www.africanbusinessreview.co.za | June 2016
TOP 10
African apps
Morocco’s
RENEWABLE ENERGY future is bright
From street food to high street Linda Reddy, Supply Chain Director, on the challenges facing the company within South Africa
Special Reports
Vinod Sharma & AIICO insurance
IN THIS ISSUE
EDITOR’S COMMENT
W E L C O M E T O T H E J U N E issue of
African Business Review. In my first editor’s comment, I’m glad to introduce features that highlight the future of African business. Outgoing editor Nye Longman quizzed Adama Moussa and Olivier-Joseph Breteche on Morocco’s Noor solar plant, which is set to be the world’s largest. Africa’s mobile banking industry is also defying limits. Our Q&A with Vinod Sharma explores how FinTech is disrupting traditional banking. We also take a look at Africa’s top five apps, which includes a tool targeted at farmers. Clearly, Africa’s future is now. We hope you enjoy the issue. Let us know what you think on Twitter @AfricaBizReview.
Wedaeli Chibelushi Editor Wedaeli.chibelushi@bizclikmedia.com
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F E AT U R E S
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TECHNOLOGY
Morocco’s renewable energy future is bright African Apps TOP 5
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INTERVIEW WITH VINOD SHARMA
Company profiles
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NANDO’S Food & Drink
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KENYA COMMERCIAL BANK FInance
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AIICO INSURANCE Technology
MINERAL DEPOSITS Mining
Banking the unbanked Written by Nye Longman Produced by James Pepper
African Business Review speaks to Vinod Sharma, a prominent CTO
growth of mobile financial services & mobile money and how FinTec
DRIVING FINANCIAL INCLUSION AS BASIC RIGHT FOR EVERY HUMAN BEING
O with one of the largest MNO in southern Africa. He talks about the
ech is already disrupting the traditional banking industry
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How can technology/MNO/ FinTech companies remain profitable while keeping costs low for Africans?
Keeping costs low while ensuring quality is always a tough job, but making services available to large numbers of subscribers will help. Partnerships that leverage existing technologies and platforms will ensure sustainability and profitability especially with disruptors. Sustainable use of technology (for example virtualisation and cloud hosting) will reduce CAPEX and keep opex low. The provision of an all-capturing ecosystem will ensure 100 percent reliance on the services being provided and this leads to increased usage and reduced service prices. Most of the companies coming into the mobile payments space are actually coming in with little or no experience of the sector and often fail to provide a soulful touch and
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product to customers. Segmenting customers based on a few simple parameters (like age, potential earnings and spending habits) will therefore ensure that business models are drawn properly and will serve relevant customers. To date, a lot of solutions are coming to the table but the question is - are we not producing too many solutions for which the problem does not exist? Providing too many services and new functionalities will not only confuse customers but will also hurt any company budgets and P&L statements. Companies should therefore launch products one at a time and give enough time for subscribers to adjust to new innovations; new services should focus on lifestyle solutions to ensure more participants.
DRIVING FINANCIAL INCLUSION AS BASIC RIGHT FOR EVERY HUMAN BEING
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VINOD SHARMA
MONEY 65+ MOBILE DEPLOYMENTS 45+ COUNTRIES 40M+ USERS 200M+ TRANSACTIONS PER MONTH VALUE $4B+ TRANSACTION PER MONTH
� mobiquity® Money� deployments
GET THE POWER to create cash-lite economies with
mobiquity Money ®
Power of Money, Multiplied
The Powerhouse of Innovation First to enable international remittance service in North Africa
First to provide closed-loop NFC merchant payments in Africa
First to facilitate domestic interoperability in an Africa country
First to provide MasterCard companion card in Africa
Taking Mobile Money to the Next Level Closed-loop NFC payments Open APIs
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Companion and virtual cards
Interest calculator
Micro-financial services
Business analytics & reporting
DRIVING FINANCIAL INCLUSION AS BASIC RIGHT FOR EVERY HUMAN BEING
Could you outline any financial inclusion initiatives that are particularly noteworthy? There are several initiatives in Africa that address financial inclusion. Finclusion - as I like to call it - is a basic right for every human being. Mpesa in Kenya was the first large scale initiative that completely revolutionised the market; it was this MNO-led model which led some people to call it a ‘virtual bank.’ EcoCash Zimbabwe is the second
largest model after Mpesa operating in same space. EcoCash has been spearheading financial inclusion through mobile money transfer services and a product suite which includes banking services, sending money across networks, remittances, and a savings club. The savings club allows communities to save as groups with minimal KYC requirements. This initiative has captured many communities especially farmers and women who now take advantage of the service to securely pool their savings.
MAHINDRA COMVIVA One of the key factors driving the success of EcoCash is its robust technology platform mobiquity® Money, which is provided by global mobility solution provider Mahindra Comviva. Econet’s partnership with Mahindra Comviva is significant, as the latter’s mobiquity® Money platform enables EcoCash to adapt to market requirements seamlessly, rapidly introduce innovative mobile money services, meet regulatory requirements and quickly scale to expand EcoCash’s customer base. mobiquity® Money offers EcoCash complete granularity of financial services and system flows allowing easy and cost effective service evolution
driven by business needs. The flexible and scalable architecture of the platform allows EcoCash to create a multi-tier agent network and quickly integrate with merchants, billers, corporates, Money Transfer Operators and banks creating a cohesive ecosystem. With multi-level, bank-grade security at its core, mobiquity® Money helps to reduce the possibility of fraud and increases customers’ sense of trust and confidence in the EcoCash service. mobiquity® Money’s deep industry expertise of over 65 deployments in more than 45 countries combined with Econet’s commitment and will to deliver need-based financial services has helped to shape the success of EcoCash.
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Q & A WITH VINOD SHARMA
MNOs/FinTech companies have threatened to leapfrog banks in some instances – is this a trend that is likely to continue? Actually the opposite is true. Banks that have embraced this trend have made gains because of the service is complementary to banking. MNOs/ FinTechs/MFS companies have only optimised the practice of ‘banking’ and have not touched anything else. First, the fintech disrupters are cutting the costs and improving the quality of financial services. Regulators, legacy IT systems, and branch networks are blessing auspiciously fintech companies in order to ‘finnovate’ (innovate). Capital getting cheaper as raw material. That means it can offer
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better deals to the borrowers and lenders who congregate on its platform. Half of the loan applications Funding Circle gets from small businesses arrive outside normal business hours. FinTechs takes a machete to the hefty fees that banks levy to send money across borders. Banks think of ‘banking’ as their life long partner, but this is no longer the case - it was the tight bind that central banks have had in the past that was keeping the status quo. Central banks have realised that it is time for them to loosen the knot between the bank and banking so that banking can breathe freely. So we can comfortably say that if banks do not accept the reality of the situation we will very soon see retail banking
DRIVING FINANCIAL INCLUSION AS BASIC RIGHT FOR EVERY HUMAN BEING
consigned to the history books. FinTech companies are making every possible use of technology and are brining innovation to the market at a much lower cost, without compromising security. FinTech’s have brought concepts as BaaP (Banking as a Platform) and BaaS (Banking as a Service) and are exploiting these to the highest possible level. In the future people will require banking but not actually the banks themselves. MNOs and FinTechs have brought banking right into the palm of the user and this brings so much convenience and cost savings on the part of the customer. It is up to banks to partner with MNOs and FinTechs to provide the underlying financial support services such as treasury functions.
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DRIVING FINANCIAL INCLUSION AS BASIC RIGHT FOR EVERY HUMAN BEING
What are the challenges, if any, of convincing Africans to use technology and become ‘banked’ for the first time? Banks have always positioned branches for certain groups who are considered to be doing well in society; some have turned away customers who are unable to raise the minimum deposit. Banks look at customers in terms of costs and unless this perception changes it will be difficult for them to serve both rich and poor. There is a need to convince people to change from the current technology to that of the future. This is a particularly big challenge as there is a need for extensive marketing, product
promotion, and education. Upcoming technology relies mainly on smart devices and high-speed networks which are mostly absent or inaccessible in most African markets. New technologies are usually expensive for African consumers due to macroeconomic, regulatory and political factors which affect the technology adoption rate. Adoption among Africans is generally high in terms of technology, especially youths - if technology innovation is targeted at youths, there are minimal challenges. The major challenges will come if the target group is over age 45 – they require time to adapt and lots of training and education in order to change from the status quo.
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Q & A WITH VINOD SHARMA
What are the potential positive impacts of FinTech, and technology in general, for Africans? FinTech and technology have greatly improved communication, financial inclusion, and education rates in Africa. FinTechs have the potential to support SMEs and upcoming smallholder agriculture businesses - the major positive impact will be improved payment speed and transaction security. Micro lending institutions will utilise Fintechs to fund smallholder operations. FinTech has reduced transaction costs, especially the cost of micro payments; it is now possible to offer financial services for few US cents. Services such as micro insurance and micro payments would not be possible without technology.
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DRIVING FINANCIAL INCLUSION AS BASIC RIGHT FOR EVERY HUMAN BEING
How can the continent address the technology skills shortage? Africa does not have a major technology skills shortage as such - it is just that the skills have been exported abroad to find better opportunities. To address this, there is a need to train the available resources and upskill them, or to outsource the services by utilising the cloud. It will be important for countries to consider
technology as a basic right with every child being introduced to technology. Skill retention strategies should be adopted by improving compensation, the working environment, and through growth and support strategies. Economic recovery, stabilisation and the improvement of political, macroeconomic and regulatory factors will facilitate skill retention and reduce the number of Africans migrating to more developed countries.
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Q & A WITH VINOD SHARMA
How does your role as a leading technology expert contribute to the continent’s technological development? My role steers the research and development efforts of innovative technology driven in Africa. Working with the second largest Mobile Financial services provider on the continent has given me the opportunity to offer services, which positively transform lives of Africans at home and abroad. In my current role, my focus remains to look at challenges in societies and develop simple and easy to use solutions. My role as a Chief Technology Officer allows me to focus not only on technology but also on business strategy and contributing to marketing plans. I sometimes meet customers in the field to get a heartto-heart connection and understand their needs and problems so that solutions coming to them will become handshake solutions. Solutions designing and crafting what the customer asked for as an expert in such a domain brings me happiness - it’s a bonus when a customer gets the product what they asked for and say with a smile “I got heard.”
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DRIVING FINANCIAL INCLUSION AS BASIC RIGHT FOR EVERY HUMAN BEING
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TECHNOLOGY
Morocco’s renewable energy future is bright Morocco’s Noor solar plant is set to be the world’s largest. African Business Review speaks to Adama Moussa, Power Engineer and Olivier-Joseph Breteche, Principal Country Officer at the African Development Bank (AfDB) who explores how the first part of the project was delivered, and the impact that it will have W r i t t e n b y: N Y E LO N G M A N 21
TECHNOLOGY What role did the AfDB play in securing financing for the project? Breteche: Since 2009, the AfDB has assisted Morocco preparing its investment plan under the Clean Technology Fund (CTF), one of the Climate Investment Funds funding windows, focusing on installing 2,000 MW of solar energy capacity by 2020 by developing the Noor Solar Complex. The Bank was responsible for channelling part of the concessional climate funds earmarked for the country’s solar energy plan. In June 2011, the CTF
approved $197 million in financing for the project, including $100 million obtained through the AfDB’s own resources. AfDB was the larger financier in debt for NOOR I. The mobilisation of climate funds has had a significant impact on lowering the cost of producing electricity from the NOOR I solar power plant and has therefore improved the attractiveness of the project. What role did the AfDB play in managing the project? Particularly, how did you coordinate discussions between
“Unlocking Africa’s enormous potential for renewable key. By facilitating Africa’s transition to renewable en plays a major role in reducing the continent’s emissio
- Olivier-Joseph Breteche, Principal Country Officer at the African Development Ba
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the Moroccan government, funding and technical partners? Moussa: In order to implement the project, a consultation mechanism was set up involving the Moroccan Solar Energy Agency (MASEN) and all donors. MASEN organised several consultation meetings which gathered all donors on matters relating to disbursements and overall project progress. On average, two project supervision missions were organised between 2013 and 2015. These missions gathered all donors, MASEN and the ACWA Power Ouarzazate Solar Project Company
e energy is nergy, the AfDB ons”
ank (Morocco)
and provided the opportunity to review the overall progress of the project in terms of communal infrastructure and resource mobilisation. During site visits, supervisory teams also met local authorities in the Ouarzazate region, traditional leaders, and people from villages in the project area to obtain their appreciation. AfDB played a critical role in negotiating the procurement arrangements including well balanced content. What will be the socioeconomic impact of the project in the Ouarzazate region? Breteche: NOOR I is built on the site of Tamzaghten Izerki belonging to the ethnic community of Ait Ougrour Toundout. It directly benefits the province of Ouarzazate, one of Morocco’s most disadvantaged regions in which the poverty rate is around 23 percent, the human development index is among the lowest in the country and more than two thirds of the unemployed are young people under 35 years old. NOOR I created more than 500 jobs during the 12 months of construction, with local workers holding nearly 42 percent of these. Construction 23
TECHNOLOGY of NOOR II and NOOR III plants is expected to create 1,600 direct jobs, mostly for the non-skilled local workforce. According to the terms of tenders, developers are obliged to give priority to local workforce. At the national level, the project is expected to give new impetus to the development of an industrial sector in the production of solar power equipment as plant developers have been encouraged to integrate local industrial solutions into their offerings. At the regional level, there is a good opportunity for replication and expansion of this new concentrated solar power technology which offers many advantages compared to photovoltaic solar technology. What role did women play in the project? Did you have any specific initiatives to include women? Moussa: The project includes an important component for women to strengthen their socio-economic integration in the region and promote their employability. The project deployment includes various training programs aimed at enhancing the employability of women and their 24
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MOROCCO’S RENEWABLE ENERGY FUTURE IS BRIGHT
THE FINANCING OF NOOR IS AS FOLLOWS AfDB / €200m CTF through AfDB / €165m World Bank / €162m CTF through World Bank / €76m KFW / €754m European Investment Bank / €209.5m Agence française de développement / €127.5m European Union / €116m Acwa Power Ouarzazate / €295m Total €2,105m
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TECHNOLOGY
“During site visits, supervisory teams also met local authorities in the Ouarzazate region, traditional leaders, and people from villages in the project area to obtain their appreciation� - Adama Moussa, Power Engineer
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MOROCCO’S RENEWABLE ENERGY FUTURE IS BRIGHT
social and economic empowerment. Among these actions: a partnership with the poly-disciplinary faculty of Ouarzazate (in renewable energy sector), training of women entrepreneurs in the region, training in agricultural activities (gardening, farming, and arboriculture) and providing agricultural kits. The project also promotes women’s participation in decision-making through their presence in local decision-making bodies (including women’s associations with gender perspectives in the region). Given the favourable environmental conditions on the continent, does the AfDB foresee an uptake of renewable energy investment? Breteche: Africa’s energy deficit holds back the economic growth needed to create jobs and lift people out of poverty. AfDB will work to end Africa’s energy crisis in ways that respect the planet’s limits, by unlocking Africa’s enormous energy potential, especially in renewables. So we do foresee an uptake and the institution is committed to contributing to this uptake. The challenge is to adopt the
right energy mix in which renewable sources gradually replace fossil fuels. The AfDB’s New Deal on Energy for Africa aims to address this challenge by closing the energy gap while stimulating low-carbon development. More about the new deal here. Unlocking Africa’s enormous potential for renewable energy is key. By facilitating Africa’s transition to renewable energy, the AfDB plays a major role in reducing the continent’s emissions. This is why the AfDB is massively investing in technology, innovations, policies and regulationws to speed up a renewables revolution. It is funding renewable energy projects across a range of technologies, scales and geographies (see figure below). The Bank is also supporting the Africa Renewable Energy Initiative launched at COP21 which is an African-owned and African-led effort to accelerate and scale up the harnessing of the continent’s significant renewable energy potential. The initiative seeks to achieve at least 10 GW of new renewable energy generation capacity by 2020 and – as an aspiration goal – to mobilise the African potential to generate at least 300 GW by 2030. 27
TOP FIVE AFRICAN APPS African Business Review takes a look at apps from a range of crucial sectors across the continent, which includes FinTech, healthcare, travel, farming, and media, developed by both locals and international innovators Written by: Nye Longman
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LIST
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LIST
Africa’s reputation for being the ‘mobile continent’ gains new credence every day – at end of 2014, it was estimated that there were over more than 630 million mobile subscriptions in subSaharan Africa, and the number is set to reach just under a billion before the close of the decade. Since mobiles provide a more affordable (not to mention portable) solution for many Africans, it is little wonder that the continent has seen a massive upsurge in innovative app technology to meet its needs. 30
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04 MFarm www.mfarm.co.ke
The MFarm is a transparency tool (accessible via the web or SMS) that allows farmers to do business better and faster. Farmers can access data on the retail price of their products, purchase goods directly from manufacturers, and contact potential buyers. All farmers need to do to use the app is send a text message, which makes the whole process even easier.
TOP 5 AFRICAN APPS
05 iROKOtv www.iroko.ng
The iROKOtv app enables users to choose their own programming from a substantial list of Nigerian TV series and Nollywood movies. Alongside traditional Nigerian programs, the service also offers a range of Korean, Ghanaian and Bollywood movie titles. Often referred to as the ‘Netflix of Africa’ iROKOtv’s users are able to download and watch content offline on their Android devices. According to founder Jason Njoku, iROKOtv’s early investors made a 3,000 percent return on their investments in just five years, which goes to show just how fast this sector is growing.
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02 mPesa www.mpesa.in
Taking its name from the Swahili word for money (pesa) this mobile app has taken the banking world by storm. The app has given millions of mobile users unprecedented access to finance by enabling them to deposit, withdraw, and transfer their money while also being able to pay for goods and services. The app’s presence has extended far beyond Kenya where it was founded - as well as Tanzania, and South Africa, mPesa has reached Lesotho and Egypt. It also serves markets as far afield as Pakistan and Eastern Europe. Not only has the app attracted millions of users, it has also disrupted the continent’s banking market; Mobile Network Operators (MNOs) have been able to leapfrog traditional bricks and mortar banks whose cost of entry is significantly higher. 32
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TOP 5 AFRICAN APPS
03 mPedigree www.mpedigree.net
The rationale behind mPedigree’s foundation addresses a growing and dangerous phenomenon: pharmaceutical fraud. By inputting a serial number, users and distributors are able to quickly identify whether a product is fake or not, and whether it meets the required minimum standards. The company’s vision is bold: “We see a near-future in which consumers can assert their choices in the marketplace with freely accessible technologies, communicating directly with brand owners, to confirm to their satisfaction with the quality of their purchases.”
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01 Uber
www.uber.com
Uber originally started out as an app to request premium taxi services in a small number of cities but has since grown to a unique phenomenon connecting travellers with drivers across the globe. To date, the app has 160,000 drivers and serves an average of a million people daily. For those who have never used the service – all it takes is a short sign-up process before users can choose their vehicle type, location and desired destination. Uber first entered Africa in 2013, with Cape Town and Johannesburg being the first cities to receive coverage. Since then, the app has grown to serve a total of 11 African cities including Abuja, Lagos, Nairobi, Cairo, and Casablanca.
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TOP 5 AFRICAN APPS
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From street food to high street Written by: Nell Walker Produced by: Charlotte Clarke
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NANDO’S
Nando’s Supply Chain Director, Linda Reddy, describes the challenges facing the company within its South Africa base, and how these complexities have been overcome with aplomb
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FOOD & DRINK
T
he world’s most popular chicken restaurant began life in 1987, in a decidedly unfashionable suburb of Johannesburg, South Africa. It was born from the dream of two young men, allowing people to enjoy the most delicious chicken in the world: fresh, flame-grilled, and prepared in a PERiPERi marinade. It was Mozambican street food, inspired by the colonial influences of Portuguese cooking. Nando’s PERi-PERi chicken was an immediate hit. It was a massive, global taste sensation that the world couldn’t – and still can’t – get enough of. Today, Nando’s continues to offer the world delicious chicken in 1,200 restaurants across 30 countries.
Nando’s is especially popular in the UK, Canada, and Australia and it remains South Africa’s favourite way of eating chicken. Linda Reddy, Supply Chain Director at Nando’s South Africa says the business’s success can be attributed to a number of things: first and foremost, it’s the incomparable chicken. It’s also the warm, welcoming, and hospitable culture of the business; the ambience of the restaurants, the great value that Nando’s offers, and the entrepreneurial culture instilled by its founders 29 years ago. “It’s a business about making money and having fun,” she says. “Our values say it’s okay to make mistakes and try different things. The company has a long history
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NANDO’S
33k+ Number of employees working for Nando’s globally
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of things that haven’t worked out and things that have worked out successfully. So it’s built on a strong foundation of those values and it’s really made the business what it is today.” Starting a company The poultry production industry in South Africa is enormous, but sourcing chicken was not always simple for Nando’s. The company approached one of the largest national suppliers when it began, but was turned away: “They said ‘thank you very much, your products are really good and you’re going in
FOOD & DRINK
the right direction, but we cannot supply you’. So it was the smaller chicken producers and abattoirs in this country which helped the founders over time. More family-run businesses came to the fore and said ‘we’ll supply you’, and would deliver right to the door. Ever since, we’ve only ever used fresh chicken.” Using fresh products, however, creates complexities within the supply chain, particularly with regards to managing the balance of a short shelf life and consumer demand. As the company has grown, logistics have become a great deal more sophisticated; fresh chicken can last up to seven days thanks to cold chain management, and distribution is completely outsourced.
“In an unpredictable economic environment it’s key to have a professional supply chain team in place to support Nando’s business and to manage risk. Linda has brought an exceptional team together who are doing a great job for Nando’s and having fun doing it” – Geoff Whyte, Nando’s CEO Southern Africa
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Proud to be affiliated to Nando’s as a Spice supplier for over 14 years
Africa Spice (Pty) Ltd Tel: 011 623 1322 | Fax: 011 6232188 Email: emil@africaspice.co.za Website: www.africaspice.co.za
FOOD & DRINK
Each country now has its own local supplier for Nando’s globally renowned sauces and bastings. “Up until eight years ago, we made our own bastings in our central kitchen here in South Africa,” Reddy explains. “That’s where we use our African Bird’s Eye chilli. It’s one of the key components that goes into the spice pack of our sauces. We made that and we controlled every element of it, from equipment to staff. We sent
out sauces from South Africa to the UK, Australia, Canada, and the US. It’s at the heart of our IP. “We still manage the African Birds Eye chili and spice pack supply relationships, ensuring they’re properly managed to create the sauces that are eventually used in the restaurant, and also to marinade the chicken in the processing plant. Fresh chicken arrives pre-marinated which gives the chilies the chance to settle into
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NANDO’S
the meat. This enhances tenderness and gives a delicious flavour.” Building a team Finding staff to implement this now-extensive supply chain has not always been simple. “For me, coming into the business was really about how we could take the supply chain
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business we already had to the next level: how to be commercially astute, and create an integrated function for the broader business whilst still giving customers the best-tasting chicken in the world.” Reddy’s immediate priority was to take the Nando’s supply chain to a world class
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“Coming into the business was really about how we could take the supply chain business we already had to the next level: how to be commercially astute, and create an integrated function“ – Linda Reddy, Nando’s Supply Chain Director
standard by being more proactive, and managing supplier relationships into committed partnerships. She latched onto her previous experience in business banking, innovation, food industry, and supply chain expertise to reinvent her business area. The company manages supply chain as a business within a business – and beyond a traditional support function. “We have a road map of where we want to go. There were things we needed to put in place to get us into the journey. We’ve developed
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Our Passion... Your Pleasure
Amaro Foods, passionately supplying baked goods since 1968. Based in Cape Town South Africa, we proudly produce a variety of flatbreads for both local and international markets. Our commitment to deliver premium quality product, relevant to our customers’ needs, is evident in the fact that we have been privileged enough to supply some of South Africa’s most favourite retail and restaurant chains. We do baking better. Tel: +27 21 507 7500 | Fax: +27 21 507 7501 | Email: tony@tonys.co.za
the road map over two years, and in the process, supply chain has evolved to become a focussed, customer-centric, specialised division of the business. The team has grown from four people to 17. Members of the team earned their place on it for their deep commodity skills and experience and having a great attitude, which is consistent with the vibrant Nando’s culture. “My vision was to bring together people with strong experience and skill in strategic sourcing and
logistics, who wanted to be part of an exciting journey to build our supply chain. We deliberately seek people who reflect our values of passion, courage, integrity, pride and family. We invest a lot of time and effort making Nando’s a great place to work and believe that our people are the reason for our success. As Robbie Brozin, one of our founders, has been saying since 1987: ’it’s the people that make the chicken’.” Up until three years ago, the
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NANDO’S
Proud partner to Nando’s
Toll Free: 0860 Vulcan / 885226
www.vulcan.co.za
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FOOD & DRINK
supply chain team would plan just three months in advance; now, the timeframe is six to 18 months, in line with marketing, innovation, and new restaurants plans. The team also holds a long-term roadmap that assists the large suppliers: how they are expected to develop in terms of capability and capacity in order to meet quality and demand.
within the Nando’s supply chain that counteract such issues, and methods to ensure sustainability of supply. Electricity, water, infrastructure, and labour all pose challenges in our Southern African business climate. There was recently a drought that put a strain on production not only of chicken, but also of sauce, basting, and marinade ingredients. Challenges Moreover, the Running a company drought significantly – however large increased the cost – in South Africa of maize, which is The year Nando’s can be challenging. the main component Resources are of chicken feed. It was founded constrained, as are also had a knock-on manufacturers, and it puts effect on key products such as businesses at risk. Reddy potatoes and greens, which are and her team has started to needed for the Nando’s side dishes. implement contingency plans Despite these challenges, Reddy
1987
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NANDO’S
is enormously confident in the company’s plans for expansion. Nando’s has recalibrated its business model to include more restaurant relocations, the team having decided that some restaurants are not optimally placed. Nando’s has also introduced drive thru restaurants in South Africa, something that has proven a popular concept. Takeaway food is a huge business in South Africa, and Reddy expects the drive thru format to expand to the UK and Australia. As for the restaurants themselves, Nando’s plans to remodel many restaurants to be more reflective of the fast casual dining style model, which will require a huge overhaul and volume of Capex. Reddy feels that the way Nando’s handles the
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complexities of conducting business in South Africa sets the company apart: “When you are in this environment and you have been in it for so many years, you learn to work with it and make it happen,” she concludes. “We deal with so many challenges, but still achieve transformation within the diverse consumer and business landscape. South Africa is on a big drive to create opportunities for diverse people of all cultures and Nando’s is fully aligned with that goal. All of that outweighs the risks.”
“We deal with so many challenges but still achieve transformation within the diverse consumer and business landscape“ – L inda Reddy, Nando’s Supply Chain Director
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Transfo by tech
Written by A Produced by
ormed hnology
Alice Young Mariana Lee
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AIICO INSURANCE PLC
Nigeria’s leading insurer is leveraging IT processes to keep ahead of the changing needs of the market. We speak to AIICO’s CIO about its digital transformation
B
ack at the time of its original incorporation in 1963 AIICO was part of the multinational AIG group; today it’s an independent insurance company operating within Africa’s largest economy and with its headquarters in Lagos where it is listed on the Nigerian Stock Exchange (NSE). Nigeria is Africa’s most populous country. Its businesses are booming and per capita income is rising fast. That makes it a prime insurance market, for both corporate and private clients. AIICO Insurance is the largest life insurance underwriter and the leading motor and transportation insurer in Nigeria, writing 33 billion Naira (around $166 million) of business in
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TECHNOLOGY
2015. It is a major player in the key oil and gas market – which for the time being is the country’s main revenue source, though its manufacturing sector, the third largest on the continent, is set to become the long term sustaining force for economic growth. Another growth area for the business is retail insurance, as that sector expands and modernizes to meet the demands of an aspirational middle class market. Apart from motor cover and other mandatory forms of insurance such as employee liability cover and public liability insurance for businesses, AIICO is big in many other sectors such as education and mortgage protection, where aspirational clients in the rapidly growing middle income groups seek to protect their family and their assets. For example it is important to ensure continuity of a child’s
education in the event of a parent’s death or disability, and AIICO’s Children’s Education Plan (CEP) is designed specifically for this need. Nevertheless insurance penetration is very low in Nigeria, taken up by less than 0.5 percent of its 173 million population. The potential for growth is enormous, says Olusanjo Shodimu, the company’s CIO, who has set himself the goal of trebling the volume of AIICO’s business through the adoption of innovative technologies in partnership with best of breed suppliers. Sanjo Shodimu joined the company in 2014 from the leading management consulting and technology firm, Accenture, where he worked for 10 years and led the delivery of various business and technology transformation initiatives for major banking and insurance clients in Nigeria and across the
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ALLCO INSURANCE PLC
To be the preferred ICT Solutions company of choice that deploys the best value-add solutions anywhere and at anytime. IT Horizons is an Indigenous fast growing systems integrator ICT company with a clear focus in technology enabled solutions and professional services for today’s and tomorrow’s business World. For over 3 years, IT Horizons has been helping its customers to successfully address some of their most complex business challenges through strategic planning, development, implementation and integration of highly innovative, flexible and customizable services and solutions that integrate business processes with ICT. We serve a vast and diverse customer base of government and private sector clients across a multitude of industry specific verticals and specializations
Our Core Values
Our Solutions & Services
• Customer Centric • Professionalism • Confidentlity
• Data Centre Transformation • Network & Security • Collaboration Solutions
• Teamwork • Efficiency • Innovative
• Enterprise Software • IT Trainings • IT Infrastructure
Telephone: 08189039359 Website: www.ithorizonsng.com Email: sales@ithorizonsng.com 56 June 2016 Office Address: No 7, Olawale Dawodu Street, Off Deeper life HQ, Gbagada, Lagos.
TECHNOLOGY
West African region. In that time, he has seen the CIO’s role evolved; from ‘just keeping the lights on’ ...to a more engaging function, driving business transformation, innovating for competitive advantage and acting as key strategic partner for business innovation. In this interview with Sanjo Shodimu, he elucidates on how AIICO is leveraging innovative technologies to disrupt the insurance sales and distribution landscape: “As the CIO, my main objective, is to sell insurance (absurd, right?); my mandate is to effectively support and enhance the sales and distribution of AIICO’s products & services and deliver superior service to all our stakeholders – be it individual customers, brokers, agents or employees. Focusing on the customer To achieve this, there is a need to understand the way the end-
users adopt technology. “I have to ask the question, ‘where are my customers and how do I reach them?’ The big difference between now and ten years ago is that most people have at least one online presence. Digital technologies – including social media and mobility are rapidly emerging as disruptive forces for businesses across all industries (insurance inclusive). Social media has blurred the lines between people’s lives. That is particularly true in Nigeria but it applies to all Sub-Saharan countries on this continent. Customers are interacting with one another on Facebook, WhatsApp and the rest, so that is where we need to reach them! At AIICO, we are forming alliances to make our products and services available on these platforms. The same is true of the internet. With motor insurance, if you have a car you need to have it insured and
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AIICO INSURANCE PLC
in the past you had to seek out an agent or physically go to an insurance company’s office to get cover, and then wait for approval. Today, you can purchase your motor insurance (and other pre-underwritten products) from AIICO’s online channels at the click of the button. AIICO is currently transforming its service delivery model. This transformation is underpinned by upgraded technology capabilities, running on a Cloud Ready Scalable Converged Infrastructure. We are constantly leveraging emerging technology trends to open
up more sales channels/points for the distribution of our products. Today, AIICO’s insurance policies can be purchased from third party locations / agents – by providing them with (access to) online tools/ platforms to sell our products. This is being achieved with the adoption of cloud technologies. With the cloud, access to insurance products is becoming ubiquitous. Additionally, these partners are helping to increase awareness of these insurance services via their own social media feeds, something that is already positively impacting sales..
Olusanjo Shodimu, CIO Mr. Olusanjo (Sanjo) Shodimu serves as CIO of AIICO Insurance Plc. He joined the company in 2014. He graduated from the University of Ibadan with a Bachelor of Science degree (First Class Honors) in Physics. He has over 10 years working experience in technology with a bias for business driven technology solutions deployment. He has handled integration, strategy and infrastructural development projects for companies like First Bank, Access Bank, Equity Investment Company, Central Bank, Crusader Insurance, Nigerian Stock Exchange etc. He worked with Broad Bank, Matrix Software Limited and Accenture before he joined AIICO Insurance PLC. Sanjo is interested in helping organisations achieve their strategic mandate via the design and implementation of effective IT/ business solutions.
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A IA I CLO L CI N O SIU NR SA UN RC AE N CPEL C PLC
248
Number of employees at AIICO Insurance
BI & Analytics
Regulatory Compliance
Revenue Assurance
Distribution (Mobility & Digital)
Process Efficiency
Turnkey Africa Limited Kenya Office: +254 (710) 241 892 Nigeria: +234 (01) 463 0890
info@turnkeyafrica.com
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In the medium to long term, AIICO will explore the option of moving in-house services to the cloud. The market for cloud services is expected to skyrocket in the next few years and there are many compelling reasons that will make insurers at the forefront of this growth. Internetenabled, externally provisioned services for managing an entire business process, such as claims processing, expense management or procurement are being adopted across the sector in the matured markets. In this way, AIICO is taking a measured approach. We have identified some services that we think we can easily move to the cloud – for example communication platforms like e-mail, as well as all of our policy authentication services. The benefits have proven outstanding. In our journey towards exploring creative ways of adopting emerging technologies relevant to our business
transformation objectives, we shall continue to take into account security and data protection issues as these are so vital in the insurance industry. AIICO’s approach in this regard is to ensure that all customers’ personal information remains fully protected from unauthorised access. At AIICO, we take security very seriously, and we continue to review our systems and infrastructure to ensure utmost confidentiality is maintained. Data is king For any organisation to survive in this age of digital transformation, data will be king. We are building a supply chain capability around data - from its collection through to its analysis. As CIO, one of my immediate functions is to provide analytics insights on our business performance – across customers and channels. This is really the next big thing for us at AIICO. We strongly believe this will be
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AIICO INSURANCE PLC
one of the key differentiating factors of the winner or losers in the industry. AIICO’s push to capture market share in the retail sector, as an example, is going to rely on effective data management. “In the last few months we have been collecting data from all our sales channels –running analytics within our data warehouse to gain better understanding of our customers’ patterns and behaviors. The outcome of this process feeds into our product development effort to enable us develop the right products to meet our customer needs. We believe that leveraging data will become the primary differentiator between us and our competitors. Embracing innovation Over the last two years, AIICO has implemented many
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significant changes within its technology environment:
• Aligned our Technology Architecture to deliver on the strategic goals of the company. • Built a fully redundant and available Compute Infrastructure (both Production & Disaster Recovery locations); and made significant investment on the network infrastructure to ensure maximal uptime for transaction processing. • Streamlined and improved our business applications to drive our core business processing and back office operations. Also AIICO is implementing a robust and scalable document management
TECHNOLOGY
www.mainone.net
solution, which will better equip us to be more efficient in our policy administration and servicing. Field Salesforce automation is another key area we are exploring to increase our policy count and conversation rate. We are working with reliable partners to automate the process from customer needs assessment to sales / policy conversion. We strongly believe, that with mobility we can reduce the sales-cycle-time for our agents
and marketers – making it easier and faster to close deals on the go. As part of our competitive positioning, especially in the retail space, technology will continue to be an integral part of AIICO’s strategy; put in the words of our Executive Director/COO, Tunde Fajemirokun - “Technology is THE Strategy”. We shall continue to exploit innovative technologies to change and improve the way we engage with our customers and other stakeholders.”
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Financing Ken Written by Nye Longman Produced by Mariana Lee
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K E N YA C O M M E R C I A L B A N K
Kenya Commercial Bank is not only making waves in East Africa for its competitive range of banking and financial services; it is also responsible for introducing millions to finance for the first time
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tarting life in 1896 as a branch of the National Bank of India, the Kenya Commercial Bank (KCB) is using over a century of experience as the leading bank in East Africa to make a positive and long-lasting contribution to the region. Maintaining a strong presence across the markets it serves, KCB is undergoing a wideranging technological transformation which is bringing about in-house efficiencies and delivering appreciable value for its customers. The changes it is currently undergoing are also enabling the bank to expedite its efforts to include thousands of unbanked citizens across East Africa, as African Business Review explores.
Operations KCB offers a variety of banking and financial services, supporting the various needs of the steadily-growing economic region. Alongside its
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more traditional loans, mortgages, current accounts, and cards, KCB offers specialised Diaspora, money market, and foreign exchange capabilities. Listed on the Nairobi Stock Exchange (NSE) KCB’s ownership is made up mainly of locals, the Kenyan government (which holds a 17 percent stake), and a small selection of institutional investors from the US and Europe. Eager to capitalise on the increasingly widespread use of mobile telephones on the continent, the Bank has formed a variety of partnerships with
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K E N YA C O M M E R C I A L B A N K
major telcos and service providers a pragmatic growth strategy: “We in order to leave its mark on the are always looking at opportunities growing FinTech and mobile to grow, either through partnerships banking markets. Its or organically. We are M-Benki account open to partnering is particularly with larger notable for offering organisations who customers the have a similar growth ability to conduct strategy.” all of their banking Recognising that online via a mobile its capabilities and The year Kenya Commercial device. operational reach Bank was founded KCB represents are vast, KCB has the largest banking used its scope in network in Kenya; last order to include an year it recorded 250 ATMs in the unprecedented amount of East country. Its seven million account Africans into its financial services holders are spread across branches portfolio using microfinance. in Burundi, Rwanda, South “With our microloans, we added Sudan, Tanzania, and Uganda via about five million customers in nine nationally-focused companies months – most of these are people making up the KCB Group. that have never had a bank account. KCB’s Group CIO Avi Mitra One of the major steps we are taking explains that the company operates is to partner with the MasterCard
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FINANCE
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K E N YA C O M M E R C I A L B A N K
“Maintaining a strong presence across the markets it serves, KCB is undergoing a wide-ranging technological transformation which is bringing about in-house efficiencies and delivering appreciable value for its customers�
Please contact your local Reseller
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Foundation to increase this financial inclusion. In this period we loaned out about $90 million, for loans that ranged from about half a dollar all the way up to $10,000,” says Mitra.
Technology transformation KCB is confident that technological innovation will be mutually beneficial for both the business and its customers, and is backing this up with serious monetary investment – it has spent $25 million over the past two years on modernising legacy systems. Keen to quickly modernise, the Bank went to the cloud: “We got rid of almost 95 percent of our clientserver environment and moved to the cloud. This has brought better efficiency, uptime, as well as agility towards time to market – it has impacted in a very positive way,” Mitra says. As a CIO, Mitra explains, it is
Avi Mitra
Chief Infomation Officer
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impossible to ignore the Internet that product. We’ll be adding more of Things – a trend which he features to that product in terms of firmly believes will be the next key savings, insurance and payments. disruptor in the digital Then it will become world. As an a value-add for organisation, KCB customers and the is keen to learn incentive to stay with what the current KCB will improve.” market has to offer He concludes: “My and how, in the not strategy is to move so distant future, more into digital Kenya Commercial Bank is money transfer is world of FinTech. I’m based in Nairobi going to transform trying to move the and disrupt the bank towards this and banking industry. at the same time become Aware of the ever-shifting nature much more agile in serving the of the FinTech space, Mitra explains customers. I want to un-shell the that KCB’s products are designed legacy behaviour and the previous with adaptability in mind: “We add company DNA. We are going to be many features which were not in the a more agile and forward-thinking, plan, so we are constantly maturing digitally-driven bank.”
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EXTRACTING V Written by:Nye Longman Produced by: A. Munatswa
VALUE
MINERAL DEPOSITS (GCO)
How Mineral Deposits Limited is using its scale for good while maintaining an efficient, profitable mineral sands operation in Senegal
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espite only being operational since the middle of 2014, Mineral Deposits’ Grand Côte Operations (GCO) in Senegal has already proved to the industry that a mining outfit can operate a profitable and productive business while making a positive impact in a developing country. In recognition of its formidable achievements thus far, GCO received an exclusive invitation to accompany the Senegalese government to last year’s COP21 conference – a well-deserved honour, as we shall explore. Operations Listed on the Australian Stock Exchange, Mineral Deposits Limited (MDL) is specialised in mining, integrating, and transforming mineral sands. In partnership with French company Eramet, MDL owns 50 percent of the TiZir joint venture, which consists of the Grande Côte
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operation in Senegal, supported by a titanium and iron ilmenite upgrading facility (TTI) in Norway, enabling the extraction and subsequent smelting of mineral sands in a single operation. Senegal’s Grand Cote Operations span over 445 square kilometres; the orebody present in this region is primarily made up of zircon and ilmenite, but also contains some high value co-products in the form of rutile and leucoxene. With an expected lifetime of just under 30 years (not counting some additional resources), the mine is set to be profitable for all involved if the correct strategy is adopted. GCO CEO Daniel Marini explains: “The operation covers a very large area, however due to the nature of the deposit we need to maintain a very elevated throughput; this achievement owes a lot to operating the largest dredge in the world.” A series of unique pumps supports this
800 Number of jobs to be supported by Mineral Deposits
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Unearth a productivity gold mine without having to dig deep.
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MINING
exceptional piece of equipment that moves the extracted ore to a floating wet concentrator plant which separates the mineral deposits from the surrounding sand. The resulting product is then driven to a dedicated mineral separation plant – once fully processed at the mineral sand process plant, the mineral sand travels via rail to GCO’s dedicated dock at the Port of Dakar. Marini explains how a range of control measures certify that the minerals GCO ships are of the highest quality: “We have a laboratory operated by a technician with a Masters in Chemistry who takes hundreds of samples every single day. This ensures our product is free from pollutants and is up to international standards.” Strategy GCO’s scientific approach goes far beyond geology, hydrogeology, and metallurgy involved in mineral grading – every aspect of its operations is calculated to deliver the most value - from shareholders to the surrounding communities. Even Marini’s appointment as CEO just over a year ago was a decision based on his broad professional experience and technical capabilities. He says: “I earned a PhD in Geology and in Mining. I worked for the UN DP in Djibouti as a geologist and hydrogeologist. I also worked on a World Bank project in North Cameroon surveying over 400 villages for water, as well as in several executive roles ( as
“The Senegalese government is keen to help those looking to develop industrial operations in the country they want to have a mining industry and are prepared to make mining into a profitable business” – Daniel Marini, CEO
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MINERAL DEPOSITS (GCO) geologist, mining engineer and metallurgist) for mining companies part of Eramet Group. Operating a successful business in Africa does not come without its challenges but, as Marini explains, the government of Senegal (which owns a 10 percent stake in GCO) has proved to be a strong asset to its operations: “The Senegalese government is keen to help to those looking to develop industrial operations in the country - they want to have a mining industry and are prepared to make mining into a profitable business. “When we needed to speak to a government official, their doors were always open – perhaps
MINING
more so than in other African countries. There’s a level of respect, not solely from ministers, but from the people living near our operations as well. Senegal is a country with a culture of education and has a wealth of skilled individuals.� He adds that GCO recently hired an external auditor to examine the entirety of its supply chain operations in order to find savings and promote efficiency. While this is yet to be fully completed, it is increasingly likely that the company will be looking to simplify its logistics operations, enabling it to work with a smaller number of providers and therefore streamline many of its processes. Like many other mining companies faced by the fall in commodity prices, GCO has engaged in a process of optimising all of these costs. Positive impact Far from ignoring its role as a key employer in the Grande Cote region, GCO has made a number
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MINERAL DEPOSITS (GCO) of commitments which will ensure its successful operations benefit both its employees – a mixture of locals and expatriates – and the communities touched by its work. Taking into account the relatively long life-span of the mine, the company has worked hard to make sure that its CSR work leaves a lasting, long-term impact. Marini expands: “We have the potential to make a huge impact – out of the 800 people we employ, 740 of them are locals; our operations, directly and indirectly, are responsible for employing a total of 2,000 people. Alongside the training we provide on-site, we also take the brightest local people and give them top professional training across numerous European institutions.” GCO also left a permanent mark on the area by constructing a resettlement village for the local people; where there were once temporary structures, now stand concrete buildings, supplied with running water and powered by solar panels. With these initiatives, the company seeks to develop local economies and prove to the entire industry that ethical extraction is very much within reach. By challenging itself to do as much as it possibly can for local communities, it is not only improving living standards but also playing a major role in fostering Senegal’s local extraction talent pool. Furthermore, GCO is showing that Senegal is a country with healthy business opportunities and an environment that is investment-friendly. 82
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The benchmark in agricultural machinery conveyance.
AGRITRANS Serving the Southern African Agricultural Industry T: +27 58 813 1303 • F: +27 86 689 7623
www.agritrans.co.za