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Report finds high business risk in 27 African and Mid-Eastern nations

15 January 2016 Comments (0) Africa, Business, Featured, Middle East

syrian war

Amidst unrest and war across Africa and the Middle East, a new report on risks to business in different nations paints a sobering picture.

Only 10 African and Middle Eastern countries are considered low risk for businesses, according to the report by Control Risks, a global risk management consultancy. Nearly three times as many countries – 27 – pose an extreme or high risk to companies operating within their borders.

Globally, insurgency is reshaping political and business affairs, according the report. In both business and politics, the established order is being disrupted by forces that appear suddenly, the report said.

Nowhere is that more clear than in Africa and the Middle East, according to Control Risks’ evaluation of political risk in 68 countries in the region. The rating is based on the likelihood that instability or interference or other factors such as corruption or infrastructure could negatively affect business operations.

Extreme risk in Burundi, CAR and Somalia

In sub-Saharan Africa, only three countries were given a rating of “extreme” risk: Burundi, Central African Republic, and Somalia.

Burundi has experienced widespread violence and the report predicts that the political and security environment will worsen in 2016, especially in Bujumbura, the capital. With the government unwilling the make concessions to its opposition, the report asserts that the risk of a coup will increase.

Meanwhile, Somalia and the Central African Republic are attempting to emerge from years of violence but remain unstable, the report said.

Violence in Burundi

Violence in Burundi

Piracy off East Africa coast declines sharply

It said a return to high levels of piracy off the coast of Somalia is unlikely in 2016.

The report said anti-piracy measures off the coast of Somalia have been effective, reducing the amount of activity to just one percent of its peak in 2011. But that might not last.

“Governments and shipping companies face the challenge of responding to the diminished threat without unraveling the work that helped to curtail the problem,” the report said, noting the paradox that the success of anti-piracy efforts could well lead to their being diminished.

However, the report cautioned about continuing offshore kidnappings and high jacking off the coast of Western Africa.

U.S. may increase anti-terror efforts in sub-Saharan Africa

On the terrorism front, the report predicts that U.S. president Barack Obama, in the final year of his term, will be more assertive internationally, including lending more support to counter-terrorism efforts in sub-Saharan Africa.

Boko Haram, the Nigerian militant group, is coming under more pressure from multiple governments and is likely to be forced to relinquish territory and instead rely on hit-and-run attacks, according to the report.

Nigeria was one of 16 countries that received a “high” risk rating. The report said the pending end of a program of amnesty for militants, and falling oil prices could worsen tensions.

Other countries with a high risk rating include: Chad, Comoros, Congo, Democratic Republic of Congo, Cote d’Ivoire, Equatorial Guinea, Eritrea, Gambia, Guinea, Guinea-Bissau, Lesotho, Niger, South Sudan, Sudan, and Zimbabwe.

Twenty-three nations pose medium risk

These 23 countries were given a medium risk rating: Angola, Benin, Burkina Faso, Cameroon, Djibouti, Ethiopia, Gabon, Ghana, Kenya, Liberia, Madagascar, Malawi, Mali, Mozambique, Rwanda, Sao Tome, Sierra Leone, South Africa, Swaziland, Tanzania, Togo, Uganda, and Zambia.

Only six countries – Botswana, Cape Verde, Mauritius, Namibia, Senegal, and Seychelles – received a low risk rating.

Middle East turmoil evident in ratings

The report also reflects political unrest and war in Northern Africa and the Middle East, where only four countries were rated low risk.

Three war-torn countries – Iraq, Syria, and Yemen – were rated extreme risk.

High-risk countries were Algeria, Egypt, Iran, Libya, and the Palestinian Territories.

Medium risk countries were Bahrain, Jordan, Kuwait, Lebanon, Mauritania, Oman, Saudi Arabia, and Tunisia.

Israel, Morocco, Qatar, and the United Arab Emirates were rated low risk.

By comparison, the United States is ranked low risk while China and Russia are ranked medium risk.

Globally, Control Risks said, the risk outlook is the worst it has been in the past decade. It cited, terrorism, instability in the Middle East, cyber-risk and Chinese economic problems as factors creating a “potentially more volatile world in 2016.”

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Middle Eastern investment in global real estate surges

14 January 2016 Comments (0) Business, Featured, Middle East

London real estate

Investment in real estate can be a fickle mistress. The ebb and flow of the cyclical patterns of real estate values can be hard to read at times, and investments, particularly in residential real estate, can lead to decreases or stagnation of your original investment. But some sectors are relatively safe, especially for experienced players who look at the patterns established over many years. Foremost of these ‘safer investments’ are the areas of commercial and hospitality real estate which can both offer big returns when the correct choices of properties are made. And of course, the old adage of any investment in real estate is ‘location, location, location’ and that is especially true when you are looking at the higher end of the market, be it commercial or residential.

Record spending on commercial real estate

Recent research by CBRE, the world’s leading commercial real estate company, highlights rising levels of outward investment in commercial real estate from Middle Eastern countries, and showed that in the first half of 2015 around US$11.5 billion was spent on commercial property worldwide. This far surpasses the previous high of US$9.6 billion recorded in the first half of 2007. Much of this investment comes from sovereign wealth funds (SWFs), particularly those of the United Arab Emirates and Qatar. Of the US $11.5 billion coming out of the area, US$8.3 billion (or 72%) of that came from SWFs.

From a macroeconomic perspective this increase in real estate spending by Middle Eastern investors is not surprising. Oil prices sit at seven year lows and investment bank Goldman Sachs predicts that this situation will not improve any time soon, especially with increases in supply and reductions in demand an ongoing issue. So, with potential revenue decreasing at a steady rate, the fund managers of the Middle East are looking at the best options to invest and receive a high level of return.

The real estate industry will continue to grow

The real estate industry globally has generally managed to weather the recent recessions better than some other sectors. This is partly due to increased activity in Asia which has offset any declines in other areas. Higher disposable incomes and relatively low rates of unemployment in many economies has also been a factor that has protected the real estate industry. Forecasts of the 10 year period from 2010 to 2020 predict that industry value added may increase by 4.5% per annum – well ahead of predicted global GDP growth in the same period. With annual revenue of over US$3 trillion and a global workforce of over 11 million, this is a sector that will continue to grow and adapt to the cyclical patterns of individual markets and economies.

Location, location, location

New York real estateAs mentioned, location is a crucial factor, and it comes as no surprise that some of the world’s major conurbations are the primary beneficiaries of this surge in spending. London leads the field, with US$2.8 billion spent on commercial property in the first 6 months of 2015, with Hong Kong (2.4 billion) and New York (1.1 billion) following in its wake. It is worth noting however that if we examine total real estate investment rather than just that originating in the Middle East, New York is leagues ahead of its English rival with a staggering US$40.1 billion of investment in real estate over the first half of 2015 compared to London’s 19.4 billion and Los Angeles’ 19.3 billion.

Change in focus to hotel properties

As well as the dramatic increase in total investment from the region, there is another distinctive factor in Middle Eastern spending on real estate. In every year from 2007 to 2014, the bulk of investment has been aimed at the office market. As this has reached saturation point in many cities, characterized by empty units, falling rents and an increase in incentive packages to attract tenants, the fund managers and individual investors have shifted their focus to the hospitality sector and to hotels in particular, which offer attractive long-term revenue streams. Of the US$11.5 billion spent in the first six months of 2015, $6.8 billion was invested in the hotel industry, with $2.5 billion being spent on hotels in London and $2.4 billion in Hong Kong. Given that this sector only attracted $1.8 billion for the whole of 2014, this is a significant increase and emphasises the increasing diversity of investment strategies by Middle East based investors.

Middle Eastern money looks for new opportunities

This increase in real estate spending, and indeed the change in focus, does not look like it will abate in the near future. Investment in the Americas looks like it will continue to increase into 2016 as Middle Eastern money looks for new opportunities outside the energy industry and outside its traditional comfort zone of Europe. While Asia appears to be a market that has so far eluded investment from the Middle East – mainly due to the dominance of China in many of the developing economies – one cannot rule out astute investors continuing to cast their net over a wider geographical area.

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Islamic Finance Opens up Business and Trade Opportunities with Muslim Nations

13 January 2016 Comments (0) Business, Featured, Middle East

islamic-business

The $2 trillion Islamic finance market is growing rapidly and is becoming a crucial mechanism for the rest of the world to trade with Muslim nations

In recent years, Islamic finance has grown rapidly across the world, and Islamic banks and associated products now make up a $2 trillion market (World Bank). It is also becoming a crucial mechanism for the rest of the world to develop business and trade opportunities with Muslim nations.

Islamic Finance: An Overview

In brief, Islamic finance is an economic and commerce system which abides by the laws laid out in the Qur’an. Its primary motivation is the prohibition of riba, earning interest, which can be loosely translated as Usury or making money from money. It also responds to the fact that money itself is considered to have no intrinsic value, being simply a medium of exchange. There are a number of ways that Islamic finance is structured to comply with these factors.

A sukuk is a sharia-compliant bond. It removes the payment of interest, and instead sees the parties own the debt: “securities of equal denomination representing individual ownership interests in a portfolio of eligible existing or future assets”. A sukuk is also used in Islamic mortgages, whereby the bank buys a property and the customer then either buys it back at an agreed above market value paid in instalments (murabahah), makes monthly payments comprising both a portion of the purchase price and a rental fee until outright ownership (ijara), or shares the returns from the asset with the bank in proportions agreed in advance (musharaka).

In terms of investments, individuals can enter into a Wakala, which sees the bank act as an individual’s manager, using the individual’s money to invest in sharia-compliant trading activities in order to generate an agreed target profit for them. Financial trading of, and investments in things that are forbidden by the Qur’an are also forbidden (e.g. alcohol, tobacco, pornography, gambling, armaments companies, or non-halal products).

In regards to bank accounts, instead of being offered an interest rate, as with investments, target profit figures are agreed. The targets offered will be along the lines of those elsewhere in the savings market.

Finally, risk is also a central area of Islamic finance: speculation (maysir) and uncertainty (gharar) are considered haram (forbidden). This rules out derivatives, options, futures, and conventional insurance. Instead, Islamic insurance (takaful) works whereby the insured individual contributes to a fund which is overseen by a manager and the individual receives any profits made from the fund’s investments.

Islamic Finance Growing Around the World

The first experiments in Islamic finance took place in the early 1960s in Egypt, but it really took hold in the 1970s as oil wealth boomed. A demand-driven niche that is growing fast, over the past decade Islamic finance has grown between 10% and 12% annually. Between 2009 and 2013, Islamic finance assets of commercial banks rose 17% (according to Ernst and Young). By mid-2014, global Islamic finance assets reached $1.9 trillion, and these assets are estimated to have surpassed the $2 trillion mark at the end of that year.

About 75% of the industry is concentrated in the Middle East North America (MENA) region, although rather unequally distributed. Figures show that in 2015, Saudi Arabia held 31.7% of the world’s Islamic finance assets, followed by Malaysia (16.7%), UAE (14.6%), Kuwait (10.5%), and Qatar (7.7%).

But it is not restricted to Muslim nations. And in recent years it has started gaining significance worldwide. Islamic banks are in operation in countries including Denmark, France, Luxembourg, Nigeria, South Africa, Switzerland, and the UK. Luxembourg is considered the hub of Islamic finance in Europe: it has 111 Islamic funds, behind only Malaysia and Saudi Arabia; it was the first European country to join the International Islamic Liquidity Management; and Luxembourg’s Central Bank was the first European central bank to become a member of the Islamic Financial Services Board. Elsewhere, in 2014, Britain became the first non-Muslim country to issue an Islamic bond: its £200 million sale attracted orders of £2.3 billion. And last year, the Islamic Bank of Britain reported a 55% increase in applications for its savings accounts by non-Muslims.

Hong Kong has since raised $1 billion from its first sukuk; in 2015, Goldman Sachs became the first US bank to issue a sukuk, raising $500 million with its debut sale; and the Bank of Tokyo-Mitsubishi UFJ, France’s Société Générale, and a number of other European and American banks, including Citibank and HSBC, are expected to launch Islamic finance operations in the next year. The World Bank and the General Council for Islamic Banks and Financial Institutions (the global umbrella of Islamic financial institutions) are looking to continue driving the development of Islamic finance globally, signing a Memorandum of Understanding (MoU) in 2015.

Islamic banks must improve performance

Although in its early stages of development, one of the draws of Islamic finance is that it appears to be more resilient to shock. During the 2008 crash, Islamic banks remained stable. This could be because excessively risky strategies, speculation, and uncertainty are banned, and risk-sharing is promoted. And as worldwide interest in ethical finance increases, many think that Islamic finance may be more able to prevent financial bubbles.

However, if Islamic banking is to effectively compete with its conventional counterparts, performance must improve. 2006-2011 data shows that conventional banks averaged a ROE of 14.6% where Islamic banks averaged 7.1%. Similarly, conventional banks averaged a 5-year cost to income of 33%, where Islamic banks averaged 51%.

Increasing interest from conventional institutions signals that Islamic finance is set to become a highly competitive market. And if embryonic challenges can be overcome, it will present a new route for business between the Middle East and the rest of the world.

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New African Development Bank leader puts energy at the forefront

12 January 2016 Comments (1) Africa, Featured, Leaders

Akinwumi Adesina

The new head of the African Development Bank says his top priority is to develop the continent’s energy infrastructure to spur economic growth.

Akinwumi Adesina, known for his reforms and anti-corruption efforts as Minister of Agriculture and Rural Development of Nigeria, became president of the bank on September 1, 2015. The bank is one of Africa’s largest lending institutions and finances projects to improve electricity, water and transportation.

“My top priority will be to focus the Bank to deliver on “power-for-all” – a universal access to electricity for Africa. Nothing is more important to Africa than access to power,” Adesina said in his vision statement for his candidacy for president.

Lack of energy slows development

Adesina said lack of energy is the greatest obstacle to the development of the continent.

“The development of the energy infrastructure for Africa will drive more rapid economic and social development of the continent, by reducing the cost of doing business, powering industrial growth, unlocking entrepreneurship of millions of small and medium size enterprises, improving educational and health systems and deepening financial services, driving agro processing to create jobs,” he said.

He noted that Africa’s total energy capacity is only 147 GW – similar to that of Belgium. He wants to expand that to 700 GW by 2040 with development of renewable resources.

“Africa has 50% of the world’s renewable energy (wind, hydropower and solar) but they remain largely untapped,” he said.

Plans to fund large and small projects

He proposes a mix of large, regional projects and smaller local ones that can be developed quickly.

“The Bank cannot afford to put all its focus on large regional power projects alone, as they are very complex, have high capital exposure and risk profiles, will take time to achieve, even though they are critical,” he said.

“Under my leadership, the Bank will pursue a twin track approach: build success in the short term, deliver successful investments in power and then scale up based on success. To show quick successes, build momentum on execution and delivery for countries, the Bank will also focus on providing support for the piloting of decentralized integrated power systems within countries.”

Corruption is an obstacle

Another obstacle, he said, is corruption.

“The cost of corruption is massive; it turns the whole continent into darkness,” he said, estimating that corruption costs Africa $148 billion a year.

Africa looks to reduce carbon emissions

Adesina was a prominent voice for a unified African agenda at the recent Climate Conference in Paris and that agenda also stressed development of renewable energy sources in order to reduce greenhouse emissions.

At the time, he said Africa needs an international investment of $55 billion a year through 2030 to create an efficient energy sector that uses more renewable resources. He said the bank would contribute $5 billion in financing, 40 percent of its total investments.

Increased investment in private sector

In addition to pledging to make investments in the energy infrastructure, Adesina said the bank would increase its investments in the private sector.

He said private sector lending by the bank was $2.1 billion in 2013.

“Given that the private sector accounts for 70% of all investments in Africa, 70% of all output and 90% of all employment, there is need for the Bank to be more expansive in its private sector operations,” he said.

Adesina also said the bank will embrace an “activist” posture in support of infrastructure developments.

“The Bank will increasingly take on a transactional approach by helping countries and the private sector to resolve legal and regulatory environments that will unlock bottlenecks to project development and execution. The role of the Bank will be more of an “activist financier” that will be more engaged in driving the execution of infrastructure projects, not just ideas and master plans,” he said.

Known for agricultural reform in Nigeria

Adesina is a respected economist and agricultural expert.

Before joining the bank, he had been Minister of Agriculture and Rural Development in Nigeria since 2011. He was known for implementing bold reforms in the country’s agricultural sector, including anti-corruption efforts and infrastructure improvements. Agriculture had been long neglected as the West African country’s reliance on oil revenues grew.

During his tenure, domestic food production increased by 22 million tons while food imports decreased significantly.

In 2013, Adesina won the Forbes Africa Person of the Year award for his reforms in Nigeria’s agriculture sector. In 2014, he was selected as Anti-corruption Man of the Year and Most Transparent and Accountable Minister of the Federal Republic of Nigeria by the Foundation for Transparency and Accountability.

He holds a master’s degree and a PhD in agricultural economics from Purdue University.

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Ivory Coast’s Guillaume Soro: From rebel leader to high government post

11 January 2016 Comments (0) Africa, Featured, Politics

Guillaume Soro

A passion for freedom has led Guillaume Soro from command of rebel forces in Ivory Coast’s brutal civil wars to the highest echelons of government in the West African nation. But Soro also faces accusations of inhumane treatment during the country’s civil war in 2011.

Soro, now President of the National Assembly, was briefly subject to an arrest warrant in Paris in December. His accuser is Michel Gbagbo, the son of Soro’s archrival, the former Ivory Coast president Laurent Gbagbo.

Michel Gbagbo has filed claims in a Paris court accusing Soro and other senior leaders in the rebellion of “kidnapping, false imprisonment, and inhumane and degrading treatment” before he was released in 2013. Soro denies the charges, saying Michel Gbagbo was arrested legally along with his father in 2011.

Michel Gbagbo

Michel Gbagbo

Former president faces charges in international court

Gbagbo’s father, the former president, meanwhile, stands accused of crimes against humanity by the International Criminal Court, charges Laurent Gbagbo has denied.

The younger Gbagbo sought to have Soro arrested and compelled to testify in December when Soro was in France attending the Paris Climate Conference. Gbagbo has dual French-Ivorian citizenship, which enabled him to bring the case to the French court in 2012. But a judge lifted the warrant after the government of Ivory Coast protested that Soro was in Paris on official business and thus had diplomatic immunity.

Soro, Gbagbo are key figures in civil war

The enmity between Soro and Laurent Gbagbo is woven into a tapestry of civil unrest in Ivory Coast that dates back nearly 15 years.

Soro, now 43, was a leader of student uprisings against Gbagbo’s predecessor from 1995 to 1998 and did six stints in prison. After studying law in France for a time, he lived in exile in neighboring Burkina Faso before civil war erupted at home in 2002.

Soro led the Patriotic Movement of Ivory Coast, an opposition group that rebelled against Gbagbo, who became president in 2000. The movement combined with two other rebel groups to form New Forces, which seized northern Ivory Coast and accused Gbagbo of discriminating against northerners and Muslims.

“I have taken up arms to (help) my country to find its true face: peace, freedom and prosperity,” Soro wrote of his decision in his 2005 book, “Why I Became a Rebel.” He said he feared the country was on the brink of genocide.

Peace agreement brings rebel leader to power

As part of a 2003 peace deal, Soro joined the Gbagbo government as Minister of Communications. But fighting continued until a 2007 power-sharing deal elevated Soro to the post of prime minister. Gbagbo and Soro participated in a disarmament ceremony, burning their weapons to symbolize the end of the conflict.

In a speech, Soro apologized “to everybody and on behalf of everybody” for the harm done by the war.

That didn’t end the violence. Rockets were fired at a plane carrying Soro in June 2007, just two months after he was named prime minister. Soro was not hurt but three other passengers were killed in the attack on the plane as it landed in Bouake. Several arrests were made and there was speculation at the time that the attackers might have been members of Soro’s own New Forces, unhappy that he had joined the government. Soro also survived five previous assassination attempts.

Dispute over 2010 election

Long-delayed elections in 2010 sparked further violence after Gbagbo refused to concede the election to Alassane Ouattara, who ultimately became president with the backing of the French and the United Nations. Soro resigned from the government and joined opposition forces in support of Ouattara, who won 54 percent of the vote.

The post-election conflict left about 3,000 people dead, displaced tens of thousands, and gave rise to accusations of war crimes on both sides.

Soro with President Alassane Ouattara

Soro with President Alassane Ouattara

Soro gains high post

Soro rejoined the Ouattara government as prime minister and then was elected in 2012 to his current post as President of the National Assembly, the second highest post in the government. Soro is also Ouattara’s designated successor.

While Soro had many supporters in Ivory Coast as well as in West Africa and Europe, some questioned how national reconciliation could go forward with a divisive figure in a top post.

“This cannot bring things forward because there are people who are still aggrieved. Moreover there are people who have complaints against him, they are talking about reconciliation. We end up having this reconciliation and they put someone at the head of state, the number two, whilst people are aggrieved by him,” says Omer Blet, a student.

Soro is one of only a few on the Ouattara side of the conflict who have been accused of crimes during the war while hundreds on the Gbagbo side have been investigated, prompting complaints of imbalance by human rights groups.

Meanwhile, Ouattara was re-elected by a landslide to a second five-year term as president in 2015, spurring hopes that the country has reached political stability. But echoes of the long conflict continue to reverberate in French and international courts.

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Ashish J. Thakkar, from refugee to millionaire

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

Ashish Thakkar

Uganda’s Ashish J. Thakkar, 34, founder and executive chairman of the Mara Group parlays a small computer business into a multinational conglomerate.

His life story reads like a sweeping epic of tragedy, adventure and success.

He was born to parents expelled from their native Uganda by Idi Amin. He became a refugee from the genocide of Rwanda. He left school at age 15 to start a computer business. Nineteen years later, that tiny business has mushroomed into a conglomerate that employs 11,000 people in 25 countries.

Meet Ashish J. Thakkar, founder and executive chairman of the Mara Group. At only 34 years of age, Thakkar’s net worth is estimated at $260 million.

Real estate, shipping, manufacturing among holdings

Mara Group, now headquartered in Dubai, operates in telecommunications, manufacturing, real estate, shipping financial services, communications technology, renewable energy and manufacturing with revenues of $100 million.

His latest venture is agriculture, large-scale maize cultivation in Africa.

The secret to his success? “It’s difficult to identify one specific reason or catalyst, but above all other things, I believe a strong sense of perseverance, always thinking big and aiming high, and of course positivity, has allowed me to realize my vision,” he said.

“Always be down to earth and approachable,” he added. “The day your arrogance or ego kicks in, it’s all over. Always remember, no matter how big you become you will still always be a drop in the ocean in the grand scheme of things.”

Foundation supports entrepreneurship

He also founded the Mara Foundation, which mentors budding entrepreneurs.

In his book, “The Lion Awakes: Adventures in Africa’s Economic Miracle,” (Palgrave: August 2015), he chronicles the economic awakening of Africa that he has seen and benefitted from first-hand.

“The West is definitely investing more in Africa — or wanting to invest more in Africa — but they’re still investing a lot in Asia as well, specifically India and China. [The] nice thing is that India and China’s investing in Africa, so the ultimate destination is us,” he says. “People do want to come to Africa; people realize that we’re the next big thing — India and China have had their time, it’s now ours.”

He also wants to be the first East African in space through Virgin Galactic, the Richard Branson-backed space tourism project. “I’m taking quite a few of flags into space, as a way to kind of send a strong message that ‘look, we as Africa have the vision and the ability as well’,” he said.

Expelled from Uganda, fled Rwanda

His super star status belies difficult beginnings.

Thakkar’s family is of Indian descent but had lived in Uganda since the 1800s until 1972, when Idi Amin expelled Asians from the country. The family lived in England for more than a decade; Ashish Thakkar was born in Leicester. The family returned to Africa and lived in Rwanda until they were forced to flee the genocide and return to England in 1994.

“From being top entrepreneurs, my parents were reduced to waking up at the crack of dawn to sell women’s clothes and drive vans to markets all around England,” he said.

From England, the family moved to Burundi before returning to Uganda when he was 14.

Started computer business with a $5,000 loan

Thakkar dropped out of school at age 15 and borrowed $5,000 to start a small computer business, traveling to Dubai regularly to bring back equipment including keyboards and mice.

“Education is good. However, informal education is much more important and valuable in life than formal education. Mentorship and vocational skills training build up an individual,” Ashish said.

Growing the business

He said he focused on growing his business rather than on taking profit.

“I reinvested everything in my business. The only way you are going to grow is if you keep on planting.”(source)

He is sometimes referred to as Africa’s “youngest billionaire” because his estimated $260 million net worth translates into more than one billion South African rand. Thakkar resists that label.

“Money should never be a measurement for anything,” he said. “I like to see myself as an entrepreneur that’s being disruptive — I like to be the underdog in a lot of cases.”

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Dubai’s Sheikh Mohammed connects on social media

4 January 2016 Comments (0) Featured, Middle East, Politics

sheikh mohammed twitter

The pioneering ruler of Dubai is conquering a new frontier – social media.

Sheikh Mohammed bin Rashid Al Maktoum has built a global social media following of millions of people and he is using social channels to connect with his citizenry and beyond.

He has 5.2 million Twitter followers and 3 million Facebook “likes” plus thousands of additional followers on LinkedIn, Instagram and other social media platforms. (By way of comparison, U.S. President Barak Obama has 5.5 million Twitter followers on his official POTUS account and 46 million “likes” on his Facebook page.)

Mohammed is @HHShkMohd on Twitter, HHSheikhMohammed on Facebook and HH Sheikh Mohammed Bin Rashid Al Maktoum on LinkedIn.

Known for being the force behind Dubai’s rapid development as a major global business and air transport hub as well as for his love of horse racing, Mohammed, 66, has been Emir of Dubai and Vice President and Prime Minister of the United Arab Emirates since 2006.

Connecting with young people

In recent years, the ruler has encouraged his countrymen to embrace social media as means to connect with young people and encourage innovation.

sheikh mohammed arab influencer summit“The significance of these (social media) channels lies in their ability to reach out easily to all members of the society through personal devices,” he said at a Social Media Influencer Summit, which he convened in 2015 to discuss legislation to insure the “best use of social media platforms.”

“It is our duty to help our young people and future generations by building a knowledge platform to protect them from any destructive and negative thoughts that affect their full potential and create constructive paths for Arab societies,” he said.

Discussing national and global issues

Mohammed has initiated a number of discussions on social media about issues facing the country and the world.

“We want every man, woman and child to join us in the biggest ever national brainstorming session to find new ideas for health and education,” he tweeted in 2013. “Education and health concern all of us, so I invite all of UAE society to think collectively of creative solutions.”

In 2015, during Ramadan, he used social media to launch a UAE Water Aid campaign to provide clean drinking water to people in poor countries. “Statistics show that 3.4 million people die every year because they lack clean drinking water,” Sheikh Mohammed said on Twitter. The campaign raised nearly $50 million in a month.

Emphasis on youth, Dubai development

Mohammed also posts frequent updates on both Twitter and Facebook describing his activities, which often focus on the need to develop the country and its young people.

One recent Tweet showed a photo of him meeting with students. “I had the pleasure today of meeting a group of students of the Mohammed bin Rashid school for communication. Positive and ambitious and persevering,” he tweeted.

“I told them constant communication with the people and listen to them … and the removal of barriers with them is the most important characteristic of a successful leader and media also successful,” he said in a follow up tweet.

Another has a photo of Mohammed in the cockpit of an airplane with the tweet: “UAE carriers have 530 aircraft worth $160 bn on their order books. UAE is a major growth driver for global aviation.”

Dubai transformation began in the 1970s

Air transport was a first major step in Dubai’s rapid development and transformation into a major global city starting in the 1970’s.

Mohammad as a young man oversaw expansion of the state-owned Dubai International Airport beginning in 1974. A decade later, he would oversee the launch of Emirates airline, which has become the largest airline in the Middle East and a strong competitor in the global airline industry.

Under Mohammed’s leadership, Dubai has become the air and financial hub of the Gulf. After he lifted a ban on foreign land ownership in 2002 and allowed the creation of special economic development zones, Dubai was able to attract significant development and multinational companies flocked to state.

Touting government efficiency

According to his LinkedIn profile, Mohammed’s “vision for the UAE has been proven successful through achieving unprecedented rankings on global indexes and has lately achieved number one worldwide for government efficiency, according to IMD data.”

More recently, it says, Dubai has developed as a humanitarian center.

“The UAE is not just a financial and economic nucleus, neither is it just a tourism hub: we are also a nerve centre of a global humanitarian work.” These words of Sheikh Mohammed physically manifest in the many charity and humanitarian foundations established by HH (Mohammed), which are major local and international players providing assistance and opportunities to the less fortunate around the globe.

Horse racing and poetry

Mohammed’s passion for horseracing is widely known. In 1992, he founded Godolphin, a family-owned enterprise that has become the largest thoroughbred racing stable in the world. The family-owned enterprise has farms in the United States, Ireland, England and Australia.

With an estimated net worth of $4 billion, he is also a well-regarded poet and has published books on leadership.

Social media for governance

On social media, however, his focus is on governance and using new technologies to improve Dubai and its people.

“The world is moving at a very fast pace and technology is evolving dramatically. We all remember how the traditional media emerged modestly but it quickly gained momentum driven by technology to become a force that impacted governments, changing the course of their work. It transformed the world into a small village.”

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Hydrogen Power in Mali

2 January 2016 Comments (1) Africa, Business, Featured

Aliou_Boubacar_Diallo

Green power in Mali from hydrogen gas wells could power the future.

Hydrogen power refers to the use of hydrogen fuel as a zero emission fuel, since burning hydrogen with oxygen emits no carbon dioxide (only water). It sounds a bit futuristic perhaps, but the physics behind it are valid, though up until recently there have been very few practical examples. This is due to hydrogen power relying on either some kind of hydrogen fuel cell or on hydrogen gas, which until recent times, wasn’t believed to be in the earth’s crust in great quantities, nor in the earth’s atmosphere in clean or usable form.

In a new book about natural hydrogen entitled Natural Hydrogen: The Next Energy Revolution?, the the authors assert that natural hydrogen seeps or wells are abundant almost everywhere on earth and are a real viable alternative to fossil fuels. The book is written by acclaimed geologists Alain Prinzhofer and Eric Deville. With this new book it is clear that hydrogen power is no longer the technology of the future, but rather the technology of today.

In July 2015, three years after their first successful test, the Petroma Company demonstrated how hydrogen gas can be used to generate power, by lighting up part of the village of Bourakebougou not far from the capital Bamako in Mali, the eighth largest country in Africa. This has created almost 100% clean electricity in a poor rural area that did not have any access to electricity, something that would have hardly seemed plausible only a decade ago. In doing so, Petroma is not only reigniting the debate about alternative energy, it is also showing the world that even a poor African country can be innovative and turn to renewable fuels and prevent the massive pollution that comes with the fossil fuels used today.

The man behind this new venture into the field of hydrogen power is 56-year-old Aliou Boubacar Diallo, who is the president of Petroma Inc and also the leader of the Democratic Alliance for Peace. Aliou Boubacar Diallo is the driving force behind the new push for green energy in Mali, where he is a well-known player in not just politics and the energy sector, but also within gold mining and peace brokering.

HEC Feasibility Study

In the field of hydrogen engines, Petroma turned to well-known experts from the Hydrogen Energy Center in the US to perform a feasibility study. HEC is on the forefront when it comes to hydrogen energy and hydrogen power generators.

The study conducted by HEC was to check if it would be possible to harvest the hydrogen gas and use it in generators and generate at least 100 megawatts of power. Furthermore the study was to determine whether it would be better to have many small plants or one larger plant. The power would be used by local villages as well as the capital Bamako and its surrounding industries.

This study was the basis which Aliou Boubacar Diallo used to start the hydrogen power revolution in Mali. The first generator was built and demonstrated in July 2015 and will be followed by many more, as ten wells are on the way. Once those ten have been successfully installed, another almost 300 are planned in the first major phase of the project, quite possibly with more to come.

mali

Power in Mali

While Mali is a large country in terms of land size, it is a poor country with around 15 million people, of which half live below the poverty line. More than ten years ago Mali was already quite green by most standards, as half the country’s power came from the use of hydroelectricity, though only about half of the citizens could be reached by the network.

Today these numbers are not much higher, as expanding the hydroelectric capacity of the country beyond the current level is expensive and many locals are still not connected with the grid.

It was pure luck when Petroma found the hydrogen well at Bourakebougou, as they were in fact drilling to get water to the village. Instead of clean water they found almost pure hydrogen, which will continuously power the generator for as long as it lives, without exhausting the hydrogen gas. In fact, while scientists don’t fully understand this seeping hydrogen gas phenomenon, some believe it could be stable enough to last for thousands of years.

With the numerous massive and almost pure hydrogen wells already found in the country, it will perhaps be feasible to convert the country to almost exclusively to renewable green sources within a foreseeable future. This has proven almost impossible for much richer and more technologically advanced nations, as their power needs are much higher.

Time will tell if this adventure into alternative energy can deliver as much as it promises.

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Phuti Mahanyele: an inspirational black business woman

30 December 2015 Comments (0) Africa, Featured, Leaders

Phuti Mahanyele

Phuti Mahanyele – an inspirational black business woman who believes that the poor representation of women in the boardroom of major businesses in the private sector is “not just a social injustice but an economic and business imperative”.

Phuti was born in Dobsonville, Soweto, South Africa on March 15th, 1971, however she largely grew up in the Claremont township outside Durban. Her mother died at the age of 42 in 1989 when Phuti was 17. Phuti has since acknowledged that this was a major turning point in her life as it made her for the first time realize how short life can be and why it is therefore so important to never take it for granted.

Throughout her life her parents continuously advocated the importance of education, never differentiating between their sons and Phuti and her two sisters.

Her father: a pioneer for the improvement of black education

Her father, Professor Mohale Mahanyele, was a successful business man and pioneer for the improvement of black education. Whilst the Chairman of the National Economic Education trust, he ensured that thousands of young people progressed into tertiary education. Throughout his life he refused to accept the fact that just because a child came from a home with insufficient funds to afford expensive higher education fees, they were not entitled to it. During his life he could have become one of South Africa’s richest men however he was never interested in making easy money, and instead believed in reinvesting both his money and time back into the people and places he loved.

Phuti was educated in Johannesburg until she was 17, at which point she moved to the United States where she attended Douglass College in New Brunswick, New Jersey. In 1993 she graduated with a degree in Economics and then went to De Montfort University in the United Kingdom where she obtained an MBA on “The Impact of International Trade on Black Economic Empowerment.” Her education didn’t end here because in 2008 she completed a course called “Global Leadership & Public Policy in the 21st century” at Harvard University.

Early career

Phuti’s first job was at her father’s company, National Sorghum Breweries, however whilst she admits to being very happy at this time of her life, she also confesses to feeling unfulfilled. After two failed applications she finally won an internship at Fieldstone – an investment banking firm in New York. After a difficult start, she flourished and achieved the position of Vice President before leaving 7 years later, at which time she moved back to South Africa.

Her next job, running the Project Finance Unit for the Development Bank of Southern Africa proved to be less successful and she left after only a few months. Looking back, she admits that it was a bad fit for her and not an environment she could continue to work in.

Whilst looking for other work she received a telephone call from Cyril Ramaphosa, the Chairman of a then relatively small company called “New Africa Investments” which became the Shanduka Group.

Shanduka Group

Phuti originally joined as the managing director of Shanduka Energy in 2004 and eventually went on to become the CEO of the Shanduka Group. It was whilst working there that she truly found her passion.

She has since admitted to finding Cyril so inspirational on their first meeting that she agreed to work with him even before she knew what the job and salary was.

Phuti speaks of the amazing culture and work ethic at the Shanduka group, admitting that Cyril’s astonishing humility and ability to inspire was fundamental to this. She has always felt hugely responsible and accountable to her community and working at the Shanduka Group allowed her for the first time to give something back, as the company, unlike so many others, didn’t just focus on the profit for shareholders.

 

Business pillars and key successes

Phuti adheres to 3 business pillars: understanding herself including her spiritually; understanding any issues affecting her staff, personal and professional; and ensuring she has all the information she needs at all times in order to be able to drive the business forward

When appointed CEO, her key priority was to ensure that the business moved some of its investments into areas that were less market sensitive, as she saw this as a way of ensuring the growth and security of the company’s investments in years to come. During her time at Shanduka she helped increase the company’s net asset value to approximately R8billion. Major deals driven by Phuti with Coca-Cola and McDonald’s were key to this success.

After 10 years at the Shanduka Group, Phuti has achieved a lifelong ambition and with the support of her business partner Jeremy Katzen, a highly experience banker from Johannesburg, has launched her own investment company called Sigma Capital.

Major influences on her life

Phuti often cites her family, notably her father as a major influence in her life, however she also frequently talks about the huge impact Cyril Ramaphosa has had on both her business and professional life.

Her parents taught her how to see beyond problems and challenges and to remain positive at all times. Phuti believes that every single person on earth has a purpose and that they are obligated to discover what it is and then achieve it.

Life changing experience

Whilst attending a meeting in London, in 2013 Phuti was experiencing severe headaches, however she assumed it was just due to tiredness and tension. Whilst out shopping after the meeting she fainted, it was at this time she first sought medical attention. She was told to rest and returned to South Africa the following day, however on arrival she ignored the advice and went back to work where she then fainted again. When she woke up in hospital she was surrounded by friends and family, all of whom she didn’t recognize. It was at this time that she was told that she’d actually suffered from a stroke, hence her loss of memory.

Although she has now made a full recovery, the experience has changed her. Whilst she still has her incredibly high work ethic and puts in long hours, she is now also committed to finding a better work/life balance by valuing the importance of friends and family and not just achievements. She is in fact now engaged again (having already been divorced twice), and is learning to cook and play the piano. She admits to being excited and is looking forward to being a better wife and stepmother. “I feel ready to be a wife now”, she said.

When Phuti was asked what she would most want to be remembered for she said, “for having given as much of myself as I possibly could”.

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Somalia resumes banana production, hopes to grow exports

27 December 2015 Comments (0) Africa, Business, Featured

somalia banana

The banana industry is making a comeback in Somalia after two decades of war devastated its leading export.

The East African country’s fledgling effort faces significant challenges, including lack of irrigation and storage infrastructure as well as a wait-and-see attitude of potential export partners abroad who are mindful of Somalia’s recent history of violence and instability.

While most of Somalia’s current crop goes to local markets, exports have begun to Middle Eastern countries including the United Arab Emirates.

About 40,000 tons annually

Currently, Somalia has about 4,000 acres in cultivation, producing about 40,000 tons annually, according to FruitSome, a company formed by about 100 growers to market Somali bananas abroad.

The current planting is less than 14 percent of the 30,000 acres that were in cultivated when the industry was at its peak. In 1990, before the war began, Somalia was the largest banana exporter in East Africa. Banana exports accounted for about $96 million and produced Somalia’s leading source of outside income.

“Prior to 1991, Somalia was renowned for its thriving banana industry. However, insecurity, lack of inputs, and poor infrastructure, has over the last two decades led to a devastating decline and eventual collapse of banana exports,” according to the Food and Agriculture Organization of the United Nations, which is providing assistance to the Somali banana industry.

Irrigation and production infrastructure destroyed during the war

The military government of Somalia was deposed by rebels in 1991, throwing the country into chaos, especially in the south, where bananas are farmed, and in the capital of Mogadishu. During the fighting, irrigation and production infrastructure was destroyed and banana growers lost access to export markets as pirates operated off the coast of Somalia. Drought and famine exacerbated the hardships in 2011.

An internationally backed central government was installed in 2012 and the nation has slowly become more stable, although insurgents of Al-Shabab, an Al-Qaeda ally, continue to operate in Somalia.

Growers, many of whom fled to refugee camps in neighboring countries, have begun to return to farms they were forced to abandon during the violence.

Lack of refrigerated storage: another challenge

“This place was a bush a year-and-half ago. We cleared the bush and now more than hundred people work here every day,” Omar Osman, a farm manager in Afgoye, said.

“Things are calm. Thank God. Us, Somalis, we have to make use of God’s blessings. This country has everything and now it is possible to make use of the land.”

In addition to clearing brush and replanting, growers must reconstruct irrigation systems destroyed by fighting factions. Lack of refrigerated storage is another challenge.

The UN Food and Agriculture Organization (FAO) has provided direct food aid to families in Somalia as well as assistance in restoring and increasing food production, including seed and land preparation services as well as farmer training.

Turkey to help Somalia

The FAO also developed several virus-free banana varieties, and Somali growers chose one, William, that is tolerant to virus attacks and drought. The FAO began making seedlings available to growers in 2012.

Turkey has also undertaken efforts to help Somalia rebuild its agricultural and fisheries sectors.

“If invested well, Somalia’s fisheries and agricultural sectors can feed the entire Africa,” said Galip Yilmac, the Somalia program coordinator with the Turkish Cooperation and Coordination Agency (TIKA).

Banana exports resumed in 2014 to Middle East markets including the United Arab Emirates. The FAO said Iran and Turkey also expressed interest in Somali banana imports.

But the Somali growers also face skepticism from some quarters. Dole, for example, invested in Somalia in the past. But a representative of the company said “right now it seems difficult to develop any agriculture program in Somalia because of the local situation.”

Somali’s bananas sold in local markets

For now, most of Somali’s bananas are sold in local markets, and livestock has replaced bananas as the country’s leading export. Other exports are fish, charcoal and scrap metal. Export partners are the United Arab Emirates, Yemen and Oman.

Somalia has a population of 10.8 million. Its 2013 GDP was $1.4 billion, according to the United Nations.

Italian colonists introduced bananas to the fertile Shabelle and Juba river valleys of southern Somalia in the 1920s. The industry grew steadily and it peaked in the 1960s. Somali bananas are known for their sweet taste and creamy texture.

Rebuilding Somalia’s banana industry

FruitSome, the company formed by banana growers in 2012, is looking to increase exports, primarily to Europe and the Persian Gulf.

“Close to a hundred farmers are still registered as members of the banana growers association. They have been hoping to be able to export again but drought, civil war, social unrest and a shortage of irrigation infrastructure has so far made it impossible to revive the industry until very recently when the country has begun to re-emerge socially and politically, supported by international partners,” FruitSome said.

Despite the challenges, the FAO was upbeat about prospects for rebuilding Somalia’s banana industry. “With peace slowly returning to southern Somalia, this makes investment in the banana industry a key priority for FAO and its national and international partners,” the UN agency said.

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