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With new leadership, Ecobank Nigeria expands services

18 February 2016 Comments (0) Africa, Business, Featured

Charles Kie

One of the country’s largest banks targets support to grow small and medium-sized business sector.

One of Nigeria’s largest banks is expanding services for small and medium-sized business enterprises as it welcomes a new top executive. The Ivorian Charles Kie is the new managing director of Ecobank Nigeria, replacing Jibril Aku, whose five-year term ended December 31. Ecobank Nigeria, based in Lagos, has more than $9 billion in assets and operates more than 600 branches, making it one of the largest banks in the country.

New services for small, medium-sized businesses

The bank recently launched a number of initiatives designed to support the small and medium enterprise (SME) sector of the economy.

Calling small and medium-sized businesses the engine of economic growth for the nation, Sunkanmi Olowo, head of SME and Value Chain Banking at Ecobank Nigeria said the bank would increase funding and support to the sector.

Olowo said Ecobank Nigeria was launching SME Club, which will provide preferred business support and tailored products to small and medium-sized businesses.

SME Club will provide capacity development, technical assistance and business, accounting, tax and legal services building to small and medium-sized enterprises as well as information mining, networking and capacity, he said.

The bank is also launched MyMall, an online e-commerce platform on which businesses can market and sell their services and goods.

Olowo said Ecobank will also offer training and funding through a New Venture Initiative, he said.

New managing director named

Charles Kie, the Ecobank Nigeria’s new managing director, joined Ecobank Transnational in 2011 and served as chief operating officer of Ecobank Capital and then became head of Ecobank group’s corporate banking division.

Previously he was chief executive officer of Groupe Banque Atlantique, based in Togo and Ivory Coast with operations in nine West and Central African countries. He also worked for Citibank, serving as CEO of Citigroup West Africa.

A graduate of the Ecole supérieure de commerce d’Abidjan in Ivory Coast, Kie has Master’s degree in Business Administration from the London School of Economics and a Master of Science degree from the University Of Clermont-Ferrand (France). He also attended Harvard Business School’s Advanced Management Program.

Parent organization emerges from scandal

Ecobank Nigeria is a subsidiary of Ecobank Transnational, a pan-African banking group based in Togo with more than 1,250 branches and offices in 36 countries in sub-Saharan Africa. It has $24 billion in assets and 11 million customers.

The parent organization got new leadership last year after two years of scandals that saw the bank accused of poor governance and fraud.

The Nigerian Ade Ayeyemi was named group chief executive in September as the bank was poised to expand its footprint on the continent.

“This organization went through a near-death experience two years ago. And now we’ve recovered, we need to power through,” Ayeyemi said.

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As the UNMDGs expire, Togo measures its poverty

17 February 2016 Comments (0) Africa, Featured, Politics

togo

The National Institute of Statistics and Economic and Demographic Studies (INSEED), Togo’s national poverty statistics tracking organization, recently released their findings for poverty levels in the country for 2015.

Between 25 August and 30 September of 2015, INSEED surveyed 2,400 households to measure the living conditions of the Togolese. The conclusion of the 2015 survey is significant for a variety of reasons, but none more important than the expiration of the United Nation’s Millennium Development Goals (UNMDGs). The UNMDGs were the world’s first data-driven goals meant to end global poverty by 2015 or 2020, depending upon the goal. Drawing upon the eight vastly general UNMDGs, INSEED used broad poverty indicators to measure the status of their citizens: access to basic social services; food safety; education and literacy; subjective poverty and monetary poverty. INSEED’s Technical Director Akoly Gentry said that survey results indicated that economic growth had occurred in Togo, although more than half of the Togolese continue to live in poverty and are subjected to the health, education and employment challenges that stem from continued poverty. The overall conclusion was that, between 2011 and 2015, economic development had reached the poorest of the poor in some way.

Conducting the Survey: Why Now?

With the expiration of the majority of the UNMDGs came the birth of the UN’s latest broad development goals, called the Sustainable Development Goals (SDGs). Where there were once 8 MDGs, there are now 17 SDGs, and in order to give a strong baseline for Togo’s SDG targets, the survey was necessary.

59% of the Togolese are 25 years old or under: continued economic development is imperative for a generation that never knew the harsh reign of colonialism and have grown up in a world where they are well aware of the wealth of the outside world. In surveying the levels of poverty of a diverse set of households around the country, INSEED was able to gather a comprehensive set of data with which to inform their development plans.

Access to Basic Social Services

Many households in the developing world do not have access to what are considered basic necessities in the western world, including electricity and improved drinking water. The proportion of households now using electricity as their main mode of lighting is 48.3%, up 9.1 percentage points since 2011. As the use of electricity has increased, the use of other/traditional modes of lighting has decreased. The use of oil lamps, the cause of many house fires and childhood burns, declined from 23.5% in 2011 to 3.1% in 2015. This alone is a massive achievement for Togo.

In countries where tap water is not fit for consumption or available at all, citizens must rely upon bottled or bagged water. In 2011, 55.9% of Togolese were utilizing drinking water, a figure that has improved to 61.8% in 2015. The availability of improved drinking water is a major component of development: clean water promotes good health and hygiene, prevents waterborne illnesses such as cholera and giardia, and prevents unnecessary deaths.

Food Safety

In the developed world, bananas and oranges are available 365 days a year, regardless of the growing season. For the billions of people living in the developed world, access to calories is not guaranteed due to famines. Famines are, of course, not a natural disaster: they occur when food management, transportation and storage systems fail. In 2011, nearly half of the population had difficulty finding food. The survey revealed that now, in 2015, one-third (33.1%) of the population has difficulty accessing adequate nutrition. These are institutional failures endemic in impoverished countries. Whether it is the physical unavailability of food or the inability of an individual to find enough capital to obtain food, one third of Togo’s population is not considered food secure. In an era where obesity threatens to overshadow cardiac disease as a leading cause of death in the western world, this is unacceptable.

Health Indicators

Health is closely linked to food and clean water access. Be it illness from contaminated water, uncooked or unclean meat or pesticide covered vegetables, these two are inextricably linked. 23.9%, or nearly one quarter, of Togolese surveyed reporting being ill within the past four weeks, up from 20.6% at the last survey. Illness was not clearly defined, and thus is an entirely subjective indicator. According to the CIA World Factbook, Togo’s risk of disease is “very high”: malaria, dengue and yellow fever are a threat particularly during rainy seasons when mosquitoes thrive; typhoid and hepatitis A as well as meningococcal meningitis are also listed as high risk diseases. The physician density is 0.05 physicians per 1,000 people–since the average size of a Togolese household is not listed, this statistic cannot be extrapolated to the survey group. It is safe to say that, at best, there may have been one doctor available to the entire group.

Education and Literacy

66.2% of the population over the age of 15 is literate according to INSEED’s survey results–according to the CIA World Factbook, 78.3% of males over 15 and just 55% of women over 15 are literate, showing gross education discrepancies between genders. Overall enrollment rates in primary and secondary schools (which does not measure attendance) improved from 81.8% to 84.8% and 41.0% to 49.2%, respectively.

Employment, Subjective Poverty and Monetary Poverty

The reported unemployment rate declined from 6.5% to 3.4% while the underemployment rate, or the percentage of people who are employed (usually through the selling of their crops at market) but who consider their employment situation insufficient for any number of reasons, rose from 22.8% to 24.9%.

The percentage of households who consider themselves to be poor in comparison to those around them fell from 81.4% to 61.7%. This does not necessarily mean that nearly 20% of the population became less poor, but that they perceive themselves as more equal to their peers.

The incidence of poverty as measured by international organizations such as the World Bank, International Monetary Fund and UN, fell from 58.7% to 55.1% in 2015. The GINI inequality co-efficient, meaning the proportion of people who own wealth in the country, was reported as 38 (although this is not recorded by the World Bank)–a score of 0 means a country has perfect equality, and a score of 100 means the country has perfect inequality (one person would own all of the wealth). By comparison, the United States has a GINI co-efficient of 41.1. Thus, the lower a score, the more equal the society.

The incidence of poverty increased from 28.5% to 34.8% in the Greater Lome region, as well as in some rural areas.

To Go Forward

Poverty is difficult to measure. Standards were created by the very countries that are partially to blame for the stunted development of enormous swaths of the world. The existing modes of development, where a country is given a loan full of conditionality (that often cut social programs), accompanied with crippling loan repayment rates, clearly does not work.

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Maha Al-Ghunaim, CEO, Global Investment House

16 February 2016 Comments (0) Featured, Leaders, Middle East

maha al ghunaim

Maha Al-Ghunaim, founder and CEO of Global Investment House, is a pioneer in the world of Arab finance

In the world of Arab banking and finance, Maha Al-Ghunaim is something of a pioneer as the founder and CEO of one of the Middle East’s largest investment companies, Global Investment House. As a women in a male-dominated industry, both in the Middle East and beyond, working in a country where only 15% of women are in the workforce, she is also something of a rarity.

Building Global Investment House

Al-Ghunaim trained in mathematics, graduating from the San Francisco State University in 1982, and has worked in asset management and investment banking for the over 30 years since. Straight out of university she joined the large government-owned investment company, the Kuwait Investment Authority. And she comments: “At that time they really took care of young Kuwaitis who were entering the workforce… I started from the bottom and learned how things are done and gradually moved my way up the ladder.”

She would work there for many years, before taking positions at the now dissolved Kuwait Foreign Trading Contracting & Investment Co. and the Kuwait Investment Company.

In 1998, Al-Ghunaim launched Global Investments House with four colleagues, having spotted a gap in the Middle Eastern market for integrated solutions in brokerage, asset management, and investment banking. She says: “We understood that the capital markets in Kuwait lacked certain products and services and we capitalized on that.” Focused specifically on opportunities in the Gulf Cooperation Council (GCC) and Middle East, the company chose to offer funds and investment products which were wholly new to the region, including bonds, index funds, fixed income funds, and private equity. The company also pushed research and development. “We widened the capital markets rather than everybody competing for the same slice – make the pie larger. We started to create very new funds and products,” comments Al-Ghunaim.

Global is now an investment bank with $3.7 billion under management, 210 employees, and offices in Kuwait, Bahrain, Egypt, Jordan, Saudi Arabia, Turkey, and the UAE. In 2008 the company became the first Kuwaiti firm to list on the London Stock Exchange, and was also listed on the Kuwait, Dubai and Bahrain bourses. “We started Global with a capital of $50 million in 1998 and, by mid-2008, we were trading at a $5 billion market cap,” comments Al-Ghunaim.

Regularly included in Forbes’ Top 100 Most Powerful Women, Al-Ghunaim is also a leading Arab businesswomen who chairs or sits on the boards of numerous companies and bodies including Kuwait’s National Industries Group, Kuwait University, Bank Muscat International, Bahrain, Baring Private Equity, Hong Kong, and Jehangir Siddiqui Capital Markets, Pakistan.

Steering Global through the financial crash

But the journey has not been easy. Having launched Global during the phenomenal Middle Eastern boom when oil prices were soaring, the company found itself significantly over-leveraged when the financial crisis hit in 2008. The company’s accumulated losses exceeded 75% of its capital in 2011, breaching Kuwaiti market rules, and the group’s shares were suspended from trading. One year later, it was forced to delist from the country’s stock exchange. “We found ourselves in the middle of liquidation disasters to pay off our debts and simultaneously organize Global International, regionally or locally. The financial crisis hit everyone around the globe… but also [there were] some mistakes that we encouraged in the way we do business,” she comments.

Al-Ghunaim successfully steered Global through this trying time, but needed to completely restructure the way the company did business. “We chose to be completely transparent with our clients, shareholders, and regulators throughout it all. This approach was unique in a culture that generally conceals problems, but we stuck to our commitment to being honest… Our earnings will be completely different from what we had before; it’s no longer about how much you make but about the quality of your earnings which provides sustainability and better valuation.” Now a risk-averse company, she reports that Global is well capitalized, debt-free, and profitable, and business is growing.

Committed to opportunities in the Middle East

Going forwards, her focus continues to lie in the Middle East, as committed as ever to the opportunities for Global in the region. “We create a strong bridge connecting buyers and sellers across the region. This is where we can really add value. Many investment houses offer similar expertise and experience in financial engineering and technical sides of the business, but our regional footprint, insight and placement power gives us an edge.”

Global is also continuing to pioneer in the region, adding new products to its range of billion dollar private equity funds. Two new products due to launch include a fund to invest in secondary private equity funds in the region, and a healthcare platform “which will allow investors to take advantage of the healthcare domain at the GCC-MENA-Turkey level”.

Al-Ghunaim also sees significant opportunities developing in education, consumer goods, and retail, “considering the demographics on the consumer-side, the strong inflow of expats, and the growing entrepreneurial spirit among SMEs”. And a spreading of bets across these sectors seems a particularly valuable strategy for Global considering the continued low oil prices in the region.

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Rail projects for Middle East, North Africa total $350 billion

15 February 2016 Comments (1) Africa, Business, Featured, Middle East

high speed rail saudi arabia

The region is experiencing a boom in development of railways to drive economic growth and benefit the environment. 

High-speed rail travel is on a fast track in the Middle East and Northern Africa. More than $350 billion in rail projects are under way in the region.

The estimate represents major rail projects in 16 countries, according to Terrapinn Middle East, which is organizing the 10th annual Middle East Rail conference in Dubai March 8 and 9.

Rail travel has become increasingly appealing in the region as a greener alternative to auto or air travel.

While the United Arab Emirates recently delayed work on a high-speed rail project, other governments that are facing budget deficits because of the oil glut prioritize rail projects as a way to improve trade and increase tourism to boost their economies.

Saudi Arabia builds high-speed line

One of these countries, Saudi Arabia accounts for about one third of the total spending with projects totaling $118.9 billion.

A major Saudi project is the $55 million Haramain high-speed rail project, which will connect the holy cities of Mecca and Medina with Jeddah, the country’s commercial capital and second largest city. Following delays, it is expected to begin operations in early 2017.

Kingdom wants to boost religious tourism

The Saudis see rail development as key to the nation’s ambitions to attract more tourists, especially to the holy sites.

The Saudi kingdom drew 16 million tourists in 2014 and wants to double that number by 2030, according Fadh Al Rasheed, group CEO of King Abdullah Economic City.

The Saudis also are building a $12 billion four-line commuter rail network in Jeddah as well as a $22 billion six-line network in the capital of Riyadh.

UAE project sees delays, staff reductions

While most projects are moving forward in spite of financial problems brought on by sharp reductions in oil prices, the United Arab Emirates in January suspended the bidding process for the second stage of its $11 billion Etihad Rail project and cut a third of its workforce. A project spokesman said the aim was to streamline operations before moving forward with bids.

Terrapinn said United Arab Emirates planned on spending $27 billion for metro rail, a tram and long-distance freight and passenger rail.

ethiad rail

Gulf States plan integrated network

Saudi Arabia and the UAE have agreed with four fellow states in the Gulf Cooperative Council to build an integrated high-speed rail network linking their countries by 2018 at a total estimated cost of $200 billion. The other partner nations are Bahrain, Kuwait, Oman and Qatar.

The goal is to create an efficient regional network of freight and passenger rail lines.

The railway network will yield environmental benefits for the region and create new jobs while reducing dependence on more expensive air or auto travel, according to Feras Shadid, a rail asset management consultant.

According to Terrapinn Bahrain has allocated $12.9 billion for rail; Kuwait, $17 billion, Oman, $16 billion, and Qatar, $46.7 billion.

China will help Iran build a high-speed line

With the lifting of sanctions, Iran is planning to develop a high-speed rail line linking the cities of Tehran, Qom and Isfahan. Terrapinn said Iran plans to spend $24.6 billion on rail projects.

China last month agreed to give Iran financial help with its high-speed rail line as part of an agreement to significantly increase trade to $600 billion in the next 10 years. China also wants to build a high-speed line linking the two countries.

Algeria, Egypt and Morocco plan rail development

Algeria, with a Terrapinn estimate of $34.4 billion, is developing light rail systems in Algiers, Oran and Constantine. While the projects have been delayed because of lost oil revenues, they are currently expected to be fully operational by 2020.

Egypt, with an estimate of $30.9 billion in spending, has projects including $1.5 billion to build a rail line linking 6th of October City to Cairo.

Morocco has an estimated $10 billion in projects, including a high-speed rail line that will connect Tangiers to Casablanca.

Farther south, Nigeria has $75 billion in rail projects, according to Terrapinn. High-speed rail service between Abuja and Kaduna is scheduled to begin operations in March. The line has nine stations.

Terrapinn also listed the following countries and their rail spending: Djibouti and Ethiopia ($4 billion shared), Iraq ($14 billion), Jordan ($3.8 billion), Lebanon ($500 million).

Major rail convention planned in March

Terrapinn released the estimates in advance of Middle East Rail 2016, the largest conference and expo devoted to rail projects in the region.

About 9,000 rail operators, government officials and contractors are expected to attend the March 8-9 event at the Dubai International Exhibition & Convention Centre. The expo will feature 300 exhibitors.

High-speed rails, or “bullet trains,” travel at significantly faster speeds than traditional trains. They can reach speeds of up to 350 kilometers per hour. They have been developed in Europe and East Asia.

Meanwhile, the boom in rail construction in the Middle East has caused worker shortages in other parts of the world.

For example, officials in Chennai, India said they have trained rail workers only to see them leave for higher paying jobs in the Middle East during the last two years, causing interruptions and delays.

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Economic Freedom in Africa

13 February 2016 Comments (0) Africa, Business, Featured

Lagos (1)

According to US think tank The Heritage Foundation and the Wall Street Journal, Mauritius, Botswana and Cape Verde are the most “economically free” countries on the African continent

At the beginning of each year, the Wall Street Journal and The Heritage Foundation release their economic freedom index, ranking countries from the most economically free to least economically free. Economic freedom is defined as the fundamental right of every human to control her or his labor or property. In an economically free society, citizens are free to work, produce, consume and invest in whatever way they see fit, and labor, capital and goods are able to move freely without undue restrictions. The index is based upon a total of 10 indicators divided into four broad groups: rule of law (property rights and freedom from corruption); limited governance (government spending and fiscal freedom); regulatory efficiency (business freedom, labor freedom and monetary freedom); and open markets (trade freedom, investment freedom and financial freedom).

Africa and the Economic Freedom Index for 2016

There are no African economies ranked as “free”, but two fall into the “mostly free” category. Mauritius was ranked 15th out of 178 with a score of 74.7 out of 100. Mauritius also has the distinction of being Africa’s only full democracy, although the newly-elected government (2014) has been accused of using anti-corruption policies to unfairly target members of the former government. Property rights are respected, meaning that the government does not unfairly seize land from citizens or other property owners. The budget deficit is under control, and public debt accounts for approximately 50% of the GDP (a level comparable to Switzerland in 2011). Notable successes are open markets and regulatory efficiency while concerns are property rights and labor freedom.

Botswana ranked second in Sub Saharan Africa with a score of 71.1 and global ranking of 30. Thanks to foreign investment, Botswana’s economy has diversified and is predicted to continue to do so. Botswana is also home to a large amount of natural resources and is a prime example responsible natural resource management because it does not rely upon a single industry to support its economy. Furthermore, Botswana has the most transparent government and lowest rates of corruption in Africa, which is notable given their natural resources (compared to Nigeria, which has a huge amount of oil, but most of the potential positive externalities are absorbed through endemic corruption). Notable successes are open markets and fiscal freedom while concerns are corruption, management of public finances and regulatory efficiency.

Moderately Free

Cape Verde

Cape Verde

Coming in third for Africa is the small island nation of Cape Verde, with a ranking of 66.5, which puts it in the “moderately free” category, and global ranking of 57. With a relatively strong rule of law, Cape Verde has been able to transition to a more open and diverse economy. Property rights are highly respected and the nation has done a good job of reigning in corruption and enhancing the quality of the regulatory system. Rule of law and open markets are marked successes for Cape Verde, while management of public spending and labor freedom are areas of concern.

There are 7 other “moderately free” countries in Sub Saharan Africa: Rwanda (63.1); Ghana (63); Seychelles (62.2); South Africa (61.9); Namibia (61.9); Madagascar (61.1); and Cote d’Ivoire (60).

The most oft cited areas of success are in the expansion of trade freedom and the increase in the efficiency of regulatory systems; areas of concern are in the freedom (or lack thereof) from corruption and property rights.

“Mostly Unfree”

Fourteen of Sub-Saharan Africa’s countries are ranked as “mostly unfree”.

Swaziland is the freest of the mostly unfree with a ranking of 59.7. This tiny landlocked country rests within South Africa’s borders and is a relatively impoverished monarchy. Political parties are banned, and the most recent elections (2013) were declared not credible by international watchdogs. Economic opportunities are few, and the economy relies heavily upon the tourism sector. Reasons for this low ranking are the stagnation of the economy, ongoing civil unrest that frequently becomes violent, high levels of corruption, mismanagement of public finance and an inefficient regulatory system. Swaziland’s successes were cited as monetary freedom and trade freedom, while concerns were listed as rule of law, management of public finances and financial freedom.

Coming in behind Swaziland are Benin (59.3); Uganda (59.3); Burkina Faso (59.1); Gabon (59); Zambia (58.8); Tanzania (58.5); Senegal (58.1); Kenya (57.5); Nigeria (57.5); The Gambia (57.1); Sao Tome and Principe (56.7); Mali (56.5); Djibouti (56) and Mauritania (54.8); Niger Cameroon Burundi (53.9); Togo (53.6); Guinea (53.3); Mozambique (53.2); Comoros (52.4); Sierra Leone (52.3); Liberia (52.2); Guinea-Bissau (51.8); Malawi (51.8); Ethiopia (51.5); Lesotho (50.6);

The main concerns in these areas are rule of law, corruption, management of public finance and regulatory efficiency. These countries are moderately to severely impoverished, and economic opportunity is low for much of their populations. Pervasive corruption makes institutional change challenging, and low levels of confidence in the government and economic sector are not encouraging.

The Bottom Eight: Repressed

Sub Saharan Africa has 8 of the world’s 24 most repressed economies: Angola (48.9); Democratic Republic of the Congo (46.4); Chad (46.3); Central African Republic (45.2); Equatorial Guinea (43.7) Republic of Congo (42.8); Eritrea (42.7) and Zimbabwe (38.2)

Angola is ranked 155th out of the world’s 178 ranked states, while Zimbabwe is a dismal 175th. These repressed countries have myriad problems that prevent development: on-going civil war, deeply embedded corruption, abuse of natural resources, mismanagement of development aid and massive rates of unemployment all prohibit economic development in these countries. While there have been a few areas of notable success (monetary freedom in the Central African Republic and Equatorial Guinea, for instance) several of these countries do not have a single notable success.

Economic Freedom: Winners and Losers

As with most global indicators, some nations simply cannot be ranked: this year, much of the Middle East that is currently mired in the ISIS conflict was considered unrankable, as were Sudan and Somalia (Africa’s notoriously failed states). It is, as always, the citizens of these countries that suffer from lack of economic development. Millions of individuals are at the whim of their too-often unfairly elected leaders, and buying into systems of corruption is the only visible way out of the swamp of poverty. For citizens of Zimbabwe, economic repression has continued for generations, and hope for change dwindles with each fraudulent election. The international community has few suggestions for these nations, as existing modes of economic development are clearly ineffective. Hopefully, as time moves slowly forward, these nations will develop their own way into the world of economic interconnectedness.

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The woman leading UAE’s drive to become an entertainment hub

12 February 2016 Comments (0) Business, Featured, Middle East

noura al kaabi

Noura Al Kaabi has brought filming of movies including “Star Wars” and “Fast and Furious 7” to Abu Dhabi as head of the free zone twofour54.

Goodbye, Hollywood. Hello Abu Dhabi. Noura Al Kaabi is leading the United Arab Emirates’ ambitious effort to become a global media and entertainment hub.

As chief executive officer of the government-owned free zone twofour54, Al Kaabi brought the high-speed car chases of the action movie “Fast and Furious 7” to Abu Dhabi and transported the “Star Wars’’ storm troopers onto the nation’s vast desert.

Other productions in the country include “Sesame Street,” the well-known children’s television show; Top Gear, a highly popular motoring show in the United Kingdom; and “Bang Bang,” a Bollywood action movie.

Zone provides infrastructure and support

It’s all part of an effort Al Kaabi is spearheading at twofour54, which aims to provide the infrastructure and support to attract foreign productions and also to grow entrepreneurship in media and entertainment within the country.

The “Star Wars” movie and other high visibility projects have put twofour54 on the map with international film companies. The project offers incentives and logistical support to attract new projects.

Bollywood has been especially interested because Abu Dhabi is only a few hours away from India.

Tax-free environment attracts foreign investment

Duraï featured in Fast & Furious 7

CNN, Sky News Arabia, and the Cartoon Network also have set up projects in the twofour54 zone.

The twofour54 zone is one of a about three dozen free zones the United Arab Emirates government has established to promote economic development and attract foreign investment. The zones provide a tax-free environment and allow foreign ownership of companies operating within it.

The twofour54 zone also offers business support services, production facilities, funding for entrepreneurs and media training.

While development of international films and programming has grabbed headlines, fostering internal talent development in media and entertainment is a key goal.

“We are enabling young skilled media professionals to learn from the world’s best producers, directors, developers and other experts in the industry,” Al Kaabi said, emphasizing the importance of bringing “fresh faces” into the industry as a way of encouraging innovation.

UAE seeks to diversify revenue base

She noted that Abu Dhabi’s emergence as an entertainment hub is contributing to the United Arab Emirates effort to diversify its revenue sources and reduce its reliance on oil revenue.

The UAE has set a goal of reducing the proportion of gross domestic product from energy products from 30 percent to 20 percent in the next 10-15 years. Other important sectors include financial services, manufacturing and tourism.

Visibility in international films can boost tourism as well, she said. “Fast and Furious,” for example, featured a scene in which the characters drove a stolen car through the Etihad Towers. That is likely to attract people who want to visit and see the structure close up, she said.

A LinkedIn Global Influencer

Al Kaabi regularly appears on power lists in the region.

She was the first woman from the region to be chosen for LinkedIn’s Global Influencer Program, which designates leaders to share perspectives on the professional network. LinkedIn has selected about 500 influencers, including U.S. president Barak Obama and Dubai vice president Sheikh Mohammed bin Rashid, since the program began in 2013.

Al Kaabi sits on several boards including United Arab Emirates University, the National Media Council, Abu Dhabi Media, and Image. She chairs in the Emirates Media Measurement Company.

She was one of Forbes Middle East’s 30 Most Influential Women in Government in 2014 and was awarded Business Woman of the Year at the Gulf Business Industry Awards.

Technology, metrics pose challenges

In spite of the progress of twofour54, she sees challenges ahead, particularly on the technology and metrics fronts.

She said the entertainment and media industry in the region needs a technology update. Another important next step is to figure out how to measure reach of the content the project produces.

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Adeeb Al Balushi: a Young Innovator

11 February 2016 Comments (0) Featured, Leaders, Middle East

adeeb al balushi

One of the youngest inventors in the world, an Emirati schoolboy is being prepared for a future providing technological solutions to the problems of people around the world.

Adeeb Al Balushi is an eleven year old Emirati boy like any other, yet in some ways he is quite unlike most other children his age. Al Balushi is a young boy who from early childhood has been driven by a desire to help people. This started with his family when he realized that his father was limited by the performance of his prosthetic foot. In an attempt to lessen his father’s discomfort he designed a light-weight, waterproof version of the prosthetic. With this success under his belt he invented a cleaning robot for his mother having noticed that her work around the house could be made much easier. Never one to be content to rest on his laurels, his ambitions are much wider ranging: he went on to create such things as a fire proof helmet whose camera system allows the wearer to see better in a fire, a smart wheelchair and a seat belt system with a built in heart monitor which wirelessly sends what could be lifesaving information to the emergency services.

“I want to change the world. There are too many people in need of assistance and all I think of is how I can be of help,” says Adeeb Al Balushi.

World Technology Tour

Shaikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai has been proactive in supporting the growth and development of young Emirati innovators in general, and Al Balushi in particular. In 2014, a world tour was organized to seven of the most technologically advanced countries in the world: the United States of America, France, United Kingdom, Ireland, Germany, Italy and Belgium. The purpose of the tour was to prepare Al Balushi for a future within the field of scientific research and in so doing help raise the profile of Dubai in the field. Conferences, workshops and meetings with leading innovators within the field were carefully planned, all the time ensuring that Al Balushi’s schooling would not be significantly affected by the tour.

The young inventor was recently invited to visit the headquarters of Thuraya, one of the world leaders in satellite telecommunication technology where he was shown the way the company also works tirelessly to bring solutions to problems; Al Balushi was provided a background to Thuraya’s efforts to bring satellite technology closer to the mainstream. Such products included the Satsleeve, a device enabling an ordinary smartphone to be used as a satellite phone, as well as the company’s IP+, which is extending broadband capabilities to areas which would normally not be able to connect to a network.

Adeeb Al Balushi

Awards and recognition

His tireless thirst for invention has led to a great deal of recognition for Al Balushi. He has been awarded the Hamdan bin Rashid Al Maktoum Award for Distinguished Academic Performance and has addressed thousands of delegates at the ITU conference in Korea. Adeeb Al Balushi is the youngest and most recognized inventor in the United Arab Emirates. He is also a member of the Arab Robotics Association, with over sixty certificates of achievement to his name; he is considered the youngest Arab inventor in this field. The year 2013 saw Al Balushi gain the UN Information Centre’s Award of Excellence, while the The Arab Youth Council for Integrated Development (Aycid) have awarded him honorary membership and named him the head of their committee for young inventors and innovators.

Persistence is key

Al Balushi is obviously a very gifted young man with the support and mentorship of a state behind him. It is also clear that he is driven in his mission to help people the world over. The passion and the associated hard work are factors, the necessity of which is not lost on him, which he takes in stride.

“There are lots of paths to take through life, but the one that will ruin everything is to decide that it’s too hard and you give up. Then all is lost and everything you have accomplished is gone. Sometimes it’s the simple changes that can lead to the biggest discoveries,” says Adeeb Al Balushi.

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Slumping oil prices, political unrest prompt risk rating downgrades

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

The credit insurer Coface says only four African countries offer an “acceptable” average probability of corporate default.

Seven African countries have seen increased risk of default while only one has improved in the past year, according to a new report by the credit insurer Coface.

Only four African countries – Botswana, Mauritius, Morocco and Namibia – received an A rating from Coface, signifying an “acceptable” average probability of corporate default.

Seven countries were rated B with a “significant” average probability of default. The remaining 32 countries rated a C or a D, reflecting high or very high probability.

Ivory Coast was the only African country rated as improving, although Coface put it on a positive watch rather than a full upgrade. Coface downgraded risk ratings for Algeria, Gabon, Madagascar, South Africa, and Tanzania, while Zambia and Namibia were placed on a negative watch.

Oil-dependent economies see increased risk

The oil glut figured heavily in Coface’s downgrades for Algeria and Gabon.

Algeria’s rating went from A4 or a “quite acceptable” probability of default, which denotes some economic weakness, to B, a “significant” probability reflecting an uncertain economic and financial outlook.

Algeria’s oil and gas revenue dropped 40 percent last year, forcing the government to cut spending, raise fuel prices and halt major projects. The government, which draws 60 percent of its funding from energy revenues, recently turned to China to finance several infrastructure projects, including a new port.

Algerian economy will expected to slow

algeria oilCoface said weak oil and gas prices would continue to slow the Algerian economy.

“Algeria remains highly dependent on the energy sector which accounts for 30 percent of its GDP. The problems faced by the hydrocarbon sector due to its lack of competitiveness and the obsolescence of its production equipment lead to the conclusion that if the oil market remains low Algerian energy production performance will stay weak in 2016.”

Gabon’s rating dropped from B to C, denoting a “high” average probability of default.

Like Algeria, the country has seen its oil revenue drop dramatically and its economic growth decline sharply. The report said economic activity was expected to “pick up as of 2016 thanks to election spending, the natural resources sector (agri-business, gold and manganese mines, wood processing) and the services sector.”

Global oil prices may drop further

Oil-dependent economies face more challenges in the coming year.

According to the report, global oil prices may decline by another $5 to $15 per barrel in the coming year. Non-OPEC production will decline, particularly U.S. shale oil, the report said. However, with economic sanctions lifted, Iran will bring additional oil to market – it has 30 million barrels in reserve and could increase production to 700,000 barrels a day.

South Africa risk “significant”

In South Africa, the report cites the nation’s recent financial crisis, higher interest rates, government deficits and political instability as factors. South Africa’s rating went from A4 or a “quite acceptable” average probability of default, which denotes some economic weakness, to B, “significant.”

South Africa’s worsening economic was thrown into an uproar late in 2015 when President Jacob Zuma abruptly fired a respected finance minister and then fired the replacement amid public protests.

With the value of the rand plummeting, South Africa worst drought in decades is putting even more pressure on the nation’s economy. The report said “agriculture, which was badly hit by drought in 2015, could again suffer as a result of El Niño in 2016.”

Tanzania, Madagascar also downgraded

Tanzania was downgraded from B to C, or “high” probability of default.

The east African nation has in the midst of a political standoff that has disrupted trade for several months. It began after the mainland government annulled an election in semi-autonomous Zanzibar, which the opposition party claimed to have won. New elections are planned in February but the opposition has threatened a boycott.

Madagascar has also suffered political unrest since a coup in 2009. Its rating went from C to the lowest possible grade, D, signifying a “very high” average probability.

The report said Hery Rajaonarimampianina, who took power in the coup and was democratically elected president in 2013, “lacks the support for implementing reforms, with popular discontent taking the form of increasing numbers of protest movements and strikes.”

Most African countries draw poor ratings

Twelve other African countries are rated D. They are: Burundi, Central African Republic, Chad, the Democratic Republic of Congo, Eritrea, Guinea, Liberia, Malawi, Mali, Sudan and Zimbabwe.

In addition to Tanzania and Gabon, 17 countries are rated C: Angola, Burkina Faso, Cameroon, Congo, Djibouti, Ethiopia, Ghana, Ivory Coast, Mauritania, Mozambique, Niger, Nigeria, Rwanda, Sao Tome, Togo, Uganda and Zambia.

In addition to Algeria and South Africa, five countries are rated B: Benin, Cape Verde, Kenya, Senegal, and Tunisia.

Four nations offer “acceptable” risk

Of the four countries that received an A rating, Morocco and Botswana were rated A4 – “quite acceptable” probability – while Namibia and Mauritius got a higher A3 rating – “acceptable” probability.

In the Middle East, Israel, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates received A ratings while Bahrain and Jordan were rated B. Coface gave C ratings to Egypt and Lebanon. Iran, Iraq, Libya, Syria and Yemen were rated D.

Globally, Coface forecasts a gradual continuing economic recovery in the euro zone.

“However, cheap oil, the weak euro, ad the slow decline in unemployment should not detract from the many sources of possible risk this year, with political risk foremost among them,” the report said.

While advanced economies should experience moderate growth this year, “it will not be enough to restart global growth this year.”

The report underscores the risks as more investors turn their attention to the continent. Despite the challenges, investor interest in Africa has grown in the past decade, with an estimated $4 billion raised in 2014. Private equity investment in Africa amounts to about 1 percent of the global total.

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Ethel Cofie builds a mobile platform to boost youth employment

9 February 2016 Comments (0) Africa, Featured, Leaders

Ethel Cofie

The Ghanaian entrepreneur is developing a micro work platform that will enable businesses and people to coordinate tasks that computers cannot perform.

Ghanaian entrepreneur Ethel Cofie sees technology as a key driver of business efficiency and revenue and she hopes to demonstrate that with her company’s latest project, M-Ablodé.

Cofie is the founder and CEO of Edel Technology Consulting. Her company is collaborating with the United States African Development Fund to create M-Ablodé, a mobile micro work platform that will enable businesses and people to coordinate the use of intelligence to perform tasks that computers cannot.

Edel said the platform would help create employment and wealth in developing economies, especially Africa. The name Ablodé means freedom or independence in the language of the Fon Ewe people who originated in Ghana, Benin and Togo.

Platform could help boost youth employment

The hope is that the platform will tap into Africans’ mushrooming access to mobile phones to help drive youth employment on the continent, which is expected to have a labor force of one billion by 2040.

Using technology to better the economy is at the center of Cofie’s experience in technology development.

“Years ago, I got tired of just building tech for tech’s sake,” Cofie said. “Instead I wanted to build tech that would clearly create something new for an organization or would make things more efficient, or something that would create more revenue.”

Global experience in technology

Cofie, who founded Edel in 2010, has more than 12 years of experience working in the United Kingdom, Nigeria, Sierra Leone and Ghana on projects including the Bill and Melinda Gates Mobile Technology for Health project, the Ford Foundation’s Nigeria election monitoring project and as an IT strategist for Vodaphone. In 2014, she was a Mandela Washington Fellow at Yale University.

Edel projects include the World Bank’s Negawatt global challenge, a competition that seeks to encourage innovation around energy issues through a process of meetups, brainstorming, prototyping and pitching.

Other Edel projects are Unilever’s Clean Team initiative to bring affordable sanitation to poor communities; an online leadership center for the Ghana Institute of Management and Public Administration, and micro-finance revenue growth for Dalex Finance.

M-Ablode

Founded Women in Tech Africa

In 2013, Cofie also founded Women in Tech Africa, a pan African organization with membership from 30 countries that has convened virtual meetings as well as conferences and training in Nigeria and Ghana.

She said she started the organization “out of my very personal need to start a ‘girls club,’ as an antidote to what had been a ‘boys club’ in the tech sector for so long.’’

The new M-Ablodé platform, due for release this summer, will tap into the proliferation of mobile phones in Africa.

Mobile subscriptions to reach 930 million

In 2002, only one in 10 in Tanzania, Ghana, Kenya and Uganda owned a mobile device, according to Pew Research Center. Today, ownership in many countries tops two-third. In South Africa 89 percent ownership is on part with the United States, Pew said.

Ericson, the telecoms giant, expects mobile subscriptions in sub-Saharan Africa to increase to 930 million by 2019.

In announcing the new platform, Edel said it would help address the growing problem of youth unemployment. Edel noted that Africa’s labor force would number one billion by 2040, surpassing China and India to make it the largest in the world. At the same time, “in Africa, youth unemployment occurs at a rate more than twice that for adults. Youth count for 60 percent of all African unemployed.”

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Drought plunges Kariba Dam hydropower to record lows

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

kariba dam

Power shortages in Zambia and Zimbabwe undermine their struggling economies.

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

The crisis at the world’s largest man-made reservoir threatens to further weaken the growth outlook for the two countries at a time when they face falling commodity prices. The struggling mining industry has been particularly hard hit.

The reservoir fell to 11 percent of capacity in late January before rising slightly to 12 percent this month after dam authorities cut hydropower production to 25 percent of capacity. A year ago, the dam, which is fed by the Zambezi River, was at more than 50 percent capacity but drought and heavier than expected water usage resulted in the decline.

Power shortage could last years

While authorities may avoid a shutdown of the hydropower production, power shortages are expected to last for years. According to the World Bank, the power deficit could last at least until 2018 and possibly until 2020.

Henry Kapata, spokesman for Zambia’s state power utililty said power blackouts were averaging eight hours a day or more when imports were limited.

Kapata said the power deficit totaled 630 megawatts in January. The utility’s goal is to reduce the deficit to less than 160 megawatts by August, he said.

Mining industry suffers

Kariba Dam

The power cuts have dealt a significant blow to a mining industry that was already in trouble.

Zambian mining interests in August agreed to cut hydropower consumption by 30 percent as the problems became evident last summer. In Zimbabwe, mines and other major users were ordered to cut their consumption by 25 percent in October.

As a result of cutbacks and global price declines, mining growth has stalled.

In Zambia, where mining accounts for 80 percent of exports, production of copper, also was expected to decline this year. Two major mining companies suspended operations and cut thousands of jobs following the decline in copper prices and thousands of jobs were lost.

Effective January 1st, the government increased power tariffs by 25 percent in an attempt to encourage mining companies to invest in power generation.

In Zimbabwe, where minerals account for 55 percent of all exports, production fell slightly in 2015, according to the Chamber of Mines of Zimbabwe. The total value of mineral shipments declined steadily between 2012 and 2015 from $2.2 billion to $1.8 billion because of low output and declining prices globally.

Finance Minister Patrick Chinamasa has said the power crisis has become an obstacle to economic growth in Zimbabwe and the government is putting a priority on power projects.

“We regard power generation as our number one priority to move the country toward an economic recovery,” Chinamasa told the Parliament in December.

Engineers see risk of dam collapse

Even as the drought eases, a larger crisis looms for the Kariba Dam. Engineering experts have been warning for years that the dam wall is in danger of collapse.

The low water level reduces the pressure temporarily, but “the bigger picture of the state of Kariba dam is critical,” said Kay Darbourn, author of an extensive 2015 report on the dam.

Darbourn said factors including high rainfall that will feed water inflows locally and from other regions as well as potential earthquake activity, “could all contribute to the likelihood of failure of the Kariba Dam.”

The report, “Impact of failure of the Kariba Dam,” (pdf) said 2014-2017 was a crucial period of danger for the dam, while a project to repair it will not be completed until 2025.

Bedrock at the foot of the dam erodes

The dam was built in 1959 on a seemingly solid bed of basalt. However, torrents from the spillway have eroded the bedrock at the foot of the dam and a large crater now undermines the base of the dam wall.

Engineers have warned for years that the dam, which is 128 meters tall and 579 meters wide, will collapse and the floodwaters will breach Mozambique’s Cahora Bassa Dam, knocking out about 40 percent of southern Africa’s hydroelectric supply.

An estimated 3.5 million lives would be at risk in Zambia and Zimbabwe as well as further downstream in Malawi and Mozambique.

Fears were heightened in January when an earthquake measuring 4.6 on the Richter scale struck less than 60 kilometers away from the dam. The dam has withstood quakes as high as 5.5. Authorities are assessing whether the quake caused additional damage to the dam.

Munyaradzi Munodawafa, spokesperson for the Zambezi River Authority (ZRA), manager of the dam, said Zambia and Zimbabwe had raised about nearly all of the $300 million needed to fix the structure. Work was expected to start early in 2016.

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