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Is time the only thing that Buhari needs to rebuild Nigeria?

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

Muhammadu Buhari

Nigeria’s president inherited a multitude of problems from the previous administration. Does he have what it takes to overcome them?

Nigeria’s President, former military ruler Muhammadu Buhari calls for time and space to achieve the objectives he laid out upon his election last year.

Buhari has openly declared his intentions for Nigeria’s future. He wants to build a country that future generations will be proud to inherit. This is rare in a continent where leaders frequently think in the short term – often selling off natural resources for instant personal gain, rather than investing in long-term solutions for Africa’s economic problems. Buhari’s Nigeria, he claims, is “for its children.” Whether these promises will materialize will depend on his ability to identify and build upon his past mistakes, and those of his predecessor.

Muhammadu Buhari comes from a large family; he was his father’s 23rd child, born in 1942 in Daura, Katsina state. He ruled Nigeria for 20 months in 1985 and has since lost three general elections to the People’s Democratic Party, which has dominated the political landscape in Nigeria since the end of military rule in 1999.

Winds of Change for Nigeria

Buhari’s perseverance has paid off and after waning public support for Goodluck Jonathan, he became the first opposition candidate to de-throne an incumbent leader in Nigeria. The issues inherited from previous governments will not be easy to overcome however, and continuing President Jonathan’s battle to contain the Islamic militants in the north will be Buhari’s biggest challenge.

Originally from Nigeria’s Islamic North, Buhari has alienated many from the mainly Christian south of the country by giving his support to Sharia law. Subsequently, he has had to strongly deny having a radical Islamist agenda. Deep-seated suspicion regarding his religious background and suggested support of Boko Haram has been quelled by a recent failed assassination attempt that left 82 dead, apparently orchestrated by Boko Haram forces.

Boko Haram, unemployment and rampant corruption to fight

Boko Haram

Boko Haram

He was previously mistrusted by the voting populace in the south, but President Jonathan’s failure to overcome the jihadi militia left Buhari with an opportunity to exploit. The 276 Chibok girls missing since 2014 have piled local and international pressure upon Nigeria’s administration. The Boko Haram crisis has left more than 20,000 dead and over 2 million displaced since 2009. Since his inauguration there has been a lot of posturing and even claims to have “defeated” the militant group, but terror attacks, kidnappings and suicide bombings are still rife, particularly in the North of the country. With an agenda to meet, but what appears to be little structural planning, it will take more than time or crude military suppression to overcome “the most deadly terrorist group in the world.”

Boko Haram is unfortunately not Nigeria’s only crisis. Buhari will also have to tackle large scale unemployment and rampant corruption. Buhari’s Deputy Prime Minster estimated that 110 million of Nigeria’s 170 million inhabitants are living in extreme poverty. He also noted that the majority of the wealth is going into the pockets of the nation’s privileged few. For Africa’s most populous nation, these economic issues add stress to the fractures caused by religious extremism and recent spates of violence. Making progress with these issues may also be the key to undermining the militant support among the population, with rampant unemployment being a key factor in their recruitment campaigns.

Buhari: an incorruptible and converted democrat for Nigeria

His biggest election promise is to tackle the fuel shortages that have blighted the population and stagnated the economy over the last several years. His plans are to increase production and improve distribution, while renegotiating terms with the rebel forces. In 2009 President Jonathan’s government agreed to pay militants $400 per month to stop their attacks on the fuel supplies. Once the money inevitably dried up, the attacks recommenced and the supply problems are now worse than ever. On paper, Buhari seems to be well placed to handle this crisis: he was the Minister for Petroleum and Natural Resources in 1976 and during his tenure heavily invested in pipelines and created 21 new petroleum storage units across the country. But his ability to negotiate with the Nigeria Delta Avengers is in contention; his rigidity and stubbornness are well known within the administration and beyond. Striking a balance between tackling the underlying issues, negotiations and strategic military moves will be key to eradicating the extremist violence that have dominated the political horizon in Nigeria.

Buhari claims to be a “changed man” and a “converted democrat,” taking full responsibility for all that happened during his short military rule in the mid-80s, and the part he played in the military coup that overthrew the democratically elected leader, President Shehu Shegari. If Buhari’s “incorruptible” and rare reputation for honesty holds true, he may be able to usher in a wave of change, washing away the culture of injustice and corruption, both in businesses and in government. He has appealed for time and patience, but will this be enough, or will the multitude of problems he faces just be too much to overcome?

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Tech Titans: The Battle for Africa

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

Microsoft 4afrika initiative

The tech giants are busy building in Africa as the continent represents a golden opportunity to reach new customers while transforming African society.

We all know the names Google, Facebook, Microsoft, and IBM. These are the tech titans who have forged the modern world we inhabit and hardly entities that the general public associates with Africa. However, foresight and innovation enabled these behemoths to propel the developed world to a new future. Now, the tech giants have foreseen that Africa’s future is one of abundant potential.

The reasons behind this trend are actually rather simple. Africa possesses 7 of the world’s 10 fastest growing economies. As a whole, Africa is the fastest growing region on earth. For tech companies this has created two general fronts on which to engage the continent. Firstly, this growth has led to the emergence of the African middle class. Tech companies suddenly have a new market in which consumers are hungry for their products. Secondly, this new market has enormous potential to grow. With limited tech infrastructure, such as internet access and mobile networks, the adoption of new technologies is still very much in its infancy across huge parts of the region. If top companies generate the conditions for mass tech usage, they stand to gain an enormous new customer base while improving the lives of millions; a veritable win-win situation.

Africa, a new frontier for Google, Facebook, Microsoft, IBM

Microsoft was arguably the first global tech company to take a major active interest in Africa. Three years ago, the company started its 4Afrika initiative. The $75m program was designed to train thousands of Africans either for their own businesses or for the company’s 22 African offices. Simultaneously the program focused on getting affordable smart devices into the hands of millions of new customers. Amrote Abdella, the regional director of the 4Afrika project said, “In order to drive the knowledge economy, we need to drive connectivity so Africans can create and access content.”

As a result the company is experiencing strong growth in the region. However, rather than resting on their laurels, Abdella went on to explain why Microsoft intends to build on its successes: “Three years down the road one of the things that we have learnt is that the need and the demand on Africa is about doubling down on investments we are making around connectivity and smart services.”

Digify, Project Loon, Link… Ambitious plans for Africa

Project Loon

Project Loon

The connectivity race is on in earnest. Google first tested the African waters back in 2012, with an SMS based version of its Gmail service. Today, their efforts have intensified while becoming more imaginative. Google intends to utilize its cheekily named “Project Loon” in the region. Loon is a network of communications balloons positioned high in the stratosphere that can be strategically maneuvered to provide connectivity in remote areas where coverage is lacking. Data is then passed through the balloon network before being transferred down to the global internet.

Google has two other notable initiatives in the region, Link and Digify. Link has seen the installation of metro fiber optic Wi-Fi networks across Uganda and Kampala, with a further roll-out underway in Ghana. Digify is a major commitment to train 1 million Africans in digital skills. Google spokeswoman Michelle Atagana explained the strategy behind the project: “The idea is to improve people’s skills so that they can increase their chances of becoming employed or start their own businesses.”

Not to be bested, Facebook is focused on waging ambitious campaigns in the booming new market. In 2015, the social media giant opened its first African office in Johannesburg. Additionally, Facebook CEO Mark Zuckerberg highlighted plans to provide satellite internet to rural areas of sub-Saharan Africa. He explained why he felt the move was key by saying, “To connect people living in remote regions, traditional connectivity infrastructure is often difficult and inefficient, so we need to invent new technologies.”

Investing to impact

IBM has also been incredibly busy in Africa in recent years. The company has opened new research centers, invested in local businesses, funded a $60m computer skills program, and created new initiatives designed to drive the usage of big data, analytics and cloud computing. Dr. Kamal Bhattacharya, the director of IBM Research explained why the company is taking such a significant interest: “As scientists we believe that science and technology is an enabler to express your needs, it is an enabler to shape your own future. And this is why IBM is making this very significant investment into Africa.”

Where the tech giants go, immense progress and social transformation follows. Economically, Africa will benefit immeasurably as the continent gains skills and business is increasingly done in today’s tech space. Socially, Africans will be able to access a global treasure trove of information, use life changing services and communicate in a way never before possible.

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BMW looks to capitalize on the emerging African market

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

BMW Rosslyn plant, South Africa

How BMW is planning to become the leading luxury car brand in sub-Saharan Africa.

BMW has recently announced big plans for a major expansion into the African market. The German automotive powerhouse has long been considering a major push across the continent, and hopes its new strategy will see it become a household name in years to come.

South Africa is the stage from which BMW hopes to address its new audience of African consumers. The company has actually operated inside South Africa longer than it has in any other country outside of Germany. BMW acquired its historic Rosslyn plant from South African manufacturer Praetor Monteerders back in 1975. Since then, BMW has firmly established its prestigious brand inside South Africa, but seen little success across the rest of the continent, largely due to economic factors. For the most part, the Rosslyn plant has been used to service export-markets in Asia and the United States.

Rosslyn revived thanks to a major face-lift

The Rosslyn plant, famed for its outstanding quality, even by BMW standards, is about to receive a major face-lift. Production rates at Rosslyn have for a number of years been limited by one curious factor: room. Space has been at a premium for some time, thanks to the increasing technological demands of making modern cars. The firm has been cramming new technology into the same old space for over four decades, forcing it to compromise while restraining productivity. However, the shackles are about to be ripped off.

In late 2015 BMW finally acquired a long sought after plot of land adjacent from the factory. They simultaneously announced a 6 billion rand investment in the company’s South Africa division. A large part of this investment will be used to build a state of the art body-shop for producing the new BMW X3, which is critical to BMW’s forward strategy. The new body-shop will be one and a half times the size of the existing facility. This should make the Rosslyn facility twice as productive, providing BMW with the resources with which to wage its Africa expansion.

Strategic moves for BMW

BMW has realized it needs a “boots on the ground” approach to lead the charge across the continent. As a result, the company has granted full autonomy to its South Africa division, while using the rest of the 6 billion rand investment to train new staff and improve supplier support services. South Africa CEO Tim Abbott explained why BMW is so invested in the expansion: “The real growth for us in the future will come from Africa.”

While BMW is an international powerhouse in developed countries, those markets are saturated. Not just in the automotive sector, but in industries worldwide, shrewd organizations are realizing that Africa is the final frontier, the last chance to grow their brand in rapidly emerging markets. BMW does not intend to be left behind. The firm intends to start its courtship of Africa by targeting markets in Nigeria, Kenya, Ivory Coast, Togo, Ghana, Angola and Senegal.

BMW busy paving the way for a successful launch

BMW X3

BMW X3

Pivotal to their strategy is the upcoming BMW X3. The X3 is a sturdy and powerful four wheel drive SUV, which also boasts the style and finish synonymous with BMW. The German giant believes that these qualities will make the car highly attractive in the African market. Tim Abbott said that “with the X3, we believe we have a vehicle that resonates with these countries.”

Whilst the X3 isn’t going to be hitting African streets until 2019, Tim Abbott explained that BMW is busy paving the way for a successful launch: “Our plan over the next three or four years must be to create a structured sub-Saharan environment for BMW vehicles so that when the X3 is ready, so are the markets.”

Abbott explained that the firm intends to do this by working with African banks to create new vehicle financing options in target countries. Additionally a scheme is underway to re-sell used BMW’s from South Africa and elsewhere in the new African markets, while working with African dealerships to enhance sales and services to Western standards.

Ultimately, BMW is looking to secure its place in Africa’s conscious as the premier luxury car brand. Armed with major investment and an airtight strategy, it would seem unwise to bet against them.

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The Ivory Coast looks to double its hydrocarbon production by 2020

29 July 2016 Comments (1) Africa, Business, Featured

ivory coast offshore oil

The Ivory Coast, plans to double its production of hydrocarbons by 2020.

The Ivory Coast boasts one of the region’s most reliable power grids, which allows the nation to export energy to its neighbors. However, a recent economic boom in the already thriving Ivorian markets has seen the demand for energy rocket. The ever-growing demand for more energy has meant that the Ivory Coast has set itself the ambitious goal of doubling its hydrocarbon production by 2020.

The numbers behind the headline

While doubling production could be quite achievable for a nation only just embarking upon the mining of newly discovered resources, the Ivory Coast has a well-established hydrocarbon industry, in which 70% of its resources are already used up by electricity production.

The obvious questions are whether doubled production is realistic, and just what needs to be achieved if the aim is to be met. In simple terms, it means an increase from around 100,000 BOE (barrels of oil equivalent) per year, to roughly 200,000 of annual production by 2020.

Despite this seeming a large undertaking, the Ivory Coast has every reason to be confident. The recent history of its hydrocarbon industries shows hugely impressive growth, and there are plans in place to help realize its goal. From 2012 to 2013, the Ivory Coast doubled its natural gas output, reaching 220 million cubic feet per day. By 2014, this was 250 million cubic feet per day – mainly produced by the Ivorian company, Foxtrot International.

The state oil company Petroci is also working with Foxtrot and GDF Suez to ensure that natural gas contributes even further to the Ivory Coast’s energy needs. Foxtrot committed almost $1 billion over a 5 year period, in 2013, to increase gas production annually.

Petroci itself has also made marked inroads in expanding oil production, increasing its production from around 30,000 barrels per day (bpd) in 2014 to a 2015 high of 53,000 bpd. Such increases, in both gas and oil, indicate that the nation is well on target to meet its grand scheme of doubling total production across the field.

Confidence in development

Foxtrot International worker

Foxtrot International worker

While the aforementioned figures are impressive, the government’s supervisor of hydrocarbon exploration and production, Ousmane Doukouré, reported that the first half of 2016 has seen oil extraction at around 45,000 bpd. While this is still a marked improvement on 2014 figures, it is down from last year’s figure. However, investment, foreign assistance, and as yet untapped resources all provide confidence.

Petroci’s Managing Director, Ibrahima Diaby, spoke at an energy conference in the country’s capital, Yamoussoukro, and indicated the scope for development. Diaby spoke on off-shore gas reserves in the country, saying, “Today we have around 60 blocks. We’ve awarded about 20.”

Companies such as Exxon Mobil and Total are working on exploration within the Ivory Coast, and in addition to outside support, the Ivorian government has pledged $3.3 billion to boost oil production over the next 5 years.

For many years, the Ivorian government focused its development efforts on the agricultural industry, and as such energy was somewhat ignored. With a concerted effort from both the government and private companies, the resource rich nation is likely to grow its output exponentially. Diaby said the outcome of the nations increased gas and oil production would boost electricity by 80% over the next 6 years.

Foxtrot International began digging 7 new gas wells in 2014, and installed a new platform at its Marlin gas field in 2015. With major international oil and gas companies invested in developing the nation’s energy infrastructure, Diaby was confident in saying, “With the current exploration, our ambition is to reach 200,000 BOE (barrels of oil equivalent) in 2020.”

Wisely, there are additional angles to meeting the Ivory Coast’s growing energy needs. Aside from the ramped up production of domestic hydrocarbon resources, Diaby also told journalists that the country would begin importing liquefied natural gas (LNG), to help supplement the gas needs of some its power plants. These imports are scheduled to begin in 2018, and the Texas based company, Endeavor Energy, confirmed that it was aiming to secure a $900 million gas-driven power project within the Ivory Coast.

If such developments continue, West Africa’s largest economy may soon become as known for its power production as its famous cocoa exporting.

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Respected Cameroonian economist joins African Development Bank

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

Célestin Monga

Célestin Monga has been named Vice President of the ADB and will take charge of governance and knowledge management at the pan-African financial institution.

Célestin Monga, a distinguished Cameroonian economist with a long career in global finance, has been named Vice President of the African Development Bank.

Monga will be in charge of governance and knowledge management at the pan-African financial institution.

Since 2014, Monga was deputy managing director of the United Nations Industrial Development Organization.

Prior to that, he spent 17 years at the World Bank, including working as senior economist for Europe and Central Asia. He also led a World Bank team that reviewed policies in the office of the vice president in charge of development economics and was a director for the structural transformation program in the African region.

Among top 5 economists in Africa

Monga also launched several initiatives, including debt relief for poor, indebted countries, and development of financial practices now used in many countries to protect against external financial disruption.

In 2012, he was named by Jeune Afrique magazine as one of the five best African economists. He has published economic analysis with some of the most prominent economists in the world, including Nobel laureates in economics.

Monga favors an economic integration model for Africa, in which markets coordinate more closely with an eye to exporting to the West.  “If you are a group of neighboring countries but all poor and producing the same raw materials, it is useless to invest in infrastructure to connect because there is no market or purchasing power among the others. It is necessary to seek markets where they are, especially in the West,” Monga said.

Monga holds a post-graduate degree from the University of Paris-Sorbonne. He was Mason Fellow at the Kennedy School of Government at Harvard and continued graduate studies at Sloan School of Management at the Massachusetts Institute of Technology (MIT). He received his PhD in France, at the University of Pau.

He has lectured at Boston University in the United States and the University of Bordeaux in France.

Writer and editor in economics

He is the author of several books and served as editor of the economy section of the New Encyclopedia of Africa.

His latest book on economics is the “Oxford Handbook of Africa and Economics” (2015), co-published with Justin Yifu Lin, former vice president and chief economist of the World Bank. Mongo is co-author of the forthcoming book from titled “Handbook of Structural Transformation.” His works, which explore aspects of economic and political development, have been translated into several languages and serve as teaching tools in many universities worldwide. His next book about the challenges of modernity in Africa, will be published in September.

Monga said he was “very excited” to be joining the African Development Bank at a time when its new president, Akinwumi Adesina, is plotting a new strategic course for the financial institution that promises to improve standards of living in Africa.

Bank shifts course

Adesina, who joined the bank in September, adopted a strategy of “power for all” or universal access to electricity for the continent. Lack of electricity, he said, is the greatest obstacle to development of Africa.

“The development of the energy infrastructure for Africa will drive more rapid economic and social development of the continent by reducing the cost of doing business, powering industrial growth, unlocking entrepreneurship, improving education and health systems and deepening financial services,” Adesina said.

Other priorities of the new leadership at the African Development Bank include increased investments in the private sector and a more “activist” approach to infrastructure development by helping resolve legal and regulatory bottlenecks that slow progress.

“Africa is living a crucial moment in its history and I am delighted to join the team to carry out this program,” Mongo said.

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A new capital for Egpyt

27 July 2016 Comments (0) Business, Featured, Middle East

Egypt's new capital city (plan)

The Middle Eastern nation builds a new capital near Cairo as it seeks to boost its economy and house a growing population.

Egypt is moving forward with plans to build a massive $45 billion new city east of Cairo that will function as the nation’s government and business capital.

Planners said the new city, which does not yet have a name, would be home to 2,000 schools and colleges, 600 health care facilities, a central business district with hotels, shopping centers and offices, and 20 residential districts with housing for at least five million residents.

Covering more than 250 square miles, or an area slightly larger than the City of Chicago, the new city will also have an international airport larger than London’s Heathrow, an amusement park four times the size of Disneyland and a public park larger than Central Park in New York City.

The plan for a new city is a centerpiece in President Abdel Fattah Al Sisi’s efforts to boost Egypt’s struggling economy. Sisi, who seized power three years ago in a bloody military coup, has proposed several mega-developments amid a slowing of tourism and direct foreign investment in the Mideast nation.

Cairo’s population will double

Planners say the project will create more than one million jobs and take about 12 years to complete.

Egyptian Housing Minister Mostafa Madbouly said one goal of the development was to ease congestion and crowding in Cairo. The city of 18 million is expected double in 40 years.

The Egyptian parliament and its government departments and ministries, as well as foreign embassies, would move to the new city, he said.

“We are talking about a world capital,” Modbouly said.

China aids development

Model for new proposed airport

Model for new proposed airport

The project got a boost earlier this year when Chinese President Xi Jinping visited Cairo to boost economic ties and announced the Asian nation’s willingness to support construction of the new city. China agreed to support the new capital project with loans, grants and other support that state media reported were worth $15 billion.

China also agreed to loan Egypt’s central bank $1 billion to increase its reserves, which stand at $16 billion, less than half the reserve at the time of the ouster of former President Hosni Mubarak during Arab Spring in 2011.

The new city is a showpiece for China’s “One Belt One Road” strategy to strengthen the country’s global position with foreign aid and investment. The strategy has prompted China State Construction to accelerate its international contracting work, building apartment houses, stadiums, roads and hotels in Africa and the Middle East.

Construction began in April

The first phase of construction of the new capital city began in April, including development of roads and communications and sanitation infrastructure on the desert site 30 miles east of Cairo.

An Egyptian-Chinese partnership that includes Arab Contractors, the Petroleum Projects and Technical Consultations Company and the China State Construction is working on the initial construction.

Modbouly said the country would also be seeking bids from private companies for portions of the first phase. Chinese companies will provide financing for the construction of a number of new buildings, including 14 government buildings and a large conference center. Estimated cost of the initial phase is $2.7 billion.

According to China State Construction, the initial phase will include a parliament building, a national meeting center, exhibition halls and offices.

Prior to Chinese involvement, the development bogged down last year over disagreements about costs and how long it would take to complete the new capital. A United Arab Emirates company that had been announced as the lead developer pulled out as Egypt cancelled its contract citing “lack of progress.”

According to The Wall Street Journal, some experts are skeptical of the project.

“Egypt needs a new capital like a hole in the head,” said David Sims, an economist and urban planner who has studied development in Egypt.

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Nigerian oil executive to lead OPEC

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

Mohammed Sanussi Barkindo

The oil cartel appoints Mohammed Sanussi Barkindo to a three-year term as secretary-general beginning Aug. 1.

A Nigerian oil executive who helped develop key global climate change initiatives is the new-secretary general of OPEC.

The Organization of Petroleum Exporting Countries named Mohammed Sanussi Barkindo to a three-year term as secretary-general beginning Aug. 1. Barkindo replaces Abdallah Salem e-Bardri of Libya in the cartel’s top job.

Barkindo is an experienced oil executive who has worked for the Nigeria National Petroleum Corporation for more than two decades and was its director in 2009-10.

He also has deep experience with the oil cartel, including service as its acting secretary-general in 2006 and 15 years on OPEC’s Economic Committee.

Climate change work cited

According to Francis Perrin, Chairman of Energy Strategies and Policies, Barkindo’s work on climate change was also a decisive factor in his appointment.

Barkindo helped produce the United Nations Convention on Climate Change and the Kyoto protocol as the leader of Nigeria’s technical delegation to UN climate change talks.

Perrin said the appointment reflects growing recognition among cartel members of the importance of initiatives to stall climate change as OPEC struggles to find its footing on a shifting global energy landscape.

Barkindo is also seen as a neutral party in simmering regional political tensions between OPEC members Saudi Arabia and Iran as well as disagreements about oil production limits.

Long career as oil executive

Barkindo earned a bachelor’s degree in political science from Ahmadu Bello University in Zaria, a post-graduate diploma in the economics of petroleum from the College of Petroleum Studies at Oxford University in the United Kingdom, and a graduate degree in business administration from Southeastern University in Washington, D.C.

He has also been deputy managing director and chief executive of Nigeria Liquefied Natural Gas and managing director and chief executive of the international trading division of the Nigeria National Petroleum Corporation as well as general manager of the corporation’s London office.

El-Badri had been set to retire in 2013, but stayed another three years because cartel members were unable to agree on a replacement amidst Middle East political tensions and discord within OPEC about whether to limit oil production as prices dropped.

Venezuela, hard hit economically by the oil slump, put forth a candidate, Ali Rodriguez, its long-serving OPEC representative. Indonesia also considered fielding a candidate.

Neutral candidate

Saudi Arabia and other Gulf members said they supported Barkindo for his experience and because Nigeria doesn’t take sides in Middle East power struggles.

While the secretary-general does not have executive power in OPEC, the official often plays the role of a neutral mediator when there are differences within the group.

It likely will fall to Barkindo to mediate ongoing conflict in the oil cartel over whether to limit production to prop up oil prices.

OPEC has seen its influence on global oil prices waning amidst an oil glut coupled with the growth of production outside the cartel, including in the United States and Russia.

OPEC member countries produce almost 37 million barrels a day compared to non-OPEC production of 57 million barrels daily, according to Global Risk Insights.

Disunity amid oil slump

Despite waning influence, OPEC’s unwillingness to set production limits has played a major role in creating an oil surplus, which has precipitated a two-year crisis. The price of oil plummeted to a low of $26 per barrel earlier this year. The current price is about $45 a barrel, less than half price of $110 per barrel in 2014, when the crisis began.

Richer OPEC nations, led by Saudi Arabia, have been willing to take financial hits of low oil prices in order to preserve market share. OPEC has rebuffed calls to limit production by poorer members including Algeria and Venezuela, which have been hard hit by the slump.

After OPEC members again failed to agree on limits in June, experts said the discord underscored the cartel’s waning ability to influence oil prices.

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Catherine Mahugu: Inspiring Women in Kenyan Tech

25 July 2016 Comments (0) Africa, Featured, Leaders

Catherine Mahugu

Catherine Mahugu is a tech innovator from Kenya who has built an empire on socially beneficial projects and connectivity.

Catherine Mahugu is leading the way in the Kenyan tech industry. Currently working from San Francisco for her e-commerce accessories business which connects consumers and local African manufacturers, she has made waves across the tech, IT and retail worlds. She credits her early interest in science and technology to her engineer father and at just 27, she has achieved a great deal in these industries.

Early life

Mahugu graduated from the University of Nairobi with a bachelor’s degree in Computer Science. From an early age she broke the mold, favoring entrepreneurial projects over “corporate” roles that she considered to be the “safe option.” Her first projects were collaborations with her student colleagues at university, such as a mobile application that helps rural water vendors connect with customers by advertising their location and prices.

Combining her degree, enterprising spirit and intimate knowledge of the regional issues affecting her native Kenya, Mahugu has been at the forefront of creating many projects that benefit local people. Her first official foray into the tech world was with KamataKab, a mobile solution that uses GPS to locate taxis in the area, an option to contact and then a rating system to rate the taxi’s service for other users to utilize. Although this was the overall winner at the Garage4Kenya awards in 2011, Mahugu knows that this app was a little too ahead of its time; it didn’t meet the recent successes of Uber and Easy Taxi today. This hasn’t fazed Mahugu however, and she feels that the experience showed her that innovation was a viable career route and that her ideas had traction in the tech world.

Innovation, Innovation, Innovation

The building blocks to her latest enterprise can be seen in her next project, SasaAfrica. This provided the foundations for Soko, launching an app that allowed merchants to connect with customers using only their mobile phones. The idea for the projects came from a chance meeting with the two other founders while in Nairobi. They all believed in a future for mobile phone technology to help African enterprises. With the percentage of mobile phone usage up to 90% in some parts of Africa, they realized that is was an obvious global solution to connectivity issues between consumers and vendors. After seeing many predominantly female artisans at local markets struggling to sell their ware to a limited customer base, they decided to launch a global marketplace that these vendors could access, in which they could accept orders and then organize distribution.

soko artisans

Profiles of the artisans on the ShopSoko.com website

Now based in California, the company helps over 1,000 artisans sell their products to a global community. After joining the Soko network, users see their yearly income increasing by a massive 400% on average. They now operate in over 40 countries and plan to expand to reach vendors in Mexico and India. Mahugu is committed to overcoming the challenges that many Africans face. They were confronted with supply issues from vendors, caused by problems such as inconsistency of electricity, so they are adapting their business model to include trusted, shared spaces where artisans can create and collaborate.

Mahugu knows the struggle many women face coming from traditional backgrounds, having less access to education, and to the outside world. She is committed to rebalancing gender inequalities and believes that “when one woman helps another, amazing things can happen.” She is a role model to young women, particularly in the tech-world. When she was expanding her business, and receiving no applications from women for the technology roles, she realized something had to be done to appeal to women like herself. She explained that the gender imbalance in the tech industry was “a harsh reality that dawned on me, and that we still need more women in technology and collaboratively need to promote this awareness.” Social enterprise and IT seem to be a winning combination for Mahugu, and her commitment to social justice and interest in empowering other women in the tech-world make her a person worth keeping an eye on.

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South African Firms Look to Invest in Greater Africa

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

House of coins

South African real-estate investors are looking for high returns in the African market, despite the myriad challenges of investing within the continent.

South Africa is, in some ways, akin to the neighborhood misfit: its historical and contemporary socio-economic environment, such as world class universities and medical schools, a fabulously lucrative niche safari sector and a diverse population set it apart from its regional and continental neighbors. As the non-African international community begins to increase its interest in Africa’s property market, so too are South African property developers. During a recent South African Property Owners Association (SAPOA) Convention, speakers suggested that property markets around the continent are ripe for investment.

Research, Research, Research

At the Johannesburg Sandton Convention Centre, speakers suggested that investors need to treat African property markets with respect: not only do investors need to know their individual markets, but they need to treat the African market as a long game, just like the American, Asian and European markets are treated. Bronwyn Corbett, head of Mara Delta investment group, the only pan-African listed fund, urged investors to see the trees within the forest: “each African country is different. Each is a challenge, and it wouldn’t be worth doing this if it wasn’t a challenge.”

Speakers meeting at the Johannesburg Sandton Convention Centre

Speakers meeting at the Johannesburg Sandton Convention Centre

That kind of optimism may be the key to successful investment choices. Property investment is full of obstacles regardless of the location but, speakers noted, Africa has some obstacles that may prove larger than in other markets further afield.

Getting a Bang for your Buck

Among the top cited concerns, some are universal and some are uniquely African. Volatile political climates, rapidly fluctuating currencies and changing rules and regulations surrounding the real estate markets were just a few of the concerns discussed by Corbett. “I appreciate that investors want us to make good deals. We are starting to find things but we have to learn as we go along. Many South African investors don’t actually know what happens on the ground in Africa and may expect things to happen more quickly,” Corbett said.
What happens “on the ground” in Africa is, Corbett insinuates, very different from what happens in the realm of South African investors. Deal brokering and relationships are very different for the elite of South Africa. These individuals entrust their capital to firms like Mara Delta to avoid the nitty-gritty of the day-to-day wheeling and dealing required to obtain high quality assets in Africa and elsewhere. Corbett cautions that it is the firm’s responsibility to have an understanding of the potential obstacles in African markets outside of South Africa. Their customers cannot be expected to have an understanding of property markets and thus, investment funds must do their homework into each potential investment market.

Mara Delta, a substantially black-owned and primarily black-managed investment firm with properties on the Johannesburg stock exchange since 2012, has an impressively broad portfolio that includes private and industrial properties in Morocco, Mozambique, Zambia, Mauritius, Kenya and Nigeria. With this geographically diverse set of investments, Mara Delta is a reliable advisor for potential investors. Corbett touched upon perhaps the primary concern for future international investors: the currency market. There are more than 40 different currencies used in Africa, and extracting funds from these countries can take time, both due to the exchange process and due to the sluggish bureaucratic process of African banks. In addition to currency-related challenges are the limited debt and credit lines available through African banks.

Worth the Price?

Some fund managers voiced their concern that African properties are significantly more expensive when compared to more developed properties in Asia, Canada and Central and Eastern Europe. “Our research indicates that prices per square meter have been significantly higher (in Africa) than similar investments in developed markets,” said Alternative Real Estate Capital Management’s Garreth Elston.

Real estate investments are, Corbett urged, worth the trouble. She cited the South African market as a symbol of endurance even in challenging times as long as quality assets are purchased, for the right price. Given the uncertainty of the global economy in light of Britain’s imminent exit from the European Union, real estate may once again become the safest bet.

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Koffi Djondo – the Togolese entrepreneur, driven by pan-African ideals

22 July 2016 Comments (2) Africa, Featured, Leaders

Koffi Djondo

Koffi Djondo is one of Togo’s most successful businessmen, but success for Africa is his ultimate goal.

Koffi Djondo may not be a name that is familiar to a lot of people outside of Togo, but Djondo is a businessman who has had huge influence on Africa’s economic landscape. As the co-founder of EcoBank and Asky Airlines, Djondo has established not just successful businesses, but enterprises that look to foster pan-African principles.

A difficult beginning

Koffi Djondo was born in a small Togolese village on July 4th, 1934. Djondo recalls a childhood characterized by extremely strict parents who eventually separated. Although Djondo does not recall his early years with much fondness, as an only child he developed a sense of self-reliance that he took into his studies.

However, even Djondo’s university education was beset with difficulties due to the politics of Togo at the time. While studying a degree in Accounting at the Institute of Social Sciences, Labor University of Law and Economics of Paris, the Togolese government contacted French authorities to ensure that Djondo was expelled from the university. This was a personal vendetta against the Djondo family, as Koffi’s uncle, Nicolas Djondo, was an outspoken critic of the Togolese regime.

Despite this setback, after a coup in Togo saw regime change, Djondo managed to return to France and complete his education. Djondo began working for the airline UTA, before moving into newly established government roles. In 1964, Djondo was appointed as the executive director of a government body – Family Allowances Fund – where he was responsible for the introduction of a mandatory retirement age and pensions. By 1973, Djondo was chairman of the Economic & Social Council, and only two years later he was elected as the president of the Chamber of Commerce and Industry of Togo.

A meeting of minds

As Djondo’s government career progressed, he eventually found himself as the President of the Federation of West African Chambers of Commerce. It was here that Djondo met his Nigerian business partner, Adeymi Lawson, and the birth of a business dream was realized.

With the help of the entrepreneur, Henry Fajemirokun, Djondo and Lawson created the first pan-African bank, EcoBank, in 1985. The goal was not simply to create a prosperous business, but to create jobs across the continent, and to imbue young Africans with a sense of opportunity and pride.

Koffi Djondo

EcoBank is now present in 33 African nations, employs over 18,000 Africans, and had a turnover of $2.3 billion in 2013. The bank has offices from London to Beijing, and Djondo feels that its success is linked to his ethos of pan-Africanism, explaining, “You can notice that African strength lies in unity; what we can call togetherness… It was this which gave success.”

EcoBank’s spirit of empowering young Africans was something that the men behind it felt was important, as it made employees “feel that their purpose was more than just making money.” The bank’s hiring policy was to find people with a “passion to make a difference in Africa.”

Renewed goals for a new century

Koffi Djondo continued making moves to invest in new ventures as the 21st century began, as he looked to create an airline that matched the philosophy of his African owned bank. His dream led to the creation of Asky Airlines in 2010, and in 2011 its first commercial flights began. While the inaugural flights often had only 10 passengers on them, by 2014 they were flying 8000 passengers a week, with an 80% occupancy rate on their flights.

Asky won the award for the “Best African Company of the Year” at the prestigious African CEO Forum Awards, and the company employs over 250 people. Djondo believes strongly in the need for greater integration between African nations, saying “Integration of the continent is the only way by which Africa will find its safety, through a common regional market.”

Asky is a company founded on the concept of integration, and Djondo sees transport as key to wider African cooperation, explaining, “pan-Africanism and integration starts with people moving…If we want to make business…we have to create the appropriate means to make things move.”

Djondo is held in such reverence by many Togolese that the village of his birth has been renamed Djondo-Condji in his honor. The man himself now lives in a village he built, Djondo Kope, but he is not relaxing in retirement. Djondo plans to expand Asky Airlines, and Ecobank grew 14% in 2014. It’s a busy life for Togo’s most successful octogenarian.

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