TMCnet News

BRIEFS [African Business]
[August 17, 2014]

BRIEFS [African Business]


(African Business Via Acquire Media NewsEdge) TELECOMS South Africa launches 3G-enabled city-tour cars » Phone-addicted tourists who don't want to wait to post their holiday snaps online can now take 3G-enabled city tours. A South African entrepreneur is offering Cape Town tours in Wi-Fi-equipped vehicles, so holidaymakers can post their photos to Facebook, Twitter and Instagram instantly. Former banker turned tour guide Shaheed Ebrahim, who won the Emerging Tourism Entrepreneur of the Year award in 2012, says, "People want to upload their pictures on Facebook and Instagram in real time, and I often host bloggers who wish to publish articles and pictures immediately." He also wants to offer tours streamed online so family and friends can joined their loved ones virtually as they travel around Cape Town.



80% of Africa's consumer consumption comes from 10 countries - Algeria, Angola, Egypt, Ghana, Kenya, Morocco, Nigeria, S Africa, Sudan and Tunisia Africa's Top 5 most travelledto cities Estimated international overnight visitors 2014 (millions) ___Estimated tourist income 2014 ($bn) Johannesburg 4.25 3.2 Cape Town 1.6 2.3 Cairo 1.35 0.8 Lagos 1.33 0.7 Casablanca 0.99 0.7 INTRA-AFRICA BAI launches in Botswana Mauritius life insurance company BAI Co (Mtius) Ltd has launched Bramer Life in Gaborone, Botswana. Regina Vaka will be its CEO, supported by Sorens Rughooputh, Deputy CEO of Bramer Life. It offers four insurance schemes adapted to Botswana. Bramer intends to open another office in Zambia this year, and in Namibia and Mozambique by next year.

Comesa grants Kenya ¤2m Kenya will access €2m to support regional integration programmes from Comesa. The fund will also sup- port domestication and implementation of regional commitments at the national level. An additional indicative amount of €4.7m will be given to Kenya under the Adjustment Facility for the next two years.


INVESTMENT New funding source for SMEs AfricInvest has partnered with FMO MicroVest II and Finnfund to form SFC Finance, with shareholders' equity of $20m and an additional $50m debt facility extended by the Overseas Private Investment Corporation (OPIC). It will focus on lending to African SMEs in need of funding for growth DEVELOPMENT Uganda remembers Norman Borlaug »The commemoration of the centenary of the birth of Dr Norman Borlaug, Nobel Laureate and a founder of the Sasakawa Africa Association (SAA), was marked in Uganda by symposiums at Makerere University and Jinja - timed to coincide with the annual National and Agricultural and Trade Show. SAA has been working with small-scale farmers and the government extension services in Uganda since 1996 - and is on target to reach 100,000 farmers across the country by 2016. Dr Borlaug died in 2009.

Essay competitions were held in schools in districts where SAA operates - as well as an agricultural debating championship involving 16 schools in six districts in the Jinja area. Forty-eight students from 16 schools took part. A separate competition was held for farmers to stimulate business planning and encourage farmers to keep reliable farm records.

Pictured above, Yohei Sasakawa (left), chairman of The Nippon Foundation, which funds SAA programmes, and Ruth Oniang'o (right), Chairperson of SAA, congratulate a school winner. "Dr Borlaug believed in young people as future farmers and advocates against hunger," she commented.

The events were attended by Dr Borlaug's daughter Jeanie and grand-daughter Julie; Tumusiime Rhoda Peace, AU Commissioner for Rural Economy and Agriculture; John Hardman, representing former US President Jimmy Carter (a founder of SAA); and former President of Benin, Nicéphore Soglo, who serves on the SAA board.

84% Trade between Brazil and Africa grew fivefold to $27bn between 2002 and 2012. Minerals accounted for 84% of Brazil's $14.3bn imports from Africa in 2012 $778bn FDI flows to developing countries reached a new high of $778bn, accounting for 54% of global inflows. The growth rate slowed to 7%, compared with an average growth rate of 17% South African direct investment in the rest of Africa equals 5% of its GDP 70% of Tete province in Mozambique is now covered by mining leases Rough-diamond prices are up about 10% this year after more than doubling in the past five Demand for freshwater is likely to outstrip global supply by about 40% by 2030 The value of South-South trade now exceeds NorthSouth trade by $2.2 trillion - over one quarter of global trade RENEWABLE ENERGY Hydropower project gets $132m Cameroon's Lom Pangar Project will receive $132m in zero-interest financing from the World Bank. The project will finance the Lom Pangar dam to store water during the rainy season and later release it during dry periods, to increase all-season hydropower generation capacity on the Sanaga River by approximately 40%.

Nine nations to get climate funding Nine African nations will receive new funding and operational support from the Climate Investment Fund (CIF) Climate Investment Funds (CIF) Scaling Up Renewable Energy in Low Income Countries Programme (SREP): Benin, Ghana, Lesotho, Mada- gascar, Malawi, Rwanda, Sierra Leone, Uganda and Zambia. SREP will provide up to $300,000 for each country to undertake development of an SREP investment plan.

Green SMEs go interest free Green energy-focused SMEs in Kenya are set to enjoy $20m interest-free funding in loans and grants over six years from Africa Enterprise Challenge Fund (AECF). The fund targets the best business ideas in green energy, innovative products or services that can help farmers to cope with extreme climatic events or after-effects like economic shocks. Businesses in arid, semi-arid or pastoralist areas of East Africa are targeted, especially those with livestock.

Burkina to host largest wind project The largest wind energy project in sub-Saharan Africa is scheduled to be completed by December 2015. Quebec, Canada-based renewable energy manufacturer, Windiga Energy will build and operate a $50m 20MW solar photovoltaic (PV) plant in Burkina Faso. Windiga will be the first independent solar energy producer in the country, with the sole power to complete a 25-year power purchase agreement with the National Electricity Company of Burkina (Sonabel).

MANUFACTURING Samsung to build S Africa factory Samsung Electronics is to build a TV factory in Durban, South Africa, investing around $20m.?Samsung wants to sell the TVs made there, mostly affordable LCD sets, across Africa. Rwanda gets $10m investment Rwanda signed a deal worth $10m for five years with Chinese-owned C&H Garments, to open up the garment manufacturing sector. Equipment shipping from China will soon commence and an initial workforce of 200 would be recruited in September. The company aims to create 30,000 jobs in the garment industry and bring in over $1bn to the country.

TECHNOLOGY Africa poised for tech take-off »Africa's leading listed technology, media and telecoms (TMT) companies have outperformed their peers in other sectors over the past 10 years, delivering annualised returns of 19% since 2004, compared with 11% across the MSCI Emerging Frontier Markets (EFM) Africa index within the same period.

The analysis by law firm Freshfields Bruckhaus Deringer suggests TMT companies in Africa may experience aboveaverage growth in the next 10 years, with the TMT sector seeing annualised returns of 19% compared with 6% for the African oil and gas sector.

The film says the traditional narrative about investment opportunities in Africa has been about oil and extractives but TMT has also proved a real growth story. Africa represents a tremendous opportunity for an industry facing slowing revenue growth, market saturation, new technology challenges and declining profitability in mature economies. It is a market being taken very seriously by Silicon Valley for reasons including Africa's tech-acquisitive and growing middle class. Many major technology companies are aiming for multibillion dollar revenues in Africa by 2015.

The research looked at 2004-2013 market capitalisation development of TMT companies among the 500 top African listed companies: nine media companies, 15 telecoms companies and 16 technology companies listed in Burkina Faso, Egypt, Kenya, Malawi, Morocco, Senegal, South Africa, Sudan, Tunisia, Uganda, Zimbabwe.

170m Standard Bank will provide $170m in debt financing to support the construction of a 118 MW gas-fired power plant being developed by Gigawatt in Ressano Garcia, Mozambique $13bnThe flow of investments in to Southern Africa doubled to $13bn in 2013. North African inflows declined by 7% to $15.5bn. West Africa's inflows declined by 14% to $14.2bn.

Investment flows into East Africa increased by 15% to $6.2bn First Bank-PayPal partner Nigeria's FirstBank has become the exclusive financial partner of PayPal in Nigeria. The partnership will enable FirstBank card holders and businesses enjoy increased transaction limits, receive instant verifications, make online payments and transfer funds across the world in 193 countries and regions globally.

Africa receives aid of $30bn a year but $192bn a year leaves via illicit financial flows, logging and fishing, repatriation of multinationals' profits, debt repayments, loss of skilled workers and costs of climate change Africa is more urbanised than India. By 2016 it will have as many urban centres as Europe The internet in Africa could add $300bn a year to GDP by 2025 Ethiopia has Africa's highest spending on infrastructure as a percentage of GDP EVENTS First US-Africa Leaders Summit As more than 40 African heads of state gathered in Washington, DC for US President Barack Obama's first US-Africa Leaders Summit to discuss economic development, security and governance, the Corporate Council for Africa (CCA) organised the US-Africa Business Forum, bringing together more than 200 US and African business people, heads of state and government officials in anticipation of $1bn of deals.

AVIATION African carriers expand operations Air Mauritius will expand its fleet by adding four new Airbus A350-900s. Kenya and China signed a bilateral air service agreement allowing national carrier Kenya Airways to access more destinations in China. Kenya Airways increase to 21 flights a week, from 14 currently. It will also fly to more destinations in China.

AGRICULTURE Pakistan to set up fertiliser company Pakistan's Fauji Fertiliser Co has formed a consortium with foreign companies to invest at least $1.25bn to set up a fertiliser plant in an African country, yet to be disclosed, to start building in 18 to 24 months.

URBANISATION Building a megacity that works Dar es Salaam, Tanzania, has redrawn its master plan to become a megacity prepared for climate change. Looking ahead to 2036, it aims to transform the city of over 4.5m people and proposes creation of a Metropolitan Development Authority to oversee planning and infrastructure development. It calls for measures to mainstream climate change adaptation into existing urban development policies.

BANKING BRICS bank finally takes shape Leaders of the BRICS group of large emerging countries have named Shanghai as the headquarters of their new development bank and nominated India to provide its first president. Brazil will head the bank's board of directors and Russia will lead the board of governors. The bank will have initial authorised capital of $100bn and initial subscribed capital of $50bn.

INTRA-AFRICA African companies turn to cross-border deals »Africa's share of global mergers and acquisitions (M&A) has risen in the past year as global and African companies seek access to customers and natural resources. A survey by law firm Baker & McKenzie, which examines the strategic drivers for cross-border deals, shows Africa's global inbound M&A market share grew 7% as international corporates sought new customer bases.

The principal reasons companies undertake cross-border M&A deals are to access to new customers or natural resources, or acquire intellectual property or human capital. Multinationals investing in Africa are primarily motivated by the first two drivers and the former is growing in importance, reflecting the continent's burgeoning middle class and increasing wealth. African companies are increasingly turning to cross-border M&A. African corporates are more likely than companies elsewhere to be planning a cross-border deal within two years: 50% of African respondents are contemplating deals as they seek to establish an international presence. Two thirds of cross-border activity is expected to be within Africa but 20% of African corporates interviewed are looking at Asia and a further 10% the US.

Due diligence remains a challenge though, identified by half of all survey respondents.

The report is based on merger market data and a survey of 350 C-level executives around the world, all of whom had recently conducted a cross-border M&A transaction.

60% Trade as a component of Africa's GDP is about 60%, so trade volumes can only go up in tandem with the growth in GDP $1.45tr Global FDI inflows rose by 9% to $1.45 trillion and increased in all major economies. Unctad projects global flows will rise to $1.6 trillion this year, $1.75 trillion next year and $1.85 trillion in 2016 Côte d'Ivoire received $4.75bn in orders for its 10-year Eurobond, six times its $750m issue size 40% of businesses in Tanzania have a survival rate of less than five years. Today, there are approximately 23m Tanzanians in the job market Zimbabwe has been ranked among top five countries in Africa in terms of quality of mathematics and science education Sub-Saharan Africa 15 years will take to reach its water goals and 150 years to reach its sanitation targets on current growth path AUTO Jaguar grants new importer rights CMC Automobiles Tanzania, which already represents Land Rover in the country, has been awarded sole and exclusive importer rights for the Jaguar brand by Jaguar Land Rover sub-Saharan Africa (JLR SSA). It's the first official availability of the Jaguar brand in Tanzania, and paves the way for innovative new Jaguar products.

RETAIL Dutch menswear spruces up S Africa Dutch retailer Suitsupply has opened the first of three planned outlets. It has launched a 'mansion' concept, renting a villa in upmarket suburb Hyde Park for six months. Permanent stores will open in Nigeria, Kenya and South Africa. It has already seen demand from African customers through its online shopping website, which ships worldwide. The company introduced country-specific payment including cash on delivery, MPesa in Kenya and Interswitch in Nigeria.

HEALTH SMS and apps combat diabetes Mobile technologies are being used in Senegal in an mDiabetes programme launched by the WHO and the International Telecommunications Union (ITU) as part of the "Be Healthy, Be Mobile" initiative. It uses an ambitious and innovative campaign with SMS and apps designed to improve prevention by raising awareness among diabetic patients as well as training health professionals.

POWER Miga supports Kenya energy The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance and credit enhancement arm of the World Bank Group, is supporting Kenya's energy sector by insuring a nonshareholder loan to independent power producer Gulf Power. Its 80 MW heavy fuel oil plant 20km from Nairobi will complement the country's energy mix. Gulf Power will sell electricity to Kenya Power, the national transmission and distribution company, for 20 years under a power purchase agreement.

MEDIA A+ to launch in October Billionaire Vincent Bolloré is expanding pay-TV operator Canal Plus in Africa by starting a new channel after taking over last month as chairman of owner Vivendi SA. The new local channel of Canal Plus, France's largest pay-TV provider, will be called A+ and begin service in October. The move signals Canal Plus's shift from distributing French channels abroad to producing local content.

INVESTMENT South Africa tops Africa's FDI charts »South Africa was Africa's best foreign direct investment (FDI) performer in 2013, leading the trend towards increasing intra-African investment, according to Unctad's WorldInvestmentReport2014. FDI inflowsto South Africa jumped from $4.5bn in 2012 to a record $8.2bn in 2013, with infrastructure being the main attraction. Mozambique ($5.9bn), Nigeria ($5.6bn), Egypt and Morocco followed.

South Africa's FDI's outflowsalmost doubled, from $2.9bn in 2012 to $5.6bn in 2013, with investments in telecommunications, mining and retail. Angola was Africa's next-biggest investor, then Nigeria, Sudan and Liberia. In all cases, outward investment flows were directed mostly to other countries on the continent.

» South African companies and companies from countries including Algeria, Egypt, Kenya and Nigeria are upgrading their crossborder operations first in neighbouring countries and then across the continent.

» The share of cross-border greenfield projects originating from other African countries increased from 10% between 2003 and 2008 to 18% between 2009 and 2013, with all the big investor countries (South Africa, Kenya and Nigeria) more than doubling their shares.

» The gross value of cross-border intraAfrican acquisitions grew from less than 3% in 2003-08 to more than 9% in 2009-13.

» Regional integration is intensifying.

» Consumer-oriented sectors are beginning to drive FDI growth.

» Intra-African FDI is focusing on manufacturing and services.

25% of South Africa's manufactured exports are destined for the subSaharan market $6.14tr Total trade between the Brics countries is $6.14 trillion, or nearly 17% of the world's total The Top 5 largest markets by 2020 Analyses suggest that the largest African markets in 2020 will be Alexandria, Cairo, Cape Town, Johannesburg and Lagos, each likely to have more than $25bn a year in spending and comparable to Mumbai or New Delhi in India. A number of smaller African markets, including Ibadan, Kano, Dakar, are also likely to develop consumer markets worth $10bn a year The consumer-facing sectors in Africa will largely be responsible for market growth, these sectors include telecommunications, consumer goods and banking, projected to increase to $1.4 trillion over the next five years if real GDP continues to grow at its current pace EDUCATION e-learning is education for the future IMF: The International Monetary Fund has launched the first in a series of free online courses for those interested in furthering their economic education.

EduMe: International telecoms and media company Millicom launched EduMe English service, a lowcost mobile English language learning course for use on mobile phones, available exclusively to Tigo's customers in Rwanda. It will launch in Tanzania soon. EduMe will also launch an entrepreneurship course EduMe Business School to Tigo subscribers in Tanzania this year, developed in cooperation with GSMA, the worldwide mobile industry body.

It will be the first purely mobile vocational business school in Africa.

CMU's first graduates: The first class at Rwanda's Carnegie Mellon University (CMU) graduated and 22 students were awarded master's degrees in information technology. Companies that have recruited CMU students for internships in East Africa include General Electric, IBM, Marriott, Microsoft, Visa and Voxiva.

Djibouti: The University of Djibouti has implemented a sophisticated software system to help it achieve its ambition to deliver tertiary education to students in countries in the Horn of Africa. The Peoplesoft system will entrench global best practices in delivering and managing higher education.

TOBACCO Going up in smoke? Uganda: Parliament is considering a new tobacco control bill that would put strict limits on tobacco marketing and consumption.

Egypt: Egyptian President Abdel Fattah al-Sisi issued a decree to raise taxes on imported and locally produced alcohol and tobacco, ranging 40 to 120%.

Zimbabwe: Tobacco deliveries this year are expected to end above 210m kilos, a 31.74% increase on the same period last year.

Malawi: It realised a 36% increase in tobacco exports in first half of this year. Cumulative tobacco exports from January to May were $137.7m. Malawi is the world's most tobacco-dependent economy. Tobacco sales generate $165m per year, with tobacco 53% of exports. It is one of seven countries that derive at least 1% of export earnings from tobacco.

Burley leaf from Malawi makes up 6.6% of the world's tobacco exports and accounts for 70% of its foreign earnings.

Burundi: EAC partners have taken issue with Burundi for introducing new taxes on cigarette imports, terming the decision "discriminatory" and "contrary to the region's customs policy". They say the $0.25 excise duty on every pack of cigarettes imported into the country violates EAC Customs Union Protocol.

(c) 2014 IC Publications Provided by SyndiGate Media Inc. (Syndigate.info).

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