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Renewable Africa: The future is clean

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

Renewable Energy

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

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

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

Fierce competition

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

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

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

Energy Africa

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

African Energy Windtower

African Energy Windtower

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

The path ahead

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

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

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

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

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

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

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South Africa’s net reserves rise to $40.826 billion in June

7 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s net gold and foreign exchange reserves rose to $40.826 billion in June from $40.48 billion in May, Reserve Bank data showed on Thursday.

Gross reserves rose to $46.366 billion from $46.081 billion previously, the central bank said.

The forward position, which represents the central bank’s unsettled or swap transactions, edged down to $1.616 billion in June from $1.64 billion in May.

 

(Reporting by Olivia Kumwenda-Mtambo; Editing by Kevin Liffey)

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South Africa should not underestimate ratings downgrades risk

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

JOHANNESBURG (Reuters) – South Africa should not underestimate the risk of credit rating downgrades this year if the ailing economy does not improve, Central Bank Deputy Governor Daniel Mminele said on Wednesday.

Pretoria dodged ratings downgrades from Moody’s, S&P Global Ratings and Fitch earlier this year, giving policymakers time to act to strengthen the economy of Africa’s most industrialised country before the next round of reviews due by December.

Analysts have said South Africa’s economy faces hurdles and that the threat of “junk” status is looming.

“During May and June, South Africa received confirmations of unchanged credit ratings from all three major credit rating agencies,” Mminele said in a speech posted on the bank’s website.

“These confirmations, however, came with a very clear message: further improvements in the macroeconomic fundamentals are required.”

He said this suggested that “in the absence of demonstrable progress being made as part of a concerted effort involving all social partners, the risk of downgrades during the next reviews towards the end of this year should not be underestimated.”

The bank expects South Africa’s economy to grow by 0.6 percent this year and a modest recovery is seen over the next two years, but Mminele said the assumptions underlying the estimate had not factored in any possible spillover effects from Britain’s vote to leave the European Union.

“The UK’s present and future are now riddled with uncertainty, naturally accompanied by a flight to safety,” Mminele said.

“For South Africa, the implications through direct trade links are expected to be relatively minimal. In 2015, the UK accounted for only 4 percent of our total merchandise exports.”

Mminele, however, said financial linkages were far larger relative to the size of the South African economy.

For example, the value of South African assets owned by UK corporates and investment funds amounted to 46.5 percent of South Africa’s gross domestic product (GDP) at the end of 2014.

In turn, South African investors owned UK assets amounting to 33.2 percent of the African country’s GDP.

“In addition, both foreign direct investment and portfolio flows are also significant. This means that South Africa could very well be affected by the realization of tail risks emanating from asset liquidation by UK corporates and investment funds,” Mminele said.

 

(Reporting by Olivia Kumwenda-Mtambo; Editing by James Macharia)

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WeFarm combines cutting edge ideas with simple technology

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

wefarm

WeFarm aims to help farmers around the world support each other through simple SMS connections.

WeFarm was launched in 2014, as a means of giving farmers – in very different areas – access to advice and information from other people in the trade. The idea was to connect people who had no internet access, in order to give them the opportunity to learn from each other, and help share vital information. The company’s slogan is: “The internet for people without the internet”.

Connecting the unconnected

With 500 million small-scale farmers across the world, offering a wealth of experiences and methods to draw on, peer-to-peer networking for this essential group of workers could be huge. CEO and founder Kenny Ewan spent 7 years working with many remote agricultural workers in Peru before he devised the idea.

Ewan explained what inspired his idea: “I was always very impressed with the unique and low-cost solutions farmers would come up with as solutions to their problems, (but) farmers living less than 20 miles away wouldn’t have any way to hear about these local innovations because very few people in rural Latin America and Africa have internet access.”

From here the WeFarm idea was born. Ewan approached his co-worker, Claire Rhodes, and the two quickly drafted out their plans. After winning grants from the Nominet Trust and the Knight Foundation, WeFarm began to pilot its service in Kenya and Peru.

WeFarm CEO and founder Kenny Ewan

Strength in diversity

While it might initially seem unusual to try and connect such different markets as Kenya and Peru, Ewan explains that a wide range of experiences is a strength for the system. Citing a recent example of a Kenyan farmer who wanted information on keeping rabbits, Ewan says, “He was able to ask questions and get information from someone who’d been keeping rabbits for 20 or 30 years on their farm. He was a farmer in Kenya. His question got answered in Peru.”

Once a farmer has signed up to the service, they simply text a question to the local WeFarm number, and WeFarm’s online system scans the question for keywords, before forwarding it to farmer profiles that seem relevant. A body of translators ensures that questions can be asked and answered in English, French, Spanish, and Swahili.

WeFarm had 33,000 Kenyan farmers signed up inside 10 months of launching, and within its first month in Uganda there were 5,000 Ugandan members.

Ewan hopes that by sending questions to both local and remote members, all those using the service can benefit greatly. “Farmers,” he noted, “can obtain both instant, relevant local knowledge as well as new ideas and insights from further afield.”

Growth for all

With over 5.2 million messages having already been sent, and with an average of 65% of all users contributing their own knowledge to the service, WeFarm is growing quickly.

The service is on the verge of launching in Tanzania and The Ivory Coast, but it also has plans far beyond these impending introductions.

There are planned moves into the markets of Rwanda, Ethiopia, India, and Brazil, with Ewan and his team currently raising $2.9 million in funding to drive this expansion.

As the database of information increases, so does the opportunity for the company to expand its positive influence. The beneficial information, that farmers can find ranges from more in-depth reports on market prices and products, to shared tips about adapting practices to climate change.

As the company grows, so does the proportion of farmers in the developing world who can grow their own business. Moreover, as everything at the user level requires no more than a basic cell phone, the penetration of the project far outstrips internet access.

Ewan says that some people were skeptical about farmers helping each other for no fee, but on the contrary their users embrace the chance to share their views. Ewan said, “It’s not just about the exchange of information; it’s also about empowering people to have their voice heard.”

As WeFarm continues to grow, a lot more of the farming world’s voices should soon be heard.

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Tinkering with South African fiscal policy won’t boost growth

5 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s economy is not growing fast enough to create jobs, but tax cuts or increases in public spending are unlikely to stimulate growth, a senior Treasury official said on Tuesday.

South Africa’s unemployment currently hovers close to 27 percent of the labour force, while data on Monday showed employment in the formal sector fell by 0.2 percent to 9.273 million people in the first quarter of the year.

The Treasury estimates that Africa’s most industrialised country could grow by 0.9 percent this year compared with 1.3 percent in 2015, while the central bank and the International Monetary Fund have forecast 2016 growth at 0.6 percent.

“It is unlikely that growth … will come from tinkering or manipulation of macroeconomic policy variables …, in other words reducing taxes or increasing expenditure,” Director General Lungisa Fuzile told a business conference organised by the Gordon Institute of Business Science.

Finance Minister Pravin Gordhan in February unveiled a package of spending cuts, civil service job freezes and moderate tax hikes, partly to avoid credit rating downgrades.

Fuzile said reforms were underway at more than 300 publicly-owned companies which the Treasury has pledged to wean off state bailouts, though he did not elaborate.

Many of these firms are a drain on the state budget and have been flagged by all three major ratings agencies as a risk to South Africa’s investment grade status.

 

ELECTIONS LOOM

Fuzile said he was concerned about the quality of governance among those firms, adding that the Treasury was close to finalising proposals for merging two state-owned airlines, South African Airways (SAA) and SA Express.

However, political analysts say the reform of state firms could suffer amid preparations for local government polls in August and factional contests in the ruling African National Congress which have led to violence and deaths across the country.

“Under such circumstances, you are not going to have a sober debate in cabinet about what to do to fix (the state firms). The calculus is not sound governance,” analyst Prince Mashele told Reuters on the sidelines of the business conference.

South Africa’s private sector contracted in June after expanding for the first time in a year in May as output fell and companies cut jobs, a survey showed on Tuesday, while another report pointed to waning consumer confidence.

 

(By Mfuneko Toyana. Editing by James Macharia and Gareth Jones)

 

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Nigerian militants say they blew up oil facilities near Warri

5 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Nigerian militant group the Niger Delta Avengers said on Tuesday it had blown up a Chevron well and oil pipelines near the city of Warri in the country’s southern oil hub.

The group, which says it wants a greater share of oil wealth to go the impoverished Niger Delta region, the source of most of the country’s crude, has pushed production to 30-year lows in the last few weeks through a spate of attacks.

It said it blew up a NPDC (Nigerian Petroleum Development Company) manifold, close to Banta, and two crude pipelines operated by the state oil company NNPC, adding that it also blew up “Chevron Well 10”, close to Otunana flow station. Chevron and NNPC were not immediately available to comment.

A remote manifold platform (RMP) is where small oil or gas pipelines converge before connecting to a larger storage hub.

The statement, carried on the group’s website, said the attacks happened shortly before midnight, but did not make clear whether the strikes were on Monday.

On Sunday the Avengers claimed responsibility for five attacks – the first such claim since June 16. Petroleum ministry sources said in late June a month-long truce had been agreed with militants, but the Avengers said they did not “remember” agreeing to a ceasefire.

 

(Reporting by Shalini Nagarajan in Bengaluru, and Alexis Akwgyiram in Lagos, editing by David Evans)

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After six months, Egypt finally settles wheat fungus row

5 July 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

ABU DHABI (Reuters) – Egypt’s agricultural quarantine authority settled a months-long dispute on Monday over wheat import specifications that have hampered the country’s massive state purchasing programme ahead of an anticipated new buying season.

Egyptian quarantine authorities’ earlier refusal to let in wheat infected with even the slightest amount of ergot, a fungus that can lead to hallucinations and irrational behaviour in large quantities but at trace levels is deemed harmless to humans, wreaked havoc in the market for supplying the world’s largest wheat buyer.

The quarantine authority said a new ministerial decree would allow it to accept imported wheat shipments containing up to 0.05 percent ergot, finally ending a long-standing zero tolerance policy that has puzzled global trade.

“A ministerial decision was taken and 0.05 percent ergot tolerance will now be endorsed,” Ibrahim Imbaby, head of the quarantine authority told Reuters by phone.

Imbaby did not give more details.

The decision comes a day after the country appointed a new head for its state wheat-importing body — one of the most influential positions in the global wheat market, ahead of the impending import season set to start this month.

The resolution to the ergot row also comes as Egypt’s domestic wheat purchases are being questioned and the earlier announced 5 million-tonne Egyptian wheat procurement figure for the season could be revised, leading to a greater import need.

The country is in the middle of a government-led recount of locally purchased wheat after the unusually high local procurement figure of 5 million tonnes, as opposed to around 3.5 million tonnes in earlier years, prompted allegations of fraud from industry officials, traders and lawmakers.

If the local purchase numbers were misrepresented Egypt might have to buy more foreign wheat to meet domestic demand while contending with a dollar shortage that has already sapped the country’s ability to import, making a resolution to the ergot squabble ever more pressing.

The quarantine’s zero tolerance policy was at odds with the more commonly accepted international standard of up to 0.05 percent already endorsed by the ministry of supplies and state grain buyer, the General Authority for Supply Commodities (GASC).

“The ministerial decree was issued after a committee in the import and export surveillance authority was formed and pressurised the agriculture ministry to issue a new decree,” one Cairo-based trader said.

The affair, which resulted in several shipments of wheat turned away at ports, a sharply lower participation at GASC tenders and higher wheat prices, was thought to be finally nearing a resolution when Prime Minister Sherif Ismail intervened in late June and said the country would adhere to the common 0.05 level.

His comments were expected to be followed by a decree changing the old regulations that governed agricultural quarantines and stipulated a zero tolerance policy.

But a decree failed to materialise until Monday’s decision and the agriculture ministry has told Reuters it had been hampered by a months-old judicial order from the prosecutor general that had banned all ergot from entering the country.

The order had followed the rejection of a French wheat shipment belonging to trading firm Bunge late last year. The firm subsequently filed a lawsuit contesting the decision.

Imbaby did not make clear how that legal hurdle had been overcome.

And after months of conflicting statements from various Egyptian agencies, some European traders remain skeptical.

“We are being cautious….they’ve changed their position so many times over ergot,” one European trader said.

 

(By Maha El Dahan. Additional reporting by Gus Trompiz in Paris; Editing by Veronica Brown and Greg Mahlich)

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Nigeria replaces Skye Bank bosses over capital failures

4 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Nigeria’s central bank has replaced the chairman and chief executive of Skye Bank after it failed to meet minimum capital ratios, its governor said on Monday.

The central bank said Skye Bank’s non-performing loan ratio has been above the regulatory limit for a while and it hadmet with Skye’s board to resolve the issue, governor Godwin Emefiele told a briefing.

Earlier, banking sources told Reuters that Skye’s chief executive Timothy Oguntayo had resigned before the central bank announcement. He was the head of Skye Bank when it bought nationalised lender Mainstreet Bank in 2014.

“The basic issue is capital adequacy and liquidity. From what we see, adequacy ratio in the bank has been weakening and we don’t want it to get to a point where depositors will be at risk,” Emefiele said.

Skye Bank is designated as one of Nigeria’s systemically important banks due to the size of total sector deposits it holds after the acquisition of Mainstreet Bank. This means it has to hold more capital.

Emefiele said the central bank had conducted a stress test and decided to replace the chairman, chief executive and all non-executive directors after they failed to recapitalise the bank.

He said Skye had been a net borrower from its rediscount window for “sometime.” The central bank also appointed Tokunbo Abiru from rival First Bank to head Skye Bank.

“(Skye) bank is not in distress and remains able to continue banking activity,” Emefiele said.

Nigeria’s central bank has powers to remove bank executives and used them during the 2008/2009 global financial crisis when it sacked nine CEOs at banks which were undercapitalised.

Last year, the regulator gave three commercial banks until June 2016 to recapitalise after they failed to hit a minimum capital adequacy rate of 10 percent.

Skye Bank has been in talks with shareholders and new investors to raise 30 billion naira ($150 million). It suspended plans for a rights issue last year due to weak market conditions.

Emefiele said the overall banking industry was sound, despite weaknesses in the economy but that none of Nigeria’s 21 commercial lenders were in distress.

Shares in Skye fell 9.5 percent.

 

(By Chijioke Ohuocha and Oludare Mayowa. Additional reporting by Alexis Akwagyiram; Editing by Louise Heavens and Jane Merriman)

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Ivorian cocoa arrivals down around 10 pct by July 3 vs last season

4 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABIDJAN (Reuters) – Cocoa arrivals at ports in top grower Ivory Coast reached around

1,412,000 tonnes by July 3 since the start of the season on October 1, 2015, exporters estimated on Monday, down from 1,575,000 tonnes in the same period the previous season.

Exporters estimated around 18,000 tonnes of beans were delivered to the West African state’s two ports of Abidjan and San Pedro between June 27 and July 3, down from 29,000 tonnes during the same period last year.

 

(Reporting by Ange Aboa; Editing by Matthew Mpoke Bigg and Louise Heavens)

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Gold eases off near 2-yr high, silver crosses $21/oz

4 July 2016 Comments (0) Asia, Business, Latest Updates from Reuters

BENGALURU (Reuters) – Gold eased off a near two-year high, while silver breached the $21 level for the first time since July 2014 in highly volatile trade on Monday, prompted by a burst of short-covering in China.

Spot gold rose about 1 percent at one point to touch a session best of $1,357.60 per ounce. This was close to the $1,358.20 level reached on June 24, the highest since March 2014, when global markets went into a tailspin in the wake of Britain’s vote to exit the European Union. Spot gold was up 0.3 percent at $1,346.60 an ounce as of 0418 GMT. U.S. gold was up 0.7 percent at $1,348.50. Silver soared 7 percent at one point to $21.107, the highest since July 2014, before retreating below $20.25 by 0415 GMT.

“There is a little bit of a two-way battle going on in silver with a number of players going short in China,” said an analyst with an international investment bank.

The Shanghai Exchange Futures went limit-up as onshore players have aggressively been covering their short positions in the last few days, especially on Monday, said the analyst.

“Once the onshore market went limit-up, the short-covering buying spilled over to the London market.”

Chinese commodities from nickel to cotton surged on Monday on hopes Beijing would unleash more stimulus to prop up a sluggish economy, brightening the outlook for raw material demand. MKS trader Sam Laughlin said in a note global uncertainty would likely continue to fuel the recent rally in precious metals, but warned that there could be sharp periods of volatility. “The metal (silver) continues to be buoyed by its unique position as both an industrial metal in risk-on conditions and a safe-haven asset in times of uncertainty,” Laughlin added. Spot gold is expected to break a resistance at $1,351 per ounce and rise more to the next resistance at $1,367, said Reuters technical analyst Wang Tao. Hedge funds and money managers raised their bullish positions in COMEX gold and silver contracts to record highs in the week to June 28. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.41 percent to 953.91 tonnes on Friday, the highest since July 2013. [GOL/ETF] The U.S. markets are closed on Monday for the Independence Day holiday.

 

(By Vijaykumar Vedala. Reporting by Vijaykumar Vedala in Bengaluru; Editing by Joseph Radford and Subhranshu Sahu)

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