African Business Review magazine - November 2016

November 2016

www.africanbusinessreview.co.za

TOP

AFRICAN

GAMING

WITH LEADING FILM STREAMING SERVICE IROKO

Q&A

STUDIOS

BUILDING

A DIGITAL CITY EKURHULENI TELLS US ABOUT ITS FUTURE SMART CITY STATUS

SONY MUSIC TAKES WEST AFRICA

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EDITOR’S COMMENT

That’s entertainment!

WELCOME TO OUR November’s issue: it’s a special one, as we’ve dedicated our first three features to the African entertainment industry.

Commodity’s slighted sister, the entertainment sector has criminally overlooked potential.

Take, for instance, the West African music scene. In our interview with Michael Uguwu, Sony Music West Africa GM, we reveal how homegrown artists are breaking onto the international scene.

We also chatted to Jason Njoku, founder of the “African Netflix”. Through a Q&A on iROKO, we enter the world of Nollywood, digital disruption and on-demand media. Finally, we tackle Africa’s video game industry. Our Top five list highlights the studios leading the expanding phenomenon.

Away from entertainment, we’ve produced profiles on Ekurhuleni Metropolitan Municipality, Project Isizwe and Egyptian Steel - three organisations heading game-changing projects.

We hope you enjoy our entertainment edition.

Feedback is always welcome - tweet me what you loved/liked/hated about it @AfricaBizReview.

Enjoy the issue!

Wedaeli Chibelushi Editor Wedaeli.chibelushi@bizclikmedia.com 3

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CONTENTS

F E AT U R E S

08 PROFILE

SONYMUSIC

TAKES WEST AFRICA TECHNOLOGY

The home of Nollywood

22 30 TOP 5

Level up! Our top five African gaming studios 5

CONTENTS

C O M PA N Y P R O F I L ES

42 Ekurhuleni Technology

54

Project Isizwe Technology

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Egyptian Steel Construction

7

PROFILE

SONYMUSIC

TAKESWESTAFRICA

African Business Review chats to Michael Ugwu, the face of Sony Music Entertainment’s West African venture Wr i t t e n b y : W E D A E L I C H I B E L U S H I

PROFILE

ONE OF THE revered ‘Big Three’, Sony Music Entertainment is the second largest record company in the world. The company recently recorded a $4.89 billion revenue, gained over a variety of global labels. These labels range from pre-eminent ones like Columbia Records to niche, genre-limited labels like Sony Music Latin.

Clearly, Sony Music has a 10

November 2016

comprehensive, successful business strategy. However, one suprises us. Sony Music was founded in 1929. It operates in countries as far-reaching as Czech Republic, Venezuela and New Zealand. Why has it only just tapped into West Africa’s burgeoning music scene?

West Africa has long been a nest for innovative music, with names like Fela Kuti, Baaba Maal and Nneka

S O N Y M U S I C TA K E S W E S T A F R I C A

“WE’VE GONE FROM A LOSS MAKING START UP TO A BREAK EVEN TYPE BUSINESS, AND NOW WE’RE WORKING TOWARDS THE REAL GROWTH THAT WE’RE LOOKING FOR. IT’S ONLY WITH THIS GROWTH THAT WE CAN REINVEST BACK INTO THE MARKET”

gaining international recognition.

Alongside Sony, major players in global music have recently twigged West Africa’s commercial potential.

Universal Music Group signed Nigerian dancehall star Burna Boy in 2015. Ice Prince’s ‘Boss’ was the first ever African video to premiere on Jay-Z’s Tidal last year.

Sony Music has long had offices in South Africa (Johannesburg and

Cape Town) and is also in talks to register in Kenya. However, West Africa is the exciting focus of Sony’s current Africa expansion. In February 2016, Sony Music announced that it had opened an office in Lagos.

INTRODUCING UGWU “I moved to Nigeria in 2008. I was actually in finance, investment banking, stockbroking to be precise,” entrepreneur Michael Ugwu tells us on the phone. In a marked London accent, Ugwu explains how he switched from money to media.

“Some of my people were trying to start a Nollywood business, so after a stint at working in the finance area in Nigeria, I decided I wanted a change in setting. I got into politics for a little bit, had a farm for a little bit…I thought ‘d’you know what?’ while I was in there, ‘let’s just try this media thing.’”

Ugwu eventually settled in Nigerian media, an underlying passion of his.

He became a founder of iROKING, a subsidiary of Nigerian digital media company iROKO partners.

“I was trying to build a type of Spotify for Africa… the fact of the matter is that the rest of the 11

PROFILE world wasn’t with us. You log onto Deezer - it wouldn’t work, you log onto Spotify - it wouldn’t work. You try iTunes - you couldn’t unless you have a foreign card.

There was a big gap there.”

Unfortunately, the venture was short-lived. According to Ugwu, iROCKING was ahead of its time – operating from Nigeria in 2012/2013 meant frequent issues with technology. Furthermore, banking and smartphone penetration was limited.

The iROCKING years weren’t fruitless, however. Ugwu had built the foundations for his own business, Freeme digital, and gathered music industry contacts. One of these contacts was Sony Music.

“I’d actually been talking to Sony Music about licensing their catalogue for something I was working on,” Ugwu expands. “They’d always been interested in the West African market, so we did one or two things together, nothing major. We’d have meetings, have dinner, and we’d always discuss West Africa.”

Ugwu offered to source a General Manager for Sony’s Western operations, but Sony was frank 12

November 2016

with him: they only wanted him.

Ugwu adds: “We went backwards and forwards a little bit. I was a bit nervous about stepping away from my business. Eventually, I thought, ‘You know what? There’s actually a bigger opportunity here to grow the business and do things you can do with a major label that an independent company can’t.’”

As an independent company, Ugwu had been battling with local telcos (telecommunication companies).

He’d had to accept whatever revenue share they gave him, but he realised that with Sony’s five million track-strong catalogue “it kinda changes the conversation”.

Gaining leverage with telcos was just one more reason to accept Sony’s offer. Ugwu took the General Manager position in 2014, and has been heading Sony Music’s West African expansion since.

PROGRESS AND PARTNERS Make no mistake, Ugwu isn’t leading a horde of music industry whizzes.

At the moment, Sony Music West Africa is technically a one-man team, comprising of Ugwu.

“I’m trying to start building

S O N Y M U S I C TA K E S W E S T A F R I C A

the local business before I start building a team,” Ugwu states, unafraid that his solo venture might be perceived as amateur. “We’ve gone from a loss-making start-up to a break-even type business, and now we’re working towards the real growth that we’re looking for. It’s only with this growth that we can reinvest back into the market.”

Ugwu’s defiance is justified – he has made substantial progress without an official. Firstly, he’s signed deals with telcos. Sony Music West Africa can now distribute its ringtones with South African giant MTN, and market its content to the telco’s 60 million plus subscribers. Ugwu is

also working on a deal with MTN’s streaming service Music Plus - “a challenging deal to sign because some telcos are a dominant player on the scene. Going backwards and forwards on how to license major label content has been a bit difficult for local partners to understand - it’s quite complex.”

Sony Music West Africa is also distributing to Airtel, a global telco that operates in 18 countries across South Asia, Africa, and the Channel Islands.

As for music platforms, Ugwu has clinched contracts with iTunes and Vevo too. “Obviously Vevo is yet to be live in the market, but they’re 13

PROFILE

The Sony Music Africa Team

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November 2016

S O N Y M U S I C TA K E S W E S T A F R I C A

looking at opportunities here and they operate primarily through their syndicated services,” Ugwu says. “They’re always looking at technology. Most of our users in the market are mobile users. Most of our users have data plans that are pretty expensive, streaming video is quite heavy so it’s a challenge economically to them.” Ugwu and Vevo are currently discussing audio bit rate streaming, in order to reduce the cost of watching videos for users.

What about YouTube and Spotify?

The platforms have 57 million and 1 billion users respectively. “On a global basis we’re still in various discussions with YouTube on giving the right price for music,” Ugwu reveals. “YouTube is a discovery platform for a lot of our listeners, but in terms of what we earn from YouTube its nothing in comparison to Spotify or iTunes. As much as we appreciate the work that YouTube has done and we proceed to work with them on various levels, we’re also keen to see improvement in the royalties that they pay on streams.”

As for the faces of Sony Music West Africa, Ugwu has assembled a stellar roster of musicians. To

coincide with the opening of the Lagos office, Sony Music signed a worldwide deal with Nigerian pop sensation Davido. The musician/ social media celebrity confirmed the deal by sharing photos of the finalised deal to his six million followers.

“We’re in London right now actually.

We’re in the studio, we’ve been doing some promo rounds, we’ve been on radio. In Lagos next week, we’re doing a whole media run to release the first music video on Sony Music,” Ugwu tells us. Sony Music has also signed with acclaimed Nigerian producer LeriQ and musician Wizkid. Never heard of Wizkid?

After gaining national stardom and recognition from international stars Drake, Chris Brown and Skepta, Wizkid has cemented his status as one of Nigeria’s biggest pop acts.

SOCIAL IMPACT We ask Ugwu why he centres local musicians like Wizkid. Why not push Sony’s existing premium content (e.g. Beyoncé, Chris Brown, Usher) in West Africa? Although born in the UK, Ugwu has an allegiance to the sounds of his parent’s birthplace.

“We wanna be in a situation 15

PROFILE where we’re actually taking talent from Africa, actually trying to create a global contemporary Afropop superstar. I think we’re at that age where we have that possibility,” Ugwu responds.

Ugwu also believes that his combined identity as a Nigerian and Sony Music Manager gives him a wider social responsibility.

“It’s important that we grow this opportunity to the stage where we’re creating massive amounts of value and potentially lifting people out of poverty,” Ugwu enthuses.

Ugwu insists that he didn’t come to Africa and set up a “briefcase-type businesses”, as he believes many international entities do. He explains how Sony Music Entertainment West Africa communicates with local artists, governments and telco partners to determine how value can be added to the local market.

According to Ugwu, Sony Music was the first international record company to “put boots on the ground”.

We ask Ugwu why he’s chosen to invest in the music industry when West Africa, specifically Nigeria, has such a commodity-driven market.

“The music industry is a massive 16

November 2016

employer of labour,” Ugwu informs.

“If we’re talking about specifically the West African, the Nigerian industry, we know there’s massive youth unemployment. One of our biggest sectors is the oil and gas industry, but you know how many people does that actually employ?”

(Not off the top of our heads – the National Bureau of Statistics informs us that the sector employs 0.01 percent of the Nigerian work force).

Ugwu continues: “You know artists actually employ hundreds of ancillary workers, from make up, to video directors, to producers, in a very informal way”. He explains that the West African music industry not only provides jobs for despondent graduates, but also lifts a significant number of young people out of poverty.

When Nigeria’s GDP was rebased in 2014, many were surprised to find that the creative industries had gone from making up 0 to 1.2 percent of the country’s GDP. “I think the real number is a lot higher than that” Ugwu speculates. “I think the number still relies on the formal economy, so for us it about trying to formalise a structure in

S O N Y M U S I C TA K E S W E S T A F R I C A

17

PROFILE

the market where we are creating markets that are taxable. ‘Cause once you create those platforms and the government benefits, the right government will be able to give back and obviously create the right business environment for more creative businesses to grow”.

CHALLENGES Inevitably, Ugwu and Sony Music face challenges. Behemoth Apple Music is live in the West African market, but collaborations with Sony Music have been hindered.

“We hope that iOS device penetration improves, and we hope that people will become aware that they can access Apple Music on their Android devices - it’s something a lot of people don’t know,” Ugwu notes.

Furthermore, Apple Music requires users to register with a bank card.

As Ugwu points out – not everyone in West Africa has a bank card.

Mobile banking is often deemed more efficient. “We’re discussing with Apple and we hope that at some point they can come closer to the market with regards to payments. That would allow us to grow their services.”

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S O N Y M U S I C TA K E S W E S T A F R I C A

19

PROFILE

From left to right: Ugwu, Davido and Vice President Sony Music International Dusko Justic

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S O N Y M U S I C TA K E S W E S T A F R I C A

Ugwu also addresses piracy: “We are obviously working with the right bodies, like the Nigerian Copyright Commission, and various parastatals within government to address some of these things, so I am at industry meetings, gatherings, and on panels.”

FUTURE Despite these issues, Ugwu remains positive about the future of Sony Music West Africa. “We’ve been pretty aggressive, we’ve been spending money in the market, and that can only grow,” he tells us. “It sounds a bit cliché, or ambitious, but music actually has that power within the local context of things”.

It does sound cliché, but we can pardon Ugwu. His closing statement is testament to how big business can promote the products of overlooked communities, via someone who is emotionally and financially invested in the scene. As we’re permitting clichés, its only right that we end with one of our own. Ugwu and Sony Music Entertainment West Africa are championing the region’s music on the international stage, and that is music to our ears.

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TECHNOLOGY

The home of

Nollywood Writ ten by: WE DAE LI CHIBE LUS HI

Hollywood who? Nollywood (the Nigerian film industry) makes around 1,000 films a year, placing it above the US’s film industry and below India’s Bollywood. We speak to Jason Njoku of iROKO, an online platform for this burgeoning Nollywood content.

CEO of iROKO, Jason Njoku

TECHNOLOGY

Hi Jason, could you tell us a bit about yourself?

My name’s Jason Njoku, I’m 35 and the co-founder and CEO of iROKO the home of Nollywood. I launched the company, in a slightly different guise, in 2010, when I realised that there was no systematic online distribution for Nollywood content, Africa’s most popular form of entertainment.

When I realised that Nollywood had 24

November 2016

no real, genuine presence online, I jumped on a plane from London to Lagos to delve a little deeper, and have been here ever since.

Can you also give us a brief overview of iROKO and its operations? iROKO has offices in Lagos, London and New York. We have a consumer-facing app, irokotv. We

T H E H O M E O F N O L LY W O O D

“We have an entire team dedicated to watching all the movies on the market and selecting only the best - maybe only even the top 5 percent or so”

Nollywood actress Funke Akindele

also have recently launched an app, in conjunction with Canal+ called iroko+, which is targeted solely at French speaking Africa. We also have an extensive distribution arm of the company that distributes content to multi-channel networks such as YouTube, as well as partnerships to supply leading airlines with amazing Nollywood content. We have two TV channels

on StarTimes in Africa and we also provide content to broadcasters around the world who are looking to source the best Nigerian movies and TV series. Through Rok-studios, we also co-produce, produce and finance homegrown content, including titles such as Single Ladies and Thy Will Be Done.

I understand that iROKO is one of the Africa’s leading technology companies. How would you describe Africa’s current technology climate?

It’s challenging, to say the very least. Start-up and operation costs in Nigeria especially are expensive, which can prove to be a hindrance for some companies.

The sector has also been awash with copycat companies who have tried to simply replicate Western businesses in Africa. Most that have attempted this have failed. However, we’re seeing a few breakthrough companies really starting to shine - which is encouraging.

Netflix now has an African arm.

How do you compete with it?

They’re in the same market as us, 25

TECHNOLOGY for sure, but not necessarily as competition. They operate a totally different business model to iROKO, and their move into Africa has been an interesting one. However, while they cater for a broad audience, irokotv is very much the home of Nollywood - we have an unrivalled catalogue, so for the hardcore Nollywood fans, of which there are many millions, irokotv continues to be the first choice. Furthermore, we have built our app to cater for a predominantly African audience - we charge as little as $1.50 a month and we no longer stream content (we’re download only), making it far easier for our viewers to actually watch the content.

In recent years, how have you maintained your position against African-based competitors like DStv? Again, it isn’t primarily a case of competition - like them, we want to make the most amazing content available to as wide an audience as possible. DStv are huge - their audience reach is seriously impressive and I’ve long been a voyeur of their work. And will no doubt continue to be for the foreseeable future.

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November 2016

Speaking of content, how do you decide what appears on iROKO? We have an entire team dedicated to watching all the movies on the market and selecting only the best - maybe only even the top five percent or so.

We’re known for showcasing quality content, so we have to make sure we keep standards high. There is also a list of directors and production houses iROKO works with on a frequent basis, as they continue to produce the films and TV series our viewers love. We also look at the data patterns of our viewers, to help inform our purchasing and commissioning decisions. We’ve had some real showstoppers - TV series like Jenifa’s Diary have been phenomenally popular, as has Husbands of Lagos. iROKO operates in several countries. How do you conduct up-to-date research on varying audiences?

We spend a lot of time analysing data, but importantly, we never stop speaking to our customers - on Facebook / Twitter / Instagram, we’re always getting feedback. We also have a big customer service team based in Lagos, who speak to iROKO customers from around the world, all the time. So

T H E H O M E O F N O L LY W O O D

Cast and crew on Husbands of Lagos set

we just make sure we never lose touch with our customers, and take their feedback (good and bad) on board.

Can you talk us through iROKO’s funding?

We were approached by Tiger Global back in 2010, after they read an article about our YouTube venture, NollywoodLove. They were impressed by the metrics and the potential growth opportunities of the audience we were building, and after the requisite due diligence and so

forth, we closed our Series A round of $3 million. This allowed us to build out our own platform, irokotv, and move off of YouTube. We’ve since had investment from Kinnevik, RISE Capital and Canal, in total $40 million.

How do you obtain and retain your employees?

Like all companies, we seek out great talent - some of which comes our way through our networks, or people approaching us directly, but we also have to go through 27

TECHNOLOGY The iROKO office

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T H E H O M E O F N O L LY W O O D

the usual recruitment processes as well. We have HR teams in London and Lagos who are always on the look-out for top tier talent. In terms of retention, we offer an awesome working environment, scope for personal & professional growth and other benefits. We still have members of the iROKO family who’ve been with us since day one.

What is your relationship with movie producers?

We work with some of the industry’s best producers.

Their creative output is essential to our business, so we keep good relationships with our producers. We now also produce a lot of our own content as well.

Are there any current iROKO projects that you’re excited about?

Yes - one or two are in the pipeline, but I’m unable to talk about them at the moment. Needless to say 2016 will probably be our biggest year yet.

What are iROKO’s plans for the next five years?

Content production is going to be core to everything we do we expect to invest in and expand our wholly-owned content library quite considerably. We also want to ‘win Nigeria’ in terms of building our customer base in the country. Since we’ve shifted to an Android-first, mobile-first, download-only model, we’ve seen our subscriber numbers grow in Nigeria, fast. We anticipate faster growth as mobile data costs fall in price over the coming years. We’re working in still a relatively ‘new’ market, so there will be plenty of hurdles and challenges along the way - technology is undoubtedly going to shift in the next five years, so we are building our engineering team as well, to ensure we are leading the way in this area as well.

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TOP 5

We bri ng yo u five of the biggest, mos t underrated ga ming co mpanies from the co ntinent.

Writ ten by: WE DAE LI CHIBE LUS HI

TOP 5 A FEW MONTHS after it turned 18, Ubisoft Casablanca closed down. The Moroccan studio was a stalwart of the African gaming scene, producing games such as Rayman Legends, Child of Light and Valiant Hearts. Although Ubisoft gave a vague reason for the closure (“we didn’t find a sustainable formula for the studio within our broader network”), the Casablanca branch’s shutdown poses a timely question.

Can gaming studios survive in Africa?

We think so. South Africa’s independent scene has been going strong since the 90s, when Celestial Games’ Toxic Bunny became the first game in the country to sell over 100,000 copies. Today, indie studios are emerging across the continent, especially in Kenya, Cameroon, Morocco and Ghana. PwC, one of the world’s biggest professional services firm, also has faith in the industry.

In 2015, it predicted that the fastest growth in South Africa, Nigeria and Kenya will be seen in video games.

Thus, we bring you our top picks from Africa’s gaming scene - studios that blend creativity, business sense and entrepreneurship.

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November 2016

LEVEL UP! OUR TOP FIVE AFRICAN GAMING STUDIOS

MALIYO GAMES Hugo Obi and Oluseye SoyodeJohnson founded Maliyo Games in 2012, making it one of the first video game companies in West Africa.

“We look at entertainment and we see music and we see video, and we realised that gaming is not something people have caught up on. Gaming itself is a global phenomenon,” Johnson says. Maliyo Games (available on web or mobile) aims to tap into the Nigerian experience, via style, graphics and culture. In Okada Ride, the player can control the motorbikes driven around real-life Lagos. Mosquito Squasher (now in its fourth edition) is Maliyo’s answer to Angry Birds.

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TOP 5

ANDREW KAGGIA Kenya’s eponymous Andrew Kaggia (formally Black Division) is best known for Nairobi X, a game based on an alien invasion of Nairobi. Nairobi X is Africa’s first domestically developed 3D first person shooter and multiplayer video game accessible for Android, iOS, Windows and PC. Founder Kaggia has noted a strong demand for local content in this form, and he’s right. Demand was so high that the server handling download requests crashed after about three hours, prompting an early release on Google Play Store the next day.

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November 2016

LEVEL UP! OUR TOP FIVE AFRICAN GAMING STUDIOS

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TOP 5

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November 2016

LEVEL UP! OUR TOP FIVE AFRICAN GAMING STUDIOS

FREE LIVES In its own words, Free Lives aims to make games that “someone out there might give a damn about�. The Cape Town company channeled its nonchalant philosophy into Broforce, a hypermasculine action-hero game that blew up in 2014. The game sold over 250,000 copies while still in development and by May 2016 had made almost $3 million. Broforce also received critical acclaim, gaining a 78 percent score from PC Gamer and an 8.8/10 from IGN. Other successful ventures include Ore Chasm and Strange Happenings on Murder Island.

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TOP 5

KIRO’O GAMES Entrepreneur Guillaume Olivier Madiba set up Kiro’o Games in 2013, and released his first game after raising $270,000 in funding. “The diaspora supports African products. People want something new, innovative and exotic—this is what Kiro’o Games will offer,” said investor Rodrigue Fouafou, CEO of Canadian brand HartNamtemah. The game, Aurion, sees a royal couple travelling through a fantasy world of tribal characters, lush greenery and percussive music.

Madiba consulted local Cameroonian tribe Bamileke for marketing help, what he calls a, “local, traditional way of fundraising in tribes with the Wall Street logic of shareholding”. For his work on Aurion, Madiba was picked by the US state department to participate in the 2016 Mandela Washington Fellowship Program.

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November 2016

LEVEL UP! OUR TOP FIVE AFRICAN GAMING STUDIOS

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TOP 5

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November 2016

LEVEL UP! OUR TOP FIVE AFRICAN GAMING STUDIOS

K U L U YA . C O M Launched in a small Lagos flat, Kuluya’s 13-man team gained $2 million funding after just six months. Kuluya produces cross-platform games with African characters. From high-end console to casual browser games, The Nigerian studio has launched 60 games since it started.

My Oga at the Top an online game was played 60,000 times within the first 72 hours. “Our games are developed for a niche audience that have, before now, not been catered for,” Kuluya state.

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BUILDING A CITY FROM THE GROUND UP Written by Jennifer Johnson Produced by James Pepper

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EKURHULENI

In 2013, nearly 60 percent of working age residents in Ekurhuleni, South Africa, didn’t have access to the internet. In the years since, the city’s local government set about changing that — and so much more

W

hether a sprawling metropolis or a growing urban settlement, many of the world’s cities share a single goal: getting “smart”. South Africa’s Ekurhuleni Metropolitan Municipality is no exception, and in 2013 the local government launched its ‘Digital City’ initiative in an effort to bridge the growing digital divide. However, the process of integrating features like free public access wi-fi and the internet of things (IoT) was not going to prove as easy as simply installing routers and sensors.

Ekurhuleni is an amalgamation of nine different city regions which lacked unified telecoms infrastructure prior to the start of the Digital City project.

For Lydia Ntlhophi, the Divisional Head for Business Relations Management

44

at Ekurhuleni Metro Municipality, and her colleagues, centralising services was the first step in digitising the city.

“We have citizens that are coming from very impoverished backgrounds and they are not really participating in the economy because buying data is expensive,” Ntlhophi explains. “Digital City is seen as one of the key activities that will help the city to bridge that gap as well to make sure that engagement with the city changes.”

At present, Ekurhuleni residents rely on Customer Care Centres (CCC) to access information and services — including paying their utility bills and logging complaints about housing. Consumers often commute to reach their nearest CCC only to find themselves facing long queues on arrival. City officials want

TECHNOLOGY

w w w. e k u r h u l e n i . g o v. z a

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Oracle Cloud Applications HCM

Human Capital Recruiting Talent

CRM

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ERP

Financials Procurement Projects Supply Chain

More Enterprise SaaS Applications Than Any Other Cloud Services Provider

Copyright Š 2016, Oracle and/or its affiliates. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates.

TECHNOLOGY

to change the way that the public The rollout of digital utilities in interacts with their local authority the city could only happen once by, quite literally, putting services broadband infrastructure was fully into the palms of their hands. fitted. To date, 602 kilometres of “We want smartphones to be the fibre optic cabling has been installed devices that citizens can engage us across Ekurhuleni, connecting a with,” Ntlhophi says. Provision of variety of offices and buildings. so-called ‘e-services’ is one of the key When the project is completed, 1,400 aims of the Digital City programme. kilometres of fibre optic cable will When work is complete in 2017, provide Internet capabilities to residents will be able to almost 700 buildings. There make use of their mobile are also 2,000 public phones to report access wi-fi hotspots fault, to consume located across the services and to apply city, primarily in for new services. its more remote Some 70 percent townships, to offer Number of Employees at of Ekurhuleni citizens convenient Ekurhuleni residents currently own access to information. a smartphone, while most Ntlhophi reports of the remaining 30 percent that there have been 1.3 has access to a landline. The city is million users of the city’s free wi-fi working to include those without wi-fi service since it debuted, and the enabled devices by creating a USSD number of users has grown by (Unstructured Supplementary Service roughly 17 percent every month.

Data) for the provision of e-services.

“We estimate a direct financial “If you want to call and report a benefit of 13 million since the launch,” fault, you press ‘star + 1’,” Ntlhophi she says. “That means Ekurhuleni explains. “We’re not excluding residents using Wi-Fi are saving any segment of the residents.” between R1 to R2 per Mb, pre paid

10,001

w w w. e k u r h u l e n i . g o v. z a

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“We are facilitating an ecosystem for small companies and big companies in Ekurhuleni. Open data has huge potential in terms of monetisation and job creation�

data is prohibitively expensive in South Africa. We project an annual benefit of about R29 million as we expand the coverage . This is tangible money that the city is spending on residents.” Around 36 percent of Ekurhuleni’s youth are unemployed and the provision of free wi-fi is intended to present them with vital new opportunities and information.

Users of the service can access a ‘walled garden’ portal, which directs them to educational content, CV building services and a business directory, among other services.

Now that much of Ekurhuleni’s connectivity infrastructure is in place, the Digital City project can turn its hand to improving computing. Prior to the start of the improvement initiative, the city’s data centres weren’t optimally organised, with multiple systems consuming electricity inefficiently. Maintenance requirements were high and when a service ‘went down’, it took officials a long time to restore it. As a result, local businesses suffered and the City of Ekurhuleni risked not being seen as a strategic partner.

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“We have provisioned a converged computing platform, with two main sites and one backup,” Ntlhophi says of Digital City’s IT solution.

“We have two main sites which have storage, computing and networking all in one, and we have one site which serves as a backup. We spent about R110 million on this converged infrastructure, the benefits far exceeds the costs. This investment helps us to ensure that IT is reliable and the experience of the user is excellent.”

Applications play an important part in the way that the newlydigitised Ekurhuleni will run. Most of the applications in use by the local government, like those related to water and energy, have been outsourced to external service providers. The local authority’s enterprise resource management (ERP) programme consists of integrated applications developed by the likes of Microsoft and Oracle. The city managed to reduce the number of applications it was using to facilitate service provision from 176 to 40 simply by “rationalising customer requirements and functionality”, according to Ntlhophi.

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The city has built a mobile app that enables citizens to view and pay their bills online as well as another app for reporting incidents and requesting services from the city.

These apps are proving to be low cost channels giving citizens 24 hour access to services provided by the city. The city has also rolled out an e-Health system that has significantly improved the processes of patient registration, records management and pharmaceutical management of ordering and distribution of medication. Development work is close to completion for another app that will be used by city officials to register indigent citizens and process their applications more efficiently.

With increased connectivity comes greater insight into the behaviours and patterns which characterise citizens’ lives. The city of Ekurhuleni exchanges information bidirectionally with its citizens, meaning that it can both send and receive data from residents.

“The importance of that is that we’re now able to build mobile apps and provide information,” Ntlhophi explains. “This is an achievement

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because not only are we making apps available, we are allowing small businesses and individuals to gather annually for a hackathon where they can build their own apps.”

The ‘hackathon’ encourages the city’s tech-savvy innovators to work together to develop IT solutions which will further help officials deliver services efficiently and effectively.

Participants utilise Ekurhuleni’s open data sets to build mobile apps, some of which can be monetised by local companies scouting for talent at the events. The Metropolitan Municipality has also introduced ‘learnerthons’ in its public libraries to teach younger, less-experienced tech users how to

code. When the Digital City initiative is complete, all 45 of Ekurhuleni’s libraries will play host to learnerthons in order to pass the spirit of digital innovation onto the next generation.

Ultimately, Digital City will facilitate a crucial, two-way conversation between residents and their local authority. The project isn’t just going to help the government provide services, but advance Ekurhuleni’s economy and, in turn, further the quality of life for its citizens.

“We are facilitating an ecosystem for small companies and big companies in Ekurhuleni,” Ntlhophi says. “Open data has huge potential in terms of monetisation and job creation.”

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Access and emp

how free WiFi is transform Written by Jennifer Johnson Produced by James Pepper

powerment:

ming South Africa

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The web is an unprecedented equaliser, permitting all users a similar degree of access to information and resources. With personal and economic development at stake, countries worldwide are clamouring to connect

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n 2016, there are still just a handful of services which are deemed crucial to a thriving community — though running water, housing and electricity are invariably among them. However, with the advent of the internet, our idea of what constitutes an ‘essential’ utility has had to expand.

Deloitte research has shown that productivity in developing countries could be enhanced by as much as 25 percent with the expansion of WiFi access. For countries like South Africa, where 75 percent of citizens can’t easily or affordably get online, it is not yet possible to compete with industrialised, knowledgebased economies. Project Isizwe,

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a not-for-profit organisation based in the city of Tshwane, is currently working with government bodies across South Africa to bring free public WiFi to the country.

“We all understand the value of Internet connectivity,” Zahir Khan, the CEO of Project Isizwe, explains, “especially in terms of educational benefits, improved healthcare services, better opportunities for economic development — and, of course, social cohesion. From that perspective it’s critical to connect the country sooner rather than later.”

In 2013, a bid to connect every citizen was launched across the city of Tshwane. To date, it is Project Isizwe’s largest deployment effort,

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with 850 Free Internet Zones (FIZs) installed in the local area and almost two million unique users accessing the web since November of 2013. By 2018, Tshwane will have WiFi within walking distance of every citizen.

Project sponsors hand-select the hotspot locations based on their perceived value for the surrounding community. It is this kind of thinking which led to the installation of 213 Internet access points outside of schools in Tshwane.

“The city has funded the provision of public access WiFi on their infrastructure outside of these schools,” Khan says. “This ensures that every learner, educator and community member in and around the schools is connected”.

Rural environments in South Africa also stand to benefit from the efforts

of Project Isizwe, though installation in these locations is admittedly more of a challenge. The large majority of financial backing for WiFi installation comes from a locality’s government and public sector bodies. In more remote regions, state revenue is limited, thus it is more difficult to get these communities online. Ultimately, Project Isizwe hopes to have an Internet access point within five kilometres of every rural citizen.

“Funding has been the biggest barrier for expansion across the entire country,” Khan says. “In five different provinces — Limpopo Province, KwaZulu-Natal, Eastern Cape, Western Cape, and Gauteng — the biggest barrier to expansion of the free Wi-Fi offering is the availability of funding.”

Project Isizwe’s not-for-profit

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PROJECT ISIZWE

Zahir Khan Zahir has extensive experience in the telecommunications sector holding various positions at South African based organisations and seeing the rapid evolution and transformation within this region. His notable achievements include successfully driving business development, product development, project management and finance. With 17 years of telecommunications experience coming at the most significant growth periods in the industry, he is well positioned to lead in the wave of connecting an unconnected Africa.

His core operations and project skills are complemented by his knowledge of network architecture and solutions with his initial experience in the finance field, ideally positioning him as a the Chief Operating Officer at Project Isizwe, spearheading the delivery of Free WiFi for South Africa and with ambitions to deliver the same achievments across the continent.

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status has enabled it to reduce the cost of installing telecoms infrastructure by what Khan describes as a “significant” margin. With the help of its partners, the project operates exclusively under costrecovery: it doesn’t charge users for its service and the large-scale financial benefits of WiFi access for South Africa will not be immediately evident.

“We are essentially three times more affordable than traditional deployments of network companies,” Khan says. “We have been fortunate enough to have great OEM and Infrastructure partners that assist us in these reductions of price as they too firmly believe that bridging the digital divide will ultimately form a stronger and more active economy for South Africa.”

Research by the World Bank has shown that a 10 percent increase in what is called ‘broadband penetration’, the amount of the Internet access market that has been captured by high-speed broadband, will result in a 1.3 percent increase in a country’s GDP. “The [financial] sustainability of Government funded public space free WiFi comes out of the long-term benefit of enabling Internet access for citizens today,” Khan says.

Historically, access to an affordable mobile device — be it a smartphone, tablet or laptop — was also a barrier to Internet access in South Africa. Khan notes that, in recent years, as the cost of these items has fallen, they have made their way into the

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PROJECT ISIZWE

“The public hotspots become a place to bridge the digital divide, where regardless of personal circumstance or background, everyone has access to the same internet” WestconGroup is a distributor of a wide range of indoor and outdoor Ruckus Wireless “Smart Wi-Fi” products.

Andries Janse Van Rensburg +27118489012 Andries.JanseVanRensburg@westcon.com www.westcon.com

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TECHNOLOGY

hands of people all over the country.

Project Isizwe has deployed in rural environments, places as remote as the mountain village of Tshedza in Limpopo province,” he explains, “even there you’ve got people with WiFi-enabled devices who can utilise and connect to the network. Devices are not the issue any longer.”

As impediments to Internet access and availability are dissolved across South Africa, people are finding creative ways to reach out into their newly-connected world. Khan cites the story of Martin Nyokolodi, a young man in Tshwane who has launched his own Internet radio station, among his favourites. Not only does Nyokolodi utilise the City’s ‘TshWi-Fi’ service to broadcast his programme, he also takes Skype calls from listeners and maintains the station’s social media presence on the network.

The benefits of connectivity have also been extended to the healthcare and hospitality sectors. Restaurant owners in proximity to a WiFi hotspot have been setting up shelters within

signal range so that customers can access the web. Khan reports that these makeshift ‘Internet cafes’ have increased restaurant profits by as much as 80 percent. Equally, the Internet has helped to streamline the process of care and diagnosis in South Africa’s clinics and medical facilities.

In its National Development Plan 2030, the government of South Africa states that it wants universally available Internet across the country in 14 years’ time.

“There’s a lot for us to do,” Khan admits.

However, Project Isizwe, and its CEO, realise the transformative impacts that Internet access can have over lives and economies — and they will go forward knowing just how tremendous the return on public space free WiFi investment will be.

“The public hotspots become a place to bridge the digital divide, where regardless of personal circumstance or background, everyone has access to the same internet,” Khan says.

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SUSTAINING STEEL Written by Nye Longman Produced by Richard Deane

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EGYPTIAN STEEL

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LEVERAGING SIGNIFICANT INVESTMENT AND NATIONAL DEMAND, EGYPTIAN STEEL IS MAKING A NAME FOR ITSELF AS AN EFFICIENT, THOUGHT-LEADING MANUFACTURER AT HOME AND ABROAD

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tepping into the steel industry in 2010, propelled by over $2 billion of investment, Egyptian Steel is growing to become a leading diversified manufacturer and stalwart of the recovering Egyptian economy. Backing up substantial capex with robust social, environmental and operational programmes, the company is looking forward to years of sustained growth and success. Since we spoke to CEO Ahmed Abou Hashima in the July 2015 issue, the company has undergone a number of structural changes and is now in the process of diversifying its offering to the domestic and international market.

Abou Hashima is proud of how far his company has come – and is optimistic about its place in developing the country. He says: “Steel is crucial for

the economy. We have a shortage of 8 million housing units and infrastructure.

The whole population lives on only 7 percent of the land. In order to develop Egypt, steel is vital for at least several decades. It’s a strategic industry that employs thousands of people.”

Operational development Operations are shared across a number of subsidiaries which consist of Egyptian Steel for Building Materials, National Port Said Steel (NPSS), and IIC for Steel Plants Management.

Together, these divisions enable the company to provide a range of steel production capabilities to the market – supported by a number of technological innovations.

“When all four plants of Egyptian Steel are at full capacity we will be able to acquire a 20-25 percent

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market share in Egypt,” says Abou Hashima. “We’re also expanding into the cement industry with a production capacity of 2 million tons per year, and going into IPO is in our plan, although there’s no set time for it yet.

“We have already taken our first step into the cement industry by establishing the sister company Egyptian Cement, and in the future, after mainly operating in steel and cement we might look into diversifying into other building materials such as wood, ceramic, and glass.

Our vision is to make the group a onestop shop for all building materials.”

By the end of 2017, all of Egyptian Steel’s plants will become operational and the company will have an estimated workforce of 6,000 people. “With the opening of the Beni Suief plant we’re also opening a vocational development centre for training steel plant workers in order to improve their skills and performance,” Abou Hashima adds.

But the centre is not limited to just people working for Egyptian Steel: “It’s open for free to anyone who wants to learn,” he says, “It helps us raise

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the calibre of our workers, and at the same time is part of our role to give back to society, and enable people to have an opportunity to improve their skills to be able to compete in today’s workforce market.”

While Egyptian Steel is backed up by significant investment, the company has had to face up to the industry-wide challenge of sourcing enough energy for production. “The government has made an enormous effort to improve the power grid,” Abou Hashima says.

“There have been new power stations launched, as well as mega projects with companies like Siemens to generate power, and the outstanding natural gas field discovered by Eni, which will have a great impact in the future.”

“The situation is definitely better, but we have started using new energy-saving technology which will enable us to avoid any problems in both the long and short run.”

Sustainable steel Embedded within Egyptian Steel’s business model is the imperative to operate as responsibly as possible, a

CONSTRUCTION

AHMED ABOU HASHIMA CEO

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EMB BUSI OPER

BEDDED WITHIN EGYPTIAN STEEL’S INESS MODEL IS THE IMPERATIVE TO RATE AS RESPONSIBLY AS POSSIBLE

EGYPTIAN STEEL

philosophy that it applies holistically to its workers, the environment and the Egyptian people.

At a technical level, the company has made massive strides in energy saving through use of more efficient technology. Combined, the eco-friendly technology the company is using saves almost 60 percent of the energy required and saves as much as 30 percent of emissions – innovations that have added an extra competitive edge. Egyptian Steel also recycles 100 percent of its steel scrap.

This technology is the first of its kind in the Middle East and Africa, and only the third instance in the world. The other two steel plants that use this technology - one in Arizona and the other in Greece - produce 250,000 tons/year, while Egyptian Steel’s Beni Sueif and Al Ain Al Sokhna plants each have a production capacity of 830,000 tons/year, making Egyptian Steel the biggest manufacturer of green steel globally.

Abou Hashima adds: “I created a concept that I like to call ‘socially responsible capitalism’ which emphasises that the civil society has rights that should be fulfilled - it’s our duty to improve people’s lives and to lessen their suffering as much as we can.”

And the company is continuing to achieve this social mission. In 2014 Egyptian Steel scrapped its advertising agenda in order to refit 40 of the poorest villages in the country with basic amenities. Since then it has also sponsored a large number of Egyptian

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EGYPTIAN STEEL IS w w w . e g y pBASED t i a n - s t e e IN l . c oCAIRO m 73

EGYPTIAN STEEL

WHEN ALL FOUR PLANTS OF EGYPTIAN STEEL ARE AT FULL CAPACITY WE WILL BE ABLE TO ACQUIRE A 20-25 PERCENT MARKET SHARE IN EGYPT – CEO Ahmed Abou Hashima

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athletes, and the Paralympic team.

What is clear from its conscious social work is a desire to share the success of the company in order to raise the standing of as many people in the county as possible.

Abou Hashima adds: “It’s very flattering that our CSR efforts got recognition on a local and on an international level. But what actually keeps me motivated is the happiness I saw on the villagers faces when they moved into their revamped homes.”

The company is also currently working to obtain ISO 9001 (Quality Management Systems), IS0 14001 (Environmental Management Systems) and OHSAS 18001 (Occupational Health Safety Assessment Standard).

Having built on an already strong foundation of investment and national demand for its products and services, Egyptian Steel is set to play a major role in developing the country’s economy and skills base for many years to come.

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