was unlikely that funding from abroad would revive the economy. Oswell Binha, an economist and chairman of Buy Zimbabwe chairman said the economy, which is at risk of recession, simply does not have the capacity to grow at a rate of more than 6 percent. “Zimbabwe under its current circumstances will never achieve any growth beyond 4 percent,” Binha said, as a result of the country’s inability to maximize key drivers of its economy.

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West African seed exchange to increase agricultural production

3 October 2016 Comments (0) Africa, Agriculture, Featured

Officials are touting the launch of an electronic seed exchange in West Africa as an important step in improving productivity and food security. The online platform will serve seven West African countries – Benin, Burkina Faso, Niger, Ghana, Mali, Senegal and Nigeria. The platform is based in Abuja, the capital of Nigeria, the leading producer of seeds in the region. Officials hope the new platform will contribute to agricultural productivity. They want to double high-yield seeds from 12 percent in 2012 to 25 percent by 2017. The electronic platform aims to provide an online point of connection for seed producers, traders, distributors, farmers, researchers and other industry stakeholders. In the long run, the platform could help improve the practice of seed quality analysis and the official catalog of seed varieties.

Exchange to boost trade

The platform will help promote the seed trade in the region while fostering healthy competition in the marketplace, said Philip Olusegun Ojo, director general of the Nigerian Agricultural Seeds Council. Ojo noted that about 70 percent of the seeds used by farmers in West Africa are produced in Nigeria. Regulatory changes have boosted the country’s seed industry, Ojo said, and today more than 155 seed companies operate in Nigeria. The electronic platform will provide farmers with information on the origin of seeds and their country of availability. The West and Central African Council for Agricultural Research and Development has developed the program in cooperation with the West African Agricultural Productivity Program.

Seeds key to improving a country’s agricultural production

Abdou Tenkouano, executive director of the council, said Nigeria has the capacity to supply nearly two-thirds of the farmers in West Africa need. Tenkouano said that the platform was designed to become a hub that will be a precursor to regional research and development initiatives in agriculture. Heineken Lokpobiri, minister of Agriculture and Rural Development, said seeds are key to food security in Nigeria, which spends more than $6 billion annually on food imports. “The objective of achieving food security can only be realized through the availability of quality seeds,” Lokpobiri said, noting that more companies should be encouraged to enter the seed market as the nation attempts to diversify its agriculture. According to Lokpobiri, the quality of Nigerian seed has improved while production has increased from about 5,000 metric tons in 2007 to 173,000 metric tons in 2015, mostly maize and rice seed. Revenue increased to more than $70 million. “We were able to achieve this success through enhanced collaboration with research institutes, liberalization of foundation seed production, strengthening of the national seed certification, as well as total withdrawal of government agencies from certified seed production and marketing,” he said.

Agriculture major occupation

Agriculture is a major sector of the Nigerian economy, engaging more than two thirds of the workforce and accounting for about a third of the nation’s gross domestic product. Major food crops include beans, sesame, cashew nuts, cassava, cocoa, maize (corn), millet, rice, soybeans and yams. Small farms that are generally widely scattered produce about 80 percent of the food. More than 75 million acres, about a third of Nigeria’s land area, are under cultivation. The new seed exchange platform may help improve constraints highlighted in a report last year that said Nigeria’s seed industry was underperforming. The study said the industry was hampered by weak technical capacity, inefficient enforcement of seed laws, information disconnects and lack of capital investment. The report said Nigeria must assure that farmers have access to new varieties of seeds of high quality and at affordable prices. “Unfortunately, the Nigerian seed industry has not fully developed the capacity to perform this role very well.”

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Algerian billionaire bets on investments abroad

1 October 2016 Comments (0) Africa, Business

Sugar refining fueled the fortune of Algeria’s richest man, Issad Rebrab.

Originally trained to be an accountant Rebrab launched Cevital, Algeria’s largest private company and owner of one of the largest sugar refineries in the world as well as a string of companies in the country and abroad.

The son of revolutionaries who fought for Algeria’s independence from France, Rebrab became the country’s first billionaire in 2013. Forbes estimates his net worth at $3.4 billion, making him the ninth wealthiest person on the African continent.

Now 72, Rebrab came from modest beginnings. He completed accounting studies at a vocational school and started his career teaching accounting and business law. He went on to start his own accounting firm in 1968.

Invests in metallurgic industry

He followed a client’s advice to invest in the metallurgical construction business, and in 1971, he acquired a 20 percent stake in Sotecom, a metallurgic manufacturing company.

Rebrab later said it was a risky move, but “at worst, I knew I could always go back to teaching.”

His fortunes took a nose dive in 1995 when terrorist attacks destroyed his factories costing him more than $1 billion. He was then forced into exile to France.

Three years later he returned to Algeria to establish Cevital.

Refinery produces sugar, oil and margarine

The company headquartered in Béjaïa is one of Algeria’s largest exporters in addition to providing products for domestic consumption, including sugar, vegetable oil and margarine. The sugar refinery produces 1.5 million tons annually. In 2012, Cevital produced 450,000 tons of oil for domestic consumption as well as quantities of liquid sugar for the country’s sodas industry. Cevital products are exported around the world, including to West Africa, the Middle East and Europe.

His other industrial interests include petro chemistry, steel, and naval and automobile construction. Rebrab is the sole Algerian enacting agent for Samsun Electronics in his country thanks to his subsidiary company named Samha .Cevicar another subsidiary is the sole agent of the car rental agency Europcar.

All five of his children now work in his businesses, which employ a total of more than 13,000 in Algeria.

Rebrab is betting that his country can compete with China for cheap labor. “We have huge potential; we can make up for lost time very quickly,” he said.

A string of investments in Europe, Sudan

He is also one of only a few Algerian businessmen that have expanded activities outside the country.

Rebrab has diversified his holdings by acquiring distressed companies in Europe.

In 2014, he acquired Groupe Brandt, a large maker of appliances based in France that had filed for bankruptcy protection. Cevital invested more than $200 million to build a Brandt plant in Algeria, which will employ 7,500 people.

Since 2013 the company has also purchased the Spanish aluminum smelter Alas Aluminum, the French assets of the Spanish household appliance manufacturer Fagor, and the Italian steelmaker Lucchini.

Cevital has also ventured south, with a 2014 agreement to invest $3 billion to develop production of sugar cane in Sudan.

Court cancels sale of Media Company

Earlier this year, Rebrab agreed to buy the media group El-Khabar for $35 million. The newspapers is published in Arab-language publication with a circulation of more than 500,000.

The Algerian Ministry of Communication challenged the acquisition, citing a law that prohibits a company from owning more than one general news company Rebrab already owning the French-language newspaper Liberté.

In July, an administrative court of Algiers gave reason to the government and cancelled the sale of El-Khabar.

 

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Mobile weather forecasting tool helps West African farmers yield profits

29 September 2016 Comments (0) Africa, Agriculture

A Swedish company has developed an innovative application that is delivering accurate GPS-based weather forecasts to farmers in six African countries.

Since the beginning of 2016, more than 80,000 farmers in Ivory Coast, Ghana, Mali, Niger, Nigeria and Senegal have put Iska Weather to use. The app has generated more than six million weather forecasts.

The forecasts, which the developer said are more than twice as accurate as those provided by other models, help farmers determine the optimum times to sow, fertilize and harvest their crops.

Farmer doubles yield

Enoch Addo, a farmer in Ghana, said the application has already helped him double his cocoa production from 10-15 bags of cocoa to more than 30. “Because I was able to spray fertilizer and pesticide at the right times, I collected more than 30 bags of cocoa.”

Obtaining accurate weather forecasts have become more and more critical for African farmers as many parts of the continent grapple with drought and severe weather attributed to climate change.

Ignitia, the Swedish company that developed the mobile weather forecasting service, wants to expand the service to other West African countries using a grant of $2.5 million from the governments of the United States, Sweden, South Africa and the Netherlands.

The goal is to connect 1.2 million small farmers with the service by the end of 2017. Eventually, the company plans to offer the service in 20 countries in Africa, Central America and Southeast Asia.

Highly accurate forecasts

Lizzie Merrill, Ignitia project manager, said the company’s forecasting model is more than twice as accurate as others, which typically are inaccurate more than 60 percent of the time. For farmers in the dry climates of sub-Saharan Africa, even a slight change in weather can results in significant losses, she said.

“Traditional global weather models have only been able to predict weather in the tropics with 39 per cent accuracy – not good enough,” she said.

Ignitia says its model has a weather prediction accuracy rate of 84 per cent since it launched as a pilot in Ghana in 2014.

Peter Okoth, an agronomist and soil scientist at Newscape Agro Systems Ltd. in Kenya, said governments in tropical nations have failed to invest in programs to provide accurate weather forecasts.

Investment could change farming

Okoth said Iska Weather could be used in other dry parts of Africa and that governments would benefit from because farmers could produce and earn more.

Support for better forecasting tools could “bring a big change on how farming is conducted and managed on the African continent,” Okoth said.

Yields of small-scale farmers in sub-Saharan Africa are among the lowest in the world, resulting in food insecurity, poverty and low economic growth. Estimates of crop losses in the region because of weather range from 20 to 80 percent.

Ignitia’s tool provides two-day, monthly and seasonal forecasts to farmers via SMS in a text-light format, which can be received on the most basic mobile phone. The forecasts are tailored to each farmer’s specific location by an automated tool that pulls in the closest GPS coordinate for each subscriber.

Low cost of service

The farmers are charged four cents per day for the service. They can pay in micro-installments using pre-paid credits and it is easy to opt out. The service is delivered in partnership with telecommunications companies in each country.

The forecasting service typically accounts for less than two percent of their total expenses, according to Ignitia. The expense is more than offset by increased income, the company said.

Liisa Petrykowska, Ignitia’s chief executive officer, said Iska Weather provides small farmers with “vital information they need to mitigate risk and create resilience,” enabling them to “increase yields and improve their livelihoods year after year”.

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Zambia fights drought with an unlikely weapon: sun

27 September 2016 Comments (0) Africa, Health, Technology

Zambia is currently in the midst of the worst drought the country has faced ever. Partly due to the El-Niño weather cycle, the lack of water has severely affected large swathes of the country notably in the southern regions where rainfall is particularly low.  In order to fight dramatic consequences of drought on Zambia’s most affected regions in 2015 the government focused on sun as a resource to help address the crisis by developing solar technology.

The case of Kanzungula’s solar powered pumps

Kazungula is a rural district located in the country’s far south. Its parched lands saw only 40mm of rain fall between November 2015 and January this year. Zambia’s Climate Chance Secretariat (CSS) identified Kazungula as an area in desperate need of attention which represented an ideal testing ground for a new solar powered scheme. Three new solar installations were built throughout Kazunglula as part of the project. Solar powered schemes involved drilling a borehole 50-60 meters deep into the arid earth to access the water table far below into the ground. Once water struck, a solar powered pump brings clean water to large storage tanks on the surface. The solar array element is critical in this process as it powers reliable water extraction in remote areas with no access to the main grid. For locals in Kazungula, the results have been nothing short of life-changing. Munji Malambo a 16 year old boy who lives in the area said in an interview with Thompson Reuters that “before this (borehole) we used to walk long distances every morning to get water before coming back to go to school […]. Most of the shallow wells in the area had dried up and the closest one was two kilometers away. Sometimes the water would get very dirty and not safe to drink.”

Implications for the future

The success of the Kazungula schemes has prompted plans for 200 installations of solar powered pumps across Zambia that the CSS hopes to complete within two years. According to Zambia’s Ministry of Finance droughtshave costs the economy an estimated US$13.8 billion over the last 30 years.  Solar schemes have then turned out to be real value for money to local and national governments. For instance, the three projects in Kazungula cost a mere $6,100 dollars. What’s more, the costs of solar installations have plummeted almost 50% over the last year. Contractors are now bidding to provide solar schemes at lower cost per MW than coal-fired generators, the cheapest historical source of energy. Solar pumping solutions like those recently used in Zambia are now being recognized as a major tool to be utilized across the African continent to fight drought consequences. With the obstacle of price removed solar energy with its many applications is set to proliferate throughout Africa.

Caution and diligence are needed

For nations such as Zambia which rely heavily on hydroelectric plants drought has placed a major strain on power production. As a result there has been a major shift to chopping and burning lumber for energy. Unfortunately this can negatively affect the water system, causing instability to recharge rates while affecting runoff to bodies of water. In the long term solar installations can help to address the energy shortage but major schemes take time to implement. Similarly, oversight is needed to manage borehole schemes themselves. Excessive drilling can cause serious consequences for the long term health of water systems. Water management is complex, and governments need to make sure the correct expertise and regulation is in place. If properly managed solar-pumping projects can become a significant ally to Africa in its fight against drought.

 

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Study: Mobile levels the banking playing field

25 September 2016 Comments (0) Africa, Technology

Mobile phone ecosystems and favorable regulatory environments areeasing access to banking and other financial services in Kenya and other African countries, even among populations that are typically marginalised from banking services. A study of 26 countries led globally by the Brookings Institution gave Kenya the highest rating – a score of 84 percent – for “financial inclusion” of woman, migrants and youth, who often are left out of the financial services system. Four other African nations received relatively high scores: South Africa (78 percent), Uganda (78 percent), and Rwanda (76 percent). Among the other countries ranked were Nigeria (72 percent), Tanzania (68 percent), Zambia (67 percent), and Malawi (61 percent). Ethiopia and Egypt hit the lowest rankings, respectively 53 percent and 49 percent. The rankings were based on four factors: national commitment, the regulatory environment, mobile capacity and adoption of traditional and digital financial services.

Survey finds increased inclusion

A survey conducted by FinAccess echoed that of Brookings showing that the number of Kenyans having access to the banking system had grown by 50 percent since 2006. The study states that in 2016, 75 percent of Kenyans had an access to financing, an increase from 67 percent three years earlier. On the other hand the Brookings Institution study revealed that Kenya’s financial inclusion landscape has benefited from the “country’s vibrant mobile money ecosystem, which features exceptionally high adoption rates – the highest of any country (in the study) by about 23 percentage points.” According to Brookings, Kenya is considered as the most mature mobile money market in the world, driven by the widespread use of the M-PESA service offered by Safaricom. As of 2015, Kenya was one of only 19 markets globally with more mobile money accounts than bank accounts. This success is explaied by government’s commitment to reinforce access to financing opportunities. Kenya’s government is a founding member of the Better Than Cash Alliance, which provides resources to ease transitions to electronic banking. Kenya’s Vision 2030 National Development Strategy highlighted the importance of inclusive finance and set a target for decreasing the proportion of the population without access to financial services.

Governments regulations to allow access to financial services

The country has also implemented regulation designed to lower the risk of fraud, promote competition in the financial sector and increase access to financial services, Brooking said. In a key regulatory change, Kenya enacted in 2009 guidelines to enable banks to name third-party agents such as post offices, markets, pharmacies, gas stations and other businesses in order to make transactions more convenient. In 2014, the government of Kenya launched a Government Digital Payments program to facilitate people-to-government payments through digital channels. By accessing a web portal, individuals can make digital payments for services such as driver’s license and passport applications. The report also pointed out that Kenyan banks have made high-level commitments to financial inclusion.

South Africa put forward

Mobile is also driving inclusion in South Africa that ranked fourth on the Brookings Institution list after Columbia and Brazil. About 70 percent of the population aged 15 or older in South Africa has an account with a mobile money provider or with a financial institution, the report said. However, regulatory challenges have slowed adoption of mobile money accounts. While South Africa does not have a formal policy to promote inclusion, the government has defined it is a priority. The report noted that South Africa has a much more robust traditional banking structure than other countries in the study. South Africa has indeed more than 10 commercial bank branches and about 66 ATMS for every 100,000 adults. Still, a Finscope South Africa survey found that about one sixth of adults in South Africa do not have a bank account or other financial services.

Uganda with large number of mobile accounts

Uganda has committed itself to increasing the number of financially included citizens from 54 percent in 2013 to at least 70 percent in 2017 according to the Brookings report. Recent regulatory changes to promote offerings of financial services through agents should drive increases in access to digital financial services in Uganda, which has already seen a proliferation of mobile money services and has the second highest level of mobile money account ownership in the study. A 2015 InterMedia survey found that about 40 percent of Ugandan adults age 15 and older were financially included, with 35 percent of adults holding mobile money accounts. Rwanda has also benefited from mobile adoption along with the expansion of community savings and credit cooperatives and agent banking locations. A 2016 FinScope survey found that financial exclusion among Rwandans aged 16 and older declined by 17 percentage points in the past four years. Chile, Mexico and Nigeria rounded out the top 10, the report said.

Egypt, Ethiopia ranked lowest

Ethiopia and Egypt both ranked at the bottom of the Brookings Institution list with much lower mobile capacity and adoption of traditional or digital banking services. In Egypt, the report said, adoption of banking services is relatively low with only about 14 percent of those aged  15 or older holding a formal bank account, a level it said was comparable to other countries in the Middle East. While mobile penetration is high, use of mobile money services has not kept pace. The report said Egypt’s political turmoil was likely to slow movement towards better access to banking services. Ethiopia also had low adoption of financial services with only about 22 percent of adults having a bank or mobile money account. While the country has sought to promote financial inclusion, its mobile capacity is also low.

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U.S. and Africa: From aid to trade

23 September 2016 Comments (0) Africa, Economy

U.S companies are just “scratching the surface” of business opportunity in Africa, effectively leaving an expanding market wide open for China, according to advocates for boosting trade, including President Barack Obama.

Dismissing the economic slowdown of some African nations as temporary, experts at the second U.S.-Africa Business Forum highlighted the potential offered by an expanding middle class, untapped mineral wealth and expanses of uncultivated farmable land on the continent.

President Obama spoke at the forum on September 21 to urging American businesses to increase trade between the United States and the African continent. “We are making progress but we are just scratching the surface,” Obama said. “There is still so much untapped potential.”

Trade exchanges rates remain low

Sub-Saharan Africa accounted for only one percent of all U.S. trade in 2015. While 5.6 percent of Africa’s trade was with the United States, that amount is much smaller than the more than 19 percent of the continent’s trade with China, which has stepped up economic ties with Africa in recent years.

According to the Obama administration, American and African countries have made deals worth $15 billion since the first U.S.-Africa Business Forum two years ago. Another $9 billion in deals were announced at the forum.

U.S. investments increased

American investments in Africa grew by 70 percent with major companies including Google and FedEx increasing their presence on the continent. African nations, meanwhile, have encouraged increased trade and business development by cutting red tape and promoting political stability.

Besides the extension of trade accords with Africa and its Power Africa program to boost electricity supplies, the U.S. increased support from the U.S. Export-Import Bank, the U.S. Trade and Development Agency, the Overseas Private Investment Corp. and the Millennium Challenge Corp.

Political instability slow growth

Africa is working hard to ease barriers to trade and investment through development of regional free-trade accords and political stability, according to Nkosazana Dlamini-Zuma, chairwoman of the African Union Commission.

Still, there is more to be done as Africa seeks to recover from an economic slowdown prompted by falling oil and commodity prices as well as a drop in demand from China, which has its own economic struggles.

The International Monetary fund recently forecast that sub-Saharan Africa’s economy would expand by only 1.6 percent this year, about half the growth rate of 3.3 percent in 2015 and well below the annual average of 5.7 percent in the 10 years before that.

Besdies, foreign direct investment in Africa dropped as the commodities boom ended. Foreign direct investment fell to about $71 billion last year, down nearly 20 percent from more than $88 billion in 2014, according to accounting firm EY.

Some African economies thrive

While South Africa and Nigeria, the two largest economies in the sub-Sahara, are struggling, other countries including Kenya, Rwanda, Tanzania, Ivory Coast and Senegal, are expected to display economic growth well over 5 percent this year.

Household consumption in Africa is expected to grow 3.8 percent annually until 2025 when it will reach $2.1 trillion, according to McKinsey & Co. It projected that the continent will have a bigger workforce than India or China by 2034.

Amadou Sy, director of the Brookings Institution’s Africa Growth Initiative, said U.S. companies have been slow to shift from seeing the continent as an aid recipient to seeing it as a potential business partner.

While aid has long been the primary focus of dealings with Africa, that is changing Sy said.

‘’The other side of the coin is that we have fast-growing economies. We have business opportunities,” he said. “The first accomplishment is getting U.S. businesses and U.S. stakeholders to look at Africa as a business partner.”

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China’s gifts to Africa: Governmental buildings and stadiums

21 September 2016 Comments (0) Africa, Economy

While much of the aid China provides to Africa comes in the form of investment and loans in infrastructure and economic development, Beijing has also given the continent dozens of government structures and sports stadiums. China promised in last August to the government of Zimbabwe a $46 million gift to build a new Parliament. The building will be located in Mount Hampden, about 10 miles to Harare, the capital. Zimbabwe’s Senate and House have grown to host a total of 300 representatives exceeding  the current Parliament’s building capacities.
The agreement between China and Zimbabwe was made official after the Forum on China-Africa Cooperation in Johannesburg in last December. The Chinese government also agreed to wipe out Zimbabwe’s debt to the country accounting for $40 million. Meanwhile, China has promessed to invest more than $1 billion in development of a thermal power plant in Zimbabwe. In return, Zimbabwe agreed to make the Chinese Yuan legal tender. Zimbabwe also abandoned its own dollar currency seven years ago after a period of hyperinflation and currently uses multiple currencies, including the United States dollar and the South African Rand.

China’s economic support has focused on governments’ facilities

Financial support to public services and government infrastructures have emerged as strategy from China to strengthen its ties to the continent by becoming Africa’s major investor and supplier in infrastructure projects. In 2012, China funded the Africa Union’s $200 million headquarters in Addis Ababa a strategic shift displayed as “China’s Gift to Africa.” The building, 100 meters tall, now dominates the skyline of the Ethiopian city. Most of the materials and furnishings were imported from China and more than 1,000 construction workers both Chinese and Ethiopian have worked on the project.

China also built an opulent presidential office complex for Mozambique’s government decorated with crystal chandeliers and with marble interiors. The structure that was opened in 2014 today overlooks Maputo Bay. However China’s financial input has never been disclosed. China has also donated $25 million for a new building to house the offices of the president and vice president in Uganda and provided furnishings from China. The building standing next to Uganda’s Parliament building was opened in 2011. In Sierra Leone, China has built a new foreign ministry, offices for its Parliament and a 100-bed friendship hospital outside the capital Freetown. China has also renovated government’s offices in Zambia.

The benefits of a “stadium diplomacy”

China has been devising a “stadium diplomacy” building more than a dozen sports venues on the african continent. Among them are the construction of Mozambique National Stadium which was built to Olympic standards at a cost of $80 million and offers seats to 42,000 spectators. I the same vein China evenly contributed to Tanzania and Malawi’s National Stadium. China also provided an estimated $600 million financial support to Angola to enable the construction of four stadiums to host the 2010 African Cup of Nations competition. For the 2012 African Cup, Equatorial Guinea built two stadiums with Chinese assistance while 2012 co-host Gabon enjoyed a gift from China of a $60 million stadium.

China invests its trade increases

China has become by far Africa’s biggest trading partner, and more than one million Chinese laborers and traders have moved to the continent in the last decade. Trade value between Africa and China was estimated to $220 billion in 2014 and was expected to increase to $300 billion in 2015.  In 2014, trade exchanges with China accounted for 15 percent of total imports to Africa and 6.5 percent of its exports. As a matter of comparison that same year imports from the United States represented 5.5 percent and exports nearly 5 percent when India’s imports accounted for 6 percent and exports for  more than 8 percent.

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In Madagascar, medical drones to the rescue

17 September 2016 Comments (0) Africa, Health, Technology

While drones are thought of mostly as weapons of war, the robotic, unmanned aircraft may play a life-saving role in remote regions that do not have access to health care. In Madagascar, the American medical drone manufacturer Vayu, Inc., and New York’s Stony Brook University, are testing use of drones to deliver medicine and equipment to remote areas. According to Dr. Peter Small, founding director of the university’s Global Health Institute, 70 percent of the population of the island that lies off east Africa live in very rural settings, including a significant number who dwell in remote settings that can only be reached by foot. “These are places that are only accessible on foot; you can’t even get a bicycle there. By using drones we can not only fly out to villages, but collect diagnostic specimens and deliver care,” Small told Digital Trends. “It is really revolutionary.”

University, country in longstanding partnership

Stony Brook University has a longstanding relationship with Madagascar, which has one of the most important and diverse ecosystems in the world. For three decades, scientists and students at Stony Brook’s ValBio Center, a 15,000-square- foot research station, have worked the island residents to bolster conservation efforts while improving residents’ quality of life. The center is located on the edge of Madagascar’s Ronamafana National Park. The university’s Global Health Institute, which has a $10 million endowment, is teaming up with Vayu, Inc., a Michigan aviation company that was launched in 2014. With more than $1.1 million in investment, the start up is focused on building affordable drone technology to provide medical aid and supplies across rugged terrain and during times of disaster. The drone can take off and land like a helicopter and is able to fly long distances.

Long-range mission accomplished

With the backing of Madagascar’s government and the U.S. Agency for International Development, the project recently achieved the world’s first long-range, autonomous drone flight. The drone collected blood and stool samples from rural villages and flew them to the ValBio center for testing. Small said the potential of drone technology to improve health care in remote areas is enormous. For example, he said a health worker who cannot diagnose a cough in a patient might be able to use a beacon to call a drone. The drone could then collect a sputum sample and fly it to lab for diagnosis then fly medications back to the patient’s location. The entire operation might take as little as a couple of days, he noted. “Drones will find innumerable uses, such as accelerating diagnosis of tuberculosis and ensuring delivery of vaccines,” Small said. Tuberculosis and many other diseases that plague developing countries, require diagnosis in a lab and stool and blood samples must be transported quickly. That is why it is critical in places like Madagascar to find an alternative to cumbersome travel by road or pathway.

Global impact likely

The organizers believe their partnership will produce significant progress in delivering quick diagnosis and medications for remote communities that lack health care professionals or facilities. Vayu in particular was founded with the purpose of developing drones for medical transport in hard-to- reach areas. “Vayu’s accomplishment is significant for public health in developing countries, where limited access hinders healthcare and it is for the future of autonomous unmanned vehicles,” said Vayu’s CEO, Daniel Pepper, a former international journalist and medical student-turned- founder of Vayu. The project could have global impact. Stony Brook University President Samuel L. Stanley Jr., MD, a nationally renowned expert in emerging infectious diseases, believes that the benefits of this partnership will likely expand well beyond Madagascar. “Global health is an immediate problem for everyone,” he said, noting that commonplace air travel has shattered natural isolation. “Advances in health delivery and implementation (in other parts of the world) can have positive impacts in the U.S. as well. The benefits of promoting health worldwide are immense.” A similar effort is already under way in Rwanda, were a Silicon Valley start up is using drones to deliver medicine and blood to patients. Zipline International said the unpiloted aircraft will transport supplies to hospitals and medical centers around the country, forming the world’s first national drone delivery system. Zipline International said it plans to expand the service to other countries later this year.

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