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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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Elumelu Foundation: Entrepreneurs will lift Africa

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

tony Elumelu Foundation

The Nigeria-based foundation pledges $100 million to train and mentor 1,000 entrepreneurs a year for 10 years with a goal of creating one million jobs.

One thousand young African entrepreneurs will receive intensive training, mentoring and networking opportunities as participants in the 2016 Tony Elumelu Entrepreneurship Program (TEEP).

The program, launched in 2015 by the Nigerian entrepreneur and philanthropist Tony Elumelu, is designed to identify 10,000 entrepreneurs over a 10-year period and empower them to launch ventures that will create one million jobs and add $10 billion to the African economy.

The Tony Elumelu Foundation has made a $100 million commitment to the program.

More than 45,000 entrepreneurs from 54 countries applied for the 2016 program, more than double the number of applicants in the first year. The successful 1,000 candidates represent a variety of fields including agriculture, information and computer technology and fashion.

Elumelu Fondation participants

Elumelu Fondation participants

All regions represented

All five regions of the continent are represented. The largest numbers of entrepreneurs came from Nigeria, Kenya, Ghana, Uganda and Cameroon.

(Here is a list of the entrepreneurs from each country and their areas of interest.)

Elumelu predicted the 2016 group of entrepreneurs “will become a generation of empowered business owners who will show that indigenous business growth will drive Africa’s economic and social transformation.”

He said his foundation has invested $8 million in the 2015 group, including $5 million that went directly the entrepreneurs as seed capital. “The results have far exceeded our expectations,” he added. With funding and networking, the program has “helped extraordinary people take control of their destinies.”

In addition to receiving training and networking for nine months, the entrepreneurs will participate later this year in the Elumelu Entrepreneurship Forum.

Elumelu is #31 on list of Africa’s richest

Elumelu is a Nigerian entrepreneur and investor who is listed as #31 on Forbes’ list of Africa’s 50 richest people. He owns the controlling interest in Transcorp, a Nigerian conglomerate with businesses in hospitality, agriculture, oil production and power generation. Forbes puts his net worth at $700 million.

Elumelu became prominent in African business circles nearly 20 years ago, when he persuaded investors to take over a small, failing commercial bank in Lagos and turned it around and made it profitable within a few years. It later merged with United Bank for Africa, which has subsidiaries in 20 countries as well as the United States and the United Kingdom.

According to his profile on Forbes, he also has a stake in the mobile telecom MTN Nigeria and owns extensive real estate across the country.

Entrepreneurs will drive growth

As many African nations work to diversify their economies and move from resource-based revenue to manufacturing and services, entrepreneurship is considered an important way to drive economic growth.

While the continent is already seeing returns, experts say entrepreneurship holds untapped potential to drive economic development to the next level.

A 2014 study ranked Uganda as the most entrepreneurial country in the world and listed Cameroon, Angola, Botswana and Burkina Faso among the top fifteen.

The study, by Global Entrepreneurship Monitor, counted the percentage of the adult population that owned a business and paid wages for at least three months. In Uganda, the percentage was 28 percent. (Suriname in South America was the least entrepreneurial in the world with less than one percent.)

African Development Bank pushes employment

Akinwumi Adesina, president of the African Development Bank, recently reaffirmed the lender’s commitment to entrepreneurship as it seeks to promote a sense of urgency about youth employment on the continent.

In Africa 10-12 million young people enter the workforce each year but only three million jobs are created annually. Even when there are jobs, young people often lack the skills employers required.

“We need a sense of urgency for tackling unemployment,” Adesina said, noting that the bank has created a strategy that could create 25 million jobs for young people on the continent. These programs focus on agriculture, manufacturing, and information and computer technology. The bank will also index youth employment and track the labor market over time.

“The skill sets and the jobs of the future are digital. The world is changing fast,” Adesina said.

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The African body SABER looks to revolutionize energy in Africa

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

SABER

Since 2009, SABER has been working to change the nature of energy within Africa.

Energy is at the very core of how economies and societies develop, and yet the sources of energy have become huge issues in recent years. Every developed nation in the world fueled its economic growth off the back of fossil fuels, but as finite resources dwindle, nations are looking for more sustainable means of energy.

In developing regions of the world this is an issue that relates to more than just growth, but also to the well-being of its citizens. The pollution caused by traditional fuels often affects the poorest people the most, and as urban centers become the financial heart of emerging markets, the need for greener energy has become increasingly stark.

The African group SABER is a prime example of people taking the initiative to change the face of energy within their markets.

What is SABER?

The African Society of BioFuels and Renewable Energies (ABREC/SABER) was established in 2009, to work towards creating cleaner and more sustainable sources of energy in Africa. The body is a public-private partnership (PPP) which is funded by 15 African nations in conjunction with various private enterprises.

SABER CEO Thierno Bocar oversees the organization’s work from its central office in the Togolese capital, Lomé.

Saber CEO Thierno Bocar

Saber CEO Thierno Bocar

SABER’s mission statement outlines how significant sustainable forms of energy will be for the emerging markets of Africa, saying, “Transitioning to clean energy is all the more demanding because energy needs are foreseen to expand considerably in Africa over the coming decades with new investment of about two thirds of existing capacity needed to keep pace with Africa’s growth.”

Although the organization is only 7 years old, it has already established a number of strong collaborative partnerships, and has turned ideas into realities. SABER was self-funded by 2012, which meant it had met its goal of being an independent advisory body to the public. In 2013, the group signed an agreement with the Committee on Economic and Monetary Union of West Africa (UEMOA), in which additional funding was allocated to move forward with several SABER projects.

Ideas turned into actions

The most notable of these projects has been the construction of solar powered street lighting across 3 African nations. Togo and Sierra Leone have both had 13,000 solar powered street lamps built, while a further 15,000 have been constructed in Benin. These developments alone are worth around $175 million of investment.

Solar energy features prominently in SABER proposals, alongside hydro-electricity and geothermal energy. These forms of energy are not only clean, but access the continent’s own resources intelligently.

CEO Thierno Bocar stated that within West Africa there were currently three areas that “have been selected: solar street lighting, rural electrification using solar kits or small-scale plants and the installation.”

However, SABER’s work is already expanding as it aims to address renewable energy needs across the continent.

Courtesy of SABER projects, there are currently solar power plants in 8 African nations, geothermal power stations in Kenya and Ethiopia, and a hydro-electric power plant in Uganda.

Continued growth

SABER has established relationships with The African Development Bank and USAID, but 2016 has seen further developments in their cooperative efforts. SABER recently announced a partnership with Oragroup that will provide further revenue for the growing number of energy projects across Africa. Oragroup wants to be known as the leading bank in Africa for fighting climate change, and Mr. Bocar described the $233 million platform as enabling “project arrangement with high added value.”

SABER’s continued growth constitutes more than its own ventures, as Bocar wants to foster environments in which local people drive change and grassroots initiatives can flourish. The plans to help build such a foundation are already in place, as SABER offers expert advice to governments, and is also striving to fund the Seeded Green African Development Fund. This structure will enable private equity to fund small-scale projects across the continent, with an initial goal of a $150 million fund over the next 10 years.

Of course, if SABER’s successes catch the imagination of others, and governments make the most of the support the organization offers, then organic growth within sustainable energy projects could well eclipse such targets. If it does then it will benefit not only Africa, but the world.

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Herman Heunis: the tech entrepreneur who stepped away from the limelight

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

Herman Heunis

What’s next for Herman Heunis, the man who created “Africa’s Facebook”?

Herman Heunis is the man who created MXit, which was at one point Africa’s most subscribed to social media platform. Born in Namibia, Heunis grew up in a rural community where his parents ran a sheep farm, but Heunis was drawn to technology as a young man. Having moved to South Africa, Heunis attended Stellenbosch University in 1977 and 3 years later began his career in computer programming.

It was not until 1990 that Heunis launched the first of his own businesses, when he created an ICT consultancy firm. This was followed in 1998 by the launch of Swist Group Technologies, an information and communication technology company which specialized in software development. This entrepreneurial spirit would eventually lead to the formation of MXit.

The MXit explosion

MXit was launched in 2005 as an instant messaging service in Stellenbosch, and it took a rapid hold within the youth of South Africa. By 2013, MXit had a larger user base in South Africa than Facebook, with 45 million registered users in the country. This user base was growing by 60,000 new registered members per day, and 750 million daily messages were being sent across the MXit network.

MXit had originally been created as a mobile game, but it struggled to find sponsors, and the gaming angle was eventually removed. Heunis explained the evolution of the MXit service saying, “An integral part of the game was communication between players. After several metamorphoses we dropped the game idea and focused only on the communication part – that worked extremely well.”

The MXit application on iPhone

The MXit application on iPhone

When MXit was launched the entire team consisted of Heunis and 7 employees, but the rapid growth of the service attracted attention and further investment. Only 2 years into its existence, MXit received major investment from the Internet giant Naspers. What had been an 8 person company grew to employing 150 people as MXit looked to expand its reach far beyond the confines of South Africa.

Through innovative viral marketing, Heunis secured 500,000 users in Indonesia, and while the core of MXit’s users was still in South Africa, the platform was being used in more than 120 countries by 2011. The speed of MXit’s success and growth was impressive, but Heunis does not like to take all the credit, saying, “Timing was perfect and I had a fantastic team. The word ‘failure’ was never an option.”

Selling up and moving on

At the height of MXit’s popularity, Heunis made a shock decision, and decided to sell the company. Stepping down from his CEO position at the end of 2011, Heunis completed the sale of his company in 2012 to Alan Knott-Craig Jr. The decision was evidently a difficult one to make as Heunis said, “Selling a company that you have started is traumatic. Fact of the matter was, I was extremely tired and burned out, and staying on as CEO was not in the interest of the company.”

Knott-Craig Jr’s company, World of Avatar, did not grow MXit as Heunis might have hoped to see. In fact, in 2015 MXit was closed down, and Heunis expressed his disappointment on Twitter. Heunis tweeted that he regretted being too burnt out to continue at the helm in 2011, but that he truly believes that MXit had “all the ingredients to become a major success story.”

Heunis has said that his motto is “You are the captain of your ship,” and it appears that without its captain, MXit experienced a rapid decline after its sale to World of Avatar. As numbers dwindled the reversal of the company’s fortunes could not be stopped, and what had been Africa’s largest social media network ceased to exist.

Since departing from MXit, Heunis has stayed away from the limelight, and thrown himself into various hobbies including endurance bike races such as the Absa Cape Epic.

While MXit’s sale has ensured that Heunis need never work again, it was never money that motivated him anyway. Heunis has said, “For a true entrepreneur, the satisfaction of creating outweighs the money rewards.”

With that in mind, it would be too soon to say that we have seen the last of Heunis as an entrepreneur, but he says he has no immediate plans to return to the world of technology.

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King of Soto: Benin’s answer to Caribbean rum?

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

king of soto

Entrepreneur Mabel Adekambi creates King of Soto, a new take on a traditional liquor that is growing in popularity.

Inspired by a tradition of fine palm wine produced in her native Benin, entrepreneur Mabel Adekambi in 2014 launched King of Soto, a high quality rum produced entirely with local ingredients.

“When we say ‘rum’ all over the world, we know it comes from the Caribbean. Why not have a proper product in Benin?” Adekambi asked.

Adekambi’s product comes in 10 different flavors including pineapple, orange, mango, papaya, strawberry and passion fruit. King of Soto only uses natural ingredients and no chemical additives.

Rum production begins with the harvest of sap from palm trees. Rich in yeast, it quickly ferments juice called palm wine. Then the wine is distilled to produce a liquor the Beninese call sodabi, or soto for short.

The nickname inspired the name King of Soto, rum produced from sodabi, spices and fruit.

Process takes 6-12 months

Typically, rum-makers use wooden or aluminum barrels like those used in wine making. However, Adekambi found those were not available in country and would be very expensive to order. Instead she uses 20-liter gasoline cans.

The fruit, spices and sodabi are mixed together and stored cans for six to 12 months before the rum is ready for bottling.

Because sodabi is a seasonal product, it is difficult to produce large volumes of rum. King of Soto uses sodobi that has been distilled several times in order to achieve a refined liqueur.

Adekambi learned about rum production as a student in France.

Studies in entrepreneurship

After studying entrepreneurship, communication and tourism in France, she returned to Benin to work as a manager at Residences Celine Hotel in Cotonou.

King of Soto has become popular, mostly by word of mouth. Production rose from 10 bottles a month to 100 bottles within the first year of operation. The rum is sold in super markets for less than $2.

Sodabi is common liquor in West Africa, although it goes by different names in different countries: koutoukou in Ivory Coast, Akpeteshie in Ghana or Ogogoro in Nigeria.

Each region has secret methods for extracting the palm wine, which creates a variety of tastes and styles.

In Benin, the name sodabi derives from the name of its inventor, who learned distilling techniques from Europeans about 100 years ago.

king of soto bottles

A staple of celebrations in Benin

Benin, especially the region of Adja, is well known for its expertise in producing sodabi, according to Professor Koblévi Aziadomé, former minister and director of the Benin agricultural research center.

Often sold in plastic bottles, the popular beverage is consumed at celebrations and festivals.

Some people add plants, spices or fruits in their sodabi to give it medicinal properties or special tastes.

Negative image

In the past, producers have failed to adequately ferment or distill the sodabi, giving it dangerous levels of methanol and creating a negative image. Both Benin and Ivory Coast have at times banned its production.

But Adekambi seeks high quality, well distilled sodabi to create rum that customers can safely enjoy.

Adekambi believes King of Soto will only grow as the quality and flavor of her product becomes more widely known.

She sees King of Soto as both a business and a patriotic effort as it grows into an export product and employs more people. “For the moment, it is not profitable. But it will become profitable and hundreds of families in Benin will benefit.”

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Alamine Ousmane Mey: Cameroon’s economic mastermind

5 June 2016 Comments (1) Africa, Featured, Leaders

Alamine Ousmane Mey

Cameroon’s Finance Minister has energized the country’s economy through reform, infrastructure developments and his own determination.

Cameroon’s Finance Minister, Alamine Ousmane Mey, has been lauded as a brilliant fiscal tactician, a shrewd manager and a facilitator of new business enterprises. Earlier this month, Mey was recognized as Finance Minister of the Year at the prestigious African Banker Awards 2016. The honor is well deserved. While not everyone will have heard of Mey, he is the mastermind driving Cameroon’s fast developing economy, and his recent award gives credit to an exceptional career.

Education and banking success

Born in Kousseri in 1966, Mey grew up in an upper-middle class family. He later gained a solid financial education by studying abroad in Germany, Belgium and Turkey. Mey studied electro-technical engineering alongside banking, which bestowed him with a keen understanding of modern economics.

Upon his return to Cameroon in 1993, Mey obtained a job with the CCEI Bank, which later evolved into Afriland First Bank. He rose swiftly through the ranks, and in 2003 he was appointed General Manager of Afriland First Bank, which was the only non-foreign owned private financial institution at the time. Mey quickly ushered in a new era of success at the company. Afriland had a key role in financing the Cameroonian economy and driving consumer spending. In 2010 the bank issued the equivalent to US$ 567m in credit, an astronomical amount by regional standards. Under his leadership the bank saw rapid growth, and quickly became one of the major banks in the region that still enjoys a strong international reputation to this day.

Government career

Mey’s successes at Afriland bank did not go unnoticed. In 2011 he was offered the role of Minister of Finance, despite no previous government experience. He quickly undertook a range of financial reforms which increased real term government revenues and cracked down on misspending. He also refocused government investment towards sustainable projects that have driven growth in the economy.

Mey has carefully borrowed money to finance key infrastructure developments outside the capacity of the government budget; this has been a particularly astute move, as the loans have been used to target under-developed sectors of the economy with high potential gains, both in monetary terms, and for the people of Cameroon. He highlighted his strategy saying, “Yes, we will borrow, but we will focus on life-changing projects.” In doing so, Cameroon has grown its economy, while comfortably servicing the loans which kick-started the process.

Lom Pangar Pipeline modification

Lom Pangar Pipeline modification

Mey has since has earned a reputation as an expert in putting together and overseeing ambitious projects incorporating multiple parties. One such example was the recent completion of the $86m Lom Pangar Pipeline modification. This complex infrastructure scheme was cost-shared between the Cameroonian government, the World Bank, and the contractor COTCO who undertook the project. The scheme has been heralded as a great success as it was finished safely, on time and under budget, while indirectly benefiting thousands of local Cameroonians. Christian Lenoble the general manager of COTCO, praised the efficiency of the working relationship: “The collaboration between the project and government was superb. To me, it was a key factor in our success in completing our work on time and within budget.”

Now versus then

Before Mey took the helm, Cameroon’s growth stood at a middling 3.3% in 2010. Since Mey took over, the economy has grown year on year and is estimated to hit 5.5% for the financial year 2015. This performance is particularly impressive when considered against both international and regional trends. Many of the world’s nations have struggled to achieve any meaningful growth since the financial crisis. Similarly, many of Cameroon’s neighbors have posted disappointing growth figures in the years 2014 and 2015, largely due to falling global commodity prices or political instability. Cameroon has bucked both of these trends, thanks in part to its economic diversification. Initially, strong commodities exports allowed Cameroon to shrug off the worst of the global financial crisis, but Mey realized the economy was still vulnerable. Under his counsel, the government implemented diversification schemes to develop the construction, agriculture, transport and energy sectors. The fruition of these strategies has allowed Cameroon to largely sidestep the commodities crash, marking another success for the Minister of Finance.

No one would disagree that Cameroon still faces big challenges ahead, but Mey is not one to rest on his laurels. He is committed to meet a range of development targets set by the IMF, and given his past achievements, there is a very good chance of him doing so. Ultimately, the future of Cameroon’s economy appears to be in the strongest of hands.

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Sub-Saharan Africa’s most debt-laden nations

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

african-currencies

Sub-Saharan Africa’s most indebted countries are revealed in the latest figures from the World Bank and the IMF.

Recent figures from the World Bank and the IMF provide a clear picture of which of Africa’s sub-Saharan nations have the highest levels of debt. The figures illustrate national debt as a percentage of the nation’s GDP, as opposed to ranking nations on absolute debt. This is an important distinction, as it accounts for how significant the effect of a government’s debt could be to its economic future.

For example, South Africa has the largest overall debt in absolute terms – with a huge 158 billion euros worth – but it also has a much larger GDP then most African states. This larger economic base ensures that South Africa is not even in the top ten of the most indebted nations.

From the highest debt to the lowest

The ten most debt laden countries of sub-Saharan Africa (with the percentage of their GDP that debt represents in parentheses) are Eritrea (126%), Cape Verde (122%), Gambia (97%), São Tomé and Príncipe (92%), Congo (79%), Ghana (74%), Malawi (73%), Angola (70% ) and Seychelles (65%).

In contrast, the ten nations with the lowest percentage of their GDP represented as debt were Nigeria (13%), Botswana (16%), DR Congo and Swaziland (20%), Equatorial Guinea (25 %) and the Comoros (29.2%), Namibia (31%), The Ivory Coast and Burkina Faso (33%) and finally Mali (35%).

Across the entire sub-Saharan region this averaged out at a 52% debt to GDP ratio, which actually compares favorably with Europe, in which the average is 92%.

What is clearly of significance is the degree to which an economy is likely to grow, and thus manage its debt without it becoming crippling. Moreover, what is sustainable for a developing nation is markedly less than it is for a developed market. While 40% is generally seen as manageable for emerging economies it can be significantly higher for large, more established markets.

The good news for Africa as a whole is that average GDP growth is second only to South Asia. A more cautionary view would note that borrowing is also growing quickly, and unforeseen humanitarian disasters, such as the 2014 Ebola outbreak, can have huge economic fallout in developing markets.

Changes to old debt and shaping the future

The single largest impact on the once debilitating debt levels in Africa occurred with the 1996 Heavily Indebted Poor Countries Initiative (HIPC). The internationally developed program was managed by the World Bank, in conjunction with the IMF and the African Development Bank. The initiative was further bolstered by 2005’s Multilateral Debt Relief Initiative, which was managed by the same trio, and led to 35 sub-Saharan nations eradicating over $100 billion of external debt.

While this allowed many nations to invest in social infrastructure, for others it simply meant writing off overdue debt, but did not create new streams of revenue for investment. Whether a nation wrote off old debt, or managed to put new resources into development, all of the affected nations profited in one key area.

According to Marcelo Guigale, a World Bank director, this universal benefit was that governments learnt “discipline” in spending, and had to have clear plans on reducing poverty. As such, Guigale stated African governments had “more money to spend and new offers to borrow—this time from private bankers.”

The concern in some quarters is that borrowing in some nations is outpacing growth, and this could lead to a return to pre HIPC levels of financial burden. An article in The Economist warned that, although Africa’s economies were growing quickly, “growing fastest of all is debt—personal, corporate and government.”

However, a trio of The World Bank’s own economists feel confident that “overall, governments have been borrowing responsibly”, and the IMF have ensured that guidance is being provided to help nations manage their debt constructively.

It is important for nations to be prudent with their borrowing, but even with some worries over rising debt, most experts feel genuine progress has been made.

Todd Moss, a senior fellow at the Washington-based Center for Global Development summarized the nature of Africa’s debt situation, saying, “Despite misgivings about certain countries, Africa is still in a fundamentally different place than it was 20 or 30 years ago when old debts were taken on.”

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Kori-Odan: Making Africa’s mark on the video game industry

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

Olivier Madiba

A Cameroon developer is one of the first to focus a game on the mythology of the continent.

With the release of one of the first African-themed computer video games produced on the continent, Cameroon’s Olivier Madiba, 30, hopes to shake up a global industry dominated by white game developers who create white heroes.

Madiba’s company, Kiro’o Games, launched the PC-based “Aurion: Legacy of Kori-Odan,” in April on the United States platform Steam to positive reviews.

To Madiba, it represents more than a video game, Madiba said.

“Our dream is bigger than that. We want to build a bridge between the gaming industry and Africa,” Madiba, the co-founder chief executive officer of Kiro’o Games said.

Game based on African myth

Based on African mythology, the game features Enzo Kori-Odan and his wife, Erine Evou, as they try to take back his throne in a land called Zama after his brother-in-law stages a coup and ousts them.

The game was a long time in the making. He first started talking to friends about making a game about Kori-Odan in 2003 while he was studying software development at the University of Yaoundé.

His father worked at a sugar factory and ran a video store in Douala when Madiba was growing up and video games became his obsession. However, since Cameroon has no video game industry, he could not find a career path in his own country.

After graduating from the university with a degree in computer science in 2009, Madiba taught himself how to create games on the internet and decided to start his own company, based on the Cameroon capital, Yaoundé.

Screenshot from Aurion

Screenshot from Aurion

Investors, Kickstarter campaign fund effort

Madiba launched the studio Kiro’o Games, in 2011, and his team began working on the game in earnest.

The studio, which has a staff of 20 artists and developers, raised $270,000 from investors and more than $55,000 in a successful Kickstarter campaign, which enabled them to complete the project.

When he was young, he had noticed few games had African heroes and the continent was often shown through the lens of war and crisis. Most games feature white heroes because most game developers are white, he said.

Game takes place in the future

Madiba wanted to change that with the story of “Aurion: Legacy of Kori-Odan,” an epic 2D adventure in which the usurped king and queen fight to regain their thrones from the evil brother-in-law.

While the story comes from African myth and tradition, the name adds an element of science fiction: The game takes place in a world that exists 10,000 years in the future on another planet far away from Earth.

Using African characters rather than the typical warriors and magicians of role-playing games, Madiba said he wanted to create a world where “Africa was on top.”

Other Africa studios are developing video games. In Nigeria, Maliyo develops smart phone games with African stories. In Kenya, Leti Arts creates puzzle games with local narratives.

Game captures international attention

But Aurion has captured much wider attention, enough that the U.S. State Department invited Madiba to participate in the 2016 Mandela Washington Fellowship Program, which is part of the Young African Leaders Initiative launched by President Obama.

In addition to being a Kickstarter Staff Pick and being featured in The Wall Street Journal, the game is receiving very good reviews, complimenting both the design and the storytelling.

It is available only for PC but Madiba hopes to develop it and other games with animation for mobile platforms as well. With low labor costs in Cameroon, he believes he can create a profitable business creating games that also tell the African story.

He hopes the game will help foster more diversity in games and create a better understanding of Africa. “Being African isn’t based on your color … It’s how you see the world and what you want to share.”

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