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The World Bank names Mauritius as Africa’s top business destination

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

business mauritius

An annual report from the World Bank has picked out Mauritius as the best place to conduct business in Africa, so just how has the island nation achieved this?

Mauritius has been named as Africa’s most business friendly country by the annual “Doing Business” report from the World Bank. The report seeks to help potential investors (and governments) identify how easy it is to create startups and investment opportunities across the globe. While Africa as a continent does not fare particularly well, Mauritius came in at number 32 on the global list, which made it the comfortable winner in Africa.

The top 5 African nations showed a diverse geographic spread, with Rwanda, Botswana, South Africa and Tunisia following, in that order, on the heels of Mauritius. A quick glance at Africa’s worst performing nations would provide no surprises, as Eritrea propped up a bottom 5 of the DRC, Central African Republic, South Sudan and Libya.

Any nation struggling with armed conflicts and political unrest is not going to provide the ideal base for creating new business opportunities, so while the bottom of the table comes as no surprise, what is it about Mauritius that has seen it take the top position?

Stability, simplicity and low taxes

Mauritius is first and foremost a fairly safe country. Not only does it not suffer from the unrest of many African nations, but it has low crime rates, and a small population which is governed by what the Economist Intelligence Unit called Africa’s only “full democracy” back in 2011. While this may no longer be fair to other nations, it is clear that Mauritius is a society with low levels of corruption and good personal safety.

Prime Minister's Office in Mauritius

Prime Minister’s Office in Mauritius

In addition to this, the Mauritian government has gone out of its way to reduce the amount of red tape involved in starting up a business. This ongoing strive to create a business-conducive atmosphere is highlighted by the 2014/15 changes to building permit rules, in which the process was streamlined to allow new ventures to start running as quickly as possible.

It now only takes 14 days to register a property, and 3-6 days to start up a new business. To help ensure the wheels on each sector of the economy run smoothly, the government has also invested heavily in education. The net result of this focus is that Mauritius has the highest rate of literacy in Africa, at 86%.

South Africa’s high commissioner to Mauritius, Nomvuyo Nokwe, told South African media that not only had Mauritius made it simple to register new businesses but that its development of education was also key. Nokwe stated, “It has highly skilled professional people…it’s made doing business easy, because you have [educated] people to work for you.”

Perhaps one of the most significant aspects to Mauritius’ burgeoning business growth, and yet one with some controversy, is its low taxation. The Africa 2016 Wealth Report referred to the huge growth in millionaires in Mauritius, but this included many from other nations who had moved there. The report found that “Mauritius was the top performing African country for millionaires during this period, with growth of 160 per cent…company and personal income tax rates are only 15 per cent, with no inheritance or capital gains tax.”The controversy around this is that some feel the nation is just a tax haven for the wealthy, and moreover that much of the money coming into the country is simply passing through. There are concerns around the rich, from nations like Kenya, using Mauritius for tax purposes, as its income tax rate is an attractive 15%.

Does the economy match the reputation?

Dipolelo Moime, chief executive of business risk consultancy Legato Services, believes it is more innovation that has attracted outsiders, saying, “Mauritius is continually reinventing and reforming itself massively to ensure the country is as business-friendly as possible, in order to attract multi-national corporations.”

Despite this, the issues around money just passing through cannot be ignored. There is an entire business strategy known as “The Mauritius Route”, which describes how investors in India use the island nation as a conduit to connect them to Indian markets. In fact, 39.6% of foreign direct investment to India, between 2001 and 2011, made its way via Mauritius.

However, this money does not pass through Mauritius in a vacuum, and the banking and legal processes it utilizes are legitimate businesses which create revenue streams for the host nation.

As things stand, Mauritius is not one of Africa’s largest economies, but the World Bank report did not base its findings on GDP, it based them on how easy it was to set up a new business in a nation, how well developed infrastructure was, and how attractive a destination was for new investment. In these measures, Mauritius must warrant its ranking.

As of 2016, Mauritius can boast the highest per capita GDP in Africa, with a 2016/17 predicted GDP growth of 5.7%. In addition, the nation’s stock exchange is widely regarded as one of the best in Africa and is worth over $7 billion. These figures are for a nation of only 1.2 million inhabitants.

Most significantly, the government is not resting on its laurels. The Mauritian government has drawn up a blueprint to diversify the economy, and invest in new industries, while continuing to develop existing ones. “Green growth” is at the forefront of plans to maximize the nation’s coastlines, with a goal of 8-9% economic growth per annum, which will ultimately lead to Mauritius being a high income status nation by 2025. The plans have worked thus far, so investors from far and near will be watching with interest.

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Muhammadu Buhari rebukes Cameron for corruption remarks

27 May 2016 Comments (2) Africa, Featured, Politics

Nigerian President Muhammadu Buhari

Muhammadu Buhari, the Nigerian President, aimed a subtle attack on David Cameron’s hypocrisy after the British PM’s comments on Nigerian corruption.

Muhammadu Buhari, the Nigerian President, was in London this month for a multinational conference on tackling corruption. The summit was being held at the Commonwealth Secretariat, in the UK’s capital city, and played host to numerous world leaders as well as the US Secretary of State, John Kerry.

While the event was a positive move by different nations to discuss strategies for breaking down corruption, it was preceded by an embarrassing leak regarding the British Prime Minister.

Only days before the scheduled meeting, Cameron was overheard talking to the British Queen and saying, “We’ve got some leaders of some fantastically corrupt countries coming to Britain … Nigeria and Afghanistan, possibly the two most corrupt countries in the world.”

Buhari’s balanced retort

As Mr. Cameron’s comments were widely reported, President Buhari’s office released a statement to say that the President was “deeply shocked and embarrassed” by the Prime Minister’s remarks.

However, there was a much more subtle retort about to come. A retort in which Buhari accepted the issues that his country faces with corruption, but also shone a light on the vein of hypocrisy, that some might see, within Cameron’s words.

When asked by the BBC whether Nigeria was indeed “fantastically corrupt,” Mr Buhari responded “yes,” and then elaborated on Cameron’s remarks by saying, “He was telling the truth. He was talking about what he knew.”

But the real riposte came when Mr Buhari explained that he was not demanding “any apology from anybody,” adding, “I am demanding a return of assets. What would I do with an apology? I need something tangible.”

This was a reference to the billions of dollars of money stolen from Nigeria by corrupt officials, who then took their ill-gotten gains to the UK. The most recent example of this involves former Nigerian state governor Diepreye Alamieyeseigha, who fled Nigeria as he faced corruption charges, and arrived in Britain with $1.8 million in cash. While Alamieyeseigha was arrested in the UK, and charged with money laundering. £1 million of this money was eventually returned to Nigeria through the Metropolitan Police.

Moreover, this was not an isolated case, or even close to being the largest amount. Funds stolen from Nigeria and siphoned to the UK are nothing new. Almost 20 years ago, the former military head of state, Sani Abacha, was shown to have stolen approximately $5 billion from Nigeria’s coffers, and half of this is estimated to have been laundered in the UK. None of this money was ever recovered by Nigeria, and the incumbent President wonders just where it is and when it will be returned.

The former governor of Nigeria’s Delta State, James Onanefe Ibori, is also estimated to have stolen $250 million from his homeland. Ibori is serving jail time in the UK, but his multitude of British properties has not been processed in order to ensure that the laundered money is sent back to its rightful home.

The reality for both nations

It is of course clear that Nigeria’s corruption problem outweighs Britain’s. However, perhaps one of the largest issues is that Nigeria’s corruption adversely affects its own people, while Britain’s corruption often allows a small number to benefit from theft outside its own shores.

Transparency International’s Corruption Index ranked Nigeria 136th out of 168 nations, and the UK was ranked 10th. However, Transparency International criticized Prime Minister Cameron’s comments, saying that the UK was a key part of the global corruption problem by “providing a safe haven for corrupt assets” and being “by far the most important part of the global offshore system of tax havens and secrecy jurisdictions.”

The recent scandal around the Panama Papers, and the naming of Mr. Cameron’s father in them, is a timely reminder that corruption is not simply a problem in the developing world.

The presence of the various world leaders in London is a positive step, but Nigeria could justifiably argue it is doing more than most to address its problems.

The Nigerian Economic and Financial Crimes Commission has only been operating since 2003, and yet by 2013 it had thousands of convictions. Nigeria appears to be taking corruption seriously, and “embarrassing” comments put to the side, it must be hoped that all the nations at the anti-corruption talks can work together for sustained progress.

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Eric Kinoti: Young Kenyan serial entrepreneur

26 May 2016 Comments (0) Africa, Featured, Leaders

Eric Kinoti

At age 32, Kinoti operates four businesses, including a tent manufacturing company with $1 million in annual sales.

Kenyan businessman Eric Kinoti says entrepreneurship is a journey. At age 32, he has already come a long way.

From a humble start selling eggs by day and working the night shift at a hotel, Kinoti has gone on to launch four companies, including the successful flagship Shades System East Africa, which manufactures canopies, military and party tents, gazebos, and car park shades.

The company, which Kinoti started when he was just 24 years old, has customers in several African countries including non-governmental and humanitarian organizations and reports annuals sales of $1 million.

Kinoti also founded and runs Alma Tents, a tent rental company; Bag Base Kenya Ltd., which manufactures bags from canvas remnants from the tent business; and Safi Sana Home Services, a cleaning company.

Forbes 30 Under 30

One of a growing number of Kenyan entrepreneurs, Kinoti has been recognized twice by Forbes as a top African entrepreneur and in 2014 was named to Forbes list of 30 Under 30 Most Promising African Entrepreneurs.

Born in Mombasa and raised in Mombasa and Meru, Kinoti went on to earn a degree in business management at Tsavo Park Institute. He became interested in business as a child. At 10, he worked as cashier in his father’s shop and sold snacks to his classmates at school.

After he finished college, he got a job as night cashier at a hotel in Malindi and spent his days buying and reselling eggs.

After a move to Nairobi, he tried to start business selling milk to hotels. But a breakthrough came when a customer asked him to supply a tent. Kinoti found that non-Kenyan companies dominated the tent business in his country, and the idea for Shades System was born.

Company expands in region

A shades system tent

Shades System, based in Nairobi, has expanded rapidly and now exports products to Somalia, Congo, Rwanda, Southern Sudan and Uganda. Customers include USAID, Toyota Kenya, Bata Company, and East African Breweries.

He said raising capital has been his biggest challenge.

At one point, he borrowed from a money-lender to start his first and saw his belongings sold off when he couldn’t pay. He ended up paying back the full amount, $20,000, plus $10,000 in interest.

But he persisted. Kinoti stressed that entrepreneurship is a journey, not an overnight get-rich success.

He said young entrepreneurs often jump from one idea to another in hopes of making fast money but that rarely pays off. “You cannot be rich in a day. You have to accept that entrepreneurship is a process,” he said.

Difficult lessons in entrepreneurship

He said he has also learned to be careful whom he trusts and not to rush decisions.

Early on, he trusted people with money and some ran off with it.

He also discussed his business ideas freely, only to find others used his ideas. The lesson? “As an entrepreneur, listen more than you speak,” he said.

Kinoti said he also made mistakes jumping in too quickly when a deal sounded good.

For example, he said opening Safi Sana Home Services was premature and the returns so far have not been very good so he is restructuring that business as a web portal offering home improvement solutions.

He said he might better have focused more attention on the tent business and waited to start a new company.

“It’s important to create a strong foundation,” he said. “Then you can proceed to another business.”

Entrepreneurship booms in Kenya

According to USAID, Kenya has become a center for entrepreneurship and innovation. The agency’s Development Credit Authority has sought to increase access to capital for small businesses and promising entrepreneurs.

In 2014, USAID mobilized $340 million in credit and enabled nearly 600,000 loans to small and medium-sized businesses.

The agency’s Yes Youth Can program has helped expand economic opportunities for young people through training and access to loans.

The hope is that young Kenyan entrepreneurs will be able to avoid the expensive moneylender trap that Eric Kinoti had to climb out of on his journey to creating a thriving business.

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In Dubai, child’s play is good business

25 May 2016 Comments (0) Business, Featured, Middle East

Fairytales Dubai

Two Emirati women combine family with entrepreneurship to launch Fairytales, an indoor play area for young children.

Basma Al Fahim and Fatma Al Madani wanted to spend more time with their young children. But to them, that didn’t mean staying at home all day like many of their fellow Emirati women.

Instead they launched Fairytales, an indoor play area for young children in Dubai. For the two friends, business innovation began with family.

Al Madani had left a seven-year career in government to focus on raising her two young daughters while Al Fahim, who has two young sons, had already launched several successful businesses when they opened Fairytales in December.

Arabian Business recently recognized Al Fahim and Al Madani for their entrepreneurship.

The play center is a new idea in the United Arab Emirates, where most women stay home to take care of their children and only 14 percent of the workforce is women, mostly younger women who have been able to attain an education as the federation of emirates modernizes.

Inspiring creativity, growth

Unable to obtain bank financing for their project, the two women funded the business themselves from their savings.

“The concept was inspired by our children,” Al Madani said, noting that their children were playing pirates and fairies while the two women held their first brainstorming session in the same room.

“They reminded us of how we played as kids’’ before digital devices came along, she said. That sparked the goal of creating an environment that stimulates the child’s imagination and intellectual growth.

Their priorities as mothers – education, healthy food, and safety – became priorities for their business, according to Al Fahim, who had already started a fashion brand, an events company, and a beauty salon.

Teach social responsibility

At Fairytales, their goal to spark the imagination and creative thinking of each child as well as to instill social responsibility among the children, who are up to age eight.

They donated more than 200 children’s books during a local donation campaign on behalf of young cancer patients in Dubai Hospital on World Cancer Day.

The two also took part in a Happy Hearts project, organized by The Happy Box in Dubai, which sent more than 600 handmade cards to orphans in India.

Basma Al Fahim and Fatma Al Madani

A serial entrepreneur

Al Fahim brought significant business experience to the venture as founder and managing director of Eventra Events, an event-planning agency.

After studying marketing at Zayed University, she moved to Dubai and worked in digital and brand marketing. Coming from a prominent business family, she wanted to set a pioneering example for young Emirati women.

Her family’s conglomerate is the Al Fahim Group, whose activities include support for development of oil and gas fields, luxury cars, hotel management and investments. She chairs the company’s employment committee.

Events business succeeds

She opened the events business in 2010, bringing a fresh approach to events ranging from corporate gatherings to weddings to exhibitions. Today, Eventra is a premier event management company in Dubai.

Al Fahim went on to open The Dollhouse, a beauty salon with what she described as a “super chic” atmosphere and attention to detail and glamour.

After establishing The Dollhouse, she also launched Sirkaya, a fashion line that has become a well-known brand in Dubai.

After starting Eventra with three employees, she said she now has more than 100 working on her different ventures.

Advice for young entrepreneurs

She said she has many more business ideas. Growth plans keep her motivated.

“When I say growing I mean improving,” she said.

Al Fahim encouraged young Emirati entrepreneurs to pursue their dreams by having confidence in themselves and focusing on key goals.

“Keep your mind positive,” she said. “Train your brain to think positively to attract the right energy in your life.”

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African banks want share of growing e-money market

24 May 2016 Comments (1) Africa, Business, Featured

mpesa

A top East African bank competes with a major telecom in Kenya as mobile banking booms.

A top East African bank hopes to challenge a telecommunication company’s dominance in electronic mobile-payments service and gain a larger share of Kenya’s electronic banking trade.

Banks in Nigeria, Cameroon and Mali are making similar moves to tap into the continent’s mushrooming market in electronic payments.

In 2014, mobile money transactions generated $656 million in revenue in sub-Saharan Africa and that amount expected to double to $1.3 billion by 2019, according to the research firm Frost and Sullivan ICT.

In much of the world, banks are the leading providers of electronic payment services. But in Africa, where more people have mobile phones than have bank accounts, telecommunications companies have been able to dominate the market.

According to the World Bank, fewer than 25 percent of Africa’s 1.4 billion people have a bank account while 40 percent have a mobile phone.

Equity offers SIM card overlay

Now, Equity Bank, Kenya’s largest in the number of customers, and other banks want to tap into a growing market.

Equity, which also operates in Tanzania and Uganda, seeks to compete with M-Pesa, Safaricom’s popular mobile payments service.

Equity has begun providing its clients with a super thin SIM card overlay that enables them to access their accounts on their mobile phones.

The service, called Equitel, is powered by Safaricom’s rival telecom, Airtel Kenya.

Equity Bank contends that market should belong to the banking sector, not the telecoms.

“We have a major problem with the mobile provider also providing financial services,” John Staley, the bank’s chief of finance, innovation and technology said. “You cannot have the freight company controlling the tracks.”

M-Pesa enjoys popularity Kenya

Safaricom is the Kenya subsidiary of the global telecom colossus Vodafone Group, based in the United Kingdom.

Launched in 2007, M-Pesa has more than 12 million active users and processes more than $18 billion in transactions yearly.

The launch of Equitel follows a yearlong legal battle in which Safaricom raised questions about the security and privacy of Equity Bank’s SIM card plan. A Kenyan court ruled in favor of Equity, enabling the project to move forward.

Bank, telecom partner in Nigeria

Meanwhile, in Nigeria, GT Bank is partnering with Etisalat Nigeria, the nation’s third largest mobile operator to create GTEasySavers, a savings account that can be opened on a mobile phone.

Mobile banking is not as large a market in Nigeria as it is in Kenya. But with mobile penetration of 80 percent and only 57 percent of adults lacking bank accounts, it may be poised to take off.

The mobile market in West Africa is growing. It was valued at $17 billion in 2014 by the market research company Ovum. Mobile data revenue totaled $3 billion, up 30 percent from the year before.

Pan-African Ecobank is partnering with the telecom Orange Cameroon to enable Orange customers with Ecobank accounts to transfer money between the two services. The companies have launched the service in Cameroon and Mali and plan to extend it to Ivory Coast, Guinea Conakry and Niger.

Orange Money is currently available in more than a dozen countries in the Middle East and Africa. With over 16 million customers, the service transferred about $9 billion in 2015.

M-Pesa fails in South Africa

South Africa, where 75 percent of the adult population has banking services, provides a contrasting example of poor demand for a telecomm payment platform.

In May, Vodacom, a Vodafone subsidiary and the country’s largest mobile network, announced it was terminating its effort to attract South Africans to M-Pesa after the service failed to catch on in the continent’s most economically advanced nation.

The company had hoped to sign up 10 million South African users when it launched M-Pesa in 2010. However, by 2015, only one million people had signed up and only 76,000 were active on the platform.

“The success factors for M-Pesa in Kenya were not present in South Africa,” said Arthur Goldstuck, managing director of the technology research firm World Wide Worx.

Usage grows in other countries

Vodacom CEO Shameel Joosub said the company saw “little prospect” of M-Pesa being successful in the near term. The service will end June 30.

Vodacom said it would continue to offer M-Pesa in markets where banking access is more limited and M-Pesa usage is growing, including Mozambique, Tanzania, Lesotho, and the Democratic Republic of the Congo.

In Kenya and other countries where mobile transactions are popular, consumers likely will benefit from new competition in the e-money marketplace, according to a consultant with the World Bank.

“As long as pricing is low enough, mobile money services and healthy competition will benefit consumers and increase financial inclusion, tech consultant Martin Warioba said.

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Smartphone opens up new possibilities for Morocco

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

morocco smartphone

Mobile and internet penetration in Morocco continues to grow and crossover, as the country embraces technology.

Technology, and in particular smartphone technology, is changing the way Moroccans live their daily lives. More significantly, the nation’s nascent love affair with smartphones and web apps offers great opportunities for economic growth.

The National Authority of Morocco’s telecoms regulator (ANRT) released a report, earlier this year, that assessed the growth of the telecoms market from 2010-2015. The report found huge growth in mobile phone use, both in terms of penetration and the average time spent using a phone per customer. At the forefront of this expansion, the report highlighted falling costs, especially in areas such as 4G, which has helped bring the use of mobile phones and the Internet more inline. This expansion has seen a 146% increase in the average monthly usage of mobile owners in the past 5 years.

Embracing new ways of living

It would be foolish to dismiss the impact that smartphone technology can have within a country. The Arab Spring movement was, in part, driven forward by the use of social media platforms such as Twitter, which allowed on the spot reports and information from everyday people. While Morocco is a stable country, without much of the political unrest found elsewhere in North Africa, the impact of smartphones and online activity has the potential to bring about an economic revolution.

Online shopping has exploded in Morocco, and the use of mobile phones for web purchases has grown at an astonishing rate. This not only benefits online giants, but encourages local companies and outlets to take advantage of the new trend. Research carried out by MasterCard illustrates just how rapidly the use of smartphones for shopping has increased. In 2013, MasterCard reported that only 9% of users had made an online purchase via their phone in the previous few months. When this survey of 4,000 people was repeated in 2014, the figure had soared to 66%!

Aaron Oliver, head of emerging payments for MasterCard Middle East & Africa, said, “With rapidly increasing internet penetration rates and availability of secure online payment options, the country’s e-commerce industry is well placed to achieve significant growth.”

E-commerce could provide Morocco with a source of revenue that shows no sign of diminishing on a global level, never mind in an emerging market – where the scope for increasing penetration is even larger.

Are social media and apps the second wave of growth?

The ANRT report on mobile expansion showed that in 2012, only 16% of mobile phone owners in Morocco owned a smart phone. By 2014, this figure had risen to 38.2%, which indicates just how quickly the mobile landscape has changed. However, social media has not yet reached anything like the ubiquitous nature of its standing in Europe and North America. This is, like most areas involving the Internet, changing and it is changing at pace.

The Arab Social Media Report found that by 2014, Facebook penetration in Morocco was at 16% of the population, and had a growth rate of 13%, which was the second highest in North Africa.

With social media come apps, social media games and the proliferation of advertising. All of these things open up doors for startup companies, and a wider customer base for existing businesses.

It is therefore no surprise that Moroccan game designers and entrepreneurs have already begun to drive the second wave of Moroccan internet and mobile growth. The private telecom group Inwi now hosts an event called Inwi Days, in which game designers have 24 hours to create a new web game, and pitch it to a panel of judges in order to win a $12,000 prize.

Méditel Telecoms have launched a similar competition for app designers, and while this development of technology is fairly new, the majority of winners have maintained clear roots to Moroccan culture and traditions.

Inwi Days gave two games, Trombia and Runner Roul, the shared first prize, and both games were inspired by Moroccan culture.

Méditel’s app challenge was won by the app Maroc Culture, which is a trivia game that tests the player’s knowledge of Moroccan culture and traditions.

As mobile phones become even more popular, and the Internet plays a greater role in the lives of people across Morocco, such markets will continue to grow. A young generation of innovators is now taking advantage of these openings to create new businesses and trends, but ones that remain quintessentially Moroccan.

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Takunda Chingonzo: Zimbabwe’s Youngest Entrepreneur

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

Takunda Chingonzo

Takunda Chingonzo is one of Africa’s youngest entrepreneurs. Can his technology company and his growing international exposure help to pull Zimbabwe out of the shadow of its government and penalizing trade sanctions?

Takunda Chingonzo is a remarkable person, achieving more in his 22 years than many in their entire lives. He is best known as a start-up entrepreneur, creating three innovative businesses since graduating from high school, but his talents have social enterprise at their core, working to better the future of Zimbabwe through the freedom of technology and information.

After completing his degree in quantity surveying in 2014, he went on to obtain a CISCO certification in network security. Although he does not have a traditional background in business or technical design, it is his entrepreneurial spirit that has been the driving force in his companies and in instigating social change. He has been recognized for his efforts with the Swell Award for Innovation at DEMO Africa, and was one of 100 young people selected to take part in an 8-week internship in the USA following the Mandela-Washington Fellowship program in 2014.

Trouble in Zimbabwe

Zimbabwe suffers from a series of trade sanctions and embargoes, designed to restrict governmental trade after a long history of violations of democratic processes and human rights abuses. Everything within the financial trade industry is restricted, from imports and exports to export insurance and credit. Because much of the equipment, services and finances necessary for young African entrepreneurs come from outside the continent, this only works to restrict growth in this sector.

In 2015, Chingonzo was selected to hold an exclusive on-stage Q&A with President Obama at the US-Africa leaders’ summit, which aims to increase the US’s engagement with Africa. He spoke candidly about how trade sanctions are detrimentally affecting businesses and entrepreneurs in Zimbabwe, as well as the political leaders they were supposed to be targeting. He discussed the interest that he received for his projects for importing goods and investment from American companies, which were withdrawn after they found out he was from Zimbabwe. This effectively means the people of Zimbabwe are oppressed twice, once from their government, and again from the punishment designed to penalize the leadership of the country.

Tech Start-ups

Despite this opposition, he has successfully set up Neolab Technology, a multi award-winning startup. Its biggest achievement to date is Saisai, a public Wi-Fi network, designed to bring free internet access to all by installing wireless mesh networks in public spaces and public transportation in Zimbabwe. Chingonzo has described this task as “liberating the internet.” He understands that the internet is the key to progression in Zimbabwe, with free access to information and communication being central factors for people to free themselves from oppression. From a business perspective, he believes that “the internet is the one tool that lowers the cost of doing any form of business,” also showing his commitment to business progress within the country. He went on to say “It provides access to information that people and communities can use to improve and magnify the work that they are already doing. An informed community engages more, innovates more, and, from a business perspective, makes more and spends more.”

Alongside Neolab, he is also the co-founder of NeoEffect, a social start-up working towards empowering underprivileged youths through IT literacy, and is involved with both the MX project and BOOT Africa which promote student start-ups in tertiary institutions.

The Future

Chingonzo’s business acumen and commitment to social change seem to be a winning combination. He was featured in the Huffington Post as one of four African innovators you should know about. Last year, he graced the cover of Forbes Africa after making it on to the Forbes “30 under 30” list as part of the continent’s “next generation of billionaires.” The exposure he has received from his interview with President Obama has generated a buzz around his projects, and the burgeoning tech industry in Zimbabwe, while exposing the inequalities in the international relationship with Zimbabwe and its people. Chingonzo doesn’t just represent technology and innovation, but the will of the people of Zimbabwe and their indomitable spirit.

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Liberia will turn schools over to private operator

21 May 2016 Comments (2) Africa, Business, Featured

bridge international academy school

Bridge International Academies, which runs schools in Kenya and Uganda, will pilot a program in Liberia’s troubled school system.

The government of Liberia plans to turn its troubled school system over to a private company, drawing objections from representatives of the United Nations and threats of a strike from the country’s teachers.

Education Minister George Werner said the country would launch a pilot project in September, when 50 of the nation’s 5,000 schools will be taken over by Bridge International Academies, a private company based in Kenya, which also operates schools in Kenya and Uganda.

Werner noted that the Liberian school system has been “in a state of decay for the last three decades.” He said he decided to turn to Bridge after realizing that incremental change by the government would not happen quickly enough for the system to benefit Liberia’s children.

Werner said education would still be free to Liberian students.

High rate of failure on exams

Disrupted by years of war and then the recent Ebola crisis, the school system was labeled “a mess” by Liberia’s president, Ellen Johnson Sirleaf in 2013 after 25,000 of country’s high school graduates failed their university entrance examination.

After Werner announced the pilot program, Liberian school teachers approved a resolution threatening to strike if the government goes ahead with the plan.

One Monrovia teacher said schools are underperforming in part because of the low teacher salaries the government pays, forcing teacher to take two jobs. Joseph Komoreah said Liberians should be in charge of their education, not an outside company.

Meanwhile, a United Nations official said the plan amounts to a “gross violation” of the Liberian government’s obligation to provide a right to education.

State should run schools, official says

Kinshore Singh, the U.N. special rapporteur on education, call the plan an “attack” on teachers and public schools.

Calling the scale of the plan “unprecedented,” Singh said a public education system is “a core function of the state and abandoning this to the commercial benefit of a private company constitutes a gross violation of the right to education.”

Singh argues Liberia would do better to invest in improving its own education system and could approach the United Nations for assistance.

A Bridge International Academy school

A Bridge International Academy school

Schools lack resources

About 1.5 million are enrolled in Liberia’s primary schools but only about 20 percent of them complete 12th grade. Classrooms are often overcrowded and under supplied, even lacking enough chairs for all the students.

Bridge operates more than 350 schools in Kenya and seven in Uganda, charging each student $6 per month. The World Bank invested $10 million in Bridge International in 2014 and social investors including Bill Gates and Mark Zuckerberg have also provided funding.

But the company has also been criticized for its teaching methods.

The company calls its approach the “Academy in a box.” Bridge develops teaching materials and delivers lessons to teachers on a tablet they can use in the classroom. Bridge also uses computers to monitor how the students are progressing so educators can intervene if there are issues.

More than 100 organizations object

After it received World Bank funding, more than 100 organizations supported a statement critical of Bridge and the privatization of education in Kenya and Uganda.

A Bridge International spokeswoman said the system enables teachers to give well prepared lessons and uses technology to streamline administrative processes.

She said Bridge pupils had a 22 percent higher pass rate on national exams in 2015 than other students.

In the pilot program, the Liberian government will continue to pay the teachers but Bridge International will vet and supervise them. The company said it is looking for outside funding for the pilot.

If the 2016-17 pilot goes well, Liberia may look for other private education providers to help run its schools.

Bridge International Academies said it is the world’s largest education innovation company with more than 100,000 students in more than 400 nursery and primary schools in Africa. The first Bridge school opened in Nairobi, Kenya in 2009. In addition to its African programs, Bridge is planning to expand into Asia.

Founded in 2007, the company hopes to operate more than 3,000 schools in Kenya, with more than two million students, by 2018. The company wants to reach 10 million students in a dozen countries by 2025 with its own schools or using its model in partner schools.

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Cyber threat looms over Africa

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

africa cyber crime

As more people transact banking and business online, experts raise questions about security from hackers targeting the continent.

Amid global alarm about cyber theft, authorities warn that banks and other businesses and institutions in Africa are increasingly vulnerable to online fraud and theft.

African and international cyber security experts, including representatives of government and the United Nations, will gather in Nairobi in June to discuss online threats and how to fight them.

As more Africans use the internet, businesses and governments are providing more transactions and services online. But experts are raising questions about whether those sites are secure from cyber criminals.

Many small and mid-sized businesses cannot afford expensive security measures such as firewalls and malware protection while governments also use templates to build their websites, which cost less but may also be more vulnerable to attack.

Kenya, Nigeria, South Africa see attacks

Kenya, Nigeria and South Africa are among African countries that have already suffered millions of dollars in losses to cyber crime.

Nigerian officials estimated the country’s institutions lost $630 million annually to cyber attacks, theft and software piracy, nearly one percent of the country’s gross domestic product while online bank fraud more than doubled.

“Global tracking of cyber-attacks indicate that Nigeria is among the countries with high numbers of software piracy, intellectual property theft, and malware attacks,” Babagana Monguno, Nigerian national security advisor, said at the recent inauguration of a 31-member Cybercrime Advisory Council.

Monguno called the threat “a serious challenge to our resolve to take advantage of the enormous opportunities the internet brings.”

Nigeria’s new Cybercrime Advisory Council, established through 2015 legislation, is charged with promoting information sharing and making recommendations designed to improve cyber security. The country’s National Cybersecurity Policy and Strategy outlines the legal, technical and institutional systems that will be required to fight cyber-attacks in Nigeria.

Kenya loss put at $150 million

In Kenya, authorities said online thieves took about $150 million in 2014, as cyber crime in that nation tripled over 2013.

A 2015 report noted that 25 percent of Kenya’s internet users are unsupervised teens that may be exposed to cyber crime.

One expert said many businesses in Kenya lack the resources and access to IT expertise they need to protect their online platforms.

Rutendo Hwindingwi, division director for Sage East and West Africa, said businesses need to implement firewalls and use anti-malware tools and have access to IT specialists who can quickly respond when applications or operating systems are attacked.

The Communication Authority of Kenya in April put out a call for tenders a study of e-commerce and cyber crime detection and prevention in the country as the government attempts to develop a strategy to fight cyber crime.

The authority said it had set up a team to monitory cyber attacks, especially those that target government systems.

South African bank customers warned

South Africa has seen cyber crime losses totaling about $65 million, according to one estimate.

The South African Bank Risk Information Center recently warned bank customers to pay more attention to security, especially on mobile phones.

The center’s chief executive, Kalayani Pillay said protecting electronic devices is critical to reducing the risk of being victimized by cyber crime.

Phillay said malware and phishing attacks were on the increase in South Africa, including efforts to target accounts of corporate executives to move large sums of money.

The country’s wealth and particularly its relatively high gross domestic product per capita made it attractive to cyber criminals, she said.

Risk grows with mobile usage

Banks continuously update cyber security measures, but criminals come up with new ways to steal from customers, she said. The risk will grow as more bank customers migrate online, especially banking on their smart phones.

The warnings come against a backdrop of global concern following two large heists this year at Asian banks.

In February, hackers sent more than 30 fund transfer orders totaling $950 million from Bangladesh Bank using Swift, a global money transfer system. The thieves successfully transferred $81 million to accounts in the Philippines.

In May, Swift revealed another heist had taken place prior to the Bangladesh theft but had only been revealed by the second bank, which one researcher said was in Vietnam. The amount of the theft was not released.

Hackers breach bank security

Swift, with 11,000 member banks, processes 25 million messages each day to process billions of dollars in transfers.

In each case, Swift said the cyber thieves bypassed security controls at the local banks to request the transfers.

As concern grows on the continent, the African Expert Convention on Cyber Security, June 22-23 in Nairobi, will bring together experts from government agencies, the United Nations, corporations and investors to discuss strategies for fighting cyber crime.

Organizers hope the event will enable participants to share expertise from different sectors and create partnership frameworks for enhancing cyber security. Participants will also learn the latest technical tools available to protect against cyber threats.

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African governments seek bailouts as commodity prices fall

19 May 2016 Comments (0) Africa, Featured, Politics

angola imf

Angola is the latest nation to seek an aid package from the International Monetary Fund as its oil-dominated economy falters.

As its economy buckles under the weight of falling oil prices, Angola is turning to the International Monetary Fund (IMF) for a bailout.

By one estimate, the West African nation faces a shortfall of $8 billion, or 9 percent of its gross domestic product, this year. Angola last borrowed from the IMF in 2009.

Angola is one of several cash-strapped African countries that are turning to the IMF for financial help as prices drop for commodities such as oil and minerals.

Ghana agreed to an aid package in 2015, it’s first from the IMF in six years. Zambia is also in talks for IMF aid, which would be its first since 2008. Zimbabwe has also asked the IMF for its first loan in nearly two decades.

Meanwhile, the IMF stopped a $55 million loan to Mozambique – part of a bailout approved last year – after discovering the country had failed to report $1 billion in unreported loans it owes.

South Africa and Nigeria may also be forced to turn to the IMF as their economies struggle.

Angola faces shortfall

Angola’s request was an about-face after the nation repeatedly said it would not turn to the IMF for help in the current crisis because the aid would come with too many conditions.

But the country’s reserves have fallen as oil prices stayed below $45 a barrel and the government is reluctant to cut services in advance of elections in 2017.

Oil accounts for 95 percent of Angola’s exports and about half of the government’s revenue. In addition to slumping oil revenues, the country has suffered a retrenchment by China, which has its own economic problems.

Monetary agency requires transparency

In exchange for IMF aid, the Angolan government is likely to be forced to be more transparent about its financial dealings as the international agency typically scrutinizes the finances of countries it assists.

One criticism of Angola’s economy is the extent to which it is controlled by President José Eduardo dos Santos, who has ruled the country for more than three decades. While nearly half of the country’s population subsists on just over $1 per day, dos Santos’ daughter, Isabel dos Santos, is the richest woman in Africa, raising questions about the source of her wealth. Isabel dos Santos has denied using state money to enrich herself.

“The IMF stands ready to help Angola address the economic challenges it is currently facing by supporting a comprehensive policy package to accelerate the diversification of the economy, while safeguarding macroeconomic and financial stability,” Min Zhu, IMF deputy managing director, said in a statement.

One expert urged caution. Ricardo Soares de Oliveira, an Angola expert at Oxford University, noted that a study in 2011 by IMF staff found that the government could not account for $32 billion between 2007 and 2010.

“The IMF should use the leverage it has to extract serious concessions and tangible reforms from the government,” de Oliveira said.

Ghana receives bailout

Angola is the not the only country turning the IMF.

Ghana, an oil and gold producer, received a three-year, $918 million bailout in 2015. The country saw the value of its crude exports cut in half between 2014 and 2015, falling to $1.5 million in the first three quarters of last year as both prices and demand fell. Gold exports fell by nearly one third to $2.4 million.

In December, the IMF also agreed to a $283 bailout loan package for Mozambique that required the southern African nation to disclose all of its borrowing. In April, the IMF said it stopped a disbursement of $55 million after learning the country had not reported millions in loans by Credit Suisse Group and the Russian VTB Group.

Mozambique, a natural gas producer, saw exports fall by 14 percent in 2015.

Zambia, Africa’s second largest copper producer, saw a shortfall of 8 percent of gross domestic product in 2015 and is also seeking IMF assistance in 2016. Zimbabwe also expects an IMF loan in the third quarter of this year.

In addition to the IMF aid, the World Bank said it expects to lend up to $25 billion this year to countries reeling from falling commodity prices.

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