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Is there hope for Eritrea?

5 July 2016 Comments (0) Africa, Featured, Politics

Eritrean refugees

Can Eritrea shake its reputation and get a handle on its migration problem?

Is Africa’s youngest country also its most repressive state? The labels it has carried for the past decade have become the lens through which the international community views it, but how fair is the reputation it has developed? Eritrea gained independence in 1993, nearly 30 years after Emperor Haile Selassie seized the land for Ethiopia in 1962. It has never held elections, has no free press and has a mandatory and indefinite national service. However, this oppressive picture seems to be at odds with the experiences of recent visitors, journalists and diplomats who have reported the country to be clean, relaxed and relatively advanced. People can be seen enjoying bars, restaurants and cinemas while going about their day under no obvious restrictions. The issues contributing to its high levels of emigration are unique. Can the problems be reversed and stability returned to this troubled nation?

Eritrea’s Troubled Past

The UN has repeatedly criticized the government for its lack of democracy and suspected human rights abuses. For over a decade, journalists have been barred from entering the country and in 2001, the government shut all down all free press houses. International sanctions placed over its alleged support of Al Shaabab Islamists in Somalia have further damaged Eritrea’s economy and deepened its isolation on the world stage.

Modern Eritrea has faced a number of crises in its young life. After just a few years of independence, a two-year war broke out in 1998-2000 that left tens of thousands dead. After 15 years of tentative peace, there has been a recent resurgence of violence. Details have been vague, with 200 Ethiopian troops reportedly killed, and both sides accusing the other of re-starting the hostilities.

Europe Watches On

Eritrea’s problems have been compounded by severe droughts and the nation’s heavy reliance on agriculture. A revival of the conflict with Ethiopia would be nothing short of catastrophic, inevitably forcing more people to flee the nation, adding to an already alarming exodus from the troubled country.

Migration from Eritrea hit new highs in 2015, with Eritreans being the largest contingent of Africans to arrive in Europe. This migration, although detrimental, is forcing the international community to take notice of the problems faced in Eritrea, driving change.

Mass Migration 

Eritrean refugee camp

Eritrean refugee camp

Due to this influx of migrants reaching Europe’s shores, the EU has recently announced a $227m “development fund” for Eritrea and has opened access to a number of emergency finance mechanisms. There is a growing perception that sanctions and further isolation are far less effective than engagement with these problematic countries; an increased amount of communication, research and aid has proven to be a more valuable strategy. It has been suggested that international isolation and hostilities with Ethiopia would only force it closer to its Somali and Sudanese neighbors, something unlikely to elicit the reforms that the UN has demanded.

The development fund, which is due to run from 2016-2020, as well as collaboration with the government to improve democratic and human rights, is expected to reduce the number of Eritreans leaving the country. The effectiveness of this campaign will depend on the government following through with reform. They claim the restrictive state has been a necessity due to a “no war, no peace” policy towards Ethiopia, and a need to be vigilant and prepared for further confrontation.

Looking Forwards

Alongside fresh UN aid, additional money is finding its way into the country through private investment in industry, particularly in the mining sector as Eritrea boasts strong mineral resources. The conflict in Yemen has also led to a fortuitous collaboration with the United Arab Emirates, with Eritrea providing “logistical facilities” from its southern port of Assab. Commentators feel that this foreign capital and cooperation is critical in paving the way to improved conditions and stability within the nation.

Despite its troubles, Eritrea has made some meaningful progress on its own. Since its independence from Ethiopia and subsequent war in 1998-2000, the country has posted promising health statistics. Under-five mortality has decreased by two thirds, due in part to successful vaccination programs that have saved thousands of lives. AIDS has long been a scourge upon Africa, with the continental infection rate standing at 5% today. Defiantly, Eritrea has bucked the trend by bringing its infection rates down to a comparatively low 0.8%.

Eritrea’s mass-migration problem is unlike those of Syria, Iraq, Afghanistan and Somalia. It has relatively low rates of corruption, it is not currently at war, and is not a hotbed of religious extremism or persecution. The problems its citizens face are related to democracy and a lack of rights, decisions the government claims are to protect the country’s future. Can this government be persuaded to work with the international community and democratize the country? The issues it faces are unique, but with an international focus on decreasing migration, coupled with foreign investment, its future could be promising.

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Paul Ballen looks to make ice-cream a South African passion

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

Paul Ballen Ice Cream

Paul Ballen’s ice-cream startup is making waves with its unique flavors and fresh approach.

Ice-Cream is pretty big business across much of the world, but South Africa is not a name that most would connect with the frozen treat. Paul Ballen is a man intent on changing this, and on creating a brand of ice-cream that is known for its quality and innovative flavors.

Ballen’s company, the eponymous Paul’s Homemade Ice-Cream, has been creating a stir in his hometown Johannesburg with its bold varieties and focus on high quality ingredients.

As the Paul’s Homemade Ice-Cream range expands and grows in popularity, ice-cream lovers will be hoping it spreads outside of its home country.

It started with a gift

The beginning to Ballen’s company began only 6 years ago, when his mother bought him an ice-cream maker for his 21st birthday. Something that was initially just a bit of fun in his parents’ kitchen, turned into a passion and a small source of income. Bellen said, “I started playing with different flavors and textures. I shared it with my friends and…ran it as a side business throughout my university studies and began supplying delis and cafés.”

Paul's ice cream flavors

Paul’s ice cream flavors

This small project slowly grew, as Ballen used social media to show people his latest flavor creations. One machine in his parents’ kitchen became three machines in the garage, as Ballen began to take orders from friends and local people. At this stage the business had grown, but it was still a very small operation. However, Paul Ballen decided to team up with a University friend, Josh Amoils, and as business partners the duo decided to make Ballen’s passion a full time enterprise.

Amoils said, “I was excited about new ventures and new opportunities and we decided to give it a go in March 2014. We moved from the garage at Paul’s parents’ house to a workshop…we simultaneously had to get on the road and visit distributing outlets to try get our ice cream out there. Things just developed from there. We just constantly kept moving forward.”

Innovative flavors lead the way

A consistent factor with Paul’s Ice-Cream, whether from his early experiments in 2010 to his latest releases, is the focus on unusual flavors and fresh ingredients.

While the range includes classic ice-cream flavors, Ballen is constantly trying new combinations and ideas to ensure that the range excites consumers.

To get an idea of their range, consider that as well as offering the ubiquitous strawberry flavor, there is also a Strawberry & Pink Peppercorn. How many other brands of ice-cream offer flavors such as, White Russian, Oatmeal & Raison and Spiced Pumpkin & Marshmallow?

Paul's Homemade Ice-Cream

Paul’s Homemade Ice-Cream

While many of these flavors remain as permanent fixtures in their range, what really differentiates Paul’s Homemade Ice-Cream is that, as an artisanal product it can constantly offer limited edition flavors to keep interest high.

Ballen says, “We create really innovative flavors. Each month we run a campaign where we create a buzz around a topic or theme and then develop an ice cream flavor based on the theme, which is then available for that month.

These flavors are also highly focused on fresh ingredients with no artificial flavorings, and no automated machinery involved in creating each batch. Amoils explains that, “We only use natural ingredients, no preservatives, no additives. We don’t compromise on the quality of the ingredients, they are as good as you can get. We feel our stuff is made with love.”

The future of Paul’s Homemade Ice-Cream

Several cafes and restaurants around Johannesburg now stock Paul’s Homemade Ice-Cream, and the company has had international media interest. Despite growing interest, the company’s ice-creams remain a true craft product, as opposed to a mass-produced product that simply uses the fashionable label of “craft” for marketing.

Bullen and Amoils currently employ a workforce of 20 people, and like any successful business it is bound to grow, but neither of the two entrepreneurs wishes to alter the ethos of what has made the company so popular with its customers. Amoils explained, “We would rather maintain our current process of training up craftsmen, as opposed to investing millions in machinery to scale up production.”

While it is an admirable approach, it means that it could be a while before dessert lovers outside of South Africa get to enjoy White Rabbit or Apple Pie flavor ice-cream.

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Brexit: Challenges ahead for Africa

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

British Prime Minister David Cameron visits South Africa

The United Kingdom’s departure from the European Union could slow trade and investment in the continent.

Brexit could not be happening at a worse time for Africa.

The economy of the continent is already struggling with falling commodity prices and the economic slowdown in China. The decision by British voters to withdraw from the European Union could trigger decreases in trade with Africa as well as aid and direct investment from the United Kingdom.

The vote, which followed a bitter campaign that centered on immigration, may signal that Britain will increasingly turn away from its support for world development, according to the Brookings Institution.

“Perhaps the biggest impact of the Brexit on Africa would be the end of British ‘outwardness’ – the country’s concern with and responsiveness to global development issues,” Amadou Sy, a senior fellow and director of the Africa Growth Initiative at Brookings, said.

Britain contributes significant aid

The United Kingdom is one of the largest contributors to the European Union’s development assistance fund for low-income economies. The nation contributes $585 million, nearly 15 percent of the total fund, second only to Germany (20 percent) and France (18 percent).

While the U.K. might provide aid directly, new mechanisms and policies would first have to be put in place, a potentially complicated and lengthy process.

Sy said Brexit also is expected to weaken trade ties between the U.K. and Africa.

Britain is one of Africa’s largest trading partners within the EU, accounting for more than 12 percent of all European Union trade with the continent (down from a peak of nearly 18 percent in 2012).

Dozens of trade pacts must be negotiated

According to General Robert Azevedo, director-general of the World Trade Organization, Brexit would require the United Kingdom to renegotiate trade agreements with the organization’s 161 member nations, a complex and time-consuming effort that could slow down trade with African and other nations. With Britain’s exit, the European Union also would have to renegotiate dozens of bilateral trade agreements, Sy said.

For example, a recent agreement between the EU and the Southern Africa Development Community allows free access to the EU market for Botswana, Lesotho, Mozambique, Swaziland and Namibia. However, with Brexit, the value of that access would be significantly diminished as it would not include the U.K. market and a separate agreement might have to be negotiated.

African agriculture may also be affected. According to Sy, the United Kingdom has been a strong opponent against agricultural subsidies the EU provides within the Eurozone because they put African agricultural imports at a disadvantage. With Britain’s departure, Africa would lose a strong voice in the EU for its farmers.

Nigeria, South Africa will feel impact

money nigeriaAfrica’s largest economies may be hard hit.

The U.K. is the fourth largest destination for exports from South Africa. That nation’s battered economy took a further hit as the rand fell by 7 percent the day after the British vote.

Economists at South Africa’s North-West University estimated that Brexit could shave 0.1 percent off South Africa’s annual economic growth, which already declined by more than 1 percent in the first quarter of 2016.

“With current growth in South Africa in 2016 expected to be close to zero, [Brexit threatens] a loss in growth South Africa can ill-afford,” Raymond Parsons and Wilma Viviers, professors at North-West, said.

Nigeria’s market reforms may be delayed

Trade between Nigeria and the United Kingdom is estimated at more than $8 billion and had been expected to more than triple by 2020. However, those advances also are likely to be interrupted as new trade deals are negotiated.

Nigeria, on the brink of recession, has been liberalizing market controls in order to spur the economy. But fallout from Brexit may also slow that effort.

Razia Khan, chief economist for Standard Chartered Bank said risk aversion world wide as well as soft oil prices could slow investment and delay normal operations on the newly liberalized market.

Africa is not alone in feeling the impact of Brexit, and stabilizing markets is the first step to blunting the economic impact, Kahn said.

As emerging markets come under pressure globally, “much will depend on how quickly financial market stability can be restored.”

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Kenyan Geothermal power continues its expansion

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

Kenya Geothermal Energy Project

Kenya continues to attract interest with its extensive geothermal energy schemes.

In the space of only a few years, Kenya has shifted its entire focus on energy, and created unprecedented growth in geothermal production. While hydro-electricity has long been the nation’s main source of power, the Kenyan government now hopes that by 2030 only 4% of the country’s energy will be hydro-electric. The notoriously unreliable rains of East Africa make a shift to geothermal power a sensible choice, and Kenya’s Great Rift Valley is proving to be a giant source of energy.

Power from within

It was back in the 1950’s when the first exploratory wells were dug in the Rift Valley. The Olkaria region of the area was quickly ascertained to have serious potential for energy creation. Under the surface there is a seething mass of geothermal activity that blanketsthe area with hot springs and bubbling, sulfuric fissures. It is no surprise that the national park in which Olkaria is found is known as “Hell’s Gate.”

Within 10 years of the first drilling, the Kenyan government, working alongside the UN, began more in-depth assessments of the energy potential that bubbled beneath the ground. By 1981, the first geothermal power plant had opened in Olkaria, with an initial output of 45 MW.

Kenya geothermal energy

Kenya geothermal energy

Harnessing this natural energy became a large project, with over $1 billion of investment over the next 20 years. However, it was an investment worth making, as Kenya’s energy demands have rocketed as the nation develops. Considering that in 2008 only 25% of the population had access to electricity, this demand was only going to increase. As such, the government developed its Vision 2030 program.

A bolder vision

Vision 2030 was launched in 2008 to outline Kenya’s plans for energy expansion that would facilitate rapid economic growth. However, droughts highlighted the unreliable nature of Kenya’s hydro-electric dependency, and in 2013 the project was updated with Olkaria’s geothermal plants the priority.

Olkaria expanded rapidly in the 21st century, with Olkaria II opening in 2003 and expanding its production in 2013. Olkaria III hosts a 110 MW generator to add to the combined power of 290 MW coming from Olkaria sites I and II.

As recently as 2014, Olkaria opened up site IV that hosts a further 140 MW of power, as the company KenGen has worked closely with multinational companies to further its production.

KenGen is the company responsible for Kenya’s geothermal production, and as a majority government owned body it has made massive inroads into expanding the energy supplied by the Rift Valley’s activity. Alongside companies like Toyota and Toshiba, KenGen has created a huge increase in the energy produced from Olkaria.

The financiers supporting its growth include the World Bank and the European Investment Bank, which hope that affordable, green energy will have even more far reaching effects. Diarietou Gaye, the World Bank’s country director for Kenya, said, “That’s why we are investing in the energy sector… [it] is a key infrastructure investment in the fight against poverty.”

This is borne out by figures quoted from KenGen CEO, Albert Mugo, who stated that the increased production from Olkaria had seen a 30% drop in energy costs for consumers since 2014.

Continued Growth

The expansion of Kenya’s geothermal power base is far from complete. The development of Olkaria V is already underway, and there are plans for an Olkaria VI site. Moreover, the fact that Kenya is now the 8th largest producer of geothermal energy in the world has attracted interest from neighboring nations. Ethiopian president Hailemariam Desalegn recently visited Olkaria, and the two nations have agreed to work side by side in the development of renewable energy.

Geothermal energy looks set to be at the forefront of Kenya’s energy revolution, and will surely play a vital role in the country’s continuing development.

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An African leader for global health?

29 June 2016 Comments (16) Africa, Featured, Leaders

Tedros Adhanom Ghebreyesus

The African Union supports Ethiopian Tedros Adhanom Ghebreyesus to become the first head of the World Health Organization from the continent.

With Africa bearing much of the brunt of disease globally, who better to lead the United Nation’s World Health Organization than an expert from the continent?

That is the reasoning as the African Union throws its support behind the candidacy of Tedros Adhanom Ghebreyesus, Ethiopia’s foreign minister and former health minister. As Africa recovers from the recent Ebola epidemic, an official from the continent would bring the perspective of someone who has seen its health problems on the ground.

U.N. members will choose a new WHO leader in May 2017 and the campaigning is well under way. Tedros is one of three candidates for the top post. The others are Phillippe Douste-Blazy, a former foreign minister and health minister from France, and Sania Nishtar, a former minister of health and education from Pakistan.

The 8,000-person health agency was founded by the United Nations after World War II to set global health policy and tackle major health emergencies. It has the authority to spur urgent drug development and push governments to fund essential drugs, as well as to declare public health emergencies.

“Someone with fresh experience from Africa can bring you a fresh view,” Tedros said.

Ethiopian growth cited

Tedros points to Ethiopia’s economic growth, as well as achievements in improving health care. He cites his government’s quick reaction to the region’s current drought, which avoided famine.

He said his experience reforming Ethiopia’s health system and reorganizing finances of the Global Fund supported his qualifications for the World Health Organization job.

Tedros became minister of foreign affairs in Ethiopia in 2012 after serving as health minister since 2005. He has also served in leadership roles in federal and regional government.

Tedros as minister of foreign affairs in Ethiopia

Tedros as minister of foreign affairs in Ethiopia

He earned a Ph.D. in community health and a master’s degree in immunology. He began his career in health in 1986. In addition to being the first African leader of the agency if he is elected, Tedros would be the first who is not a medical doctor.

Renowned for malaria research

A globally recognized researcher on malaria, he published a study of the incidence of malaria among children living near dams in northern Ethiopia, a key contribution to the field in 1999, and was named ‘‘Young Investigator of the Year’’ by the American Society of Tropical Medicine and Hygiene. He was the first non-American to receive the “Jimmy and Rosalynn Carter Humanitarian Award” in 2011 for significant achievements in improving human health.

According to the Global Fund, Ethiopia’s health programs are well managed and report significant achievements, including a 50 percent drop in the incidence of HIV and an even greater drop in AIDs-related deaths.

Still, Tedros’ tenure as health minister was not without controversy. Several groups of Ethiopians living abroad are opposing his candidacy, citing his refusal to declare a cholera epidemic when he was health minister that led to thousands of deaths. Tedros responded that the deaths could have had many causes, but a report said laboratory checks confirmed cholera was the cause.

The ministry also had to return $6 million to the Global Fund amid accusations that funds to fight HIV were misspent on health clinics. Tedros denied the money was misspent. He said the funds were returned because they were spent after a deadline had passed.

African Union backs candidacy

The African Union endorsed his candidacy in January.

“He is Africa’s candidate,” said Abdelmalek Boudiaf, Algeria’s health minister.

Margaret Chan, the current WHO chief, said half the regions of the world had never had one of their own leading the health agency. Eight chiefs have come from Europe, the Americas or the Western Pacific, which includes China and Japan.

The French candidate, Douste-Blazy, dismisses the importance of geopolitics, saying strong leadership ability is the key.

Sania Nishtar, the Pakistani candidate, said the argument for an African leader could just as easily apply to South Asia.

Vote “a nail biter”

Geopolitics could give the African candidate an edge in the voting. This year, for the first time, each of the U.N.’s 194 members gets a vote rather than the executive board making the selection.  With 54 states, the continent will account for more than a quarter of the votes.

Still, in spite of the backing of the African Union, delegates from at least two West African nations that are former French colonies said they preferred the French candidate.

Nothing is certain. “It will be a nail biter,” said Suerie Moon, research director at Harvard Global Health Institute.

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Romain Girbal: Doing Mining Differently in Africa

28 June 2016 Comments (0) Africa, Featured, Leaders

Mining has often been a “dirty” industry, with a history of exploitative social practices and environmental degradation, particularly in Africa. Various treaties and organizations have made efforts to clean up mining practices over the years, but French entrepreneur Romain Girbal has decided to start at the source. He is the president and cofounder of the Responsible Mining Alliance (AMR), a new company that is working to develop responsible mining projects in Africa that respect both the community and the environment. The company has already started its first bauxite mine in Guinea and its passionate leader is looking to expand.

Romain Girbal: From the City to the mines of Africa

Romain Girbal looked set to pursue a career climbing the corporate ladder. He studied business law at the University of Paris X Nanterre and international trade in Madrid. After graduating from the prestigious HEC business school in Paris in 2007, he moved to London and worked in the City as a junior consultant in structured financing for mining behemoth Glencore, where he focused on West Africa and Latin America. Glencore is the world’s largest commodities trading company, with over $170 billion in revenue in 2015. Looking back on his experience there, Girbal notes that “working there allowed me to familiarize myself with the sector and to quickly learn its norms, challenges and growth opportunities.” These lessons helped him to later launch the Responsible Mining Alliance.

In 2008, however, Romain Girbal left Glencore to become the director of the legal department of Harvest Energy Limited (owned by State Oil), a British company working in fuel distribution in several European countries. In his new role, he managed the daily negotiation and drafting of contracts. Girbal soon felt the need for a change, stating, “I then realized that I had more of an entrepreneurial spirit, and I wanted to try out an African adventure.” He joined up with Thibault Launay, a friend he made in London, and the two decided to try to make it on their own.

In 2012, they created Adventure Capital Corporation, a venture capital and consulting firm specializing in mining, oil and gas investments, mostly in Africa. These first steps foreshadowed the creation of the Responsible Mining Alliance in July 2015. This time, Romain Girbal and Thibault Launay set out to develop mining projects in Africa that were responsible both socially and environmentally, an innovative and ambitious vision that would begin to take shape in Guinea.

The Responsible Mining Alliance (AMR) rethinks mining

logo-alliance-mimiere-responsable“With the Responsible Mining Alliance, we wanted to show that you can do mining differently,” declared Romain Girbal in February 2016 when asked about the philosophy of AMR on French business channel BFM. With this credo in mind, the two young French entrepreneurs set up shop in Guinea, persuaded of the enormous potential of mining in this emerging country. The Responsible Mining Alliance now holds a bauxite mining permit in Boké, in the northwest of the country.

Although Romain Girbal and Thibault Launay were eager to jump into the mining sector in Africa, they wanted to do so in a new and ambitious way. This is why the Responsible Mining Alliance goes further, with the goal of doing “socially responsible mining” as they told BFM Business. What does that mean?

“We’re trying to set new standards in the mining industry, first in Guinea where we are starting our operations. We’ve signed partnership agreements with the Boké School of Mining and the Boké Center for Professional Education so that our mining engineers and geologists can give free classes there,” explained Romain Girbal, sincerely motivated by the idea of changing things in an economic sector that has been stained by negative clichés. While the government of Guinea has standards for socially and responsible practices, his group is “working hard to set ever higher standards. Mining is about more than extracting raw materials. It can also be a way to get local communities involved in mining by starting win-win partnerships for everybody.”

The Responsible Mining Alliance’s vision could be summed up in a few key points: following high social standards, respecting the environment, favoring local employment as much as possible and training engineers and workers through partnerships. These aren’t just pretty words; as Romain Girbal likes to point out, “For us, we consider it a requirement. In terms of employment, for example, right now we are only a small team in Guinea, but 18 of our 21 employees are Guineans.”

romain-girbal-photo-conseil-administration-alliance-miniere-tesponsableThe high standards Girbal has set for his project have attracted outside attention as well: in January 2016, Xavier Niel, the famous French billionaire and boss of telecom operator Free, decided to invest in the Responsible Mining Alliance via his personal holding company NJJ Capital. This was a big publicity win for the young mining company, and other well-known investors and partners have since joined the adventure. These include Anne Lauvergeon, ex-CEO of Areva; Edouard Louis-Dreyfus, head of Louis Dreyfus Shipowners; Alain Mallart, head of Energipole; and Daniel Lebard, head of ISPG. Not to mention Arnaud Montebourg, the former French Minister of the Economy, who worked his network to support the young French entrepreneurs’ project. In addition, the well-known French business journal Les Echos recently wrote an effusive article on AMR about how this mining startup is taking the Paris elite by storm. It’s just the latest media success for a project that seems to be going quite well.

Bauxite, the mineral at the heart of the AMR

Beyond the historical ambitions of this project, the AMR represents a strategic business choice to invest in bauxite, a mineral necessary for the production of aluminum. Bauxite is sold to aluminium oxide refineries, who then sell it to aluminum smelters to make the final product. According to Girbal, “You need about 4 tons of bauxite to produce 1 ton of aluminum.” In the context of globalization, where emerging economies like China have profoundly shaken up the market, bauxite is one of the most important raw materials for several strategic economic activities, such as aviation, transportation and construction.

In 2010, worldwide production of bauxite reached 211 million tons. Australia is the largest producer, with a third of the market, followed by China, Brazil, India and Guinea, which holds an 8% share.

According to the French Geological and Mining Research Bureau (BRGM), Guinea alone holds 52% of the world’s bauxite reserves. Romain Girbal readily shares this number to show the potential of the Responsible Mining Alliance in this West African country undergoing rapid growth. “For the moment we’re only operating in the Boké prefecture, which is the real global center of bauxite and where the future of this strategic mineral lies because it’s where you find the world’s best bauxite,” Girbal notes. “Big mining companies are setting up here more and more.”

In Boke prefecture, in the northwest of the country, the Responsible Mining Alliance has obtained an exploration permit for 295 square kilometers (114 square miles). Prospecting has already begun and extraction should start soon. This deposit contains an estimated 650 million tons of very high quality bauxite.

“I think we came at the right time to Guinea, getting started with a very promising bauxite permit,” Girbal says. “That’s how we have been able to develop the Responsible Mining Alliance and get to where we are today.”

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In Madagascar, a small family company mushrooms

28 June 2016 Comments (0) Africa, Featured, Leaders

Ylias Akbaraly

Ylias Akbaraly heads Sipromad Group with 2,000 employees and revenue of $100 million a year.

Madagascar is among the world’s poorest countries, but that hasn’t stopped businessman Ylias Akbaraly from amassing a fortune estimated at $710 million.

Akbaraly, a Franco-Malagasy of Indian origin, has helped build a family business into a conglomerate with holdings in industry, tourism, real estate, aviation, banking, agribusiness, pharmaceuticals and security as well as technology and telecommunications.

Forbes ranked him as the fifth wealthiest person in francophone Africa and his company reported $100 million in revenue last year.

He has master’s degrees in management and marketing from the University of California, Berkeley, and from the School of Management Company of Paris. He also sits on the international council of the Belfer Center for Science and International Affairs at Harvard University.

Company employs 2,000

As chairman and CEO of the Sipromad Group for 20 years, he has helped transform his family’s business from a company of 20 employees to one with 2,000 people on staff and offices in Mauritius, Paris and Dubai in addition to Madagascar.

sipromad.com

sipromad.com

He received the Pravasi Bharatiya Samman Divas Award in 2009, the highest recognition from the Indian Government to a non-resident Indian, and Britain’s Non Resident Indian Businessman of the Year in 2006.

In 2008, he also co-founded with his Italian-born wife, Cinzia Catalfamo Akbaraly, the Akbaraly Foundation, a charitable organization that aims to reduce poverty through the development of projects in education, nutrition, health, child development and housing. The foundation currently is focused on the “4Awoman Project” to fight against women’s cancer in Madagascar and in Africa.

Akbaraly is also a director of Man and Wife, a family and social magazine published in India, Real Estate Observer, a magazine specializing in real estate and real estate development in India, and the Madagascar Foundation in United States.

Building tallest structure in region

The company is building the Orange Telecommunication Tower, a 33-story headquarter building in Atananarivo, Madagascar, that is expected be the tallest structure on the Indian Ocean.

The family and the business grew from humble origins.

His family came from India to Madagascar in 1918 when his great-grandfather sought better opportunities. He became a trader in the coastal town of Belo Sur Tsiribihina. The business passed through generations, and Akbaraly’s father moved the company to Antananarivo in 1972. Initially, Sipromad manufactured and sold wax in Madagascar, then diversified into soaps and candles.

After he returned from studies in the United States, Ylias Akbaraly began working in real estate and rose within the company.

Company sales total $100 million

With the expansion of capitalism in the country starting in the 1980s, more investment was possible and the company expanded its holdings significantly.

Today, the family group includes some twenty companies in different sectors as well as interests in other firms and has combined sales of $100 million.

Akbaraly, who aspires to make his home country a major trading hub on the Indian Ocean, said his hero in India is Mahatma Gandhi because he was able to elevate an entire nation and help it grow.

He said he also admires U.S. President Barack Obama as a symbol of global change.

He sees a bright future for his home country as a hub for trade between the Indian Ocean and Africa and a great place to invest, especially in tourism, agriculture, renewable energy and mining. As its political unrest comes to an end, the country, he said, is primed for growth.

“I dream that this beautiful island will become the dragon of the Indian Ocean and a hub for all Africa.’’

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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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