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Why Tunisia Believes Exports May Ignite Recovery

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

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Due to political instability and terrorism, Tunisia has been struggling economically. Could exports be the solution?

Tunisia’s economy had been in a fragile condition for many years. Still reeling from the global financial crisis, the Arab Spring uprisings left Tunisia and many other North African economies stagnant as a result of the regional instability. The problem was further compounded by risk adverse foreign investors, who came to view countries in the region as unattractive prospects.

Then came the terrible terrorist incidents of 2015. The attacks were designed to undermine the Tunisian economy, and they were successful in doing so. The portents were dire for a country in which tourism accounted for 14.9% of GDP in 2014, whilst employing approximately 12% of the working population.

Exports as the answer

A full-on financial crisis was fortuitously averted by the slump in global oil prices, combined with a good year for Tunisian exports of olive oil. Olive oil production on the European continent was hampered by a historically poor harvest in 2015. Yet Tunisia enjoyed record harvests, which enabled the beleaguered nation to quadruple its export revenues of olive oil from US$ 250 million in 2014 to in excess of US$ 1 billion in 2015. These factors have helped Tunisia narrowly avoid the fiscal brink; additionally they have illuminated a potential escape route from the economic wilderness.

The boom of last year’s olive oil season has set events into motion, as Tunisia can ill afford to let such a success become a one-off. Fortunately the EU has realized this, and in an effort to assist Tunisia they doubled the country’s olive oil export quota back in September 2015. If high production can be maintained, Tunisia can become a perennial player in this area. However, in a microcosm that reflects the overall Tunisian economy, Tunisian olive oil products are exported in their most basic and least valuable form. Value and jobs can be added by exporting refined, branded bottles as opposed to the current situation: exporting raw olive oil that is refined and branded by Spanish or Italian firms.

Transitioning to the exportation of more diversified and sophisticated products is something that would benefit other sectors within Tunisia. As an example Tunisia currently exports crude oil. However efforts are being made to finance and build the necessary facilities that will allow for the exportation of refined oil products. As with olive oil, this will create jobs and generate more revenue from the countries resources.

What needs to be done

At a recent conference to discuss the promotion of Tunisian exports, the President of the Tunisian Confederation of Industry Trade and Handicrafts, Wided Bouchamaoui, highlighted the value that an increased focus on exportation would bring to the economy: “Tunisia could raise the value of its annual exports to 100 billion dinars in the next decade.”

However, if such targets are to be achieved, continued oversight will be needed. Due to government intervention, the Tunisian dinar has been overvalued for many years, subsequently hampering exportation as Tunisian goods have been comparatively expensive. In an attempt to remedy the situation the Tunisian Central Bank has allowed the Dinar to depreciate in a controlled fashion. Despite this, the currency is still overvalued by as much as 15% according to some analysts. Further controlled depreciation is an ugly necessity, should Tunisia want its goods priced properly on the international market. This would serve as the catalyst to stimulate Tunisian exports and help reduce the trade deficit (US$ 6.6 billion).

The painful fallout from this policy is that for ordinary citizens their savings have lost value and their buying power has been reduced. The government finds itself in a precarious, high stakes situation: risk social unrest by allowing the currency to slide further, or hamstring the export-led recovery by giving in to public pressure.

Additionally, Tunisia has a major problem with illegal cross border imports and exports, a legacy from the Zine El Abidine Ben Ali regime. These activities undermine the country’s legitimate export enterprises, discourage foreign investors and deprive the state of taxable revenues. Whilst the current government has taken some steps to eradicate these practices, more must be done to legitimize all cross border trade.

If managed correctly, the export industry can be used as a major weapon in the Tunisian economic recovery. The benefits are numerous: exports can generate much needed revenue for the nation, tackle high unemployment, rebalance the trade deficit, generate new industries and encourage long-absent foreign investment in the country.

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Mauritania, Senegal seek to become oil, gas exporters

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

senegal gas

The two West African countries bet on a long-term recovery as global fuel prices slump.

In spite of the slumping price of oil in the past year, two West African countries are betting on a long term recovery as they race to produce enough oil and gas to become exporters by 2020.

Mauritania and Senegal both report promising off shore oil discoveries and each nation plans to proceed with multi-billion dollar extraction projects.

However, David Thomson, an analyst with Wood Mackenzie cautioned that securing financing for the projects could be challenging and take time. “These projects are massive and they’re very capital intensive,” Thomson said.

Offshore wells promising

In Senegalese waters, Cairn Energy reported that it had drilled three wells that revealed significant amounts of oil off Africa’s western extremity. Drilling was planned at a fourth, according to the Scottish energy company’s chief executive, Simon Thomson.

The United States company Kosmos Energy said it had confirmed a large pool of natural gas that straddled the Mauritanian-Senegalese border at sea and it planned to drill in the area.

The projected yield is 20 trillion cubic feet of natural gas, an encouraging threshold for further drilling, Kosmos spokesman Thomas Golembeski said.

Other African nations wait

The Senegalese and Mauritanian plans contrast with other nations such as Tanzania and Kenya, which are delaying tapping similar resources until the economic climate improves.

Nadine Kone of Oxfam International questioned the wisdom of Senegal’s and Mauritania’s plans. “Why rush with oil given where prices are now?” Kone asked.

After increasing by 20 percent in April, global oil prices fell in early May to below $45 a barrel and experts predicted weakened demand.

Senegal oil

Producers see increase in demand

Golembeski said the Kosmos thinks demand will have increased by the time the gas site is ready to deliver. He cited the ease of shipping to Europe as an advantage for exports from the region.

“Demand for oil and gas will continue to increase over time as more and more people around the world move from rural areas into the cities and want the conveniences of modern life,” he said.

Both countries have enjoyed steady economic growth in the past five years.

With a population of 3.6 million and a gross domestic product of $15.5 billion, Mauritania has seen sustained economic growth, primarily as a result of growth of the mining industry. The country is Africa’s second leading exporter of iron ore and also exports gold and copper.

According to the Heritage Foundation, the nation’s gross domestic product saw a growth rate of more than 5 percent on average during the past five years.

Senegal’s economy has grown at an average annual rate of 3.5 percent in the past five years, the foundation said, but volatility of economic growth has undermined progress in social development and fighting poverty. The nation has a population of 14.5 million and a gross domestic product totaling $33.6 billion. Senegal is primarily rural and has historically had few natural resources, relying instead on agricultural exports.

In 2015, with a growth rate of 6.5 percent, Senegal was the continent’s second fastest growing economy. Services, chemical production and construction drove growth.

Questions about oil proceeds

Kone of Oxfam questioned whether the five-year window the energy companies are projecting from exploration to sale is enough time to create a legal framework to regulate the governments’ use of proceeds from their 10 percent shares in projects within their boundaries.

Despite economic growth, both countries suffer from youth unemployment and chronic poverty and many residents do not have access to housing, health services, education or even clean water.

Kone cited Ghana, which discovered oil in 2007, as a model in the region that Mauritania and Senegal might emulate. Ghana created a dedicated fund from the proceeds that it used to invest in priority areas such as education and agriculture.

A contrasting example is Nigeria, where the state-run oil agency withheld billions of dollars funds that were designated for government services. Nigeria derives about 70 percent of its revenue and is Africa’s top producer of crude oil.

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African Development Bank: Ease visa rules to promote trade, tourism

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

passport-kenya

Saying cumbersome visa requirements undermine business growth, the organization ranks visa openness of 55 nations.

Making access to visas easy or scrapping the requirement entirely is an important way governments can help promote tourism and trade among the nations of the continent, according to the African Development Bank (ADB).

The ADB has developed the Africa Visa Openness Index to assess which countries have the most open and efficient visa access. The bank says cumbersome visa procedures undermine doing business across borders on the continent.

On average, travel within the continent is often difficult because African nations are “more closed off to each other than open” the ADB said in its 2016 report (pdf) on visa access. “Free movement of people is not a reality across Africa.”

Most require visas in advance

The report said only 20 percent of the 55 countries in the index do not require visas and only 15 percent offer visas on arrival, meaning more than half require visitors to obtain visas in advance.

To make matters worse, the report said, many of Africa’s strategic hubs have restrictive visa policies while the continent’s small, landlocked and island states tend to be more open to promote trade links with neighboring countries.

The report said countries in West and East Africa tend to be more open than in other regions.

The top 10 nations for openness stand out, with an average score of 0.86 (out of 1) on the ADB index, more than double the overall average of 4.25.

Seychelles is first for openness

The top 10 countries are Seychelles, Mali, Uganda, Cape Verde, Togo, Guinea-Bissau Mauritania, Mozambique, Mauritius, and Rwanda.

At the bottom of the list are Eritrea, Ethiopia, Sudan, Angola, Gabon, Libya, Egypt, Equatorial Guinea, São Tomé and Príncipe, and Western Sahara.

South Africa was 35th on the list, Nigeria 25th and Kenya 16th.

The report said eight of the top 10 countries for openness have seen gains in travel and tourism as a portion of gross domestic product.

In Seychelles, which is visa free, tourism accounted for nearly 57 percent of the country’s gross domestic product in 2014 and was expected to increase by more than 5 percent in 2015.

Rwanda, Mauritius ease requirements

The report highlights benefits to Rwanda and Mauritius after they adopted open visa policies for visitors from other African countries in recent years.

Both countries have seen an increase in African business and leisure travelers, which has produced “an economic impact that is still growing,” the report said.

After Mauritius relaxed visa requirements for visitors from 48 African countries, more than one quarter of visitors to the nation in 2014 came from other African states, with revenue from tourism totaling $1.2 billion.

“Greater visa openness forms part of Mauritius’ Africa strategy, which aims to promote the country as a gateway for investment into the continent,” the report said.

New open visa policies are also helping Rwanda with gross domestic product growth of 7 percent in 2014 and tourism income up 4 percent to more than $300 million.

Rwanda adopted a visa-on-arrival policy and cut its fee by half, to $30, then saw visits by Africans increase by 22 percent annually.

“We are seeing more African travelers not just in tourism, but in business,’’ said Francis Gatare, chief executive officer of the Rwanda Development Bank.

ADB wants visa requirements eased

The report notes that the African Union’s Agenda 2063 calls for removal of visa requirements across the continent by 2018 and creating an African passport.

Other potential solutions include offering visas on arrival, as Mauritius and Rwanda have begun doing, creating visa-free regional blocs or visas for regional blocs, offering multi-year visas, or offering visa-free access to Africans as Seychelles does.

Other way to make travel more is to offer eVisas so the traveler can apply online rather than having to be present to obtain a visa, the report said. Currently, nine African countries offer e-Visas: Côte d’Ivoire, Gabon, Kenya, Nigeria, Rwanda, São Tomé and Príncipe, Sierra Leone, Zambia and Zimbabwe.

Questions about security

The report argues that more open visa policies will not undermine security.

“Having strong systems in place including biometric databases at border controls and joining IT systems with other countries and regions seems to be the answer. That allows information sharing and greater cooperation, which in turn minimizes risk and provides higher levels of security overall.”

The report emphasizes the importance of travel to the development of the continent in the coming years.

By 2034, air arrivals to destinations in Africa are projected to increase to 280 million from nearly 120 million in 2014.

That increase “needs to be matched by more visa-open policies on arrival on the ground,” the report said.

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Looking Back on Kenya’s First Startup Acquisition

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

Weza-Tele-Founders

Kenyan financial technology startup Weza Tele was acquired by AFB financial group for $1.7 million, the first and largest acquisition of a tech startup in Kenya.

The startup-acquisition cycle is every Silicon Valley entrepreneur’s dream: a tiny idea that results in a multi-million dollar payout when a corporation recognizes the genius of your small-but-wildly-successful company. WhatsApp, the seemingly simple messaging service used around the world, was bought by Facebook for $19 billion; Skype, the Star Trek-like video calling system millennials had been dreaming of since childhood, was bought by Microsoft for $8.5 billion; and Clementine, an app that allows users to make conference calls without being tied to a cell phone, was bought by Dropbox for $100 million after less than one year on the market. In tech-intensive countries, these stories are hardly noteworthy because as soon as a new startup emerges, rumors abound regarding which major company will buy it.

This is not the case for countries like Kenya, where the startup industry is truly only starting up. In fact, the first-ever acquisition of a startup by a major company occurred in mid-2015 when AFB, the consumer finance group based in Ghana, purchased the Kenyan startup Weza Tele for $1.7 million.

A True Start Up

Weza Tele is truly the byproduct of the 21st century competitive yet collective experience: Weza Tele was created at Nailab, a co-working space that provides 3-6 month internships for budding entrepreneurs, and launched at DEMO Africa, a conference that hand picks innovative products and services from around Africa, in 2014. Weza Tele was founded by Hilda Moraa, Sam Kitonyi and Newton Kitonga and is “a leading provider of innovative value added mobility solutions in commerce, supply chain and distribution, and mobile payment options” available not only in Kenya, but also across Nigeria, Tanzania and Zimbabwe.

Weza Tela has two major existing business solutions: MyOrder, which makes supply chains for small and medium distributors transparent and gives greater visibility to individual manufacturers, and Odoo, which is a website-building application that provides a suite of add-ons including SMS ordering. In addition, Weza Tela offers services to streamline businesses’ SMS-ordering processes and can be hired for consulting services. Frost & Sullivan, the entrepreneurial company who awarded Weza Tele with its 2014 Entrepreneurial Company of the Year, said that “Weza Tele has excelled in an untapped market by tailoring flexible solutions for small scale supply chain sector. It offers cost-effective solutions to address the challenges faced by SMEs in the supply chain industry and provides valuable tools to drive their sales and marketing.”

Weza Tele myOrder

Selling Out Encourages Others to Buy In

After its 2014 launch at DEMO Africa, Weza Tela was met with major success, and purchased by AFB just one year later. AFB “provides credit access to customers in Africa through a range of financial products, including mobile loans and retail credit cards.” Launched in Ghana in 2010, AFB now operates in Kenya as well as Tanzania and has more than 400 retail partners. By purchasing Weza Tela, AFB will be able to get its foot in the door of markets in Nigeria and Zimbabwe.

This landmark acquisition, says Jessica Colaco (director of partnerships and community at iHub), is “history in the making as it opens doors for growing startups in this ecosystem. The Weza Tela team are a lighthouse for others in the Kenyan startup ecosystem” and will encourage others to continue working towards their goal. AFB’s purchase shows Africans that major, multi-national companies have confidence in homegrown ideas.

A Vote of Confidence for Homegrown Ideas

Weza Tele has promised customers that the transition will be seamless and services will not be interrupted. Should this transition go as planned, big things may be looming on the startup horizons for Kenya and beyond.

By demonstrating their confidence in Weza Tele through a massive purchase, AFB is not only showing young entrepreneurs that their ideas have value and may result in a big payday, but demonstrating to Africans in general that they do not need to rely on outside ideas to move their countries forward. If large financial institutions are willing to take the risk on relatively young startups, then perhaps more ideas will come to fruition through co-working spaces and conferences meant to showcase and launch the best and brightest.

Encouraging young leaders to create their own solutions to local problems is of the utmost importance for any community, particularly one that has had been so directly and heavily influenced by outside forces for centuries. It is ideas like those behind Weza Tele that show a deep understanding of the needs of local businesses. Hopefully, Weza Tele’s success story is just the first chapter for Kenyan technological innovation.

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SoleRebels: An Ethiopian success story

13 May 2016 Comments (3) Africa, Business, Featured

SoleRebels

The eco-friendly shoe manufacturer, launched by a young woman entrepreneur, sees rapid growth and global demand.

A young Ethiopian entrepreneur has turned her concern for unemployed artisans from her home community into a global shoe brand with millions of dollars in revenue.

Bethlehem Tilahun Alemu’s SoleRebels produces eco-friendly shoes that are sold internationally by large retailers including Whole Foods and Amazon as well as in a growing number of the company’s own standalone stores.

SoleRebels also complies with fair trade standards set by the World Fair Trade Association, according to Alemu. The company pays employees three or four times the minimum wage in Ethiopia and provides medical insurance and transportation to and from work.

Helping jobless artisans

Alemu, 35, started the company in 2005, shortly after she finished college. She had seen that skilled artisans lived in squalor and chronic unemployment in her small, impoverished community of Zenebework in Addis Ababa.

“I wanted to find a way to share my love for the amazing artisanship of Ethiopia with the world while creating well-paid meaningful work for the people in my local community, while leveraging their immense creative skills,” she said.

At the start, the company was Alemu, her husband, her teenage brother and two artisans. It has grown to employ 300 people in Ethiopia and several hundred more in its international stores.

Shoes from local fibers, recycled tires

SoleRebels produces comfortable, hand-crafted sandals, slip-ons and laced shoes using recycled tires for the soles and local natural fibers, including hand-spun cotton, jute, and Koba, an indigenous plant cultivated in Ethiopia for thousands of years.

The design of the shoes draws on Ethiopia’s famous Selate and Barabasso shoes that soles that were worn by Ethiopian rebel fighters who opposed Italian forces attempting to colonize the country nearly a century ago. Those shoes used recycled tire material for the soles.

The name SoleRebels derives in part from that historic connection.

However, the name also reflects Alemu’s goal of countering a dominant narrative – a legacy of the famine years – that Ethiopians are destined to rely on international aid.

SoleRebels in Stores

Ethiopia’s economy booming

Alemu said the success of Sole Rebels is “living proof” that her country, one of Africa’s poorest, is ready to move from being dependent on foreign aid to taking charge of its economic future with home grown skills and resources.

Eugene Owusu, who represents Ethiopia with the United Nation’s Development Program said SoleRebels is “blazing a trail’’ for other companies as his country seeks to reduce its need for foreign aid.

Owusu said nation’s booming private sector would help the country continue to grow its economy and reduce poverty.

The economy of Ethiopia has grown at a rate of about 10 percent a year in the past decade with growth domestic product reaching an estimated $50 billion in 2014.

As one of the fastest growing non-oil economies in Africa, Ethiopia has become a destination for foreign investment. Ethiopia seeks to grow exports as a share of its economic output largely with the sale of minerals and manufactured goods.

International recognition

With her own exporting success, Alemu has been widely recognized for her achievements.

The World Economic Forum named her a Young Global Leader in 2011. She was featured on Forbes list of “100 Most Powerful Women” and listed by Business Insider as one of “Africa’s Top 5 Female Entrepreneurs” in 2012. The following year, Fast Company named her one of its “100 Most Creative People in Business 2013,” while The Guardian called her one of “Africa’s Top Women Achievers.”

SoleRebels shoes are sold in more than 30 countries through online sales and major retailers plus a growing number of the company’s own shops. In addition to its flagship store in Addis Ababa, SoleRebels has more than a dozen standalone retail outlets in the United States, Taiwan, Japan, Greece, Switzerland, Spain, Austria, and Singapore.

$10 million in revenue projected

One of the world’s fastest growing footwear brands, the company projects it will have 50 stores by 2018 and forecasts revenue of $10 million or more this year.

Alemu said her business model shows that eco-friendly production and community empowerment go hand in hand with financial success. But as much as her product helps her community, Alemu said quality is the key to her company’s success.

“We don’t want to make a pity product; we want people to buy our shoes because they look good.”

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Nairobi establishes itself as one of Africa’s leading tech hubs

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

nairobi

Nairobi leads the way as Africa’s most recognized tech hub and it is set to get bigger.

Nairobi has been establishing itself as a tech hub for several years now. The high numbers of STEM graduates that come through the doors of the several colleges around the city have helped sustain this reputation. However, it is only in the past few years that the entrepreneurial ethos which fuels startups has really begun to flourish.

As things stand, Nairobi still has an unemployment rate of 40%, but the government is hopeful that by investing in the technological talent pool of the city, startup companies will help address this problem.

Quite simply, startups create jobs but only in recent years has the proliferation of mobile phones and the internet in Nairobi allowed tech startups to prosper.

Investing in the infrastructure of growth

Nairobi has had the potential to explode as a thriving tech hub for some time, but without the average person having access to the technology to provide a large customer base, the progress of the city was stifled.

However, Internet penetration has rocketed, with 43% of the Kenyan population having access in 2014, compared with only 14% in 2010. In addition to this, by 2014 82% of Kenyans had a mobile phone. These factors are instrumental in opening up markets for tech-based startups.

A prime example of this is the 2010 startup M-Farm that allows farmers to get instant access to market prices and where they can buy and sell goods at the click of a mobile phone button. The business was set up by three women who wanted to help farmers cut out middle men and make a greater profit. Co-founder, Linda Kwamboka sums up the importance of technological access by saying, “Mobile phones are the best way to go (for business).”

The enterprising nature of local people, together with the government, has ensured that the city and nation do not miss out on the opportunities that a tech centered industry could provide. In 2010, Nairobi’s iHub opened, a large complex for investors, entrepreneurs and tech graduates to converge and develop new ideas. In only 6 years, the hub has spawned 170 startup companies and created over 1,300 new jobs.

iHub in Nairobi

iHub in Nairobi

The iHub complex now seeks to be entirely self-funded and one of its creators, Erik Hersman told Forbes magazine that, “A group of people are investing in the iHub in order to help us grow…The iHub’s mission is to catalyze the growth of the Kenyan tech ecosystem.”

To help sustain such growth, the Kenyan government partnered with the firm Nailab to create a technology program worth $1.6 million that would provide funding and educational support to entrepreneurs. The support has worked.

By 2014, technology accounted for 8.4% of Kenya’s GDP, but this is a proportion that is continually rising. In fact in the summer of last year, Bloomberg reported that Kenya’s tech industry could be worth $1 billion over the next 3 years.

A city evolving

Despite the development in Nairobi, it is obviously a long way off catching up with the hugely prosperous cities of the developed world. But this is something that could well change. The range of startups is already hugely diverse, from laptop manufacturers like Taifa to the likes of Rehau HomeGas, which creates micro-biogas equipment that runs off cow manure.

New hubs for innovation are opening, with both the aforementioned startups coming from the newly established Nairobi Industrial and Technology Park. Moreover, the Economist Intelligence Unit has predicted that by the end of this year, Nairobi will be one of the 40 fastest growing urban economies on the planet.

What seems likely to maintain this meteoric rise is that the government continues to commit itself to investing further in the city’s development as opposed to treating its new success as a finished task. The country’s grandest plans center on a Techno City, which they hope to have opened by 2025. This complex would provide housing and work spaces for 200,000 professionals. Bloomberg reported that major corporations such as Samsung and Blackberry are already expressing interest.

When the US President Barack Obama visited Kenya last year, he spoke of an emerging economy and entrepreneurial spirit within the country.

The attitude of Kenya’s government, graduates and the people working within its tech industries can perhaps be summed up by a line from Obama’s speech that drew warm applause:

“Because of Kenya’s progress, because of your potential, you can build your future right here, right now.”

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FillApp: Saving South Africans at the pump

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

south africa petrol station

FillApp is the latest in apps aimed at saving consumers money by notifying them of real-time price fluctuations. This South African smartphone application lets users know the best times and locations to fill up their gas tanks based on their car size, make, model and fuel type.

The South African rand lost more than 26% of its value in the last 6 months of 2015, crushing citizens’ ability to participate in the global market. This devaluation was intensely felt across all sectors, particularly those involving global goods such as gasoline. As the rand fell (and continues to fall), South Africans are paying the price at the pump. Despite the fact that oil prices are plummeting to new lows, South Africans were not feeling the same relief as, say, Americans. This is because their currency was falling faster than the price of petroleum.

Sense Saves Cents

Recognizing the need to alleviate this financial burden, the South African tech company TouchFoundry created FillApp, an app for Android and iPhone platforms that allows users to save money at the pumps. Users simply input basic metrics about their vehicle, such as make, model, tank size, gasoline type and whether the driver is more likely to fill up at coastal or inland cities.

Based upon these metrics, the app is able to calculate an individual driver’s savings if she should fill up on a certain date. The app then sends each user a notification at the beginning of each month letting them know if they should fill their tanks sooner rather than later based upon the predicted price changes.

FillApp

FillApp calculates these fluctuations based upon publicly available information from government and agency websites. Co-founder Lance Jenkins says that “every-day people aren’t able to access this data efficiently and conveniently when they need to. So, we did the time, crunched the code and came out with an elegant product that will hopefully add a touch of convenience to everyone’s lives.” Jenkins is referring more to the intellectual accessibility of information rather than the physical availability: the information FillApp uses to make its predictions is readily available to anyone with internet access, but it is taking the time to understand what the data means and how those numbers will be applied to the real world that takes time.

The Department of Energy recalculates fuel prices to include taxes and levies at the end of each month, and the South Africa Central Energy Fund uses this information to update fuel-price predictions on a daily or weekly basis. The Department of Energy puts these new, comprehensive prices into effect on the first Wednesday of each month. As soon as FillApp learns of the new price predictions, they are able to advise users on when and where to fill up their tanks based upon the information previously provided.

These sources allow the FillApp to provide up-to-date fuel price predictions based upon national agencies’ publications. “We scan reliable sources and we then basically get an algorithm that gives us a prediction of what the fuel (price) will probably be,” said Fabio Longano, TouchFoundry’s founder.

Taking Back the Purchasing Power

It is publicly sourced apps like this that are helping consumers take back the power in a world that seems impossibly confusing and unpredictable. By empowering consumers with knowledge about when and where to fill their tanks, FillApp is giving South Africans the information they need to potentially save a great deal of money.

As OPEC (Organization of Petroleum Exporting Countries) has allowed oil prices to fall thanks to a flood in the market, South Africans (and most others) have experienced relief at the pumps. Unfortunately, gas prices seem to be particularly unreliable in South Africa: Reuters predicts that the price of gasoline will go up by 12 cents to 12.74 rand/liter, or about $3.20/gallon. The current price of gasoline in America is, for instance, between $1.99-$2.65, depending upon the state. This means there is substantially more of a burden upon South African gasoline consumers than upon American: not only is the price of gasoline about a full dollar more per gallon in South Africa than in America, but given the massive differences in average income, the high price of gasoline takes up a larger proportion of a South African’s income than it does an American’s. This is not unusual, however. The United States is known for having low taxes on gasoline and usually has much lower gas prices than developing countries.

Getting the Goods

While South Africans’ relief at the pump has not been as intensely felt as in other countries, FillApp is increasing consumers’ ability to make informed decisions about when and where to purchase gasoline. Apps like this are popping up all over the world, and give a fascinating look at the future of capitalism in a world with increasing income gaps.

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Wari is now Senegal’s first choice for money transfers

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

wari

The money transferring business Wari has become Senegal’s first choice as it continues to expand into other countries.

Wari might not be a familiar name to people outside of Senegal, but the money transferring system is almost synonymous with sending money in the country of its creation. In fact, Wari is so widely used that in Wolof (the country’s most widely spoken language), the phrase “Warima ko” means “send me money”.

Wari’s main rival in the world of money transferring was the international company Western Union, but Wari now holds 80% of the market in Senegal and the company is growing at a staggering 35% per month.

How it works and why it’s winning

The Wari system is fairly straightforward. A person pays money into one of the multitude of Wari outlets and an SMS is sent to the person they are sending the money to. The person who receives the message then takes their ID and the code they were sent to their nearest outlet and withdraws the cash. By partnering with 45 different banks and 17 African post offices, Wari has ensured that members of the public are never far from a place where they can make and receive a payment.

In addition to this coverage, Wari is commission free and very low cost, which is something that hugely encourages poorer people to feel comfortable using it. In a country like Senegal, being able to provide people with an easy and affordable way to send and receive money is a major selling point as 94% of the population does not have bank accounts. A cash-dominated culture, in which many people are quite poor, makes transfer networks almost essential.

Wari has ensured its status as the first choice by a combination of low costs, ease of use and availability. There are 45,000 points of sale across 26 nations and 2,000 of these are in Senegal, where the company processes around 65,000 transactions per day!

Kabirou Mbodje

Kabirou Mbodje

The parent company behind Wari is Cellular Systems International, established in 2008 by CEO Kabirou Mbodje. Mbodje’s local knowledge and understanding of his own nation’s culture and needs allowed CSI to launch Wari and rapidly gain traction in the market. But aware that the needs and attitudes in other African markets will differ, Mbodje has adopted a sensible strategy toward expansion.

Think global, act local

Mbodje has said that, “Wari was designed by Africans with a vision to go global” and yet going global always involves adapting. Mbodje was self-aware enough to recognize that without the same local knowledge that had helped conquer Senegal, Wari needed to work in conjunction with other companies to be successful in new markets.

As such, Wari has built partnership deals with numerous businesses and organizations in any new country in which they launch. Wari provides the technology to companies who understand local needs but do not have the means to deliver all these services.

From NGO’s to gas stations, Wari has carefully constructed a network of partners within nations like Tanzania, Morocco and Gabon.

The result of such localized deals is that Wari is processing an average of 40 million transactions monthly and the majority of these are outside of the initial Senegalese market.

The road ahead

Despite, what is ostensibly a huge success story, the CEO of CSI and the Wari brand is very measured in his appraisal of his company’s growth. When interviewed by New African Magazine, Mbodje said, “I think I will call my business a success when I am able to serve all of Africa as one entity, giving everybody, everywhere access to…pensions, life insurance… health care, these kinds of things.”

These are hugely ambitious plans but the first steps have already been made. Last year, Wari launched project Services Relay Points that offers citizens services ranging from remote medicine to bill payments. A percentage of revenues are donated to local groups providing healthcare and educational facilities. Launched in Senegal, it has now also been rolled out to Mali and Mbodje sees it as the start of his grand plan.

It is something that Mbodje believes in strongly and it aims to also change the way the continent is viewed from outside. He has previously stated, “Africa doesn’t need aid or loans, but organization.” It will be interesting to see just how far Wari can go in bringing about such change.

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Bassita helps fund social change through clickfunding

9 May 2016 Comments (3) Business, Featured, Middle East

Bassita

Bassita is an Egyptian startup company that created click funding, a new way for charities and campaigns to source funding.

If you have never heard of clickfunding before, then it’s probably because this highly innovative form of fund raising was only created 2 years ago. In 2014, an Egyptian startup company called Bassita was launched, and with it the concept of clickfunding was born. The name of the company comes from an Arabic word that means “simple,” and the idea of clickfunding is to make the creation of funds as simple as possible.

The clickfunding model works through the culture of social media, in which people constantly share and like articles, videos or images with other people. What Bassita does is create a short video highlighting a campaign or promoting a cause and a sponsor agrees to a certain number of shares or likes that must be met for it to then fund the campaign.

This means that people can directly help push a project toward being funded simply by clicking a “like” on Facebook or by sharing the video online. Co-founder, Alban de Ménonville states that, “It’s easy for the cybernaut – by clicking on an appealing project, she’s helping to fund change that is good for her community or society.”

This provides people with the opportunity to feel a connection to campaigns that they like and to feel that even a small action, such as sharing a video, can be a part of a genuine change.

bassita website

Clicking for change

The idea sounds so simple that it seems strange that nobody had thought of it before. But this is often the case with new ideas that become rapidly popular and important. A few years ago, the idea of crowd funding might have sounded like people asking for handouts, and yet businesses all across the world have successfully used the model. Social media has become increasingly political and major uprisings such as the Arab Spring were intrinsically linked to the use of outlets such as Facebook and Twitter. To harness the huge amount of activity that social media generates and to use viral videos in a fashion that generates real financing for important projects seems sure to succeed. After all, the overhead costs are small and the commitment of users is nothing more than clicking on “share” or “like.” The very first campaign that Bassita made a video for was a huge success. On September 1st, 2014, they created a video for a Baraka Optics campaign, which aimed to provide 1,000 underprivileged workers in Egypt with eyeglasses. Baraka Optics had agreed to fund this if Bassita got 10,000 views on Youtube, a target that was quickly met.

Since this opening campaign, Bassita has teamed up with UNICEF to help provide 1,000 new clean water connections to homes in Upper Egypt. In order to extend the way in which users can be involved, Bassita created a points-based system in which the target was 1.5 million points. People provided 1 point for viewing the video, 2 points for liking it, 3 points for sharing or re-tweeting it and 5 points for commenting on the video or tweeting about it.

There is a unique nature to these campaigns in how they give any person a chance to play a small role in helping to bring about positive changes. Ménonville said, “The clickfunding model can change the world. More than one million people are giving their clicks to help those who do not have access to water! Yes, our clicks count.”

Bassita’s UNICEF video was viewed 2 million times on Facebook within 3 days of being uploaded and the 1,000 water connections are already being built.

The men behind the clicks and the road ahead

The two men who created the Bassita idea are both French nationals who relocated to Cairo to launch their scheme. Alban de Ménonville and Salem Massalha felt that Africa provided a great opportunity for a young business and as Massalha is of Egyptian origin, the North African country became their new home. In an interview with Popout magazine, Ménonville said, “What we’ve managed to do in Egypt in one year is unthinkable in France, for example. Our team comes from diverse backgrounds, and that is our strength.”

As with many new ideas that become ubiquitous, the men behind the clickfunding idea believe that it will become a global concept that simply adapts its campaigns in relation to the different issues facing various places. Bassita has already won a Young Innovators Award and a 2015 Orange Prize for African Social Ventures.

Then in April of this year they won funding of 60,000 Egyptian Pounds from Injaz’s Startup Egypt prize. The future for clickfunding looks extremely promising and the team behind it all truly believes it can revolutionize advertising and ways in which we engineer social and environmental change. When asked about the Injaz award, co-founder Salem Massalha said, “This prize brings us one step closer to changing the world.”

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Bamboo – Africa’s Green Gold?

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

Bamboo poles

Bamboo farming could provide many African states with a green and lucrative industry.

If you asked the average person on the street to name a country that they associated with the bamboo plant, it’s unlikely you would hear many answers other than China. However, Africa has extensive bamboo reserves that the continent could reap huge rewards from.

What makes the prospect of harvesting the continent’s bamboo reserves particularly exciting is that the benefits offered are not solely economic. While the bamboo would indeed provide a veritable gold mine of revenue to many nations, it is also an opportunity to try and slow down the deforestation that threatens Africa’s myriad environments.

Sustainable, clean profits?

The issue of deforestation is obviously not confined to Africa, but many African countries are particularly at risk from the environmental impact that the practice brings. Cutting down large areas of forest contributes to a cycle of drought and pollution, especially as it leads to soil erosion which has been a primary factor in some of the disastrous famines that the continent has faced.

What makes bamboo so much better? According to Dr. Chin Ong, a retired professor of environment science, bamboo holds soils together, utilizes less water than trees and offers a greater overall package. Ong told the New York Times, “You want firewood; you want to reduce erosion, to maintain the water supply, generate cash and employment. Bamboo comes the closest — it gives you the most things.”

Bamboo is technically a grass, which means after a harvest it regrows and does so quickly. In fact bamboo can grow an astonishing meter per day, and it absorbs almost twice the amount of CO2 that is taken in by a tree.

A crop that is rapidly replenished, reduces pollution levels and does not damage the fertility of soils when harvested is clearly an environmentalist’s dream.

But do the numbers add up on the commercial side? The short answer is yes.

The International Network of Bamboo and Rattan (INBAR) is an intergovernmental body that works with the UN and has valued the global bamboo trade at $60 billion.

Thus far, 18 bamboo growing African states have joined INBAR as they look to make the most of their natural resources without devastating the local eco-system to do so. According to the United Nations Environmental Program (UNEP), bamboo has over 2,000 uses and China claims that if the plant is processed, this number rises to 10,000!

Despite such a glowing profile, the industry has yet to really take off in the majority of the 36 African nations where it grows. Adal Industrial PLC is a company trying to raise awareness and interest to help develop Africa’s bamboo farming. CEO Adane Berhe summed up the current problem facing the bamboo trade in Africa when he spoke to CNN saying, “The farmer who has bamboo is rich, but he doesn’t know it.”

Ethiopia takes the lead

Bamboo cooperative members in Ethiopia

Bamboo cooperative members in Ethiopia

One African nation that is investing in the industry is Ethiopia. Not only is Ethiopia rich in bamboo, with 2.47 million acres of it untapped, but due to widespread deforestation, the government has taken drastic steps to promote sustainable harvests and green industries.

The government has banned producing charcoal from hardwoods and has welcomed investment from China and other nations seeking to grow the bamboo trade.

INBAR now has an office in Addis Ababa and local people and small farmers have embraced the opportunity.

State Minister for Agricultural and Rural Development, Mitiku Kassa says, “Ethiopia has the resources, the investment, a rapidly-developing manufacturing industry and a strong demand for our bamboo products…The expansion of Africa’s bamboo sector has begun.”

As Ethiopia’s bamboo industry begins to grow, the hope is that other nations take note and follow their lead. The early signs are promising as the membership to INBAR continues to expand with new African members; there is patently interest in what the plant has to offer.

China has already offered investment in Ghana and a recent bamboo project there opened up 1,500 jobs.

The chief research scientist at the Forestry Research Institute in Ghana, Andrew Akwasi Oteng-Amoako told IPS news, “We anticipate a revival of investment interest in Ghana’s bamboo industry in the near future thanks to Ethiopia’s success.”

With recent government decrees from Rwanda and Nigeria on the importance of looking into utilizing bamboo resources, the future of Africa’s “green gold” looks promising.

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