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African Union launches electronic passport for the continent

11 October 2016 Comments (0) Africa, Featured, Trade

Seeking to boost trade, tourism and investment, the African Union has launched a common electronic passport that the organization hopes eventually will give holders visa-free access to all of the organization’s 54 member nations. The African passport initially is being made available to heads of state and diplomats. The goal is full use by all citizens by 2018, although because of complicated logistics that aim is far from guaranteed. The passport, launched in July at the 27 th African Union Summit in Rwanda, is part of the African Union’s Agenda 2063 plan to develop a more unified “One Africa” economy on the continent in order to boost development and growth. Officials say the common passport is aimed at facilitating free movement of people and goods around the continent as a way of fostering intra-African trade and development.

One step toward economic integration

The passport “is a steady step toward the objective of creating a prosperous and integrated Africa,” outgoing African Union chairman Nkosazana Dlamini-Zuma said at the launch. The African Development Bank has been a strong advocate for the common African passport, noting that cumbersome visa requirements in many countries limit intra-African tourism and make trade between African countries cumbersome and expensive. “African countries are closed off to one another, which makes travel within the continent difficult,’’ the development bank said, noting that the continent has some of the toughest visa restrictions in the world. Moreover, restrictions are particularly high from Africans traveling within the continent compared to European or North American visitors, the bank said, noting that business visas are more difficult to obtain than tourist visas. The cost of visas places a burden on citizens who would travel or do business across borders. According to the bank, Central Africa, the region with the highest use of traditional visas, is the least connected to other regions. At the same time, East Africa, with the highest number of visas available on arrival, is among the most open regions in the world.

Benefits in Rwanda cited

Rwanda, which allows entry visas for all African citizens who come to its borders, has seen a 24 percent increase in tourist frequentation from other countries on the continent since it loosened requirements in 2013. The African Development Bank estimated that easing visa requirements could generate an additional $200 billion in the tourism sector and create as many as 5 million new jobs. The bank also said visa restrictions limit the ability of businesses to attract and retain the best African talents, saying that the lack of mobility of professionals is impeding economic growth. Emerging fields such as banking, mining and information technology in particular require more flexibility to compete in the marketplace. A new Visa Openness Index developed by the bank in support of easing restrictions concluded difficulty for business travelers was underscored. According to the index report, more than half of the 55 countries ranked require visitors to obtain visas in advance. Only 20 percent do not require visas and only 15 percent offer visas on arrival. Moreover, many of Africa’s strategic hubs have more restrictive visa policies while smaller nations tend to be more open.

10 countries stand out for openness

The top 10 nations for openness posted an average score of 0.86 (out of 1) on the ADB index, twice the overall average. The top 10 countries are Rwanda, Seychelles, Mali, Cape Verde, Togo, Guinea-Bissau Mauritania, Mozambique, Uganda, and Mauritius. At the bottom of the rankings were Eritrea, Ethiopia, Sudan, Angola, Gabon, Libya, Egypt, Equatorial Guinea, São Tomé and Príncipe, and Western Sahara.

Access to biometric systems not assured

While the African Union wants full implementation of the new passport by 2018, the logistics of that timeline are daunting. Each country can decide when to begin accepting the new passport. But many nations do not have access to biometric systems that are required to access the electronic passports. Despite the challenges, advocates say the transition to a common passport is a vital part of the goal of “One Africa,” embodied in Agenda 2063. Visa “restrictions harm our integration efforts, negatively affecting tourism, investments and trade. A more relaxed visa landscape could help push our shared vision of one competitive African market,’’ said Moono Mupotola, manager of integration and trade at the African Development Bank. “To encourage intra-African trade, without a doubt, we need to work on visa openness.”

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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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Thato Kgatlhanye and her “upcycled” solar powered schoolbags

24 August 2016 Comments (0) Africa, Featured, Leaders

Thato Kgatlhanye

Thato Kgatlhanye is a bright South African startup entrepreneur who is using innovation to benefit lives of local youths.

Thato Kgatlhanye is another shining tech star to come out of South Africa in recent years. Her passion for social change and empowerment is reflected in her landmark product: the solar powered school bag.

At age 18, Kgatlhanye founded Rethaka, literally meaning “we are fellows.” She set out with no concrete business plan in mind, just the idea that she wanted to do something that impacted young people and benefited underprivileged communities. Less than two years later, Repurpose was born.

Combining tech innovation and social motivation

Kgatlhanye had noticed that many children in South Africa walked to school carrying their books, or using plastic carrier bags. She was concerned that they frequently journeyed along busy roads, often late at night. Her vision was to create a practical book bag for disadvantaged students that could be low-cost and environmentally friendly.

Kgatlhanye and her business partner Rea Ngwane founded Repurpose with a $50,000 seed. The two childhood friends generated the startup capital by winning hard fought business competitions, and attracting corporate grants. They produced a prototype in partnership with an industrial product designer, before launching their brand of “upcycled” school bags. The bags are made from hundreds of reclaimed plastic carrier bags. They contain a solar powered battery element designed to charge on the student’s walk to school, and then emit light for up to 12 hours. Not only are these bags strong, durable and waterproof but they also come in many bright and unique designs and are made from high visibility materials.

Utilizing waste materials

The bags were designed with three core concepts in mind, forming the cornerstones of Repurpose’s success.

The first is its recycling element, which helps to alleviate Africa’s plastic crisis by upcycling collected carrier bags into a useful end product. Repurpose sets up “PurposeTextile” Banks for locals to deposit used plastic bags, taking them out of the environment ready to be made into repurposed bags.

The second is the bags’ durability and practical nature. They are long lasting, waterproof and available in bright colors. They are also made out of a highly reflective material in order to be more visible to vehicles. Three children are needlessly killed every day on dangerous South African roads, often walking to and from school along roads not built for pedestrian travel.

The final element is the solar powered light. The solar panel charges on the student’s walk to school and then can be used as a lantern for up to 12 hours of light. Many children cannot study once it gets dark as their families’ cannot afford candles or kerosene. Furthermore, around 3 million people are killed globally each year from accidents and illnesses involving kerosene and other temporary light sources.

Repurpose bags

Upcycling, generous donors and low-income families

Repurpose seeks out “Giving Partners,” who are matched with low-income schools that pay for a consignment of bags. Although Rethaka is a for-profit, women-owned business, they profess to do “what is right, not what is easy,” and their ethos is focused on generating profits, jobs and empowerment in otherwise struggling communities.

A recent graduate in Brand Management from Vega University, Kgatlhanye is enjoying her business success at a very young age. Her company has now dispensed over 10,000 backpacks, with plans to roll out further development and promotion of her bags. Repurpose has significant potential for the rest of Africa. Kgatlhanye has expressed a desire to extend her project across the continent, where it can save lives, benefit the environment and benefit children on a far grander scale. They intend set up more workshops in other African countries over the next 5 years, creating jobs and extending their reach. They also want to partner with large organizations like UNICEF to distribute the bags on a larger scale to identified African communities.

But Kgatlhanye is setting herself even wider targets. After identifying a new market, her next project is a range of luxury bags to be sold in the western world. This will be on a one-for-one model, donating one backpack for each bag sold. At just 23 years old, she is part of a new generation of change makers in South Africa. These individuals are utilizing their business acumen, entrepreneurial ideas and commitment to social progress for the greater good.

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The 10 best African airlines

23 August 2016 Comments (1) Africa, Business, Featured

Kenya Airways

African airlines have worked to improve safety and reliability to obtain eight spots in the top 100 global airlines, according to rating agency Skytrax.

Skytrax has published its latest survey, with 8 African Airlines falling into the “Top 100” global airlines. This is progress in a continent hardly known for its aviation prowess. Although Africa is the second largest continent, with the second largest population, it only accounts for 3% of all air traffic. High poverty rates with poor infrastructure and investment has typically stifled Africa’s air industry. Dire safety records, exorbitant fuel taxes and uncooperative governments have also compounded the problems for those who want to travel around Africa and internationally.

Fortunately for frequent flyers, there is a growing market for air travel in Africa. This is driven in part by increased business, trade and tourism along with a rising number of business “hubs” driving a demand for affordable and reliable flights routes. Back in 2012, African air traffic only accounted for 1% of all air travel and only 5 African airlines made it into the top 100 list.

Skytrax Awards: the pinnacle of safety and excellence in aviation

The Skytrax awards are a global benchmark in quality and safety and are widely known as the “Passenger’s Choice Awards” due to their selection process. Consumers from across the globe take part in a satisfaction survey to determine the winners; no external sponsorship, payment or influence alters the results.

Clear winners of the Skytrax awards are the South African airlines. Heading up the country’s list is South African Airways, a consistently well-rated airline that flies to 38 destinations and is a premier international aviation leader. Mango also made the list at number eight, a subsidiary of South African Airlines and a low-budget alternative with well-rated services and safety records. Finishing off the South African contingent is Kulula at number seven, another “no-frills” airline, operated as a franchisee of British Airways. South Africa’s reputation for business and status as a regional trading hub, coupled with its higher than average economic statistics can account for its prominent position in Africa’s aviation industry.

Luxury islands and South Africa coming out on top

Kenya Airways upsets the status quo by winning Africa’s Leading Airline at the 2016 World Travel Awards. In doing so it unseated South Africa Airways as Africa’s best airline, an award they had taken home for 22 years in a row. They also won the “Best in Business Class” award, clinching both the overall and luxury travel recognition, something many airlines struggle to do. Kenya airways has recovered spectacularly from its problematic history. Dogged by accidents in the early 2000s, “The Pride of Africa” has made great safety improvements to become a world-class airline. Kenya Airways Marketing Director, Chris Diaz explained, “This is sign enough that we are putting the dark clouds behind us to cruise unimpeded as Africa’s most respected airline.”

Air Mauritius and Air Seychelles are beaten only by South African Airways on Skytrax’ list. Their prominence as travel leaders is unsurprising due to their luxury locations and high levels of international tourism which drives expectations and assures quality. Air Mauritius has code sharing agreements with Emirates and other world class airlines, which is a certain sign of excellence, due to Emirates’ notoriously high standards in partnerships. Air Seychelles boasts Etihad as a stakeholder and was recently awarded a 4 star rating at the Skytrax awards.

All-Boeing fleets and drastic turnarounds

Ethiopian airlines

Ethiopian airlines

Also highly rated was Ethiopia Airlines, coming in at number four on Skytrax’ list. The firm also won Best Airline in Economy award at the World Travel Awards 2016. Ethiopia Airlines is the flag carrier of Ethiopia and has a strong reputation for cargo travel as well as its popular passenger air travel. TAAG Angola Airlines successfully made 2016’s list, real progress after a 2007 European travel ban and subsequent re-haul of the entire fleet and board. Now, it is has a Boeing-only fleet and has agreements with Emirates and other top-class airlines.

The airlines rounding off the top 10 are Royal Air Maroc and Air Austral. Air Maroc is fully owned by the Moroccan government and has its headquarters in Casablanca. It was formed in 1953 and also operates an all-Boeing fleet; it has now become a formidable force in African air travel. Taking risks, they were the only airline to continue flying to Sierra Leone, Guinea and Liberia amid the Ebola outbreaks, becoming an essential part of the fight against the disease and supplying the region with resources and medical staff. The last airline is Reunion Island’s Air Austral who has a particularly young fleet for African aviation, with an average age of 5.2 years. The success of these airlines demonstrates that the industry has come a long way in recent years, drastically changing the perception of African air travel.

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Nana Boateng Osei and his sustainable vision for Ghana

22 August 2016 Comments (0) Africa, Featured, Leaders

Nana Boateng Osei

Nana Boateng Osei and his company Bôhten have created an innovative and sustainable product that is benefiting his home country of Ghana.

Nana Boateng Osei is the young man behind the stylish luxury eco-eyewear company Bôhten. He hails from a Ghanaian family that is deeply proud of its heritage. He has travelled the world, conceived various outlandish business ideas and even appeared on the Canadian version of Dragon’s Den. Today his company Bôhten is going from strength to strength, while also giving back to his home country, Ghana.

Travel, the Big Apple, education and Lilo

Osei’s early life certainly wasn’t dull. Due to his father’s job as a diplomat for the Foreign Ministry of Ghana, Osei and his siblings spent long periods of time in countries such as the U.K, the U.S, Yugoslavia and South Africa. His family eventually settled to live permanently in New York City. However, they held on tightly to their Ghanaian roots; Osei has said that at home his family would always speak Twi and eat traditional Ghanaian dishes. They became closely involved in the Bronx’s large Ghanaian community and retained strong links with family in their home nation.

In 2007, Osei moved to Canada to study Environmental Science at the University of Ottawa. It was while at University that he first began to create and pursue his own business ideas. In 2009, Osei opened a marketing firm Lilo Enterprises, which was designed to connect sustainable and environmental product manufacturers to consumers. Lilo foreshadowed the creation of Bôhten, highlighting the causes that Osei holds dear. He also flirted with other unorthodox businesses such as vertical gardens and limousine services during this time.

Ghanaian beginnings and the Dragons’ Den

Nana Boateng Osei

Bôhten eyewear was born from the culmination of multiple ideas. Firstly, Osei was inspired by a trip back to Ghana where he was moved by the natural beauty of the area. Also, some of his family worked in the local wood business, which interested him. These factors swirled with his love of fashion and passion for sustainability. He said, “At some point, my interests began to play off of each other and during that trip, the seed of the idea for using reclaimed wood for glasses was planted.”

In 2012 he started initial work on Bôhten while still at University. He derived the company from his own name, Boateng, which means prosperity in Twi. Osei got the chance to pitch his business in the infamous Dragons’ Den during a student special episode. While he impressed with his pitch, he didn’t receive an offer from the Dragons, who felt the business was too young.

Osei wasn’t deterred by the Dragons’ decisions. He went on to bring family members into the business to help him grow the organization. Osei has said that with hindsight, investment partners may have stifled his creative freedom, and that the company has managed to move forward without them by knuckling down and getting things done.

The exposure from appearing on the show led to skyrocketing sales and growth. Some say the Dragons missed out.

A sustainable vision for Ghana

Sustainability is at the heart of the business; Bôhten uses reclaimed wood from items such as chairs and tables, all sourced in Western Africa. Additionally Osei wants to use Bôhten as means to better the economy in Ghana. The company currently manufactures its glasses in Canada. However, later this year the firm intends to open a full-scale manufacturing plant in Ghana. The plant going live will be the realization of a long term ambition for Bôhten. “Our ultimate mission is to create a zero-waste facility in Africa that will not only serve to create jobs but also educate people the importance of eye care, sustainable design and social entrepreneurship.”

Osei says that eye care is woefully inadequate in Africa. He explained that the high levels of UV radiation on the continent are responsible for some of the issues that African’s face. To combat such problems, Osei has partnered Bôhten with eyesight charity Sightsavers. For every sale Bôhten makes, the company will make a donation to Sightsavers programs, aimed at eradicating avoidable blindness in West Africa.

As Bôhten grows, so will the benefits that it brings to Ghana and other nations in the region. Nana Boateng Osei is tenacious, compassionate and conscientious individual; a great example for Ghana and Africa as a whole.

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Tanzania extends its e-tax system to cut fraud

21 August 2016 Comments (0) Africa, Featured, Politics

John Magufuli

Tanzania’s president, John Magufuli, has extended the e-tax system to all government bodies as he bids to slash fraud.

Tanzania’s president, John Magufuli, has been in office for less than a year, but he is already making a name for himself as a staunch opponent of fraud and corruption. Magufuli has attacked tax evasion and corruption, in a bid to ensure that the government no longer loses billions of dollars in unpaid funds. One of the most significant measures taken in this battle with tax evasion has been the announcement that the nation’s e-tax system will now apply to all government departments and bodies.

The e-tax system

It was 6 years ago that Tanzania first introduced its e-tax system, but it has taken until now for the system to be applied to government positions and departments.

The e-tax system involved the distribution of Electronic Fiscal Devices (EFDs) by the Tanzania Revenue Authority (TRA) to Tanzanian businesses. The EFD is an advanced version of a traditional cash register that records all transactions, and provides the TRA with an easily processed record of the tax owed.

Prior to this point, businesses recorded sales in hand written books, which not only allowed much easier deceit, but ensured that the TRA’s job was far more difficult. Director of Education and Taxpayer Services Richard Kayombo said that businesses would claim to have sold less, and that the old system was practically “worthless” in terms of stopping tax fraud.

In contrast, EFDs are compatible with the TRA’s own Electronic Fiscal Device Management (EFDM), which provides the government with real-time sales information. Kayombo said, “The system enables us to get information directly from a trader when they make business transactions.”

An Electronic Fiscal Device (EFD)

An Electronic Fiscal Device (EFD)

While the system was initially rolled out to large scale traders in 2010, a second drive in 2013 saw it become compulsory for mid-sized traders too. However, it has taken President Magufuli until now to extend this measure to governmental departments and bodies too.

Magufuli not only feels that it will be a huge financial boon for government coffers, but that it is also a matter of principle. Magufuli explained, “We forced entrepreneurs to capitalize on the electronics tax collection while we, in government, have not resorted to the same thing, which is a total contradiction.”

The increased reach of Tanzania’s e-tax system ensures that the government cannot be accused of hypocrisy in regards to its stance on corruption, and it also means that taxation revenue is expected to exceed the government’s original target for the financial year. The commissioner general of the TRA, Alphayo Kidata, predicted that takings would surpass “the collection target of 15.5 trillion Tanzanian shillings during the 2016/2017 fiscal year.”

This is a figure akin to more than $7 billion.

Looking to reap the rewards

In the first 2 months of Magufuli’s crackdown on taxes last year, the TRA collected around $700 million in taxes. However, while some of this was achieved by targeting corrupt officials and business owners, the true impact of the president’s policy will not be seen until the end of the financial year.

The rollout of e-taxes to all government bodies was announced only last month, after Magufuli met with the Rwandan president, Paul Kagame, who has successfully implemented a similar system in his nation. Rwanda has offered to send IT experts to assist Mr. Magufuli’s government in the implementation of the technology, and the announcement was greeted with widespread approval by Tanzanian commentators and experts. If the move is as successful as hoped, Magufuli’s government will be in a strong position to build the economy and social infrastructure.

In 2014, tax collections covered 75% of government expenditure, but universal e-taxation could make a dramatic difference to this. Mr Kayombo confirmed that in the first year of commercial businesses using EFDs, tax revenue rose by 23%, and by 27% in the second year. A similar success within government institutions would provide Tanzania with a huge influx of revenue.

Professor George Shumbusho, Senior Lecturer at Mzumbe University, felt that it was an excellent move from the government, and one that could have a massive impact, exclaiming, “This is a commendable decision given the fact that the country has been losing a lot of money to unscrupulous public officials…With this system, the government may be able to fund its budgets by 100 per cent.”

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Starting up in Nigeria: a challenging environment

20 August 2016 Comments (0) Africa, Business, Featured

Nigeria startups

Nigeria has massive potential for innovative tech start-ups, although there are numerous obstacles in their way.

While it is officially Africa’s biggest economy, the Nigerian nation is struggling. Talk of a recession has darkened the horizon for over a year. The slump of global oil prices has been a hammer blow to the country, while terrorism and oil refinery problems have worsened the situation. Nigeria is currently beholden to oil for 70% of its revenues; it must rebalance its economy to unbind itself from market volatility. The country realizes this, and is making an effort to diversify its revenue sources. Many are starting to look toward innovative start-ups to take the country in a new direction.

Big tech potential in Nigeria, Konga leads the way

The conditions in Nigeria are rife for daring tech start-ups to create new solutions and drive growth. Unlike other regions on the continent, Nigeria has high rates of mobile penetration with approximately 75% percent of its 175 million people using mobile phones and data services, making it the largest mobile market in Africa. However, this market is currently woefully underexploited. According to a 2013 report by consultancy firm McKinsey, only 1.5% of the country’s $500 billion economy took place online. This void presents a glaring opportunity for tech start-ups to create revolutionary new services.

Konga, is one such start-up that seized the initiative. Launched in 2012, Konga was an early pioneer in Nigeria’s tech space, offering online retail services. Today the company is thriving, offering a range of original solutions, which have connected all manner of suppliers and manufacturers to consumers across the country. Other innovators are also following Konga’s lead, carving out their own niche in Nigeria. However for every success, many start-ups struggle to overcome barriers in their way.

Unusual obstacles: reluctance and electricity

The issues facing start-ups vary. Some are complicated while some are frustratingly mundane. One simple yet formidable roadblock that start-ups face is the availability of electricity. For a new business trying to carve its own niche in the ecommerce space, a reliable energy supply is essential. However, when energy supply is unreliable, as it often is in Nigeria, a start-up has to generate its own power and purchase alternative fuel sources in order to consistently operate. Ultimately, this can lead to greatly increased costs which squeeze margins, snuffing the life out of promising but cash-strapped startup ventures.

KongaPay launch

On the whole, Nigerians are still very wary about parting with their money over the internet, for fear of their capital or financial information being stolen. This paranoia is not entirely without merit, as Nigeria is a hotspot for online scamming and phishing schemes. In order to accommodate these fears, some successful start-ups such as Konga and Jumia have built cash-only payment methods into their business. Konga has also recently created a payment system called KongaPay whereby money is held securely until orders are delivered. Despite these efforts, reticence remains. While some start-ups have survived, this reluctance has certainly deterred some consumers from using new services, reducing the customer base that new start-ups rely on for growth. Tech firms must realize they need to foster a safe and reliable online payment environment, and convince the masses to use it.

Investment is needed, although so is caution

New accelerator programs sponsored by large foreign entities are helping more start-ups get off the ground, especially in the Fintech space. However, Nigerian banks aren’t traditionally interested in providing loans to risky start-up ventures, and encourage start-ups to attract private equity investors instead. Fortunately, foreign private equity is really starting to pick up in Africa, with more and more investors willing to take a punt on a good idea. Regrettably, these investors sometimes undervalue Nigerian enterprises, and strong-arm inexperienced Nigerians into unfavorable deals.

Other issues such as the country’s poor logistics system can bring woe to start-ups who rely on delivering a physical product. Sometimes the lack of skills in critical areas such as accounting and marketing can kill a promising tech business before it can get off the ground. In other instances, eager entrepreneurs try to make an idea that has worked elsewhere work in Nigeria; without analysis and adaptation this often leads to the graveyard.

A veritable gauntlet of obstacles faces Nigerian start-ups. However, those that have survived are serving as a shining example to those that wish to follow. Success is more likely if a fledgling firm is aware of the pitfalls ahead, provided they have a great idea, a solid business plan and the business acumen to make it all come together.

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Gauteng Emerging as South Africa’s App Development Hub

19 August 2016 Comments (0) Africa, Business, Featured

South Africa app

Gauteng province in South Africa is fast emerging as a center for app development on the continent.

It wasn’t long ago that finding an Internet connection in Sub-Saharan Africa was next to impossible. Today, the scene couldn’t be more different: millions of young Africans are as connected to the Internet as their European or American counterparts. Through mobile phones and devices, many of the logistical challenges surrounding Internet infrastructure have been avoided. African businesses have been particularly aware of the potential of the Internet. Many small businesses are taking full advantage of the options available to them through app creation, and certain areas are fast emerging as app development hubs. According to Cassie Lessing, the Managing Director of the Strato IT Group, Gauteng Province, where both Pretoria and Johannesburg lie, is leading the way in app development.

In the Middle of it All

It comes as no surprise, then, that the province that is home to South Africa’s de facto and legal capitals should be a hub for innovation. As new businesses make their way into the market, app developers are highly sought after: the app economy is expected to create trillions of dollars of direct and indirect opportunities around the world, and Africa is no exception. The African Internet population is so mobile that they are poised to leapfrog directly into the era of apps, bypassing the cumbersome online experience. There are numerous websites where businesses can look for app development companies and individual developers, a fascinating look at the truly online nature of the future.

Already the country’s economic powerhouse, Gauteng provides app developers with more resources than they would have elsewhere. With a plethora of cool hang-outs and co-working spaces, young thinkers are able to learn from one another in informal environments, thus enriching each individual’s skill set. The apps that are being developed are varied and seem to span across nearly every field: news, government information, entertainment, healthcare services, mining, logistics, shopping and banking are just a few of the numerous industries in which apps have recently emerged.  “Economies rely on information to function effectively and the app economy represents a leap forward towards the goal of an informed and efficient knowledge-based society. Organizations that do not adopt and utilize the emerging technologies like mobility, digitization and cloud will be disadvantaged and lose out to the early adopters,” Lessing says.

Piloting the Future

Lessing’s company, the Strato IT Group, has been quick to capitalize upon the growing app market. Strato boasts an impressive “satisfied clients” portfolio, with big names such as Toyota, Deloitte and Babcock, to name a few. Unlike other companies in their field, Strato claims it prioritizes face-to-face relationships rather than the faceless services provided by mainstream IT companies. Ironic, given that a common side effect of mobile apps is to reduce the time users spend making face-to-face interactions with the world around them.

With a reputation built upon excellence, Strato has long been the go-to company for businesses looking to enhance their online presence. They now provide clients with app management, app development and consulting, as well as the newer “Application Management Outsourcing” (AMO) whereby Strato finds developers with the required “scarce skills” to handle a client’s needs.

The Strato IT Group has begun a pilot project whereby consumers (companies in need of apps) are able to connect with developers and be a part of the app creation process. This allows consumers to access experts while maintaining their company’s identity. “This approach not only serves to test and enhance product, but also provides valuable raw material for proof of concept and proof of value exercises,” says Lessing of the project.

The Future is Now

Strato exemplifies the opportunities available for businesses from any sector: connecting businesses with app developers not only increases the visibility of both parties, but provides users with services that increase ease of access. Apps developed through the Strato IT Group and elsewhere have already increased the efficiency with which South Africans can go about their daily lives: the recent launch of an app-accessible stock market, the creation of cheap fuel finding apps and app-based coupons have all made life a little easier and a little cheaper for South Africans.

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