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King of Soto: Benin’s answer to Caribbean rum?

6 June 2016 Comments (0) Africa, Business, Featured

king of soto

Entrepreneur Mabel Adekambi creates King of Soto, a new take on a traditional liquor that is growing in popularity.

Inspired by a tradition of fine palm wine produced in her native Benin, entrepreneur Mabel Adekambi in 2014 launched King of Soto, a high quality rum produced entirely with local ingredients.

“When we say ‘rum’ all over the world, we know it comes from the Caribbean. Why not have a proper product in Benin?” Adekambi asked.

Adekambi’s product comes in 10 different flavors including pineapple, orange, mango, papaya, strawberry and passion fruit. King of Soto only uses natural ingredients and no chemical additives.

Rum production begins with the harvest of sap from palm trees. Rich in yeast, it quickly ferments juice called palm wine. Then the wine is distilled to produce a liquor the Beninese call sodabi, or soto for short.

The nickname inspired the name King of Soto, rum produced from sodabi, spices and fruit.

Process takes 6-12 months

Typically, rum-makers use wooden or aluminum barrels like those used in wine making. However, Adekambi found those were not available in country and would be very expensive to order. Instead she uses 20-liter gasoline cans.

The fruit, spices and sodabi are mixed together and stored cans for six to 12 months before the rum is ready for bottling.

Because sodabi is a seasonal product, it is difficult to produce large volumes of rum. King of Soto uses sodobi that has been distilled several times in order to achieve a refined liqueur.

Adekambi learned about rum production as a student in France.

Studies in entrepreneurship

After studying entrepreneurship, communication and tourism in France, she returned to Benin to work as a manager at Residences Celine Hotel in Cotonou.

King of Soto has become popular, mostly by word of mouth. Production rose from 10 bottles a month to 100 bottles within the first year of operation. The rum is sold in super markets for less than $2.

Sodabi is common liquor in West Africa, although it goes by different names in different countries: koutoukou in Ivory Coast, Akpeteshie in Ghana or Ogogoro in Nigeria.

Each region has secret methods for extracting the palm wine, which creates a variety of tastes and styles.

In Benin, the name sodabi derives from the name of its inventor, who learned distilling techniques from Europeans about 100 years ago.

king of soto bottles

A staple of celebrations in Benin

Benin, especially the region of Adja, is well known for its expertise in producing sodabi, according to Professor Koblévi Aziadomé, former minister and director of the Benin agricultural research center.

Often sold in plastic bottles, the popular beverage is consumed at celebrations and festivals.

Some people add plants, spices or fruits in their sodabi to give it medicinal properties or special tastes.

Negative image

In the past, producers have failed to adequately ferment or distill the sodabi, giving it dangerous levels of methanol and creating a negative image. Both Benin and Ivory Coast have at times banned its production.

But Adekambi seeks high quality, well distilled sodabi to create rum that customers can safely enjoy.

Adekambi believes King of Soto will only grow as the quality and flavor of her product becomes more widely known.

She sees King of Soto as both a business and a patriotic effort as it grows into an export product and employs more people. “For the moment, it is not profitable. But it will become profitable and hundreds of families in Benin will benefit.”

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Sasol warns U.S cracker could cost $11 bln, expects lower returns

6 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s Sasol on Monday raised its forecast for the cost of its U.S. ethane cracker by 26 percent to as much as $11 billion due to construction delays and also flagged lower expected returns from it.

The Lake Charles Chemicals Project in the state of Louisiana which includes a cracker will produce 1.5 million tonnes of ethylene a year for use in plastics and chemicals.

Shares in Sasol, which had previously forecast its cost at $8.9 billion, where down by more than 5 percent as of 0730 GMT.

The petrochemicals maker said in a statement that higher-than-expected rainfall had contributed to delays in the project.

It also said costs had been boosted by higher labour costs, building materials and bid contract prices.

The world’s biggest maker of motor fuel from coal said it now expected lower returns due to “changes in long-term price assumptions and the higher capital estimates”.

Returns will be down by as much as the company’s lower long-term price assumptions, Sasol said.

Lower oil prices have forced the company, which makes 40 percent of its revenue from the fuel, to lower its dividend, delay major projects and cut jobs.

The cracker will be funded by existing loans and cash flow without breaching Sasol’s gearing targets. Sasol has already spent $4.5 billion on the project which is about 40 percent complete.

Sasol also warned that full-year headline earnings per share, a popular measure of profit, would fall by 10 to 30 percent due to low oil prices and an impairment charge on operations in Canada.

“The volatile macroeconomic environment, in particular lower crude oil prices, has had a significant impact on earnings,” Sasol said.

 

(Reporting by Zandi Shabalala; editing by Jason Neely)

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Alamine Ousmane Mey: Cameroon’s economic mastermind

5 June 2016 Comments (1) Africa, Featured, Leaders

Alamine Ousmane Mey

Cameroon’s Finance Minister has energized the country’s economy through reform, infrastructure developments and his own determination.

Cameroon’s Finance Minister, Alamine Ousmane Mey, has been lauded as a brilliant fiscal tactician, a shrewd manager and a facilitator of new business enterprises. Earlier this month, Mey was recognized as Finance Minister of the Year at the prestigious African Banker Awards 2016. The honor is well deserved. While not everyone will have heard of Mey, he is the mastermind driving Cameroon’s fast developing economy, and his recent award gives credit to an exceptional career.

Education and banking success

Born in Kousseri in 1966, Mey grew up in an upper-middle class family. He later gained a solid financial education by studying abroad in Germany, Belgium and Turkey. Mey studied electro-technical engineering alongside banking, which bestowed him with a keen understanding of modern economics.

Upon his return to Cameroon in 1993, Mey obtained a job with the CCEI Bank, which later evolved into Afriland First Bank. He rose swiftly through the ranks, and in 2003 he was appointed General Manager of Afriland First Bank, which was the only non-foreign owned private financial institution at the time. Mey quickly ushered in a new era of success at the company. Afriland had a key role in financing the Cameroonian economy and driving consumer spending. In 2010 the bank issued the equivalent to US$ 567m in credit, an astronomical amount by regional standards. Under his leadership the bank saw rapid growth, and quickly became one of the major banks in the region that still enjoys a strong international reputation to this day.

Government career

Mey’s successes at Afriland bank did not go unnoticed. In 2011 he was offered the role of Minister of Finance, despite no previous government experience. He quickly undertook a range of financial reforms which increased real term government revenues and cracked down on misspending. He also refocused government investment towards sustainable projects that have driven growth in the economy.

Mey has carefully borrowed money to finance key infrastructure developments outside the capacity of the government budget; this has been a particularly astute move, as the loans have been used to target under-developed sectors of the economy with high potential gains, both in monetary terms, and for the people of Cameroon. He highlighted his strategy saying, “Yes, we will borrow, but we will focus on life-changing projects.” In doing so, Cameroon has grown its economy, while comfortably servicing the loans which kick-started the process.

Lom Pangar Pipeline modification

Lom Pangar Pipeline modification

Mey has since has earned a reputation as an expert in putting together and overseeing ambitious projects incorporating multiple parties. One such example was the recent completion of the $86m Lom Pangar Pipeline modification. This complex infrastructure scheme was cost-shared between the Cameroonian government, the World Bank, and the contractor COTCO who undertook the project. The scheme has been heralded as a great success as it was finished safely, on time and under budget, while indirectly benefiting thousands of local Cameroonians. Christian Lenoble the general manager of COTCO, praised the efficiency of the working relationship: “The collaboration between the project and government was superb. To me, it was a key factor in our success in completing our work on time and within budget.”

Now versus then

Before Mey took the helm, Cameroon’s growth stood at a middling 3.3% in 2010. Since Mey took over, the economy has grown year on year and is estimated to hit 5.5% for the financial year 2015. This performance is particularly impressive when considered against both international and regional trends. Many of the world’s nations have struggled to achieve any meaningful growth since the financial crisis. Similarly, many of Cameroon’s neighbors have posted disappointing growth figures in the years 2014 and 2015, largely due to falling global commodity prices or political instability. Cameroon has bucked both of these trends, thanks in part to its economic diversification. Initially, strong commodities exports allowed Cameroon to shrug off the worst of the global financial crisis, but Mey realized the economy was still vulnerable. Under his counsel, the government implemented diversification schemes to develop the construction, agriculture, transport and energy sectors. The fruition of these strategies has allowed Cameroon to largely sidestep the commodities crash, marking another success for the Minister of Finance.

No one would disagree that Cameroon still faces big challenges ahead, but Mey is not one to rest on his laurels. He is committed to meet a range of development targets set by the IMF, and given his past achievements, there is a very good chance of him doing so. Ultimately, the future of Cameroon’s economy appears to be in the strongest of hands.

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Sub-Saharan Africa’s most debt-laden nations

4 June 2016 Comments (0) Africa, Business, Featured

african-currencies

Sub-Saharan Africa’s most indebted countries are revealed in the latest figures from the World Bank and the IMF.

Recent figures from the World Bank and the IMF provide a clear picture of which of Africa’s sub-Saharan nations have the highest levels of debt. The figures illustrate national debt as a percentage of the nation’s GDP, as opposed to ranking nations on absolute debt. This is an important distinction, as it accounts for how significant the effect of a government’s debt could be to its economic future.

For example, South Africa has the largest overall debt in absolute terms – with a huge 158 billion euros worth – but it also has a much larger GDP then most African states. This larger economic base ensures that South Africa is not even in the top ten of the most indebted nations.

From the highest debt to the lowest

The ten most debt laden countries of sub-Saharan Africa (with the percentage of their GDP that debt represents in parentheses) are Eritrea (126%), Cape Verde (122%), Gambia (97%), São Tomé and Príncipe (92%), Congo (79%), Ghana (74%), Malawi (73%), Angola (70% ) and Seychelles (65%).

In contrast, the ten nations with the lowest percentage of their GDP represented as debt were Nigeria (13%), Botswana (16%), DR Congo and Swaziland (20%), Equatorial Guinea (25 %) and the Comoros (29.2%), Namibia (31%), The Ivory Coast and Burkina Faso (33%) and finally Mali (35%).

Across the entire sub-Saharan region this averaged out at a 52% debt to GDP ratio, which actually compares favorably with Europe, in which the average is 92%.

What is clearly of significance is the degree to which an economy is likely to grow, and thus manage its debt without it becoming crippling. Moreover, what is sustainable for a developing nation is markedly less than it is for a developed market. While 40% is generally seen as manageable for emerging economies it can be significantly higher for large, more established markets.

The good news for Africa as a whole is that average GDP growth is second only to South Asia. A more cautionary view would note that borrowing is also growing quickly, and unforeseen humanitarian disasters, such as the 2014 Ebola outbreak, can have huge economic fallout in developing markets.

Changes to old debt and shaping the future

The single largest impact on the once debilitating debt levels in Africa occurred with the 1996 Heavily Indebted Poor Countries Initiative (HIPC). The internationally developed program was managed by the World Bank, in conjunction with the IMF and the African Development Bank. The initiative was further bolstered by 2005’s Multilateral Debt Relief Initiative, which was managed by the same trio, and led to 35 sub-Saharan nations eradicating over $100 billion of external debt.

While this allowed many nations to invest in social infrastructure, for others it simply meant writing off overdue debt, but did not create new streams of revenue for investment. Whether a nation wrote off old debt, or managed to put new resources into development, all of the affected nations profited in one key area.

According to Marcelo Guigale, a World Bank director, this universal benefit was that governments learnt “discipline” in spending, and had to have clear plans on reducing poverty. As such, Guigale stated African governments had “more money to spend and new offers to borrow—this time from private bankers.”

The concern in some quarters is that borrowing in some nations is outpacing growth, and this could lead to a return to pre HIPC levels of financial burden. An article in The Economist warned that, although Africa’s economies were growing quickly, “growing fastest of all is debt—personal, corporate and government.”

However, a trio of The World Bank’s own economists feel confident that “overall, governments have been borrowing responsibly”, and the IMF have ensured that guidance is being provided to help nations manage their debt constructively.

It is important for nations to be prudent with their borrowing, but even with some worries over rising debt, most experts feel genuine progress has been made.

Todd Moss, a senior fellow at the Washington-based Center for Global Development summarized the nature of Africa’s debt situation, saying, “Despite misgivings about certain countries, Africa is still in a fundamentally different place than it was 20 or 30 years ago when old debts were taken on.”

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Higher South African rates leave households saddled with crushing debt

3 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Rate increases by South Africa’s central bank have left at least 10 million people crippled by debt in a country where many people buy on credit.

The result may be a further slowdown in South Africa’s slumping economy, which is now expected to grow just 0.9 percent in 2016. That would only aggravate the problem for those struggling with debt.

South Africa’s unemployment rate is already at a record high of nearly 27 percent. Food prices are soaring as a drought afflicts southern Africa.

Consequently, many households are borrowing to put food on the table. But inflation exceeds the central bank’s target of 3 to 6 percent, leading it to raise interest rates by 200 basis points in the past two years.

Inflation slowed to 6.2 percent in April, but commercial banks have raised their lending rates. Home loans now average around 10.5 percent, up from a low of 8.5 percent in 2012.

“Almost 75 percent of the income of the average household in South Africa is spent towards credit providers, to pay debt, so at the end of the day they don’t have enough money left to pay for their living expenses,” said Neil Roets, chief executive of Debt Rescue, a local company that helps clients manage debt.

“It’s had a devastating effect on consumers, especially because of the fact that a lot of consumers already find themselves in a situation where they are over-indebted,” he said, referring to the rising rates.

Industry officials say about 47 percent of the consumers that buy on credit are in debt arrears. About 10 million people, or a fifth of South Africa’s 52 million people, buy on credit.

The TransUnion South Africa consumer credit index, a gauge of consumer credit health, fell to a three-year low in the first quarter of this year. Debt defaults, defined by three months of arrears, rose 1.8 percent year-on-year during the quarter, after shrinking 5.3 percent in the fourth quarter of 2015.

Analysts said South Africans are still paying the price for unbridled lending that fuelled a consumer frenzy. That helped the economy grow an average 5 percent a year in the five years before 2009, when a recession wiped out nearly a million jobs.

Households are now reluctant to take up new debt. Private sector credit grew in April at its slowest rate since late 2013, central bank data showed.

Retailers are feeling the pinch across the board, with consumer demand for non-essential goods in particular dropping. New vehicle sales fell 10.3 percent in May from the same month last year, the sixth consecutive contraction.

“Both consumer and business confidence is unlikely to improve significantly in the short term, given the poor economic outlook and the poor job market,” Nedbank analysts Johannes Khosa and Dennis Dykes said in a note.

“Credit growth is likely to remain contained in the months ahead as the economic environment remains weak.”

 

(By Stella Mapenzauswa. Editing by James Macharia, Larry King)

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KFC quits Botswana after two decades as economy struggles

3 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – KFC will shut its 12 outlets in Botswana next week as they are no longer viable, closing its doors after operating in the southern African nation for 20 years, its owners said on Friday.

Botswana’s economy has been hurt by a commodities downturn and a drought, which has put thousands of jobs at risk.

Proprietors of the Botswana KFC franchise, VPB Propco, said in a statement KFC Botswana will cease operating next week, with all stores closed by June 5.

KFC has restaurants in 14 countries in Africa.

 

(Writing by TJ Strydom; Editing by James Macharia)

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Kori-Odan: Making Africa’s mark on the video game industry

3 June 2016 Comments (0) Africa, Featured, Leaders

Olivier Madiba

A Cameroon developer is one of the first to focus a game on the mythology of the continent.

With the release of one of the first African-themed computer video games produced on the continent, Cameroon’s Olivier Madiba, 30, hopes to shake up a global industry dominated by white game developers who create white heroes.

Madiba’s company, Kiro’o Games, launched the PC-based “Aurion: Legacy of Kori-Odan,” in April on the United States platform Steam to positive reviews.

To Madiba, it represents more than a video game, Madiba said.

“Our dream is bigger than that. We want to build a bridge between the gaming industry and Africa,” Madiba, the co-founder chief executive officer of Kiro’o Games said.

Game based on African myth

Based on African mythology, the game features Enzo Kori-Odan and his wife, Erine Evou, as they try to take back his throne in a land called Zama after his brother-in-law stages a coup and ousts them.

The game was a long time in the making. He first started talking to friends about making a game about Kori-Odan in 2003 while he was studying software development at the University of Yaoundé.

His father worked at a sugar factory and ran a video store in Douala when Madiba was growing up and video games became his obsession. However, since Cameroon has no video game industry, he could not find a career path in his own country.

After graduating from the university with a degree in computer science in 2009, Madiba taught himself how to create games on the internet and decided to start his own company, based on the Cameroon capital, Yaoundé.

Screenshot from Aurion

Screenshot from Aurion

Investors, Kickstarter campaign fund effort

Madiba launched the studio Kiro’o Games, in 2011, and his team began working on the game in earnest.

The studio, which has a staff of 20 artists and developers, raised $270,000 from investors and more than $55,000 in a successful Kickstarter campaign, which enabled them to complete the project.

When he was young, he had noticed few games had African heroes and the continent was often shown through the lens of war and crisis. Most games feature white heroes because most game developers are white, he said.

Game takes place in the future

Madiba wanted to change that with the story of “Aurion: Legacy of Kori-Odan,” an epic 2D adventure in which the usurped king and queen fight to regain their thrones from the evil brother-in-law.

While the story comes from African myth and tradition, the name adds an element of science fiction: The game takes place in a world that exists 10,000 years in the future on another planet far away from Earth.

Using African characters rather than the typical warriors and magicians of role-playing games, Madiba said he wanted to create a world where “Africa was on top.”

Other Africa studios are developing video games. In Nigeria, Maliyo develops smart phone games with African stories. In Kenya, Leti Arts creates puzzle games with local narratives.

Game captures international attention

But Aurion has captured much wider attention, enough that the U.S. State Department invited Madiba to participate in the 2016 Mandela Washington Fellowship Program, which is part of the Young African Leaders Initiative launched by President Obama.

In addition to being a Kickstarter Staff Pick and being featured in The Wall Street Journal, the game is receiving very good reviews, complimenting both the design and the storytelling.

It is available only for PC but Madiba hopes to develop it and other games with animation for mobile platforms as well. With low labor costs in Cameroon, he believes he can create a profitable business creating games that also tell the African story.

He hopes the game will help foster more diversity in games and create a better understanding of Africa. “Being African isn’t based on your color … It’s how you see the world and what you want to share.”

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Tanzania’s energy regulator raises retail fuel prices, citing costly crude

3 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

DAR ES SALAAM (Reuters) – Tanzania’s energy regulator raised maximum retail prices on fuel on Friday, citing higher international crude oil and refined product prices, a move expected to exert upward pressure on inflation.

Fuel prices have a big effect on the inflation rate in the east African country, which slowed to 5.1 percent year-on-year in April from 5.4 percent the previous month.

The Energy and Water Utilities Regulatory Authority (EWURA) raised the retail price of petrol by 4.49 percent and the price of diesel by 1.95 percent.

Maximum kerosene prices were raised 1.84 percent in the latest monthly price caps, which take immediate effect.

“To a large extent, increases in wholesale and retail local petroleum products prices have been caused by the continued increase of petroleum products prices in the world market,” EWURA said.

The regulator increased the price of petrol in the commercial capital Dar es Salaam by 80 shillings ($0.0366) a litre to 1,865 shillings, and the price of diesel in the capital by 31 shillings to 1,633 shillings.

Kerosene prices in the commercial capital rose 29 shillings to 1,607 shillings per litre.

 

($1 = 2,187.0000 Tanzanian shillings)

 

(Reporting by Fumbuka Ng’wanakilala; editing by Elias Biryabarema and Adrian Croft)

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Zambia shortlists bidders to build two large-scale solar plants

2 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LUSAKA (Reuters) – Zambia has shortlisted bidders to build two large-scale 50 megawatt (MW) solar power generation plants as the nation battles a power deficit which threatens industrial output.

Zambia’s power shortfall has risen to 1,000 MW from 700 MW in November due to lower hydro generation as water levels have dropped because of drought.

NEON S.A.S./First Solar Inc and Enel Green Power SpA are front-runners for the two projects, Zambia’s Industrial Development Corporation said in statement.

The two bidders put their tariffs at 6.02 cents per kilowatt hour (kWh) and 7.84 cents per kWh, respectively, and the proposed tariffs would remain fixed for 25 years, the statement said.

“The two provisional winning tariffs are both well below those typically offered under unsolicited proposals from solar developers in Zambia or elsewhere in Africa,” it said.

The two projects would be the first large-scale solar Independent Power Producers (IPPs) in Zambia developed with support from the World Bank, which acted as the lead transaction advisor.

 

(Reporting by Chris Mfula)

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IMF team in Angola for loan talks, economy diversification on agenda

2 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LUANDA (Reuters) – A team from the International Monetary Fund is visiting Angola to negotiate a loan facility after lower oil prices hammered the finances of Africa’s second largest crude exporter, the Ministry of Finance said on Wednesday.

The ministry said the IMF team will be in Angola from June 1 to June 14 and would discuss options on how to diversify the economy and reduce the dependence on the oil sector.

“The initial negotiations focused on recent economic developments, fiscal, monetary and exchange rate policy in the country, as well as the evaluation of the reforms that the government has been implementing,” the ministry said in a statement.

Angola said in April that it would begin loan negotiations with the IMF on a three-year loan facility.

Angola’s economy grew rapidly after a 27-year civil war ended in 2002, peaking at growth of 12 percent three years ago, but a sharp drop in oil prices has sapped dollar inflows, dented the kwanza and prompted heavy government borrowing.

Oil output represents 40 percent of Angola’s gross domestic product and more than 95 percent of foreign exchange revenue.

 

(Reporting by Herculano Coroado; Writing by Olivia Kumwenda-Mtambo; Editing by Alison Williams)

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