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Nigeria’s Dangote shifts focus from cement to oil and gas

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

LAGOS (Reuters) – Africa’s richest man, Aliko Dangote, plans to launch Nigeria’s first private crude oil refinery by 2019 while almost doubling his cement production on the continent by adding plants in eight countries as he shrugs off a regional economic downturn.

Dangote told Reuters the $12 billion refinery would have a capacity of 650,000 barrels a day, cornering the market in Africa’s most populous country, where fuel shortages are a perennial problem.

Until recently, Nigeria was Africa’s biggest crude oil producer but it imports 80 percent of its fuel because poor maintenance means its four refineries never reach full output. Its current daily consumption is 260,000 barrels, according to the International Energy Agency.

A slump in commodity prices has hammered Nigeria’s economy – along with many others on the continent – and raised the cost of borrowing but Dangote, whose business empire stretches from cement to flour and pasta, is pushing hard into oil and gas.

“It will be ready in the first quarter of 2019,” the billionaire founder of Dangote Cement said of the refinery. “Mechanical completion will be end of 2018 but we will start producing in 2019.”

Dangote said the plant, which will include a $2 billion fertilizer unit, was being funded through “loans, export credit agencies and our own equity”.

Some $3.25 billion had come from local and foreign banks, while the central bank had also chipped in. The IFC, the private sector arm of the World Bank, has lent $150 million.

Dangote also has plans for a gas pipeline through West Africa. Nigeria has the world’s ninth largest proven gas reserves, at 187 trillion cubic feet (tcf), but loses half of it to flaring and re-injection.

Despite the new focus on oil and gas, the business magnate said he planned to build cement plants in Cameroon, Ethiopia, Kenya, Mali, Niger, Nigeria, Senegal and Zambia by 2018. Another plant will open in Congo Republic by September, he added.

A cement plant in Ivory Coast would triple output to 3 million tonnes, up from an initial target of 1 million, he said, while two new plants in Nigeria would add 6 million tonnes annually.

“As at now, what we have in operation is almost about 45 million tonnes, so we have just another 40 million tonnes to go,” he said, affirming an Africa-wide production target of 85 million tonnes a year by 2018.

 

FX CRISIS

The collapse in oil prices has hit Nigerian companies hard, with many unable to access dollars due to central bank foreign exchange restrictions imposed to prop up the naira.

The worst-affected have gone to the wall or shed large numbers of staff, but a study by Reuters of an 11-week period in March to May showed that Dangote firms managed to secure a healthy share of dollars at the cheap official rate. [nL4N19E3JX]

Dangote said the $161 million bought during that period from the central bank merely reflected the size of his business and did not represent preferential treatment.

“We have been badly affected like any other company,” he said, arguing that operational costs totalled $100 million each month due to recurring expenses such as the purchase of parts for cement production and running a fleet of 9,000 trucks.

“When you are talking about 20 billion dollars worth of projects, what is 161 million? One-hundred-and-sixty-one million dollars is my six weeks’ need,” he said.

Dangote’s sugar refinery in Nigeria had reduced capacity by 15 percent as a result of the dollar crisis. “We ended up owing a lot of dollars,” he said.

This week, the central bank removed the peg that has held the naira at the official rate of 197 for the last 16 months, leading to a 30 percent devaluation as the currency traded freely on the interbank market.

Dangote said the decline had pushed up costs. [nL8N19F31Y]

“This devaluation alone, we have lost over 50 billion naira ($176 million),” he said.

“The gas, which is our main source of power, is priced in dollars. If there is 40 percent devaluation, your price will go up by 40 percent. Every single aspect of the production will go up by that percentage,” he said.

Dangote also said he was eyeing a listing on the London stock exchange “within the next year or two”.

($1 = 284.1500 naira)

 

(By Alexis Akwagyiram. Editing by Ulf Laessing and Ed Cropley)

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Morocco enters free trade pact with China

24 June 2016 Comments (0) Business, Featured, Middle East

morocco china trade

The north African nation seeks to diversify its trading partners through agreements with the Asian giant as well as India and Brazil.

Morocco has signed a free-trade agreement with China, the North African nation’s largest trading partner in Asia.

While the overall effect on the Moroccan economy is under debate, experts say the agreement will create more purchasing power for Moroccans, who will have access to Chinese goods that are typically less expensive than those produced in country or elsewhere.

The move underscores China’s growing role in the economy of the continent as well as Morocco’s determination to diversify its trading partners. Morocco has also entered trade agreements with Russia and India and an agreement with Brazil is under negotiation.

China is Morocco’s fourth largest trading partner after Spain, France, and the United States. Morocco is China’s seventh largest trading partner in Africa. While trade between Morocco and China has grown in recent years, it is still dwarfed by Chinese trade with neighboring Algeria. Trade between China and Algeria reached $8.6 billion in 2013 compared to $2.3 billion in trade with Morocco.

Experts debate impact

Analysts say the new agreements could have mixed results.

Moroccan textile factory

Moroccan textile factory

On the plus side, competition from Chinese goods could force Moroccan industries to better serve consumers in their country and Moroccan businesses will gain greater access to one of the largest markets in the world.

At the same time, they say, more than half of Moroccan exports are minerals, fertilizers and metals produced by large industries while small businesses struggle to compete.

Some argue that the opening of trade will cost jobs in Morocco, but others note that Moroccan and Chinese workers seldom compete for the same jobs. China’s economy is based on heavy and light industry, while agriculture, food processing and precision manufacturing dominate Morocco’s. The two countries do have some direct competition in textiles and leather.

The agreement will create more wealth in Morocco. With access to cheaper goods, even poor Moroccans will gain spending power.

Economic progress

With a gross domestic product of $252 billion and a population of about 33 million people, Morocco has made significant progress in integrating its economy into the global market through efforts including streamlined procedures for operating a business and launching a nascent aeronautics industry, according to the Heritage Foundation.

After a strong performance in 2015, with growth in the gross domestic product of 4.4%, the Moroccan economy has slowed this year, according to the World Bank. Drought has reduced cereal production, and GDP growth is expected to be less than 2% in 2016.

While Morocco has been a U.S. trading partner, as well as a key ally in the war on Islamist terrorism, the nation in recent years has sought to expand its trading partnerships, notably with members of the BRICS coalition of emerging economies that seeks to break Western domination of the global economy.

BRICS is made up of the emerging markets of Brazil, Russia, India, China and South Africa.

Agreements with India, Russia

In October, Morocco and India signed agreements designed to encourage more trade between the two nations. Morocco’s major exports to India are rock phosphates and phosphoric acid.

In November, Morocco announced a free trade agreement with Russia. Morocco is Russia’s main trade partner on the continent and its exports include citrus fruit, vegetables and frozen sardines.

In June, Moroccan representatives met with trade officials of Brazil to discuss a possible free trade agreement. Brazil is another importer of Moroccan phosphates and its derivatives.

Chinese influence grows

Meanwhile, China is a major trading partner with other African nations including South Africa ($20 billion), Nigeria ($15 billion) and Angola ($36 billion).

China in recent years has been developing relationships with many African countries through investment, aid and trade relationships, driven largely by China’s energy needs.

Morocco, a net oil importer with strong ties to the United States and Europe, has not been of great interest to China until recently. However, Morocco has sought allies in its territorial dispute with the separatist Polisario Front in the Western Sahara.

Given China’s strong trade ties to Algeria, it seems unlikely, however that the Asian nation would support Morocco in that dispute.

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Zimbabwe to import 250,000 tonnes of maize from Mexico

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

HARARE (Reuters) – Drought-hit Zimbabwean will import more than 250,000 tonnes of maize from Mexico to fill the shortfall caused by the severe drought sweeping through the southern Africa, the agriculture minister said on Thursday.

Joseph Made said Zimbabwe would also import the staple crop from neighbours South Africa and Zambia, as well as from the Ukraine but did not give precise figures for these imports.

“We anticipate anyway upwards of 250,000 tonnes will be coming from Mexico. The other maize will obviously be coming from Zambia as well some from South Africa and Ukraine,” Made told reporters.

An El Nino-induced drought has hit southern Africa, slashing the output of the staple maize crop.

Zimbabwe’s government previously said the drought forced it to cut the 2015 growth forecast to 1.5 percent from 3.2 percent, with the 2016 output unlikely to be any better.

The U.N. World Food Programme said earlier in June that output in Zimbabwe would fall below 60 percent of the five-year average of between 700,000 and 1 million tonnes.

 

(Reporting by MacDonald Dzirutwe; Writing by Mfuneko Toyana; Editing by James Macharia)

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Tunisia struggles to attract foreign investment

23 June 2016 Comments (0) Business, Featured, Middle East

tunisia oil

Tunisia reports slowed growth as international companies show concern about the difficulty of extracting oil and phosphates as well as high taxes.

Growth of foreign investment in Tunisia has slowed amid concerns about a lack of government incentives and the difficulty of extracting the North African nation’s oil and phosphates.

Direct foreign investment in Tunisian industry amounted to $81 million in the first four months of 2016, an increase of less than 5% over the same period in 2015. A year earlier, direct foreign investment had doubled as the country adopted its first constitution and formed a government in the aftermath of Arab Spring.     

Tunisia lacks appeal to investors for a number of reasons, according to experts.

“Insecurity, high taxation and the difficulty of extraction of potential reserves are the main obstacles that prevent Tunisia from being attractive to foreign investors,” said Radhi Meddeb, chief executive officer of the engineering company Comete.

Tax policy cited

Only 15% of oil company executives believe Tunisian tax policy encourages investment, according to Global Petroleum Survey 2015.

Under the nation’s tax policy, the state gets 80%of the revenue on the sale of oil while the operating companies receive only 20%, even though they bear all of the costs with no help from the government.

Tunisia also has more limited reserves than other sources of oil and phosphates. The Global Petroleum survey estimated the country’s oil reserves amount to the equivalent of about 850 million barrels, compared to nearly 24 billion in Texas. Reserves of phosphates amount to 100 million tons, 20 times less than in Algeria.

While relatively stable compared to other nations that were part of Arab Spring, Tunisia is not immune to political and economic upheaval. For example, Gafsa Phosphate posted nearly $10 million in losses in 2014 amid recurring strikes by transport workers.

Production drops sharply

While 50 foreign companies were operating in the extraction industry in 2010, when the Arab Spring began, fewer than half that many operate in Tunisia today.

Nationally, phosphate production has dropped by nearly 60%, from 8.5 million tons in 2010 to 3.5 million tons. Oil production has fallen by half, from about 90,000 barrels a day in 2009 to 45,000 this year, according to Trading Economics.

On the plus side, Tunisia has announced it will join the Initiative for Transparency in the Extractive Industries, a global standard that promotes accountability and fights corruption in the use of revenues from extracted resources.

Tunisia first applied to join the initiative in 2012, but political instability prevented its membership, according to Kais Mejri, head of governance at the Ministry of Industry.

Tunisia believes that the initiative will make the nation more attractive to foreign investors compared to rivals who are not part of the initiative. “We hope to return next year to the same (foreign investment) rates as before 2011,” said Ridha Bouzaouada, Tunisia’s Director General for Industry.

Part of larger, regional struggle

Tunisia is not alone in its economic challenges.

More than five years of turmoil across the region has created a negative economic outlook, according to Hamdi Tabbaa, president of the Arab Businessmen Association.

Tabbaa estimated regional economies have lost about $1.2 billion in the past five years as Syria, Iraq, Yemen, Libya, Egypt, Lebanon and Tunisia saw an average decrease of 35% in their gross domestic product.

Direct foreign investment in the region was also dropping. It declined from $48 billion in 2014 to $44 billion last year, well under half of the record high of $96 billion in 2008, according to the Arab Investment and Export Credit Guarantee Corporation.

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South Africa’s Eskom raises wage offer to union to 7%: NUM

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

JOHANNESBURG (Reuters) – South African power utility Eskom has raised its wage offer to 7 percent from 5.75 in negotiations with workers, the National Union of Mineworkers (NUM) spokesman said on Wednesday.

“NUM is going to seek a mandate from its members about Eskom’s latest offer, then we will respond to the management,” Livhuwani Mammburu said. The offer was still below NUM’s demand of a 15 percent increase for the least-paid workers.

The utility employs over 42,000 people with NUM representing more than 14,000 of workers.

 

(Reporting by Tanisha Heiberg; Editing by James Macharia)

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Investors cheer Nigeria currency float but won’t rush back yet

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

LONDON (Reuters) – Nigeria’s swift one-step move to a floating currency has been welcomed by investors but most nonetheless will stay away until Africa’s biggest economy shows signs of recovering from damage inflicted by the 16-month old exchange rate peg.

Nigeria this week finally ditched the peg that had throttled foreign exchange markets, led to widespread capital flight and caused its first quarterly economic contraction since the 1990s.

Investors, local businesses and international lenders had called for a devaluation for months as the government burned through hard currency reserves to preserve the naira after a steep oil price tumble tore apart its finances.

But while investors welcomed the float as the right first step, most plan to watch Nigeria from the sidelines anticipating more pain in store.

“It is positive, it is a more credible and flexible exchange rate regime in the long-run, you will see an external rebalancing of the economy, a fiscal adjustment and so on,” said Jonas David, emerging market specialist at UBS Wealth Management in Zurich.

“But in the near term, things will get worse before they get better.”

A slide into recession after the economy shrank in the first quarter of the year and a fresh spike in inflation are among issues investors will want to wait out, said David, together with confirmation that the new regime is functioning properly.

Once that happens, focus will shift to fundamentals such as returning the economy to growth – key for a country of 180 million where some 46 percent live in poverty.

Inflation too is running at the highest in more than six years – it hit 15.6 percent in May – already above the central bank’s 12 percent interest rate.

The currency devaluation is likely to push inflation north of 20 percent in the second half of the year, meaning authorities will need to ramp up interest rates if they want to lure back foreign money to bond markets.

“Right now you have negative real interest rates, so investors will not be enamoured with buying Nigerian bonds given where inflation is or where it is headed,” said Kevin Daly at Aberdeen Asset Management. “You need (a yield) somewhere between 15-20 percent to make this attractive.”

 

TUMBLING AND SOARING

Foreigners held $5.4 billion of Nigerian bonds in September 2013 but dumped most of them after the country was ejected last year from JPMorgan’s GBI-EM index – the most widely used emerging debt benchmark.

A country cut from the index needs to wait at least 12 months before re-inclusion.

But the bond market’s size, liquidity and turnover all made it attractive to foreign investors, said Samir Gadio, Head of Africa Strategy FICC Research at Standard Chartered Bank, noting that Lagos’ $150 million daily turnover was next only to South Africa’s on the continent.

Nigeria’s bourse has avoided the same fate, as index provider MSCI has retained it in its frontier equity indexes with a sizeable 12.4 percent weight. But local stock exchange data shows foreigners’ share dealings are down 66 percent from a year earlier.

While the market has surged about 8 percent this month in anticipation of foreigners’ return, fund managers, eyeing an ominous combination of rampant inflation and slowing growth, may not rush back.

Africa’s biggest oil exporter saw its economy shrink by 0.36 percent – its worst performance in a quarter of a century – and economists predict the contraction deepened in the second quarter due to fuel and FX shortages.

“It will be at least 12 months before we see any green shoots,” said Yvonne Mhango, Sub-Saharan Africa Economist at Renaissance Capital in Johannesburg. “The pain has to cut in full through the economy.”

An average naira rate of 270 per dollar this year implies a fall in Nigeria’s dollar GDP to $400 billion from $481 billion in 2015, Renaissance Capital estimates.

All this is set to hit the local population and firms hard, but foreign companies operating in Nigeria have also suffered. Brewer Heineken for instance reported that consumers had been shifting to cheaper brands.

“(Naira devaluation) will lead to a consumer recession, a collapse in profits in companies,” said Robert Marshall-Lee, investment director at Newton Investment Management.

While Marshall-Lee predicts an “ugly market” for the next couple of years, he says stronger companies such as Guinness Nigeria, Nigerian Breweries or lenders Zenith Bank and Guaranty Trust Bank will probably weather the storm.

“When we see the market pricing the new reality and the stocks de-rate to reflect the new profit base, we will let that shake out happen. It might well over-correct which will give us an opportunity to buy.”

 

(By Karin Strohecker. Additional reporting by Sujata Rao in London and Chijioke Ohuocha in Lagos)

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World Bank program puts Zambia on path to solar energy

22 June 2016 Comments (2) Africa, Business, Featured

solar farm zambia

The African nation will develop two solar farms that will produce more than 70 megawatts.

With an assist from the World Bank, Zambia will build two solar power projects that will provide the cheapest electricity on the continent.

First Solar Inc., the largest panel producer in the United States, along with the French company Neoen, together will build a 45-megawatt plant that will produce electricity that will sell for just over six cents per kilowatt-hour. Enel, an Italian company, will build a 28-megawatt plant that will sell power for just under eight cents per kilowatt-hour.

The two solar farms will be built near a substation that sends power to Zambia’s capital, Lusaka.

The companies are the first winners of an auction program the World Bank launched to encourage wider use of renewable energy in developing countries.

Program reduces costs, risk

The Scaling Solar program, World Bank, International Finance Corp. and Multilateral Investment Guarantee Agency pooled resources to offer financing, insurance and advice to potential solar developers. This reduces their risk and helps cut costs to build and launch projects, in hopes of attracting large developers capable of building large-scale solar farms to the continent.

The World Bank estimates that less than a quarter of the population of sub-Saharan Africa has access to electrical power. Some African countries, including Zambia, rely heavily on hydropower and have seen energy shortages and outages in recent droughts. Zambia expects to auction another 200 megawatts of solar within a year.

Solar energy development is an important piece of the continent’s plans to help fight global climate change, as approved at COP21 in Paris last year.

Senegal, Madagascar participate

Madagascar and Senegal are also participating in the Scaling Solar project and the World Bank expects to add a fourth African country later this year.

The goal is to encourage development of 850 megawatts of capacity in Zambia, Madagascar and Senegal, which would require an investment of about $1 billion.

The program could be adopted in Asia as well.

“It’s not designed for Africa” alone, said Jamie Fergusson, global lead for renewable energy at the IFC, told Bloomberg. “It’s designed for countries with limited independent power producing experience where the power buyer is a publicly-owned utility.”

Competitive auctions

Scaling Solar uses competitive auctions to award development rights and offers the endorsement of the World Bank. This can allay concerns of international banks about political risk. Using standard contracts, it also speeds development significantly.

More than 90% of Zambia’s generating capacity comes from hydropower.

Drought has brought record-low water levels at the Kariba Dam on the Zambia-Zimbabwe border, forcing significant power cutbacks and rationing.

The reservoir has been at 12%capacity this year and dam authorities cut hydropower production to 25% of capacity in January. A year earlier, the dam, which is fed by the Zambezi River, was at more than 50% capacity.

Africa turns to renewables

With renewable energy a priority on Africa’s climate change agenda, solar developments are becoming more common on the continent.

Morocco this year turned on the first phase of what will be a 580-megawatt farm that will be the world’s largest and serve more than one million people when it is completed in 2018.

Noor 1, the first section located near Ouarzazate, currently produces 160 megawatts of power.

Morocco, which imports more than 90% of its energy, wants to generate 40% of its energy from renewable sources by 2020, with a third of that total coming from solar, wind and hydropower each.

In South Africa, George Airport will use electricity from a 750-kilowatt solar project. Projects that will provide hundreds of megawatts are underway in the nation, where clean energy investment rose to $4.5 billion last year.

Entrepreneurs boost small efforts

Smaller efforts are also taking shape as “solarpreneurs” enter the market.

In Ghana, a local company named Volta builds small solar projects for hospitals, health clinics and schools and lets them pay over time. According to the company’s founder, Mahama Nyankmawu, a 45% reduction in energy costs puts repayment well within reach for his customers.

Another company, Off-Grid Electric, said it is installing more than 10,000 solar units a month in Rwanda and Tanzania. The company recently raised $70 million in investment to expand its operations.

As interest in solar grows on the continent, the World Bank’s Scaling Solar project should help quicken the pace of development.

Antonio Cammisecra, head of business development at Enel in Rome, said the World Bank program for Zambia “accelerated our entry by as much as a couple of years.”

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South Africa’s rand steady, caution prevails ahead of British referendum

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

JOHANNESBURG (Reuters) – South Africa’s rand pulled back from seven week highs against the dollar on Wednesday, with traders and analysts expecting caution to prevail on the eve of a British referendum on whether to remain in the European Union.

Domestic economic headlines have taken a backseat in moving the currency this week, although inflation data due out at 0800 GMT could boost it slightly if higher than expected, raising the prospect of higher interest rates this year.

At 0653 GMT the rand traded at 14.7290 to the dollar, not far off its previous close at 14.7350.

It was however down about 10 cents from Tuesday’s high of 14.6225, the rand’s strongest level since May 4 which came on the back of a rise in risk appetite as investors bet on Britain staying in the EU after Thursday’s vote.

“Optimism in financial markets ahead of the UK referendum has tempered ahead of the vote tomorrow,” Standard Bank said in a note.

Government bonds edged higher in early trade, with the yield for debt due in 2026 dipping 2 basis points to 8.97 percent.

The stock market’s Top-40 futures index was up 0.26 percent, signalling a slightly firmer start for the bourse at 0700 GMT.

 

(Reporting by Stella Mapenzauswa; Editing by Tiisetso Motsoeneng)

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Nigeria stocks near 8-month high on investor interest after FX float

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

LAGOS (Reuters) – Nigerian stocks ended near an 8-month high on Tuesday as investors renewed interest in shares after the central bank floated the naira to lift currency curbs viewed as harming investment and helping cause the economy to contract.

The main share index rose 2.27 percent to 29,422 points, a level last seen on October 2015.

Investors snapped up shares across banks, and consumer goods, hoping that a “freely” traded interbank forex market will help foreign buyers return to stocks after Nigeria ended an currency peg, which caused them to flee.

 

(Reporting by Chijioke Ohuocha)

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Africa’s crippling brain drain

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

africa brain drain

Millions of highly educated African professionals move to other countries in search of greater opportunities, undermining health care, science and development.

With thousands of well-educated Africans emigrating each year, brain drain is stunting the continent’s growth, especially in medicine and science.

African migrants totaled more than 30 million by 2010 – about 3 percent of the total population of the continent – more than doubling over the previous 20 years, according to a report by the World Bank. About half migrated to other countries within Africa, while others went abroad to the Middle East, Europe and the United States. Many are fleeing conflict in their home countries or seeking better economic opportunities in more advanced African economies. However, many of those fleeing are among Africa’s best educated, and they are seeking to work abroad.

“You cannot eat patriotism”


Gichure wa Kanyugo, a Kenyan-born psychiatrist who works in Boston, said domestic conditions such as poverty, conflict, unemployment and poor health care discourage Africans from returning to their homelands.

“We would like to return home, but domestic conditions don’t allow it. You cannot eat patriotism, can you?” Kanyugo said.

The Economic Commission for Africa estimated that 20,000 educated professionals have left Africa every year since 1990 and the United Nations declared that the outflow of African professionals is “one of the greatest obstacles to Africa’s development.”

The problem is especially acute in the fields of health and science.

In sub-Saharan Africa, 38 of 47 nations fall short of the minimum standard of 20 doctors per 100,000 people set by the World Health Organization.

Shortages of qualified medical personnel were evident during the recent Ebola crisis. In 2014, for example, Liberian officials reported that there were only 170 doctors in the country. Liberia had nearly eight doctors per 100,000 people in 1973 but the rate dropped to just 1.4 by 2008.

Limited opportunities

Meanwhile, experts say most engineers and scientists who train in Africa choose to work abroad because opportunities are limited in Africa, which provides only one percent of the world’s scientific research.

Thierry Zomahoun, chairman of the Next Einstein Forum, said Africa loses $4 billion a year because jobs in science, technology, engineering and math must be outsourced to foreign professionals.

Zomahoun, whose organization staged Africa’s first international science and technology conference in Dakar in 2016, said the solution is greater investment in science and research on the continent to make scientists who have remained on the continent more visible.

The International Development Research Center said brain drain also has financial and societal costs. This is because African countries lose significant amounts of their investment in higher education as graduates leave or decide not to return home when they finish studies abroad.

According to the World Bank, Egypt, Morocco, Burkina Faso, Algeria and Zimbabwe were the top five African emigration countries in 2010.

Emigration rates are among the highest in countries that have gone through armed conflicts, such as Eritrea and Liberia, and in countries with small populations such as Cape Verde and Lesotho.

The most common destinations are France, the United States, Ivory Coast, Saudi Arabia and South Africa.

In the United States, African immigrants account for 4 percent of the country’s foreign-born population. Nigerian, Ethiopian, Egyptian, and Ghanaian immigrants account for 4 in 10 of the African born population in the U.S.

A slowing drain?

Fortunately, there are signs the drain may be slowing. Adcorp, a South African human resources management company, found that more than 350,000 highly skilled South Africans returned from other countries in the six years following the 2008 financial crisis.

One expert said governments must put in place policies that encourage African expatriates to return.

But African businesses also must create more opportunities, said Menghis Bairu, CEO of Serenus Biotherapeutics, which develops medical therapies for sub-Saharan Africa.

Until Africa can more effectively retain professionals or persuade those who have left to return, “Virtual participation” may help ease the problem, engaging expatriate professionals to coach, mentor and help plan advancements, according to the International Development Research Center.

“Virtual participation … shows promise as a means to engage the African Diaspora in development efforts,” the center said.

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