December 2017
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EGYPT CAN BE
AFRICA’S ROCK STAR Room for tech
disruption
in African
banking
BANKING DIGITALISATION DIEBOLD NIXDORF IMPROVES THE CUSTOMER EXPERIENCE BY DRIVING CONNECTED COMMERCE
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FOREWORD HELLO AND WELCOME to the December edition of African Business Review, the final issue of 2017. This month’s cover story is an exclusive interview with ATM producing giant Diebold Nixdorf. Ricardo Dias Marques, Managing Director for Algeria, English Speaking Countries (ESC) and West Africa, and Portuguese-speaking African countries, discusses how the company continues to connect African consumers to vital banking services. “With the ways ATM technology seamlessly bridges the physical and digital worlds of cash, we are introducing new solutions to meet the everchanging needs of consumers,” he reveals. Also discussing banking and finance is Microcred CEO Arnaud Ventura, whose company is looking to use technology to help bridge the gap between the banked and unbanked population. Given the relative lack of traditional banking infrastructure, the continent represents a huge chance for fintech and digital banking businesses to make a real difference to people’s lives. Other features to look out for include a roundup of the economic status of several African countries, a look at the region’s top 10 telecoms companies and Songas’ energy plans for Tanzania.
Enjoy the issue! www.africanbusinessreview.co.za www.bizclikmedia.com
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Room for tech
disruption in African
banking TOP 10
INSIGHT
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C O M PA N Y REPORTS
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Diebold Nixdorf Technology
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Songas Limited Energy
INTERVIEW
Room for tech
disruption
in African
banking
MICROCRED CEO ARNAUD VENTURA DISCUSSES WHY HE FEELS IT’S IMPORTANT TO BRING TECH OPPORTUNITIES TO BANKING IN A CONTINENT WITH LESS THAN 50% BANKING PENETRATION WRIT TEN BY S TUART HODGE
INTERVIEW MICROCRED CEO ARNAUD Ventura is a man on a mission. He believes passionately that banking services should be available to anyone who wants them – and with banking penetration in Africa still sitting at less than 50%, according to figures from the African Development Bank, he is doing everything he can to increase that figure. Financial inclusion is at the root of everything Microcred does and Ventura says the key to engaging customers in the African market is offering products and services that are simple and easy to understand and access. Ventura is also shrewd enough, though, to see the business opportunity represented by the lack of banking penetration in the continent, and it has become even more exploitable now that more people have access to mobile phones and digital devices. The entrepreneur has form for recognising opportunities too - he was one of the brains behind Club Internet, one of France’s oldest internet providers, which launched back in 1995. “I was lucky enough in a way, to spend some time when I was quite young, 19 or 20, in the Silicon Valley, in Palo Alto, and I basically saw the 8
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start of the web,” says Ventura. “Some of my friends there were working on a browser that became Netscape. “I came back to France saying ‘wow, the internet’s going to be amazing, I want to be part of that’ and, so, we had the idea to start an internet provider in France. Which we did. “We worked together with a large investor and we started Club Internet. Obviously, I became very excited about the huge opportunity of helping billions of people get onto the internet and, in fact, in the last 20 years, this is what has happened. “Over the last 10 years, I’ve been just as excited at the huge opportunity of offering banking services to people. The major challenge in most of the countries where we operate is that the majority of the population doesn’t have a bank account and is excluded from financial services. “I consider banking as something that is quite essential in the world we live in, to anyone. If you don’t have the proper way of paying, the proper way of saving your money, the proper way of borrowing when you need it… then you are really short of the basic ingredients to make a life for yourself. “So, when I realised that there
“WE WANT TO HELP DEVELOP DIGITAL SOLUTIONS IN A MUCH MORE AGGRESSIVE WAY” - ARNAUD VENTURA, CEO, MICROCRED 9
INTERVIEW
Microcred offers vital banking services across Africa was this huge opportunity to offer 600mn or 700mn people in Africa those banking services, that made me as excited as I was 20 years ago when I saw the start of internet.” In the decade between witnessing the birth of the web and starting up Microcred in 2005, Ventura worked in both Thailand and Argentina and he admits that his time in both countries made him care deeply about international development. During his time in South America, the Frenchman helped to start PlaNet Finance, which very quickly became basically a consortium of organisations supporting the development of microfinance in emerging markets. 10
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“In the first five years we opened probably around 25 offices in 25 countries,” says Ventura. “We were working mostly with international organisations such as the World Bank, IFC and European Commission trying to advise and to support the development of computer finance and microfinance. “As I got more and more involved with microfinance, I could see that there was a real need to grow and develop professional organisations and companies that will address financial inclusion. “So, in 2005, I raised about $10mn with couple of investors who decided to support me in setting up Microcred. Our idea was to create new banks
MICROCRED HAS DISPERSED 60,000 NANO LOANS IN 6 MONTHS
70% of Microcred’s operations are Africa-based
focusing on micro and SME banking. From very early on, it worked quite well.” Some 70% of Microcred’s operations are centered in Africa, so what is it about operating in the African market that has worked so well for the company? “Africa is a continent where most of the businesses are informal. For
example, someone selling tomatoes in the market, where it’s not a formal company, it’s just an individual making a living out of a small activity. And that’s most of Africa today. Informal, small businesses. This informality is slowly disappearing from Eastern Europe, Latin America and Asia, while it’s still very present in Africa. 11
INTERVIEW “Basically, from day one, our business has been to offer financial services to excluded people. If you take Madagascar, one of the first places we invested, when we created a bank there, only 5% of the population had access to a bank account. So, the first thing was to start serving the 95% of the population who didn’t!” When the company was started, there were many doubts about whether a newly-launched enterprise could succeed in providing to micro and small entrepreneurs in the African market. But after about 18 months, Microcred’s first bank in Madagascar posted a profit, proving that the model could work. The company has grown significantly in the decade since and now has 10 banks, most of which have been consistently profitable for the majority of that time, so Ventura’s attentions have now turned to the future. “The most mature banks had been profitable for five or six years consistently,” he acknowledges. “So, we started thinking ‘what’s next?’ and that’s when we decided, thinking beyond micro and small entrepreneurs, that our agenda and goal was to now address financial inclusion more broadly. 12
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“We want to help develop digital solutions in a much more aggressive way to start creating solutions for all of the customers which are not served in the markets where we are operating.” And in doing that, particularly in Africa, there exists an opportunity one which has only been accelerated by the development of technology and the prevalence of mobile penetration in the continent. Africa is now the world’s fastest growing mobile market and figures from the GSMA trade organisation’s 2017 Mobile Economy Report state that by 2020, there are expected to be more than 500mn mobile subscribers across the continent. Ventura is pleased with this growth
BANKING PENETRATION IN AFRICA IS UNDER 50%
Microcred now owns 10 banks
and is keen to see it continue. “There are probably other financial players and factors,” he concedes. “But, clearly, in Africa there exists one of the largest untapped banking markets. “That’s why I’m so passionate and excited about this. There are hundreds of millions of clients in need of the service, but they cannot get it because there are not enough providers, not enough companies, or the product or solution they need is unavailable. “I think the opportunity is there because of access to technology and mobiles. We are a bank ourselves
so we don’t need to work with other banks – rather we work with other players in the market that are helping to grow mobile penetration. “We collaborate with mobile operators, companies who can provide technical expertise, and with payment providers. This allows us to play our role as a bank and enhance access to services. “I guess the most important point to consider now is that, whilst in the past our strategy was to rely on and use our distribution network based
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on branch and bricks and mortar, increasingly we are looking at how to distribute our service digitally. That’s where we collaborate with a number of other players in the digital space.” With the constant advancements of technology, the parameters of how digital technology can disrupt the financial and banking sector are always changing, and as Africa is such a large and diverse continent, levels of disruption vary from region to region. One of the latest innovations to hit the market is nano loans, and Microcred has already dispersed 60,000 of them in just six months. Ventura feels this shows concrete evidence that his excitement is justified. “The truth is, Africa is a big continent,” he adds. “And so, in some countries the disruption is starting or has started. In others, the disruption has not started yet. If you take Kenya or South Africa, some disruption is already in place or is already happening. But if you take DR Congo and Cote d’Ivoire, or pretty much most of Africa today, disruption has yet to come. “Microcred decided to move towards precisely this objective because we believe there is an opportunity in Africa today that there was not yesterday. We are trying to become the disruptor, rather than being disrupted, and in most of the markets we should be able to do that. “We want to play the role of the disruptor to accelerate financial inclusion.”
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INSIGHT
EGYPT CAN BE AFRICA’S ROCK STAR
E StĂŠphan Colliac, Chief Economist for France and Africa at Euler Hermes, discusses economic potential on the continent Wr i t t e n b y D A N B R I G H T M O R E
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INSIGHT
Stéphan Colliac, Chief Economist for France and Africa, Euler Hermes
EULER HERMES IS a subsidiary of Allianz and a global leader in trade credit insurance. Stéphane Colliac is the company’s Chief Economist for France and Africa, and believes, despite political volatility and exchange rate challenges, the potential for the region, particularly in Egypt, remains steadfastly significant. In his speech at the recent ‘Risk Frontiers 2017’ conference in London, Colliac noted that while Africa’s debt 18
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ANGOLA’S PUBLIC DEBT IS CURRENTLY 80% OF ITS GDP may have increased slightly, at 32% of the continent’s GDP, it remains well below its previous peak of 55% back in 2002. So, the roots for optimism in the continent’s progress are still strong. The main driver behind the African economy is a move towards urbanisation (seen on a similar scale in China), offering countries like Nigeria huge potential for development once their institutions embrace the need to organise and develop each sector
from conception. In some economies such as Rwanda, Kenya, Ethiopia, Senegal and Morocco, there have been major reforms and the business climate has improved as a result, followed by overseas investment. So, which country is leading the way and blazing a trail for growth in the region? “Egypt can be Africa’s rock star,” Colliac proclaims. “After key reforms in the exchange rate, subsidies and the partial unwinding of capital controls, the country has improved following short-term funding from private creditors and the IMF (International Monetary Fund). It was the top country in the Middle East and Africa last year for foreign direct
investment. Euler Hermes upgraded its risk rating in March from D4 to D3 and we’ve just upgraded it again to C3. So, the potential is here, we just need to wait for cyclical stability.” However, Colliac believes that while there is no general solvency issue in the region, liquidity requirements are pushing some countries to request further IMF support. “The IMF support was welcome as many small economies went into liquidity distress,” recalls Colliac. “This was the case in around 25 countries worldwide, half of them on the African continent – which was explained by commodity prices. It’s also down to poor management in the last phase of the economic cycle. 19
INSIGHT “During a period of high commodity prices, there was not enough focus on saving, so African economies had difficulty coping with the shock. Many countries on the continent have deficits, which are normal when you’re developing an economy by exporting your commodities and importing capital goods, but this leads to current account deficits and the liquidity distress we’ve seen.” So, what is driving fiscal vulnerabilities and increasing public debt on the African continent in oil exporting economies like Algeria, Angola, Libya and Nigeria? “It’s related to the volatility of fiscal revenues when they are too commodity dependent,” explains Colliac. “If you decrease the level of fiscal spending it goes with the commodity price strength, so it’s pro-cyclical. You want to keep your fiscal spending unchanged and raise the debt if you’re a government seeking re-election that wants to avoid damaging protests.” Colliac believes that debt increase issues differ from country to country. For example, where Nigeria’s debt is sustainable (coming from a low level after its renegotiation with private creditors a decade ago), Angola’s 20
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public debt is currently 80% of its GDP. Of that figure, however, much of this is towards official creditors, including China, which will allow for additional funding and favourable repayment terms to finance what is a key overseas relationship for the Asian powerhouse. However, Colliac warns there are still liquidity concerns over exchange rate volatility. “Inflation is the tricky part for countries in the region because while they’re pushing for a decrease, without capital influence it can create a credit crunch in the economy so the central bank has to tighten the debt in terms of capital controls leading to reduced liquidity.” Highlighting the short-termism of
NIGERIA’S POPULATION IS
200MN
Colliac believes that debt increase issues differ from country to country
governments seeking re-election in the region, Colliac admits it’s more favourable for Euler Hermes to work with democratic institutions offering an open approach to problem solving. “With dictatorships, change can only really be affected with a revolution,” he observes. “Having judiciary support in countries like Kenya means that elections can be re-run. By contrast, in Gabon it was far less democratic
and there were no solutions, which led to a run on its assets and the need for urgent IMF help.” Colliac believes that although Africa has been lagging behind the rest of the world in its development, this can actually be an advantage for the continent. “You don’t have to develop in the same ways anymore,” he asserts. “In a world where more consumers are connected for mobile payments, 21
INSIGHT you need less capital investment to develop your business in the region if you make a good job of your research and development phase.” Allianz has a deep African strategy and has been developing recently in Nigeria and Kenya following last year’s focus on Morocco. “We’ve seen two things in these countries,” observes Colliac. “Good institutions allowing us to develop the business and the potential for large numbers of customers. So, even if we only capture a small share of the market, it’s a positive with these large populations.”
NIGERIA Colliac notes that despite previous poor planning and a volatile political base, Nigeria boasts a population of 200mn, offering fertile ground for a boom when customers enter a new sector (such as mobile tech) en masse. He sees the upturn here linked to recovery in Europe. “I think it’s the end of the shock and you can find natural reasons for this like the stabilisation of the oil price. There’s been a move on policy with tighter capital controls to stabilise the Naira which was starting to unwind in March this year, helping to end the credit crunch and improve growth. It 22
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means, on a corporate level, they no longer suffer from cash shortages.” Colliac points to the need for a flexible exchange rate regime within Africa’s monetary union – a key factor in Egypt’s success – but notes the difficulty for a commodity exporter like Nigeria to let the exchange rate move freely. “When the price is doubling, your exchange rate is appreciating a lot so it’s difficult to have export competitiveness at the same time. So, when the price decreases, you have a freefall of your currency and you have mini-inflation,” he explains. “So, you have a parallel exchange rate that appears and the people begin to have this in their mind more than the official one.”
SOUTH AFRICA “We’re now seeing a re-balancing of the economy in South Africa which is quite positive,” Colliac continues, “but it means the private sector is buying less and when that happens prices can freeze. It’s the case now but re-balancing is only half way through its cycle. The current account deficit was about 4% of GDP and will probably reach two or 2.5%, so still deficit that needs
more force from the private sector to push it further towards a complete re-balancing. At the moment, the leeway for growth is not very strong.” Is the rise of public debt to 53% of GDP a further cause for concern? “It’s normal for the ratings agencies to give a speculative rate with this development, but the timing was, in our view, not exactly great,” Colliac answers. “We downgraded South Africa from B1 to B2 because of the deterioration of the balances in the short run, but in our view the trend of public debt is sustainable. If you compare it to Mozambique or Zambia it is more favourable. South Africa has a deeper domestic financial market so it’s easier to finance. The decrease in inflation is good news, and the monetary policy is easing also.”
EGYPT “Egypt’s improvements were accelerating before the revolution when it was the best performing country in the ranking of the World Bank for 2010,” remembers Colliac. “In terms of capital controls, it has since worsened, but if you look at stabilisation in terms of financial evolution you see that business in Egypt was not
“The main driver is a move towards urbanisation, offering countries like Nigeria huge potential for development once their institutions embrace the need to organise and develop each sector from conception” STÉPHAN COLLIAC Chief Economist for France and Africa, Euler Hermes
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INSIGHT deteriorating: it was the cyclical conditions following the uprising. “Secondly, the commodities sectors will benefit more due to new developments in Egypt such as the continued discovery of gas resources in the East Nile Delta. Egypt will need to open its doors to find the right partners to exploit these new revenue streams and the capital goods to build pipelines. So, the quest for growth will have to allow for more foreign investment via the further unwinding of capital controls.”
MOROCCO Colliac bemoans the backdrop of political problems which have dogged the ability of the Dirham exchange rate to become flexible for so long. “You just have to do it and not talk too much about it,” he says. “If you give dates for this, the people can take a run on the economy which is what happened in Morocco. The country lost one month’s worth of foreign exchange reserves in terms of imports. It’s still sustainable, but it shows the amount of the run on the banking system after they’ve taken too long to prepare the reforms because they lack skills in implementation. However, it is the most 24
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“Egypt was the top country in the Middle East and Africa last year for foreign development” STÉPHAN COLLIAC Chief Economist for France and Africa, Euler Hermes stable country in the region - they’ve had democratic institutions for 13 years now. If Morocco wants to go further with a diversified economy, the country needs reform, not just to attract foreign investment, but to organise inland investment with Moroccan investors.” With its strong agricultural base and open economy, Colliac believes Morocco can be the Mexico of Africa. The country has already entered the automotive and pharma sectors, but he warns its economy (with a GDP growth rate of 3%) is still too linked to the population flow coming from the Middle East and more diversification is needed.
THE FUTURE Colliac has worked on emerging markets worldwide throughout his career and is relishing the opportunity Africa presents: “I enjoy being able to develop an insight even without data – just with my research, feelings and impressions.” Morocco is an important country for Euler Hermes as it provides the company its gateway towards new business developments in West Africa. “Our market share has matured to 80% here,” says Colliac who notes that Euler Hermes’ strategy is aligned with that of the Moroccan government. “In June 2017, Morocco
was accepted as a member of the Economic Community of West African States (ECOWAS) – a community including countries like Senegal and the Ivory Coast. It helps to create many constructive meetings between leaders to inspire investment in the region.” Euler Hermes will use this African link to accompany Allianz in its efforts on the continent, according to Colliac. “Allianz has its regional office in Morocco so we are following in that tradition by organising our activities in 44 countries across the continent in order to harvest its long-term potential.” 25
TOP 10
Top 10
African Telecoms Companies Edited by OLIVIA MINNOCK
AFRICAN BUSINESS REVIEW TAKES A LOOK AT THE CONTINENT’S TELECOMS COMPANIES WITH THE HIGHEST ANNUAL REVENUE The centre of global development is always shifting, and if the past few years are any indication, it is now swiftly shifting toward the African continent. Ghana, Nigeria, Botswana, Ethiopia, and other African countries have shown tremendous growth in recent years, with advances in everything from manufacturing and education to renewable energy. If these countries are to sustain that growth over the long term, however, their businesses must have access to quality telecommunications services. The following telecom companies are filling this vital need. Ranked in order of annual revenue, these firms provide the resources necessary for businesses, nonprofits, and government agencies across the African continent to coordinate their activities and achieve sustained growth.
TOP 10
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9MOBILE
As one of Nigeria’s leading telecommunications providers, 9Mobile offers 4G data plans, voice calls, digital content, and business phone services. The company currently has roughly 20mn subscribers, generating an annual revenue stream of $637mn. Besides supplying fast and reliable services, 9Mobile distinguishes itself with its extensive corporate social efforts, which include combating malaria, promoting care for those with HIV, providing career counselling, and contributing to Ebola containment efforts. It also seeks to minimize the environmental impact of its services, notably by designing eco-friendly SIM cards for mobile customers. 28
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VODAFONE EGYPT
A subsidiary of the British telecommunications giant of the same name, Vodafone Egypt is a major provider of phone and internet services in the North African country. It was one of the first private companies to offer these services in the country, having won some of the Egyptian government’s earliest contracts when it began privatizing communications infrastructure in the late 1990s. Thanks to this early entry to the market and its ability to offer advanced phone services, Vodafone Egypt generates just under $1bn in annual revenue.
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Though relatively new to the African continent, GloCom has quickly risen to prominence thanks to its quality SIM cards. These cards have become particularly popular in Accra, Ghana, where the company operates under the brand GloCom Mobile Ghana. It generates $1.178bn in annual revenue.
With 12mn subscribers and $1.893bn in annual revenues, Safaricom is one of the largest and most important mobile phone and internet providers in Kenya. The firm primarily focuses on providing telecommunications services in major cities including Nairobi, Mombasa, Eldoret, Nakuru, and Kisumu. It has become particularly important in recent years due to its mobile banking software, which has made it easier than ever for Kenyans to start and use bank accounts. Considering how important banking is for economic growth, this makes Safaricom one of the most critical drivers of development in Kenya.
GLOCOM
“THESE FIRMS PROVIDE THE RESOURCES NECESSARY FOR BUSINESSES, NONPROFITS, AND GOVERNMENT AGENCIES ACROSS THE AFRICAN CONTINENT TO COORDINATE THEIR ACTIVITIES AND ACHIEVE SUSTAINED GROWTH.”
SAFARICOM
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Often referred to simply as Ethio Telecom, this telecommunications company is a subsidiary of the government of Ethiopia, which uses it to provide phone and internet services for all Ethiopian citizens. It generates annual revenues of $1.19bn. The company is currently in the middle of efforts to expand telecommunications services to millions more Ethiopians. If successful, this effort will make business, education, and other key economic activities easier and more affordable throughout the country.
Also known as Etisalat Egypt, this company is one of the fastest and most reliable telecommunications providers in the country. It was the first brand in the country to offer Downlink at a rate of up to 7.2 megabits per second, making it a favourite among Egyptians seeking consistent access to the internet. Thanks to this speed advantage and its competitive pricing features, Etisalat Misr provides internet access to 99% of the Egyptian population. This allows it to generate roughly $3bn in annual revenue.
ETISALAT ETHIOPIAN TELECOMMUNICATIONS MISR COMPANY
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3
A subsidiary of the Bharti Airtel company, Airtel Africa has 78mn subscribers on the African continent. It has been particularly successful in Nigeria and Ghana, which together account for 60mn of its customers. It has become popular among business professionals and others who have to travel from country to country. This is due in no small part to its One Network plan, which allows subscribers to buy a service plan in one country and use it at the same price in other countries. With so many subscribers in some of the continent’s most vibrant economies, Airtel Africa earns $3.5bn in annual revenue.
With more than 55mn customers, Vodacom has one of the largest subscriber networks on the continent. It provides telecommunications services in 40 different countries, including Mozambique, Nigeria, Zambia, Angola, the Democratic Republic of the Congo, and Cameroon. It is particularly successful in the country where it is headquartered, South Africa, where it has 23mn subscribers and a market share of 58%. With such a large and widespread network of operations, Vodacom earns $5.4bn in revenue each year. The company’s success is due largely to its valuable promotions and flexible, affordable pricing structure.
AIRTEL AFRICA
VODACOM
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TOP 10
2
THE MTN GROUP
Based in South Africa, the MTN Group offers telecommunications services not only in Africa, but also in many European and Asian countries. The firm has been particularly successful in Nigeria, where it provides 35% of all telecommunications services. Combined with earnings in 19 other countries, this has allowed the MTN Group to generate $10.92bn in revenue, the second highest figure for any telecom firm on the continent. MTN is widely renowned for the quality and affordability of its services, having been named the Most Admired African Brand in 2015.
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‘MTN IS WIDELY RENOWNED FOR THE QUALITY AND AFFORDABILITY OF ITS SERVICES, HAVING BEEN NAMED THE MOST ADMIRED AFRICAN BRAND IN 2015’
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ORANGE EGYPT
Originally known as Mobinil, Orange Egypt is the largest telecommunications company on the continent. It generates $11bn in annual revenue. The company has taken the lead in constructing telecommunications infrastructure, having installed underground coverage stations throughout Cairo and other major Egyptian population centres. It also collaborates with satellite companies to offer roaming services, providing its customers with the flexibility to make calls from a range of different locations.
11bn
The annual revenue of Orange Egypt in USD
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Diebold Nixdorf: Banking digitalisation Written by Catherine Sturman Produced by Greg Churchill
BRIDGING THE PHYSICAL AND DIGITAL WORLDS OF CURRENCY AND PAYMENTS, DIEBOLD NIXDORF IMPROVES THE CUSTOMER EXPERIENCE BY DRIVING CONNECTED COMMERCE
I
n an increasingly digitised world, global ATM manufacturer Diebold Nixdorf has made a concerted effort in recent years to implement its solutions globally to further encourage total financial inclusion. By incorporating alternate power sources, mobile banking capabilities, as well as digitally onboarding new consumers, Diebold Nixdorf is leading the charge in banking digitalisation. With a 32% market share, Diebold Nixdorf is the only ATM manufacturer in the world to have more than a million ATMs installed, placing them at the top of the global ATM market. Every day, Diebold Nixdorf enables businesses to provide seamless, secure and personalised experiences in both the physical and digital world of cash and consumer transactions,
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in addition to placing significant focus on the customer experience. “We are constantly introducing new solutions to meet the everchanging needs of consumers,” Ricardo Dias Marques, Managing Director for Algeria, English Speaking Countries (ESC) of West Africa, and Portuguesespeaking African countries says. As a global leader in driving connected commerce, Diebold Nixdorf has optimised its capabilities to ensure positive customer experiences, each time cementing its presence in over 130 countries, and working with nearly all of the world’s top 100 financial institutions and a majority of the top 25 global retailers. “Today’s financial institutions and retailers need a services partner with the capabilities and expertise to enrich the customer experience,”
TECHNOLOGY
Ricardo Marques
Managing Director for Algeria, English Speaking Countries (ESC) of West Africa, PALOP. Ricardo Marques currently serves as the managing director of Algeria, English Speaking Countries (ESC) in West Africa and Portuguesespeaking African countries (PALOP) for Diebold Nixdorf. In this role, he is responsible for driving the organisation’s strategies and operations in the area to enable secure, software-defined connected commerce and related services across the financial and retail industries. Marques is a senior management executive with more than 17 years’ experience in the IT and Telco’s industries. Business leader with expertise in consulting, human capital management, business processes, operations leadership and international management, he has worked across Europe, Middle East and Africa. Prior to his current assignment, Marques was the responsible for the business operations in Middle East Africa. Prior to Diebold Nixdorf, Ricardo held senior management roles in other multinational companies, starting and leading operations in Africa, Middle East, establishing himself has an international management expert. He holds a Bachelor degree in Business Administration, an Executive Master in International Business and a Master degree in International Management.
“The ATM will support banks in the implementation of revenue generating strategies which will create additional selling opportunities, but it will also offer new ways in providing an array of services for customers” Ricardo Marques Managing Director for Algeria, English Speaking Countries (ESC) of West Africa, PALOP.
adds Marques. “They look for a trusted advocate who deeply understands the industry, business objectives and related systems, software, security and service components that keep everything running at the pinnacle of efficiency. “Service delivery is based on a powerful, interconnected system of people, processes, tools and technology, risk management controls and ongoing performance measurement. These are all designed with the consumer experience in mind. Our platform
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is based on global standardisation and best practices worldwide.”
Financial solutions Building collaborative, customised solutions through new and existing partnerships, Diebold Nixdorf has become the backbone for both the financial and retail sector, and its technologies are highly scalable in order to adapt to consumer needs in alignment with emerging trends in the market. This all centers around its mission to provide endto-end connected commerce
TECHNOLOGY
solutions that seamlessly moves from the financial to retail space. However, Marques believes that the humble ATM will continue to offer long-term solutions for businesses seeking to integrate the unbanked African market into an effective, complete financial ecosystem. “Migrating certain transactions traditionally done at the branch to the self-service channel via ATMs, kiosks, or other digital solutions can support banks’ efforts to drive revenue generating strategies, such as marketing at the ATM, which in turn can create additional selling opportunities,” he said. Advanced data analytics have unlocked Diebold Nixdorf’s ability to provide its customers with datadriven insights, which can help transform traditional business processes for consumers, ensuring they remain the business focus.
Emerging technologies and mobile growth Viewing technology as an enabler, and keeping ahead of the curve
surrounding key trends in the market, Marques explains that emerging technology will help to aid and facilitate greater financial inclusion. Biometric authentication, for example, is one of many emerging technologies that deliver convenience and security. However, Marques says that this technology will not necessarily replace existing systems. “As long as there is a need for cash, the ATM industry will find new and innovative ways to assist. We don’t see cash going away anytime soon. In reality, the use of cash actually tends to increase as additional methods of access are introduced. ATMs will continue to play a significant role,” he explains. According to Marques, a current area of exponential growth across Africa is the implementation and emergence of mobile technology and services, which has simplified the banking experience for consumers. With over a billion unbanked customers across Africa utilising mobile
w w w. a f r i c a n b u s i n e s s re v i e w. c o . z a
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CONTINUING A TRADITION OF EXCELLENCE Olicom is a group of companies which has established itself as a leading IT player and market leader in banking automation business by providing specialized passbook printers and high end dot-matrix print heads to its strategic partners worldwide.
PRODUCTS
www.olicom-group.com | +39 0125 1906220 Olivetti Banking & Postal Line of Business
TECHNOLOGY
technology, there is significant market opportunity for Diebold Nixdorf to tap into and support. Mobile technology has also supported the integration and application of further digitisation strategies and financial technologies, and has encouraged a more efficient, connected customer experience. “Mobile technologies have enabled banks to partner with major service providers to transform the access and payment of services,” explains Marques. “The consumer experience should always be at the center of technological development. “Financial institutions must provide a seamless interaction through different physical and digital channels (mobile, online, ATM), where they can leverage Diebold Nixdorf’s solutions to create such experiences.” Research results from ATM Marketplace’s ATM Future Trends 2017 report identified mobile technology as the number one factor that will have the greatest impact on the ATM industry globally. “Ironically, according to a
2017 Forrester research report entitled Banking on Millennials: It’s not all about mobile, more than half of younger millennials and almost two-thirds of older millennials expect to access all their accounts with a bank within a single mobile app,” Marques continues. “Furthermore, almost three quarters of older millennials and two-thirds of younger millennials have used a smartphone or tablet for day-to-day banking in the past three months. Today’s consumers want personalised, secure transactions and a seamless experience. “Consumers demand to be treated as a unique individual, not just a number,” notes Marques. “Therefore, financial institutions need to not just provide value, but rather customised experiences using secure technologies to engage, onboard and deepen relationships with consumers.”
Mobile banking vs ATMs “The mobile smartphone boom across the continent and the rapid adoption of mobile banking will
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certainly not hinder the rate of ATM distribution,” continues Marques. “The rise in smartphone penetration has led to the increased use of mobile banking services, and it’s a trend that will continue as our society becomes ever more connected through the Internet of Things (IoT).” Marques says that the use of mobile technology will support the need to transform cybersecurity services surrounding ATM technology and reduce cases such as ATM fraud and improve current cybersecurity levels. “As the boundaries between the branch, the computer and the smartphone disintegrate, we’re seeing digital banking become inclusive of the entire banking experience – with the bottom line that consumers want the ability to bank where they want, how they want, with no hiccups along the way. “Nonetheless, there are still many hurdles. Africa’s financial infrastructure is still lacking in many regions. The cost to open a banking account itself can be prohibitively high, whether for
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the financial institution or for the consumer. Financial literacy is an ongoing issue within cultures that have traditionally taken very different approaches to money management. Collaboration between stakeholders in the industry, coupled with advancements in technology, will ultimately have a positive impact on financial inclusion in Africa.” ATMs will continue to be an essential tool for consumers, and the customer experience will remain the fundamental pillar of Diebold Nixdorf’s evolution. As a result, the company has launched a new, advanced software solution, Vynamic Mobile, which, among other things, empowers consumers to access information on the next closest ATM right at their fingertips, should the ATM they are in front of be unavailable. Putting the control back into customers hands has, therefore, turned an inconvenient situation into a positive experience for the customer.
Further advantages Working with financial institutions
Diebold Nixdorf’s next generation mobile application suite – Vynamic Mobile – enables a unified and highly personalised experience by leveraging cross-platform data and integrating multiple channels to drive connected commerce
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FROM TWO COMPANIES, WE DEFINED ONE VISION:
CONNECTED COMMERCE
AN E X P A N D E D PRESENCE, WITH EVEN STRONGER GLOBAL EXPERTISE
MYANMAR
THE NETHERLANDS POLAND
THAILAND VIETNAM
CZECH REPUBLIC
CANADA
UK GERMANY
USA
FRANCE
CHINA TAIWAN
PHILIPPINES
VENEZUELA MOROCCO ALGERIA
PERU
INDONESIA
INDIA RUSSIA
BRAZIL SOUTH AFRICA
TURKEY ARGENTINA
IN MORE THAN
MALAYSIA SINGAPORE
AUSTRALIA
130 COUNTRIES
A COMBINED COMMITMENT TO INNOVATIVE SERVICES, SOFTWARE & SYSTEMS SOLUTIONS
SERVICES
SOFTWARE
SYSTEMS
OVERNIGHT, OUR SERVICE ORGANIZATION NEARLY DOUBLED.
14,500 SERVICE MEMBERS
TECHNOLOGY
to address the challenges seen regularly by the financial and retail sectors, Diebold Nixdorf will continue to be focused on providing tools catered for its customers to drive consumer satisfaction and retention. The implementation of mobile, crosschannel interactions will support this goal and enable consistent consumer experiences across all of its platforms. However, according to Marques, the consumer must stay informed to ensure overall success. “Financial education is imperative in this new era of banking, especially when it comes to educating consumers about new technologies, such as fingerprint, document readers and virtual tellers. Providing personal, face-to-face assistance to consumers while they are using an ATM is one of the best ways to provide education, and it creates an opportunity to
collect immediate feedback and reactions to added features.”
So, what does the future of financial and retail banking look like? “As financial and retail markets converge, and synergies expand in the areas of mobile, contactless technology, smart data and more, it will become even more vital that companies recognise and react proactively to emerging trends,” Marques concludes. “Our strategy is to always put the consumer at the centre and develop solutions which provide the utmost convenience for them. We want to enable more seamless experiences, remove pain points for consumers, and then identify the touchpoints that deliver what they need. Experience-driven banking offers a much more holistic approach to connecting with consumers.”
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ELECTRIFYING
TANZANIA
Wr i t ten by N el l Wal ker Produced by G reg Churchil l
Nigel Whittaker, Managing Director of Songas, explains how the company is supplying much-needed energy to Tanzania
“
It’s very important for everybody to have access to reliable electricity, and I think that Africa generally suffers in comparison with the rest of the world.” Nigel Whittaker, Managing Director of Songas, holds these beliefs that mirror those of his company and its parent company, Globeleq. Songas is a major player in the electricity sector for Tanzania, and has been since it became operational in 2004. The company uses natural gas from Songo Songo Island and processes it on location, before transporting it along a 225km pipeline to the Ubungo Power Plant in Dar es Salaam, owned and operated by Songas. The gas is then converted into electricity which is sold cheaply to TANESCO to sell on to its customers. In a nation which relies heavily on
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hydroelectric power via precious water supplies which are subject to droughts, and expensive fuel oil must be imported, Songas’s presence is a necessity. “Only around 30% of people in Tanzania have access to electricity, but the government has a plan to increase the industrialisation of the country,” says Whittaker. “In order for that to happen, reliable electricity needs to be available so that industry can thrive. “Currently there’s about 1,100MW of electricity available in Tanzania, and the government wants to increase that to 5,000MW, to develop industrialisation and improve access to electricity. We support that. We want to be a part
ENERGY
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ENERGY
of that programme, because we’re we’re constantly generating,” part of the solution in Tanzania.” explains Whittaker. “We are Whittaker has 35 years of running 24/7, and our electricity experience in energy, including is the cheapest thermal generator 25 in power generation. Having in East Africa; we sell to TANESCO worked for big industry names like at about six cents a kilowatt.” Powergen, E.ON, and Sumitomo, This not only benefits citizens Whittaker took on his current role wanting electricity from a clean, with Songas in 2015, and reliable, cost-effective has been applying source, but ensures his expertise to the that Songas remains well-established a top choice as a company ever supplier. Globeleq, since this time. one of Songas’ When Songas’ shareholders, is business began, dedicated to power Number of it was the only development employees at Songas gas fired generator in Africa in the country and it and works supplied between 30-50% hard to supply of the electricity in Tanzania. While electricity on the continent, it is more like 25%, the company a known driver for social and remains an extremely important economic development. part of the local electricity Using Tanzanian gas, Songas generation sector. This is due in can continue to provide electricity part to its very high availability more economically than the fuel (98%) and a load factor of 92%. oil generators which have to import “Songas is very important to the gas into the country; this has Tanzania because it’s reliable and saved Tanzania billions of US dollars
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Industrial gas turbine SGT-800 Power generation: 47.5-54 MW(e) 47.5 MW Version Gross efficiency: 37.7% Heat rate: 9,547 kJ/kWh (9,084 btu/kWh) Turbine speed: 6,608 rpm Pressure ratio: 20.1:1 Exhaust mass flow: 132.8 kg/s (292.8 lb/s) Exhaust temperature: 541°C (1,007°F)
50.5 MW Version Gross efficiency: 38.3% Heat rate: 9,389 kJ/kWh (8,899 btu/kWh) Turbine speed: 6,608 rpm Pressure ratio: 21.0:1 Exhaust mass flow: 134.2 kg/s (295.8 lb/s) Exhaust temperature: 553°C (1,027°F)
54.0 MW Version Gross efficiency: 39.1% Heat rate: 9,206 kJ/kWh (8,725 btu/kWh) Turbine speed: 6,608 rpm Pressure ratio: 21.4:1 Exhaust mass flow: 135.5 kg/s (298.7 lb/s) Exhaust temperature: 563°C (1,045°F)
siemens.com/gasturbines
Siemens’ SGT-800, a proven distributed generation turbine for Africa! Whatever the power generation requirements may be, Siemens, a global engineering powerhouse has the right combination of technology, solutions and skills to meet the requirements, and yes, often exceed. Siemens gas turbines are precisely designed to master the dynamic African energy market environment. Low lifecycle costs and an excellent return on investment right from the start are just two of the benefits that Siemens gas turbine portfolio offers. Mark Van Antwerp, Vice President of Power & Gas Sales for Southern and Eastern Africa at Siemens says: “Our gas turbines fulfil the high requirements of a wide spectrum of applications in terms of efficiency, reliability, flexibility and environmental compatibility. There has been a major shift in the market from centralised power generation to distributed generation. At Siemens we believe that this is a trend much to the benefit of Africa as the electrification levels are still low. One of our innovative products is the SGT-800. This machine is getting a lot of attention in the continent primarily because it offers broad flexibility in fuels, operating conditions, maintenance concepts, package solutions, and ratings.” The excellent efficiency and steam-raising capability make it outstanding in cogeneration and combined cycle installations. The SGT-800-based power plant, designed for flexible operation, is perfectly suited as grid support. The SGT-800 combines a simple, robust design, for high reliability and easy maintenance, with high efficiency and low emissions. With more than 300 units sold and over 4 million equivalent operating hours, it is an excellent choice for the African markets. Matthieu Cecillon, Vice President of Application Engineering for Sub-Saharan
Africa at Siemens says: “The Siemens SGT-800 gas turbine is available in three versions with power output of 47.5, 50.5 and 54.0 MW respectively. The gas turbine combines a robust, reliable design with high efficiency and low emissions. This makes it an ideal choice for municipal and industrial power generation, refineries, and the oil and gas industry. Its high exhaust energy content makes the Siemens SGT800 particularly well suited for combined heat and power and combined-cycle applications. Reliability, environmental compatibility, and low lifecycle costs are the key features of the Siemens SGT-800: With up to 60,000 operating hours (EOH) between major overhauls, low maintenance costs, and an excellent electrical efficiency, the Siemens machine achieves the lowest lifecycle costs and the best combinedcycle efficiency within its class.” The Siemens SGT-800 is a single-shaft machine with 15 compressor stages. The first three stages have variable guide vanes. To minimize leakage over the blade tips, abradable seals are applied to stages four to fifteen. The three-stage turbine is built as one module and is bolted to the compressor shaft to provide for easy maintenance. The turbine stator flanges are air-cooled to reduce running clearances and improve efficiency. The overall design of the Siemens SGT-800 gas turbine ensures easy service access to the combustor and the burners. The cold end of the gas turbine is connected to the generator via a reduction gear unit; this reduces the turbine speed from 6,600 rpm down to 1,500/1,800 rpm. The Siemens SGT-800 gas turbines are equipped with Dry Low Emissions (DLE) combustion system to reduce nitrogen oxide emissions. The combustion system is designed to operate on both gas and liquid fuels and it’s capable of on-line switchover between fuels.
SONGAS LIMITED
since its operations began in 2004. Songas uses reliable infrastructure which means that there is no need to constantly update its technology. “The company has not changed a lot since we went operational in 2004,” says Whittaker. “Prior to that there was a lot of time and effort involved in developing the gas process and the building of the pipeline, upgrading the old plant by converting it to gas, and adding new units. Since then the plant has been running in a stable operation.” While stability is something to aspire to, it can never be quite enough when a business can do so much more and with its excellent service in a nation with low rates of electricity consumption. So how can Songas keep doing what it’s doing, but do more of it? The challenges for Songas are external, and things which will take time to change. Both TANESCO and the Tanzanian government are dealing with struggles which affect Songas, but Whittaker is hopeful. “The government is hoping to organise a financial package with the World Bank which will alleviate TANESCO’s financial issues, making it financially viable going forward,” he says. “We’re anxious to see the outcome because it’s important not just for companies like Songas, but the whole financial electricity sector generally.” Songas is developing a plan to upgrade two of
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“Songas is a thriving business, it runs very well, the plant performance is very good, and the electricity price is low. We think we’ve been a fantastic asset for Tanzania” Nigel Whittaker, Managing Director
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its six units which will enable it to produce more electricity. It’s simpler for the company to upgrade existing units, as the site contain all of the necessary infrastructure already, than to build entirely new facilities, and generation capacity could increase from 180MW to 240MW if the government grants approval. “Songas is a thriving business, it runs very well, the plant performance is very good, and the electricity price is low. We think we’ve been a fantastic asset for Tanzania. Pan African Energy Tanzania (PAET) recently put some calculations in the newspaper saying that Songo Songo Island gas has saved the Tanzanian government $6.2bn since operations began – money that would otherwise have been spent on producing the same amount of energy with imported fuels. So Songas has been very successful, not just for the shareholders but for Tanzania as a whole.” 54% of Songas’ shares are held by Globeleq and 46% are held by the Government of Tanzania through holdings by
TANESCO, TDC and TDFL. Songas sees a future in which its generating capacity is expanded by about 30%, and its parent company, Globeleq, is extremely interested in pursuing other power development projects as soon as it gets the go-ahead. The gas at Songo Songo Island is sufficient to meet the needs of Songas’s future growth, and the infrastructure is not fully utilised. So while Songas does have to wait for precisely the right environment and the necessary approval, the future certainly looks bright. “There are enough resources on Songo Songo Island for us to introduce, improve, and increase electricity generation,” Whittaker concludes. “Tanzania will be a very interesting market for us once we can see there’s some stability returned to the electricity sector here.”
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