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Western-trained talent returns to Ethiopia

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

Talented Ethiopians who grew up abroad are returning to their homeland, sparking hope and driving change in the once stagnant nation.

For a long time, Ethiopia has struggled as one of the poorest countries in Africa. 1974 saw the end of the iconic Haile Selassie’s rule, as the brutal Derg communist dictatorship seized power. The following years were harsh, and so began a long-lasting trend, whereby many of Ethiopia’s most skilled citizens left the nation to seek better lives in the western world. The once great kingdom languished under corruption, war, famine and drought.

Prior to the Derg regime, mass migration from Ethiopia was non-existent; sadly that was due to change. George Mesfin, an American-Ethiopian who fled with his family at the age of 14, summed up the situation by saying, “During the Derg years, for a while, everyone who could get out, got out.”

After the despotic government fell in 1991, it took a long time for the country to start making progress. However, members of the Ethiopian diaspora have started returning to their homeland, attracted by a growing economy and a more stable political situation. Making a difference seems to be the motivation that drives some to give up their comfortable lives in the western world. Many of the diaspora recognize the opportunity to use their western skills for the betterment of Ethiopia. The chance to become leaders who drive the nation forward resonates deeply within the souls of the patriotic. Those who have chosen to go back are helping to change the country in dramatic ways.

Returning Home

One of Ethiopia’s more famous returnees is Tadiwos Belete. Belete moved back to Ethiopia after developing a successful luxury spa business in Boston. He has since used his skills to create a thriving Ethiopian spa empire which employs over 1,500 people and focuses on using a solely local supply chain. In a 2013 interview Belete said, “The profitability is here, you can see it, you can feel it, you can touch it. But as well, as a human being you can make a difference here.”

While official figures are not available, Ethiopian economist Bisrat Teshome estimated that Ethiopians returning from other countries have injected more than $1 billion into the economy while starting over 2,000 new businesses. The influx of foreign-earned capital that comes with the returning migrants is a welcome source of investment for the country, where access to foreign currency and corporate investment are still lacking.

Western Influences

In the nation’s capital Addis Abbaba, a profusion of cafes, restaurants, fashion boutiques and other western-inspired businesses have appeared. Less visible, but no less important, the returning diaspora is investing in property development, agriculture, technology and a host of other sectors.

Kaldi's Coffee located in Addis Ababa

Kaldi’s Coffee located in Addis Ababa

However, Tesholme feels that improvements can be made “if that money was pumped into the industry sector, then it creates more jobs.” He went on to say that the manufacturing sector is underdeveloped in Ethiopia, and that manufacturing has the scope to create significantly more jobs for similar start-up costs, while also benefiting from foreign trade.

Ethiopia is also growing culturally through the return of its lost children. Some have found that their presence has positively influenced cultural attitudes towards workplace productivity and business best practices. Others have commented that Ethiopia has started adopting western standards of health and hygiene. Perhaps even more significantly, Ethiopia may stand to gain from the homecoming in a political sense. Shanta Devarajan, head of the Africa region at the World Bank, feels that the returnees have a positive role to play in political reform: “The diaspora might bring strengthened governance to African societies. These are people who have been outside the system and are able to observe it from afar, and that might actually strengthen government, something that we need so badly.”

Looking to the Future

Ethiopia faces issues such as a bloated bureaucracy, which is criticized as being slow to act and is an obstacle to international business. Additionally, the government is criticized for being ineffectual at a local level. Ethiopians who have experienced a more sophisticated system are well positioned to drive for reform and facilitate positive change.

The success of the diaspora is encouraging ever more ethnic Ethiopians to consider returning. In the last six months 2,600 have already made the trip home, a fourfold increase on the same period last year. If the new arrivals continue in the same vein as those who came before them, then Ethiopia’s reemergence on the world scene looks exceedingly likely.

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The end of OPEC?

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

opec meeting

OPEC’s refusal to impose production limits and an evolving global marketplace signal diminished clout for the oil cartel.

When OPEC ministers once again failed to agree on production limits to bolster oil prices in early June, it was yet another signal that the days of the oil cartel’s dominance in the global marketplace are over.

Members of the Organization of Petroleum Exporting Countries may continue to be important players in world oil markets, but “the cartel has lost its privileged ability to control global oil prices,” according to Global Risk Insights, which assesses political and business risk around the world.

OPEC nations, led by Saudi Arabia, traditionally have been the world’s swing oil producers, with enough reserves and daily production to control the price of oil. But that has changed in recent years as the United States, Russia and other smaller non-OPEC countries increased production.

Non-OPEC production rises

Total OPEC production is nearly 37 million barrels a day compared to non-OPEC production of nearly 57 million barrels daily, according to Global Risk Insights.

Despite waning influence, OPEC’s refusal to set production limits has played a major role in creating an oil glut, precipitating a two-year crisis that has seen the price of oil drop to as low as $26 per barrel earlier this year before climbing to $52 this month. That compares to prices of about $110 per barrel in 2014, when the crisis began.

Some OPEC nations, led by Saudi Arabia, have been willing to absorb the financial shocks of plummeting oil prices in order to preserve market share, reasoning that the low prices would drive competitors, notably U.S. shale oil producers, out of business.

OPEC has rebuffed calls to limit production by members Algeria and Venezuela, which have been hard hit by the slump.

Saudis take a financial hit

Saudi Arabia itself has not been immune to the financial impact of low oil prices.

The Gulf nation has spent more than $150 billion of its reserves in less than two years and posted a deficit of $98 billion last year.

Earlier this year, the Saudis borrowed $10 billion from a consortium of international banks, its first foreign debt in 25 years. The government also was considering asking creditors to take IOUs because it cannot pay its bills.

Oil rig at Bakken Formation

Oil rig at Bakken Formation

The OPEC strategy to let oil prices fall in order to wound its competitors has had mixed results, especially in the United States.

While 59 shale oil companies in the U.S. have filed for bankruptcy, production has dropped only slightly because of more efficient production. While financially troubled, the U.S. shale production should be able to rebound quickly once oil prices start rising, perhaps as early as next year.

Deal with Russia falls through

OPEC also came under fire from a top Russian oil executive in the spring, after a proposed deal between OPEC and Russia to freeze output fell through.

Igor Sechin, an ally of President Vladimir Putin, said tensions between Saudi Arabia and fellow OPEC member Iran have undermined the oil cartel. Saudi Arabia and Iran are vying for political dominance in the Middle East, and Iran, freed from Western economic sanctions, has vowed to significantly increase its oil exports.

“At the moment a number of objective factors exclude the possibility for any cartels to dictate their will to the market,’’ Sechin said. “As for OPEC, it has practically stopped existing as a united organization.”

Saudis pledge economic reform

Meanwhile, the Saudis have pledged sweeping economic reforms that signal their intention to go their own way on oil prices.

The reforms aim to diversify the country’s oil-dependent economy by increasing non-oil revenue to $141 billion by 2020. However, Saudi Arabia said it would maintain its output of 12.5 million barrels per day until 2020.

Deputy Crown Prince Mohammed bin Salman said his hope was that in 20 years the country would no longer be oil-dependent. The Saudi kingdom relies on oil for 80% of its revenue.

Saudi Arabia has vast oil reserves and has modernized production at a time when other oil producers including Venezuela and Iran have let their industries deteriorate.

At the OPEC meeting in early June, the Saudi oil minister also alluded to the waning clout of the cartel, saying that the market would determine prices.

“I think managing in the traditional way that we tried in the past may never come again,” Khalid al-Falih. Oil producers should “let the market forces continue to seek and find that equilibrium price between supply and demand.”

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Ushahidi: An African technology with global reach

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

Ushahidi

The mobile crowdsourcing platform, launched by Kenyan entrepreneurs nearly a decade ago, has been used by an estimated 90,000 projects worldwide.

Ushahidi, the mobile crowdsourcing software used to alert people of danger during civil unrest and to help aid agencies provide relief in disaster zones, is taking the world one text at a time.

Used in 159 countries and 31 languages, the software was developed and first deployed during post-election violence in Kenya nearly a decade ago. Today, Ushahidi estimates 90,000 projects worldwide have used the software, which is available as a free download.

Ushahidi, which means “witness” in Swahili, has grown from an ad hoc team trying to save lives in a crisis into a sophisticated nonprofit software development organization that aims to help solve global problems.

Its widely used open source crowdsourcing tool enables people to share information and interactive maps on their phones using SMS text messaging.

Platform documented violence

Four Kenyan technologists developed the software in 2007. As protests over disputed elections spiraled into violence at the end of that year, an estimated 1,500 people were killed in two months. In Nairobi, unwittingly walking into a neighborhood where violence had erupted could mean injury or death.

Enter the Ushahidi crowdsourcing software, which enabled residents to report flare-ups. The software mapped these reports to show people what areas they should avoid in real time, potentially saving hundreds of lives.

The initial deployment drew 45,000 users in Kenya who documented hundreds of incidents of violence that might have otherwise not been reported.

It was developed in a few days by an ad hoc group of technologists and bloggers “trying to figure out a way to gather more and better information about the post-election violence,’’ according to co-founder Ory Okolloh, who said the group believed the government and police were underreporting the number of deaths.

Ushahidi map

Helped aid workers after Haiti earthquake

The platform gained international prominence in the aftermath of the 2010 earthquake in Haiti, when it was used to identify and map locations where rescue and aid were needed. Within days, a live Ushahidi map had 2,000 individual reports that were mapped using satellite imagery. The platform was credited by aid workers with saving hundreds of lives.

Use of the platform has grown exponentially and has adapted to different situations.

While it is impossible to know how many people are using the platform because it is a free download, Ushahidi estimates it has been deployed for 90,000 projects with 6.5 million posts that have potentially reached 20 million people.

Deployed in media crackdowns, war zones

In Nigeria, Mozambique, Zambia, Colombia and Albania, groups used the participatory platform to detect election fraud. It is being used in Sweden to collect reports of anti-gay discrimination. It was also used during media crackdowns in Egypt during and after the Arab Spring. Organizations including the United Nations Office of Humanitarian Affairs have used it to coordinate aid activities in Libya, Syria and Afghanistan.

In Nigeria’s election-monitoring, one report found that use of the Ushahidi software increased voter turnout by 8% in 2011.

In a 2015 election in Nigeria, social media was a force in keeping the polling process transparent but the Ushahidi data-collection platform offered more credible information, according to Liesl Louw-Vaudran, a consultant with the Institute for Security Studies.

“Lively activity on social media also has a downside, however, with rumors of violence, cheating and slandering of opponents being rife on Twitter,” Louw-Vaudran said. “This is almost impossible to control, but data-gathering software like Ushahidi, can serve to provide early warning of potential election violence.”

Global software developer

With philanthropic support, Ushahidi has grown into one of Africa’s major software developers. Headquartered in Nairobi, it has global operations. Backers include the Omidyar Network, the Ford Foundation, the Knight Foundation, the MacArthur Foundation, Humanity United, Google and Cisco.

While the crowdsourcing software is a free download, organizations pay Ushahidi for support and customization, as well as other software products it has developed including data collection, management, visualization tools and enterprise systems.

Another Ushahidi project includes partnership in the Resilient Network Initiative, which trains community organizations to use open-source tools to engage with their local governments.

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Morocco enters free trade pact with China

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

morocco china trade

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

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

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

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

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

Experts debate impact

Analysts say the new agreements could have mixed results.

Moroccan textile factory

Moroccan textile factory

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

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

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

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

Economic progress

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

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

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

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

Agreements with India, Russia

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

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

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

Chinese influence grows

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

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

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

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

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Tunisia struggles to attract foreign investment

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

tunisia oil

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

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

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

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

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

Tax policy cited

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

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

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

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

Production drops sharply

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

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

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

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

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

Part of larger, regional struggle

Tunisia is not alone in its economic challenges.

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

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

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

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World Bank program puts Zambia on path to solar energy

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

solar farm zambia

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

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

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

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

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

Program reduces costs, risk

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

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

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

Senegal, Madagascar participate

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

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

The program could be adopted in Asia as well.

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

Competitive auctions

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

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

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

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

Africa turns to renewables

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

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

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

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

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

Entrepreneurs boost small efforts

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

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

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

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

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

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Africa’s crippling brain drain

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

africa brain drain

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

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

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

“You cannot eat patriotism”


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

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

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

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

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

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

Limited opportunities

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

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

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

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

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

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

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

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

A slowing drain?

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

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

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

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

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

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A snapshot of African youth, a growing consumer segment

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

group of african american college students

A new survey finds young Africans aged 15-24 spend more than two hours a day on the internet and voice concern about jobs, rising costs and corruption.

Young Africans spend more than two hours a day on the internet and nearly one-fourth say social media plays a key role in their purchasing decisions.

Those are two takeaways from a new “African Youth,” a study (pdf) of consumer practices and values of young people between the ages of 15 and 24 by the French research institute Ipsos.

Ipsos surveyed more than 1,800 young people who are part of an increasingly important demographic in the social and economic affairs of the continent. Africa has the highest concentration of young people in the world with a population of about 220 million in this age group.

Those surveyed reside in seven countries – Ivory Coast, Senegal, Morocco, Democratic Republic of Congo, Kenya, Nigeria, and South Africa.

Youth are optimistic despite concerns

Florence de Bigault, Director of Ipsos Africap, said brands must pay attention to young Africans as they have become an important consumer market.

Mall of AfricaAs a group, they “already play a leading role in the development of the African continent. They contribute to consumer spending, shopping mall visits, They aspire to education, employment, entertainment and full access to electricity and the internet,” de Bigault said.

According to the study, young Africans have high expectations for and optimism about the future, but also express concern about jobs, the rising cost of living and corruption.

Food, clothing are top expenses

Among the findings of the survey:

  • 81 percent of young Africans are optimistic about their personal future.
  • 63 percent are optimistic about the future of their country
  • 69 percent are concerned about unemployment, the top concern
  • 63 percent are concerned about the rising cost of living
  • 59 percent are concerned about corruption
  • 34 percent regularly go to shopping centers and markets
  • Their top spending items are food and beverages (43 percent), clothing (38 percent), and telecommunications and internet (33 percent).
  • They spend an average of 2:20 hours a day on the internet and social networks. Young Moroccans spend 3:15 hours per day.
  • 12 percent of those aged 20-24 work for themselves.
  • 22 percent of 15-24 year-olds are influenced by social networks in making purchase decisions
  • 49 percent in Ivory Coast and 30 percent in Senegal prefer French brands while fewer than 2 percent of young people prefer them in Nigeria and South Africa (the continent’s two largest economies).

Firm launches African research project

Ipsos is one of the largest research firms in the world. Operating in 87 countries with 16,000 employees, Ipsos has the capacity to conduct research in more than 100 countries.

The “African Youth” study is ongoing research, including quarterly updates of the youth survey as part of Ipsos’ Africap initiative.

In 2016, Ipsos launched Africap, a consultancy designed to help clients develop business in African markets. It is composed of more than 800 partners in 14 African nations – Algeria, Tunisia, Egypt, Morocco, South Africa, Nigeria, Ghana, Kenya, Tanzania, Uganda, Zambia, Mozambique, Angola, and Ivory Coast.

Other ongoing Ipsos studies of the continent include:

  • A survey of food consumption trends in urban African homes;
  • A study of media usage in French-speaking Africa;
  • A survey to study emerging lifestyles and consumption trends.

De Bigault said African youth would continue to be an important part of Ipsos research, focusing on their consumer spending potential.

Another recent study found that youth in East African want a greater voice in their future. The youth-led study by The MasterCard Foundation Youth Think Tank looked at employment and entrepreneurship trends in East Africa. The initiative trained 15 youth from Tanzania, Rwanda, Uganda and Kenya to conduct research on young people seeking to enter the job market in their communities. The study includes information from more than 400 interviews with young people, officials and other East Africans. It found young people are eager to have a voice in policy decisions that affect them and are committed to improving their skills. Barriers to earning a living include limited access to information, technology and land as well as gender inequality.

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Who is Hisham el Khazindar?

17 June 2016 Comments (0) Featured, Leaders, Middle East

Hisham el Khazindar

Hisham el Khazindar, Co-founder and Managing Director at Qalaa holdings shows what he, and Egypt, are made of.

Hisham el Khazindar has gone from being a graduate in Cairo to running one of the Middle East’s leading investment firms, picking up an MBA from Harvard and work experience at places like Goldman Sachs. But how did this graduate from the American University in Cairo end up running a billion-dollar organization? First, look to exactly what he achieved along the way.

The man with the M&A plan

After graduating from the American University in Cairo in 1996 with a BA in Economics, Khazindar aptly started his career with EFG Hermes, a leading investment bank in the Middle East and North Africa (MENA) region. He spent his first three years there advising on key cross-border Mergers & Acquisitions (M&As), as well as carrying out high-profile equity offerings. Much like someone not accustomed to letting a good opportunity go to waste, Khazindar seized the chance to take a temporary transfer at Goldman Sachs in London in 1999 that lasted two years, continuing his work on M&As.

Khazindar returned to EFG Hermes as an Executive Director, advising on M&As and Initial Public Offerings (IPOs) – however, he was yearning for more. In 2001, Khazindar decided that the best way for him to progress would be to complete an MBA at Harvard Business School and, after graduating, Khazindar did not spend much time doing nothing. In 2004 he co-founded Citadel Capital (now known as Qalaa Holdings) and is now Managing Director of a $9bn private equity firm that controls investments in industries as varied as mining, oil and gas, cement, agri-food, transportation and logistics.

Perhaps due to his phenomenal progress, Khazindar sits on several boards in the region, from electrical and wind energy companies to eyewear providers. The list goes on: in total, Khazindar serves as director to six other companies and sits on the board of eight more. As if this wasn’t enough, he’s also earnt accolades including Young Global Leader in 2013 and being listed in the top 100 Young African Leaders.

Not an Inexperienced Public Orator

Khazindar is not unaccustomed to speaking in front of large audiences, having spoken at an Egypt: The Future conference and even given a TEDx talk, a local version of TED talks, about Egypt’s next 20 years. When he spoke at the TEDx in his native Egyptian Arabic, he occasionally brought in his perfect command of English to explain his ideas and largely did so with the eloquent ability of any other TED talk. He spoke of the importance of maintaining a reputation in business and of having to explain away any negative stereotypes that people can have of businessmen or entrepreneurs. This is something, he joked, that doctors and engineers have no problem with (jobs considered very prestigious in parts of the Arab world). Continuing to talk of the importance of the changes in Egypt and the necessity of grasping opportunities, Khazindar is certainly thinking of the impacts of his choices today in 10 or 20 years’ time.

In an interview with the Oxford Business Group, Khazindar kept away from delving into politics as much as possible, but he was unambiguous when it came to economic policies that the government would need to implement in order for economic recovery and growth to occur. These were, in no particular order, signs of lasting stability, appointment of ministers with proven economic ability, a workable constitution and articulation of clear economic objectives. As the interview moved onto financing tools and energy subsidies, Khazindar goes on to talk about the importance of SMEs and direct cash programs.

The future’s bright, the future’s…

Evidently, Khazindar knows what he’s talking about, he isn’t afraid to say what he thinks and he won’t let one success distract him from the next. His thinking is long term, for the progress of not just the Egyptian nation, its people and government, but of the entire region too. Something that Khazindar is quick to highlight is Egypt’s economically advantageous geographical location in Africa, in the middle of the Arab world and across the Mediterranean Sea from Europe; markets, he adds, with 1bn, 400m and 700m people, respectively. With such a large workforce to drive the economic growth (almost one in four Arabs in the Arab world is an Egyptian), it’s hard to see a future that isn’t better for Egypt.

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Yeelenpix – the African startup changing the way Africa is seen

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

yeelenpix

Yeelenpix is the startup company selling images of Africa that reflect the continent’s diversity.

Yeelenpix is a company in its infancy, having only been launched in 2013, but it aims to broaden the way that Africa is presented in pictures. Asking someone to pick an image that represents a vast continent would be impossible, and the team behind Yeelenpix felt that the images available were too limited.

From the Pyramids of Egypt to iconic wildlife on safaris, there are images that are distinctly African, but whole areas of African life, trade and experiences had little documentation. Yeelenpix founder Moussa Fofana felt that this was problematic, not just for how the continent was seen by the rest of the world, but for businesses in Africa who needed stock images for marketing.

Fofana elaborated on the catalyst for starting up his company saying, “It all started with a remark made to me one day, by a friend who works in communications in Abidjan…she had to go and buy images on the western platforms to illustrate papers for her African clients, without the benefit of African images that are at hand.”

Moussa Fofana

Moussa Fofana

Fofana set up the company with his close friends Alex Poblah and Maguette Mbow, who were living in Paris at the same time as Fofana. Fofana is from the Ivory Coast, and the word “yeelen” actually means “light” in his native language of Dioula.

An African database

With a gap in the market identified, the three friends set up Yeelenpix, and immediately looked to source additional funding. However, thus far the company has been entirely self-funded as, according to Fofana, “The private equity firm with whom we were negotiating in Paris has proved too greedy.”

This setback did not stop the company from having early success. Yeelenpix quickly built up a large cache of over 10,000 images from across Africa, and they currently have a network of 50 professional photographers providing them with photographs. In addition to providing employment opportunities for African photographers, Yeelenpix also works with British and French photographers who spend extensive time on the continent.

Within 2 years of their launch, Yeelenpix’s clients include the TV station Africa 24, and Morocco’s Chaabi Bank. The range of images is set to grow, as Fofana has stated they aim to have 100 professionals working for them within a year, and they are also happy to work with amateurs if the quality of their work is good enough. If a company needs images of rice farming in Nigeria, or the cotton industry in Mali, then Yeelenpix can provide the pictures needed to create promotional brochures.

By accepting work from amateurs, Yeelenpix is not only providing work opportunities for aspiring photographers, but it is increasing the range of its reach. Areas of life that might not have attracted professionals become accessible, and countries with less status (than some of Africa’s most famous destinations) get greater opportunities for exposure.

Fofana explained the company ethos on utilizing talented amateurs saying, “They can express their vision of Africa and the market. Young people who are not yet professional contact us, word of mouth starts working.”

Democratizing the process of how the continent is represented puts at least some of the power into the hands of the people, who live and work in the nations being portrayed.

Affordable Accessibility

Yeelenpix operates a flexible price structure to allow as great a number of organizations as possible to access their database, and use their images. On average, it costs $22 to use a Yeelenpix image for a website, with a commission rate of 35% to 60% of sales paid to the photographer.

There are additional fees for companies wishing to use an image on printed materials, but pricing structures are negotiable, thus allowing smaller clients to still benefit from the wide stock of images available at the Yeelenpix website. The images are also hosted in various categories to help clients filter out images that are not relevant to their needs.

Fofana and his team want Yeelenpix to create jobs, but also to inspire pride in showcasing Africa in new ways. Talking about what drives his team Fofana sums it up saying, “We wanted to participate in the dissemination of a new image of Africa. Africa is changing and evolving. (We want to) enable African photographers to become better known and live their art.”

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