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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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John Lewis to open in Dubai as retail surges in the UAE

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

john lewis

UK-based department store John Lewis is set to launch in Dubai as the UAE becomes a top global market for retailers

Taking the middle class favorite across the globe, UK-based department store John Lewis has announced plans to open shop in the Middle East with the launch of a home department in Dubai. Scheduled to open in spring 2017, the shop-in-shop will take prime position in the new flagship Robinsons Department Store in the Dubai Festival City Mall, both owned by UAE-based conglomerate the Al-Futtaim Group. The 15,000 square feet shop will be John Lewis’s largest outlet oversees, and will stock a range of own-brand furniture, cookware, textiles, glassware, and bedroom, bathroom, living, and gifting assortments.

The agreement extends the current partnership between the Al-Futtaim Group’s Robinsons Department Store and John Lewis in Singapore. As part of the announcement, the duo also confirmed the opening of a 630 square feet John Lewis shop-in-shop in the Kuala Lumpur Robinsons store in Malaysia. Both new outlets will be designed by John Lewis’s in-house team.

Andy Street, John Lewis’s managing director, comments: “We’re delighted to be working with Robinsons again on two new ventures. The success of our existing international shop-in-shops has given us the confidence to open in the Middle East and increase both the scale of the space and product assortment. This is an exciting time for Al Futtaim’s Dubai Festival City Mall and we’re pleased that John Lewis will be a part of the next phase of its redevelopment.”

Building a stable home market

The announcement follows a failed Middle Eastern expansion attempt by John Lewis in 2011. Again working with the Al-Futtaim Group, plans had been drawn up to open several stores across the region, including in Dubai and Egypt. But at the time, much of the British high street was struggling, and so John Lewis pulled out, commenting that a focus on the home market was the first priority.

Now the employee-owned John Lewis operates 46 shops across the UK, of which 32 are department stores. And it is performing well relative to the market, posting particularly strong results for the important Black Friday, Christmas, and post-Christmas trading period with total sales of $1.38 billion (£951 million). Its viral “Man on the Moon” ad also triggered a 5.1% jump in online sales year-on-year. Although the company has warned that 2015 profits will be down, it has blamed this on higher pension charges, and on the whole, John Lewis is in good health.

John Lewis has also been busy building a portfolio of overseas stores, including 14 shop-in-shops across Singapore and the Philippines, seven in South Korea, and a further seven shop-in-shops set to launch in De Bijenkorf department stores across the Netherlands.

Booming retail market in the Middle East

But emerging markets are playing an increasingly important role. Reportedly about 70% of the world’s growth is likely to come from emerging markets in the coming years. With a rising population, a growing middle class, and rapid urbanization, the Middle East is a particularly attractive and largely untapped burgeoning market.

According to an Arcadis index ranking of 50 international markets, the UAE is the eighth most attractive market globally for retailers, with the UAE ranked first in the region thanks to strong infrastructure and ease of operation. Dubai is at the center of that market, with the second largest number of global brands after London, rising local purchasing power, a wealthy expatriate community, and a thriving tourism sector with plenty of foreign luxury consumers. Currently Dubai alone commands around 30% of the Middle East luxury market.

Modern retail concepts, including the Dubai Mall which claims around 50% of Dubai’s luxury purchases and hosted a record 54 million visitors during the annual Dubai Shopping Festival, also provide ideal conditions for growth. Developments capitalizing on the successful Expo 2020 bid and new mall openings are also expected to reinforce Dubai’s position at the center of a Middle Eastern retail in the coming years.

But with religion tied so closely to both society and business, the Middle Eastern market does also come with risks. Dano-Swedish brand Arla Foods (owner of Lurpak, Puck, and Arla) is a good example. In the early 2000s it was a major player in the Arab world, dominating the Middle Eastern markets for butter, cheese, and cream. But in 2005, and again in 2008, the publication of cartoons unflatteringly depicting Islam’s prophet in Danish newspapers led to boycotts of Danish goods, and sales plummeted. Arla Foods has never quite recovered.

Good chances of success

This partnership between John Lewis and Al Futtaim has a good chance of success. John Lewis has a strong reputation, voted the retailer with the best reputation in Europe, the Middle East, and Africa in a survey by the Reputation Institute (2013 and 2014). This will make it attractive to the Middle Eastern market. And Al Futtaim has the expertise and knowledge of the local culture. As Paul Delaoutre, President of Al Futtaim Retail, comments: “Al Futtaim’s solid regional retail infrastructure, know-how and reputation seamlessly blend with John Lewis’s global appeal as a renowned retailer in a long-awaited exclusive partnership designed to offer discerning UAE consumers even more choice and options.”

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A commuter rail network for Jeddah

5 February 2016 Comments (1) Business, Featured, Middle East

jeddah metro

Saudi officials hope the network, to begin operation in 2020, will ease congestion in the nation’s second largest city.

An extensive rail network, a critical piece of a plan to reduce severe traffic congestion in Saudi Arabia’s commercial capital, is expected to begin operation in 2020.

The $12 billion Jeddah network will have four lines – a Blue Line with 19 stations, including the airport, a Green Line with 12 stations, a Red Line with 24 stations, and an Orange Line with 30 stations.

In all, the network will comprise about 150 kilometers of track and will include construction of a road-rail suspension bridge over Obhur Creek. The network will connect to the Haramain high-speed rail station for travel outside the city.

Jeddah, a port city on the Red Sea, is Saudi Arabia’s second largest city after the capital, Riyadh. Jeddah also is a gateway to the holy sites of Mecca and Medina.

Traffic congestion plagues city

The train network is the central element of a larger plan by Saudi officials to ease major automobile traffic congestion in the city of 3.4 million people by 2030.

Traffic in the city has been described as “nightmarish,” and commuters are plagued with poor road design, lack of traffic officers, and drivers who do not follow traffic rules.

One goal for the Jeddah transportation plan is to increase from 12 percent to 50 percent the city population living within a 10-minute walk of public transportation.

Osama Abdouh, executive director of the government-backed Jeddah Metro Company, which is managing the project, said the project will “provide the best and most suitable types and choices for public transportation” for Jeddah residents and visitors.

At the same time, it will reduce traffic congestion and pollution in the city, Abdouh said.

Traffic in Jeddah

Traffic in Jeddah

Bus network, tram and ferries also planned

The Jeddah Public Transit Program also envisions a bus network, cycle networks and marine ferries along with a tramway on the Corniche coastal resort area.

The Saudi Council of Ministers approved the $12 billion transportation plan for Jeddah in 2013. Abdouh said the exact cost is to be determined as plans firm up.

Several contractors are already at work developing plans and designs.

The British architecture firm Foster + Partners was awarded a contract to develop the architecture for the master plan. Aeocom Tecnology Corp., based in the United States, is providing support for the planning and design phase, while a French company, Systra, is providing the engineering designs.

Bids to be sought

Later this year, the Jeddah Metro Company will seek bids a variety of contractors to supply trains and equipment, communications, passenger information, fare collection and train control systems, automatic train supervision, an operations center and depot buildings as well as mechanical, electrical, ventilation, cooling and plumbing systems.

Abdouh said the project expects to ask for bids for many aspects of the project in the second quarter of 2016, once the designs are completed.

The project is also in the process of acquiring approximately 150 pieces of property needed to develop the network in Jeddah.

The Saudi capital, Riyadh, is also getting a rail system. A six-line network with 178 kilometers of track and 85 stations is expected to be completed in 2018.

The projects are going ahead despite economic struggles in Saudi Arabia. Tumbling global oil prices have forced the Saudi government to dip into reserves.

The 2016 budget cuts government spending by nearly 14 percent from 2015 levels, but the country is still expected to have a budget shortfall of 13 percent of gross domestic product this year.

Meanwhile, development of railways is surging in the Middle East and Northern Africa. One 2014 estimate said rail and metro that were under way or planned in the Middle East totaled more than $200 billion and would cover more than 36,000 kilometers.

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Akon Switches On: Turning Fame into Light for Africans

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

Akon Solar Academy

American-Senegalese rap star Akon is putting his fame to use: providing electricity for the millions of people who need it in 15 sub-Saharan African countries.

Rappers may be famous for many things, but philanthropy is not one of them. Akon, the Senegalese-American rapper famous for dance hits like “Smack That” and “I wanna love you”, is changing that perception through his latest business endeavor. Unlike his peers, Akon’s newest business is not a clothing line or new cologne, but the creation of a solar power company. In February 2014, Akon announced that he would be changing the public face of rap by launching his company to invest in capital development for millions of sub-Saharan Africans.

Lighting the Way

In September of 2013, Akon and his friend and soon-to-be-business partner Thione Niang, were discussing how they could improve their hometown of Kaolack, Senegal. Both had been born and raised in this West African country, in a town without electricity. They decided that infrastructure was a key priority in Senegal’s development, and that electricity was a fundamental key to promoting employment, education and positive change in Senegal and other sub-Saharan African countries. In regions without access to electricity, life slows after dark, and in equatorial countries, darkness falls around 6pm, year round. Light is a fundamental aspect of human activity, and without electricity, families are forced to resort to what can be dangerous alternatives: approximately 3.5 million people die per year from respiratory illnesses related to indoor burning.

Akon and Niang joined forces with Malian entrepreneur Samba Bathily to bring an end to energy poverty in sub-Saharan Africa. They decided that creating a company, Solektra International, would provide a clear path to Akon and Niang’s dreams. Through Solektra International, the three co-founders created Akon Lighting Africa, a for-profit company working to create jobs and stimulate economic growth through sustainable, low-cost electricity.

Going Against the Grain: A For-Profit Company in a Non-Profit Sector

When we think of “helping Africans”, images of smiling do-gooders and the logos of non-profit agencies like the United Nations Development Programme come to mind. Not often do corporate giants like Huawei enter the conversation, but this is exactly the conversation Akon is changing. Akon is working with companies like Huawei, Solektra and Sumec to implement his projects because he “doesn’t believe in aid in Africa.” By using their expertise, Akon Lighting Africa is able to access their enormous network of partnerships to provide low-cost electricity to thousands of Africans. Their projects are provided free-of-charge to the communities they work in from a US$1billion credit line established with various international banks. According to the Akon Lighting Africa website, the average cost of lighting a village is approximately US$75,000, which includes micro-solar grids, personal solar packs for homes, street lights, lights and wiring for educational and health institutions, and the elements needed to connect each light to the grid.

Changing the Rap Game

Not satisfied with the status quo that has left billions of humans in the dark, Akon took matters into his own hands when he co-created Akon Lighting Africa. This company “aims to develop an innovative solar-powered solution” for the 600 million Africans without electricity. Akon Lighting Africa works to enable school children to study so they can pass their exams; to increase economic opportunity for small business owners; make roads safer and improve the quality of services available at existing institutions, like health centers and schools; and to ensure better access to information, all while creating jobs for the young people of Africa.

In just twelve months, Akon Lighting Africa has brought solar powered electricity to 480 villages across 15 different African nations, including 100,000 solar street lamps and 1,200 solar micro grids. Through public-private partnership, Akon’s company has installed solar powered lights into schools, community centers, health institutions, streets and private homes in rural communities. Not only has this project provided villages with electricity for the first time, but the physical construction and maintenance of these solar power grids has indirectly created jobs for a reported 5,500 young people. Unemployment, especially among the under-35 population, is endemic across sub-Saharan Africa. Lack of infrastructure, such as electricity, is just one symptom of poverty; joblessness is another. Akon’s approach is tackling both.

A Bright Future

Akon’s vision is that Solektra and Akon for Africa will be the dominant provider of renewable energy in Africa within the next decade. In 2016, Akon Lighting Africa plans to expand to 10 additional countries including the Democratic Republic of the Congo, Angola and Chad. Both Akon Lighting Africa and Solektra International are emerging as key players in the future of solar power for unlit African communities–Solektra International has been invited to attend the Powering Africa Summit for 2016, showing their increasing importance in the development conversation.

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